EXHIBIT 99.2
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UNITED STATES BANKRUPTCY COURT
FOR THE DISTRICT OF DELAWARE
In re: Chapter 11
UNITED COMPANIES FINANCIAL Case Nos. 99-450 (MFW) through
CORPORATION, ET AL., 99-461 (MFW)
Debtors. JOINTLY ADMINISTERED
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SUPPLEMENTAL DISCLOSURE STATEMENT FOR THIRD AMENDED
PLAN OF REORGANIZATION FOR DEBTORS PURSUANT TO
CHAPTER 11 OF THE UNITED STATES BANKRUPTCY CODE
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WEIL, GOTSHAL & MANGES LLP RICHARDS, LAYTON & FINGER, P.A.
Attorneys for Debtors and Attorneys for Debtors and
Debtors in Possession Debtors in Possession
767 Fifth Avenue One Rodney Square
New York, New York 10153 P.O. Box 551
(212) 310-8000 Wilmington, Delaware 19899
(302) 658-6541
NY2:\952970\01\KFB#01!.DOC\78473.0003
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A. INTRODUCTION
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PURSUANT TO AN AGREEMENT BETWEEN, AMONG OTHER PARTIES, UNITED
COMPANIES FINANCIAL CORPORATION ("UNITED COMPANIES") AND CERTAIN OF ITS DIRECT
AND INDIRECT SUBSIDIARIES, AS DEBTORS AND DEBTORS IN POSSESSION (COLLECTIVELY,
THE "DEBTORS"), AND THE OFFICIAL COMMITTEE OF EQUITY SECURITY HOLDERS (THE
"EQUITY COMMITTEE"), (A) THE DEBTORS AGREED TO MODIFY THE SECOND AMENDED PLAN OF
REORGANIZATION FOR DEBTORS PURSUANT TO CHAPTER 11 OF THE UNITED STATES
BANKRUPTCY CODE, DATED JULY 7, 2000 (THE "PLAN"), A COPY OF WHICH IS ANNEXED AS
EXHIBIT "A" TO THE DISCLOSURE STATEMENT FOR SECOND AMENDED PLAN OF
REORGANIZATION FOR DEBTORS PURSUANT TO CHAPTER 11 OF THE UNITED STATES
BANKRUPTCY CODE, DATED JULY 7, 2000 (THE "DISCLOSURE STATEMENT"), THAT WAS
MAILED TO ALL CREDITORS AND HOLDERS OF EQUITY INTERESTS ENTITLED TO VOTE ON OR
ABOUT JULY 14, 2000, TO PROVIDE FOR ENHANCED TREATMENT FOR HOLDERS OF EQUITY
INTERESTS AND SUBORDINATED DEBENTURE CLAIMS AND (B) THE EQUITY COMMITTEE AGREED
TO WITHDRAW ITS PROPOSED SECOND AMENDED PLAN OF REORGANIZATION, DATED JULY 10,
2000 (THE "EQUITY COMMITTEE PLAN").
AS A RESULT, THE EQUITY COMMITTEE SUPPORTS CONFIRMATION OF THE
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AMENDED PLAN, AS DEFINED BELOW, AND URGES ALL HOLDERS OF EQUITY INTERESTS TO
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VOTE TO ACCEPT THE AMENDED PLAN.
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The Debtors submit this Supplemental Disclosure Statement,
dated August 10, 2000, in connection with the solicitation of acceptances for
the Third Amended Plan of Reorganization for Debtors Pursuant to Chapter 11 of
the United States Bankruptcy Code, dated August 10, 2000 (the "Amended Plan"). A
Modification of the Amended Plan of Reorganization for Debtors Pursuant to
Chapter 11 of the United States Bankruptcy Code, dated August 10, 2000 (the
"Modification"), a copy of which is annexed hereto as Exhibit "1", sets forth
the modifications to the Plan. Unless otherwise defined herein, capitalized
terms used herein shall have the same meanings ascribed to them in the Amended
Plan, the Modification or the Disclosure Statement. By order, dated August 15,
2000 (the "Supplemental Disclosure Order"), a copy of which is annexed hereto as
Exhibit "2", the Supplemental Disclosure Statement was approved by the
Bankruptcy Court in accordance with section 1125 of the Bankruptcy Code. The
Confirmation Hearing scheduled for August 15 and 16, 2000 at 9:30 a.m. has been
adjourned to September 13, 2000 at 11:30 a.m. so as to provide creditors and
holders of Equity Interests an opportunity to consider the Modification and the
Amended Plan. This Supplemental Disclosure Statement is intended to (i) advise
all Creditors and holders of Equity Interests of the substance and purpose of
the amendments to the Plan and (ii) to inform all Creditors and holders of
Equity Interests in Class 3 (Bank Claims), Class 4 (Senior Note Claims), Class 5
(General Unsecured Claims), Class 6 (Convenience Claims) Class 7 (Subordinated
Debenture Claims), Class 8 (Subordinated Penalty Claims), Class 9 (Pride Equity
Interests), and Class 10 (Statutorily Subordinated Claims and United Companies
Common Equity Interests) who voted either to accept or reject the Plan of their
opportunity to change such votes or, if such Creditors and holders of Equity
Interests did not previously vote on the Plan, to inform them of their
opportunity to vote to accept or reject the Amended Plan. THIS SUPPLEMENTAL
DISCLOSURE STATEMENT SHOULD BE READ IN ITS ENTIRETY, INCLUDING, WITHOUT
LIMITATION, EXHIBIT "3" HERETO (SCHEDULE OF ESTIMATED RECOVERIES UNDER THE
AMENDED PLAN) AND IN CONJUNCTION WITH THE MODIFICATION, THE PLAN AND THE
DISCLOSURE STATEMENT PREVIOUSLY MAILED TO YOU.
The statements contained in this Supplemental Disclosure
Statement and the exhibits hereto are made as of the date hereof unless
otherwise specified herein, and the delivery of this Supplemental Disclosure
Statement does not imply that there has been no change in the information set
forth herein since such date. This Supplemental Disclosure Statement has been
prepared by the Debtors in consultation with the Creditors' Committee and the
Equity Committee. Except to the extent described herein, the information set
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forth in the Disclosure Statement remains accurate as of the date of the
Disclosure Statement, including the financial projections, valuations and
liquidation analysis. HOLDERS OF CLAIMS AND EQUITY INTERESTS ENTITLED TO VOTE
(CLASS 3 (BANK CLAIMS), CLASS 4 (SENIOR NOTE CLAIMS), CLASS 5 (GENERAL UNSECURED
CLAIMS), CLASS 6 (CONVENIENCE CLAIMS), CLASS 7 (SUBORDINATED DEBENTURE CLAIMS),
CLASS 8 (SUBORDINATED PENALTY CLAIMS), CLASS 9 (PRIDE EQUITY INTERESTS), AND
CLASS 10 (STATUTORILY SUBORDINATED CLAIMS AND UNITED COMPANIES EQUITY
INTERESTS)) SHOULD READ THIS SUPPLEMENTAL DISCLOSURE STATEMENT CAREFULLY, IN ITS
ENTIRETY AND, WHERE POSSIBLE, CONSULT WITH COUNSEL, PRIOR TO CHANGING ANY VOTE
PREVIOUSLY CAST IN RESPECT OF THE PLAN OR VOTING ON THE AMENDED PLAN FOR THE
FIRST TIME.
B. DESCRIPTION OF AMENDMENTS TO THE PLAN
-------------------------------------
The Debtors filed the Plan and the Equity Committee filed the
Equity Committee Plan on July 7, 2000 and July 10, 2000, respectively.
Thereafter, solicitation commenced with respect to the Plan and the Equity
Committee Plan. As noted above, the Equity Committee and the Debtors
subsequently reached a resolution of the issues which led the Debtors and the
Equity Committee to file alternative plans of reorganization. Pursuant to such
resolution, the Equity Committee has withdrawn the Equity Committee Plan and
agreed to the changes in the Debtors' Plan pursuant to the Modification.
Additionally, the Equity Committee and Credit Suisse First Boston Management
Corporation ("CSFB"), holder of approximately fifty percent (50%) of the
Subordinated Debenture Claims, agreed to withdraw their objections to the
Debtors' proposed sale of assets pursuant to the Residual Purchase Agreement and
the Whole Loan Agreement or, as the case may be, pursuant to an Alternative
Residual Sale Transaction.
The following are the salient amendments to the Plan as set
forth in the Modification:
o Subordinated Debt (Class 7). On the Effective Date, each holder of an
Allowed Subordinated Debenture Claim (Class 7) shall be entitled to
receive such holder's Pro Rata Share of (a) Two Million Five Hundred
Thousand Dollars ($2,500,000.00) and (b) three million (3,000,000)
Litigation Trust Interests. This distribution has increased from each
holder's Pro Rata Share of two million (2,000,000) Litigation Trust
Interests. In addition, on the Effective Date, the Debtors shall pay
directly to such holders of Allowed Subordinated Debenture Claims
arising under the Subordinated Debentures which have incurred fees and
expenses in connection with the negotiation and preparation of the
Amended Plan, an amount equal to the fees and expenses incurred by such
holders of Allowed Subordinated Debenture Claims during the period from
the Petition Date up to and including August 10, 2000 up to the
aggregate amount of One Hundred Twenty-Five Thousand Dollars
($125,000.00). See Modification atP.P. 13, 15; Amended Plan at Sections
11.2 and 11.6.
o Equity Interests and Statutorily Subordinated Claims (Classes 9, 10A
and 10B). The distribution of Litigation Trust Interests for each
holder of Allowed Pride Equity Interests (Class 9), Allowed Statutorily
Subordinated Claims (Class 10A) and Allowed United Companies Common
Equity Interests (Class 10B) has increased from each holder's Pro Rata
Share of one million (1,000,000) Litigation Trust Interests to each
holder's Pro Rata Share of three million (3,000,000) Litigation Trust
Interests. See Modification at P. P. 20, 21; Amended Plan at Sections
14.2 and 14.3.
o Bank Claims, Senior Note Claims and General Unsecured Claims (Classes
3, 4 and 5). The aggregate number of Litigation Trust Interests for
each holder of Allowed Bank Claims (Class 3), Allowed Senior Note
Claims (Class 4), and Allowed General Unsecured Claims (Class 5) has
decreased from seven million (7,000,000) Litigation Trust Interests to
four million (4,000,000) Litigation Trust Interests. The allocation of
such Litigation Trust Interests among such Creditors remains unchanged,
See Modification at P. P. 3, 4, 9; Amended Plan at Sections 1.18, 1.19
and 1.123.
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o Contribution of Intercompany Claims. On the Effective Date, all
Intercompany Claims shall be contributed to capital. See Modification
atP. 12; Amended Plan at Section 2.3.
o The Litigation Trust.
o Litigation Trustee and Litigation Trust Board. The Litigation
Trustee will be unanimously appointed by the Litigation Trust
Board to administer the Litigation Trust in accordance with
the terms and provisions of Article XXVII of the Amended Plan
and the Litigation Trust Agreement. The Litigation Trust Board
shall be a group of up to three Persons appointed prior to the
Effective Date by the Bankruptcy Court, one of whom shall be
nominated by each of the Creditors' Committee, the
Subordinated Indenture Trustee and the Equity Committee. All
major decisions, including the retention of professionals and
the settlement, abandonment, and management of actions will
require unanimous agreement of the Litigation Trust Board.
o Funding Expenses of the Litigation Trust. In accordance with
the Litigation Trust Agreement and any agreements entered into
in connection therewith, on the Effective Date, the Debtors
shall transfer One Million Seven Hundred Fifty Thousand
Dollars ($1,750,000.00) to the Litigation Trust. This funding
has increased from the initial allotment of One Hundred
Thousand Dollars ($100,000.00).
o Annual Distributions. Except as provided in Section 27.8(b) of
the Amended Plan, the Litigation Trustee shall distribute at
least annually to the holders of Litigation Trust Interests
all net cash income plus all net cash proceeds from the
liquidation of assets (including as Cash for this purpose, all
Cash Equivalents); provided, however, that the Litigation
Trustee shall not be obligated to make any such distributions
unless the aggregate amount of any such distributions is equal
to or greater than One Million Dollars ($1,000,000.00); and,
provided, further, that the Litigation Trust may retain such
amounts (i) as are reasonably necessary to meet contingent
liabilities and to maintain the value of the assets of the
Litigation Trust during liquidation, (ii) to pay reasonable
administrative expenses (including any taxes imposed on the
Litigation Trust or in respect of the assets of the Litigation
Trust or the escrow created in accordance with Section 27.14
of the Amended Plan), and (iii) to satisfy other liabilities
incurred or assumed by the Litigation Trust (or to which the
assets are otherwise subject) in accordance with the Amended
Plan or the Litigation Trust Agreement.
o Allocation of Distributions. Distributions of net cash income
of the Litigation Trust proceeds and all other net Litigation
Trust proceeds shall be made in the following order of
priority and amount: First, an aggregate amount of Ten Million
Dollars ($10,000,000.00) to holders of Allowed Bank Claims,
Allowed Senior Note Claims and Allowed General Unsecured
Claims in accordance with their respective share of Litigation
Trust Interests; and second, to each holder of Litigation
Trust Interests in accordance with such holder's Pro Rata
Share thereof.
See Modification at P. P. 5, 6, 16, 24, 25; Amended Plan at Sections 1.83, 1.85,
27.3, 27.8 and 27.8(b).
o Limited Release of Directors, Officers and Employees. As of the
Effective Date, the Debtors shall be deemed to have waived and released
their present and former directors, officers, employees, consultants
and agents who were directors, officers, employees, consultants or
agents, respectively, at any time, from any and all claims of the
Debtors, including, without limitation, claims which the Debtors or
Debtors in Possession otherwise has legal power to assert, compromise
or settle in connection with the Chapter 11 Cases, arising on or prior
to the Effective Date. This section has been modified to delete the
time restriction of the limited release. See Modification at P. 28;
Amended Plan at Section 42.5.
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On August __, 2000, the Debtors filed with the Securities and
Exchange Commission a Form 8k and attached financial statements for the year
ending December 1999. Such documents are available on the Debtors' website,
http://www.ucfc.com.
This Supplemental Disclosure Statement summarizes the terms of
the Amended Plan, which summary is qualified in its entirety by reference to the
full text of the Amended Plan, and if any inconsistency exists between the terms
and provisions of the Amended Plan and this Supplemental Disclosure Statement,
the terms and the provisions of the Amended Plan are controlling. If you wish a
copy of the Amended Plan, please call Ms. Denise Sciabarassi, Weil, Gotshal &
Manges LLP, at (212) 310-8000.
THE PROPONENTS, CSFB AND THE EQUITY COMMITTEE BELIEVE THAT
PROMPT CONFIRMATION AND IMPLEMENTATION OF THE AMENDED PLAN IS IN THE BEST
INTERESTS OF THE DEBTORS, ALL CREDITORS AND HOLDERS OF EQUITY INTEREST AND THE
DEBTORS' CHAPTER 11 ESTATES. MOREOVER, THE PROPONENTS BELIEVE THAT, UPON
CONSUMMATION OF THE AMENDED PLAN, REORGANIZED UC WILL BE ABLE TO PROVIDE A
SUBSTANTIAL RETURN ON CREDITORS' CLAIMS.
C. RE-SOLICITATION OF VOTES
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Accompanying this Supplemental Disclosure Statement is a
ballot for either (i) changing your vote(s) on the Plan or (ii) casting your
vote(s) on the Amended Plan if you did not previously vote on the Plan, together
with a pre-addressed envelope for the return of the ballot. AS DISCUSSED FULLY
IN THE DISCLOSURE STATEMENT, BALLOTS FOR ACCEPTANCE OR REJECTION OF THE AMENDED
PLAN ARE BEING PROVIDED ONLY TO HOLDERS OF CLAIMS AND EQUITY INTERESTS IN CLASS
3 (BANK CLAIMS), CLASS 4 (SENIOR NOTE CLAIMS), CLASS 5 (GENERAL UNSECURED
CLAIMS), CLASS 6 (CONVENIENCE CLAIMS), CLASS 7 (SUBORDINATED DEBENTURE CLAIMS),
CLASS 8 (SUBORDINATED PENALTY CLAIMS), CLASS 9 (PRIDE EQUITY INTERESTS), AND
CLASS 10 (STATUTORILY SUBORDINATED CLAIMS AND UNITED COMPANIES COMMON EQUITY
INTERESTS), BECAUSE THEY ARE THE ONLY HOLDERS OF CLAIMS AND EQUITY INTERESTS
THAT MAY VOTE TO ACCEPT OR REJECT THE AMENDED PLAN.
ONLY THOSE CREDITORS AND EQUITY INTERESTS IN CLASS 3 (BANK
CLAIMS), CLASS 4 (SENIOR NOTE CLAIMS), CLASS 5 (GENERAL UNSECURED CLAIMS), CLASS
6 (CONVENIENCE CLAIMS), CLASS 7 (SUBORDINATED DEBENTURE CLAIMS), CLASS 8
(SUBORDINATED PENALTY CLAIMS), CLASS 9 (PRIDE EQUITY INTERESTS), AND CLASS 10
(STATUTORILY SUBORDINATED CLAIMS AND UNITED COMPANIES COMMON EQUITY INTERESTS)
WHO WISH TO CHANGE THEIR PRIOR VOTES ON THE PLAN OR WHO WISH TO VOTE FOR THE
FIRST TIME, NEED TO VOTE USING THE ENCLOSED BALLOT. PURSUANT TO THE SUPPLEMENTAL
DISCLOSURE ORDER, ALL VOTES CAST TO EITHER ACCEPT OR REJECT THE ORIGINAL PLAN
WILL BE DEEMED TO BE VOTES CAST TO EITHER ACCEPT OR REJECT THE AMENDED PLAN,
UNLESS A NEW BALLOT CHANGING THE VOTE IS TIMELY RETURNED TO THE UNITED
COMPANIES, INC. BALLOTING AGENT IN ACCORDANCE WITH THE INSTRUCTIONS SET FORTH
BELOW AND ON THE BALLOTS. A TIMELY RECEIVED NEW BALLOT WILL SUPERSEDE ANY
PREVIOUSLY RECEIVED BALLOTS.
After carefully reviewing this Supplemental Disclosure
Statement, if you decide to change your previously cast vote in respect of the
Plan or to vote for the first time in respect of the Amended Plan, please
indicate your vote and, where relevant, your election of distribution, on the
enclosed Ballot and return it in the envelope provided. Voting procedures and
requirements are explained in greater detail on the Ballot and the instructions
of the reverse side of the Ballot. Please be sure to return the Ballot to the
party indicated on the Ballot and in the envelope provided. If the Ballot and
envelope you receive instruct you to return your Ballot to your bank or broker,
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please do so. If the Ballot and envelope you receive instruct you to return your
Ballot to United Companies Balloting Agent, please send the Ballot in the
envelope provided to:
United Companies Balloting Agent
c/o Logan & Company, Inc.
546 Valley Road
Upper Montclair, New Jersey 07043
IN ORDER TO BE COUNTED, BALLOTS MUST BE RECEIVED BY 5:00 P.M. (EASTERN STANDARD
TIME) ON SEPTEMBER 11, 2000. ANY EXECUTED BALLOTS WHICH ARE TIMELY RECEIVED BUT
WHICH DO NOT INDICATE EITHER AN ACCEPTANCE OR REJECTION OF THE AMENDED PLAN
SHALL BE DEEMED TO CONSTITUTE AN ACCEPTANCE OF THE AMENDED PLAN. IF YOU MUST
RETURN YOUR BALLOT TO YOUR BANK OR BROKER, OR THE AGENT OF EITHER, YOU MUST
RETURN YOUR BALLOT TO THEM IN SUFFICIENT TIME FOR THEM TO PROCESS IT AND RETURN
IT TO UNITED COMPANIES PLAN BALLOTING AGENT BY THE VOTING DEADLINE. IF YOU ARE
THE HOLDER OF A CLAIM OR EQUITY INTEREST IN CLASS 3 (BANK CLAIMS), CLASS 4
(SENIOR NOTE CLAIMS), CLASS 5 (GENERAL UNSECURED CLAIMS), CLASS 6 (CONVENIENCE
CLAIMS), CLASS 7 (SUBORDINATED DEBENTURE CLAIMS), CLASS 8 (SUBORDINATED PENALTY
CLAIMS), CLASS 9 (PRIDE EQUITY INTERESTS), AND CLASS 10 (STATUTORILY
SUBORDINATED CLAIMS AND UNITED COMPANIES COMMON EQUITY INTERESTS) AND HAVE ANY
QUESTIONS CONCERNING VOTING PROCEDURES, OR DID NOT RECEIVE A BALLOT, RECEIVED A
DAMAGED OR ILLEGIBLE BALLOT, OR LOST YOUR BALLOT; OR IF YOU ARE A PARTY IN
INTEREST AND HAVE ANY QUESTIONS CONCERNING THE SUPPLEMENTAL DISCLOSURE
STATEMENT, THE AMENDED PLAN OR THE VOTING PROCEDURES IN RESPECT THEREOF, PLEASE
CONTACT THE INFORMATION AGENT AT 1-888-559-9367.
Additional copies of this Supplemental Disclosure Statement
are available upon written request to:
Weil, Gotshal & Manges LLP
767 Fifth Avenue
New York, New York 10153
Attention: Ms. Denise Sciabarassi
APPROVAL OF THIS SUPPLEMENTAL DISCLOSURE STATEMENT DOES NOT,
HOWEVER, CONSTITUTE A DETERMINATION BY THE BANKRUPTCY COURT AS TO THE FAIRNESS
OR MERITS OF THE AMENDED PLAN. No solicitation of votes may be made except
pursuant to the Supplemental Disclosure Statement, the Disclosure Statement and
section 1125 of the Bankruptcy Code. In the event any Creditor wishes to change
its vote or vote for the first time on the Amended Plan, such Creditor should
not rely on any information relating to the Debtors and their businesses, other
than that contained in this Supplemental Disclosure Statement, the Disclosure
Statement, the Amended Plan and all exhibits thereto, and the Modification.
D. CONFIRMATION HEARING
--------------------
Section 1128(a) of the Bankruptcy Code requires the Bankruptcy
Court, after notice, to hold a hearing on confirmation of a plan. By order of
the Bankruptcy Court, the Confirmation Hearing scheduled for August 15 and 16,
2000 at 9:30 a.m. has been adjourned to September 13, 2000, at 11:30 a.m., New
York City Time, in the United States Bankruptcy Court, Sixth Floor, Courtroom of
Bankruptcy Judge Mary F. Walrath, 824 North Market Street, Wilmington, Delaware
19801. The Confirmation Hearing may be adjourned from time to time by the
Bankruptcy Court without further notice except for an announcement made at the
Confirmation Hearing or any adjournment thereof.
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Section 1128(b) of the Bankruptcy Code provides that any party
in interest may object to confirmation of a plan. Any objection to confirmation
of the Amended Plan must be in writing, conform to the Federal Rules of
Bankruptcy Procedure and the Local Rules of the Bankruptcy Court, set forth the
name of the objectant, the nature and amount of Claims or Equity Interests held
or asserted by the objectant against each of the Debtors' estates or property,
the basis for the objection and the specific grounds therefor, and be filed with
the Bankruptcy Court, with two (2) copies delivered to chambers, together with
proof of service thereof, and served upon (i) Weil, Gotshal & Manges LLP,
Attorneys for the Debtors, 767 Fifth Avenue, New York, New York 10153,
Attention: Brian S. Rosen, Esq.; (ii) Richards, Layton & Finger, P.A., Attorneys
for the Debtors, One Rodney Square, P. O. Box 551, Wilmington, DE 19899,
Attention: Mark Collins, Esq.; (iii) Wachtell, Lipton, Rosen & Katz, Attorneys
for the Official Committee of Unsecured Creditors, 51 West 52nd Street, New
York, New York 10019, Attention: Chaim J. Fortgang, Esq.; (iv) Morris, Nichols,
Arsht & Tunnell, Attorneys for the Official Committee of Unsecured Creditors,
1201 North Market Street, P.O. Box 1347, Wilmington, DE 19899-1347, Attention:
William H. Sudell, Jr., Esq.; (v) Covington & Burling, Attorneys for the Banks,
1330 Avenue of the Americas, New York, New York, 10019, Attention: Michael
Hopkins, Esq. (vi) Long, Aldridge & Norman LLP, Attorneys for the Official
Committee of Equity Security Holders, One Peachtree Center, Suite 5300, 303
Peachtree Street, Atlanta, Georgia 30308, Attention: Charles E. Campbell; (vii)
Saul, Ewing, Pernick & Saul LLP, Attorneys for the Official Committee of Equity
Security Holders, 222 Delaware Avenue, Wilmington, DE 19899-1266, Attention:
Norman L. Pernick, Esq. and (viii) The United States Trustee for the District of
Delaware, Curtis Center, Suite 950W, 601 Walnut Street, Philadelphia,
Pennsylvania, 19106, Attention: Daniel K. Astin, Esq., so as to be received no
later than 4:00 P.M., New York City Time, on September 6, 2000.
Objections to confirmation of the Amended Plan are governed by
Federal Rule of Bankruptcy Procedure 9014. UNLESS AN OBJECTION TO CONFIRMATION
IS TIMELY SERVED AND FILED, IT MAY NOT BE CONSIDERED BY THE BANKRUPTCY COURT.
CONCLUSION
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The Debtors believe that the Amended Plan is in the best
interests of all Creditors and holders of Equity Interests and urge the holders
of impaired Claims and Equity Interests in Classes 3, 4, 5, 6, 7, 8, 9 and 10 to
the extent such holders have not previously voted to accept of the Plan, to vote
to accept the Amended Plan and to evidence such acceptance by returning their
ballots so that they will be actually received on or before 5:00 p.m., Eastern
Standard Time, on September 11, 2000.
Dated: New York, New York
August 10, 2000
Respectfully submitted,
UNITED COMPANIES FINANCIAL CORPORATION
By: /s/ Lawrence J. Ramaekers
---------------------------------------
Name: Lawrence J. Ramaekers
Title: Chief Executive Officer
PELICAN MORTGAGE FINANCIAL CORPORATION
By: /s/ Lawrence J. Ramaekers
---------------------------------------
Name: Lawrence J. Ramaekers
Title: Chief Executive Officer
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UNITED COMPANIES LENDING GROUP, INC.
By: /s/ Lawrence J. Ramaekers
---------------------------------------
Name: Lawrence J. Ramaekers
Title: Chief Executive Officer
UNITED COMPANIES LENDING CORPORATION
By: /s/ Lawrence J. Ramaekers
---------------------------------------
Name: Lawrence J. Ramaekers
Title: Chief Executive Officer
ADOBE, INC.
By: /s/ Lawrence J. Ramaekers
---------------------------------------
Name: Lawrence J. Ramaekers
Title: Chief Executive Officer
ADOBE FINANCIAL, INC.
By: /s/ Lawrence J. Ramaekers
---------------------------------------
Name: Lawrence J. Ramaekers
Title: Chief Executive Officer
GINGER MAE, INC.
By: /s/ Lawrence J. Ramaekers
---------------------------------------
Name: Lawrence J. Ramaekers
Title: Chief Executive Officer
UNICOR MORTGAGE, INC.
By: /s/ Lawrence J. Ramaekers
---------------------------------------
Name: Lawrence J. Ramaekers
Title: Chief Executive Officer
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SOUTHERN MORTGAGE ACQUISITION, INC.
By: /s/ Lawrence J. Ramaekers
---------------------------------------
Name: Lawrence J. Ramaekers
Title: Chief Executive Officer
UNITED COMPANIES FUNDING, INC.
By: /s/ Lawrence J. Ramaekers
---------------------------------------
Name: Lawrence J. Ramaekers
Title: Chief Executive Officer
GOPHER EQUITY, INC. I
By: /s/ Lawrence J. Ramaekers
---------------------------------------
Name: Lawrence J. Ramaekers
Title: Chief Executive Officer
UNITED CREDIT CARD, INC.
By: /s/ Lawrence J. Ramaekers
---------------------------------------
Name: Lawrence J. Ramaekers
Title: Chief Executive Officer
-------------------------- -------------------------------
BRIAN S. ROSEN MARK D. COLLINS
A Member of the Firm A Member of the Firm
WEIL, GOTSHAL & MANGES LLP RICHARDS, LAYTON & FINGER, P.A.
Attorneys for Debtors and Attorneys for Debtors and
Debtors in Possession Debtors in Possession
767 Fifth Avenue P.O. Box 551
New York, New York 10153 Wilmington, Delaware 19899
(212) 310-8000 (302) 658-6541
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EXHIBIT 1
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UNITED STATES BANKRUPTCY COURT
DISTRICT OF DELAWARE
In re: Chapter 11
Case Nos. 99-450 (MFW) through
UNITED COMPANIES FINANCIAL CORPORATION, 99-461 (MFW)
ET AL., JOINTLY ADMINISTERED
Debtors.
--------------------------------------------
MODIFICATION OF SECOND AMENDED PLAN OF REORGANIZATION
FOR DEBTORS PURSUANT TO CHAPTER 11
OF THE UNITED STATES BANKRUPTCY CODE
WEIL, GOTSHAL & MANGES LLP RICHARDS, LAYTON & FINGER, P.A.
767 Fifth Avenue One Rodney Square
New York, New York 10153 Wilmington, Delaware 19899
Attorneys for Debtors and Attorneys for Debtors and
Debtors in Possession Debtors in Possession
NY2:\956780\01
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United Companies Financial Corporation, Pelican Mortgage Company, Inc.,
United Companies Lending Group, Inc., United Companies Lending Corporation,
Adobe, Inc., Adobe Financial, Inc. I, Ginger Mae, Inc., Unicor Mortgage, Inc.,
Southern Mortgage Acquisition, Inc., United Companies Funding, Inc., Gopher
Equity, Inc. I, and United Credit Card, Inc. hereby modify and amend the Second
Amended Plan of Reorganization for Debtors Pursuant to Chapter 11 of the United
States Bankruptcy Code, dated July 7, 2000 (the "Plan")1, as follows:
1. Section 1.18 of the Plan, entitled "Allowed Senior Claim", shall be
amended by inserting "Note" in the heading thereof following the word "Senior"
contained therein.
2. Section 1.49 of the Plan, entitled "Creditor Cash", shall be amended
by inserting ", Subordinated Debenture Claims" after the words "Convenience
Claims" in clause (i) thereof.
3. Section 1.67 of the Plan, entitled "General Unsecured Claim" shall
be amended by inserting "a Subordinated Penalty Claim" after the words "a
Subordinated Debenture Claim,".
4. Section 1.68 of the Plan, entitled "General Unsecured Interest
Amount", shall be amended by (a) deleting "seven million (7,000,000)" in the
second line of such Section and (b) inserting "four million (4,000,000)" in lieu
thereof.
5. Section 1.83 of the Plan, entitled "Litigation Trustee", shall be
amended by (a) deleting "to be" in the first line of such Section and (b)
inserting "unanimously" in lieu thereof.
6. Section 1.85 of the Plan, entitled "Litigation Trust Board", shall
be amended by (a) deleting "upon nomination by the Creditors' Committee" in the
second line of such Section and (b) inserting "one of whom shall be nominated by
each of the Creditors' Committee, the Subordinated Indenture Trustee and the
Equity Committee, respectively," in lieu thereof.
7. Section 1.95 of the Plan, entitled "Plan", shall be amended by
deleting "Second" in the first line of such Section and inserting "Third" in
lieu thereof.
8. Section 1.98 of the Plan, entitled "Plan Supplement", shall be
amended by deleting "Borrower Settlement Trust Agreement, " from the second line
of such Section.
9. Section 1.122 of Plan, entitled "Senior Creditor Cash" shall be
amended by (a) deleting "Article IX" in the third line of such Section and (b)
inserting "clause (a) of Section 9.1" in lieu thereof.
10. Section 1.123 of the Plan, entitled "Senior Creditor Interest
Amount", shall be amended by (a) deleting "seven million (7,000,000)" and (b)
inserting "four million (4,000,000)" in lieu thereof.
--------
1 Unless otherwise defined herein, all capitalized terms used herein shall have
the meanings ascribed to them in the Plan.
<PAGE>
11. Section 1.155 of the Plan, entitled "Unsecured Claim", shall be
amended by inserting "a Subordinated Penalty Claim" after the words "a
Subordinated Debenture Claim," in the third line of such Section.
12. Section 2.1 of the Plan, entitled "Compromise and Settlement",
shall be amended by (a) inserting ", the holders of Subordinated Debenture
Claims" after the words "Senior Note Claims" in the third line of such Section
and (b) (i) deleting "cancellation" in the eighth line of such Section and (ii)
inserting "contribution" in lieu thereof.
13. Section 2.3 of the Plan, entitled "Cancellation of Intercompany
Claims", shall be amended by (a) deleting such Section in its entirety and (b)
inserting the following in lieu thereof:
"Contribution of Intercompany Claims: On the Effective Date,
all Intercompany Claims shall be contributed to capital."
14. Section 11.2 of the Plan, entitled "Treatment of Allowed
Subordinated Debenture Claims", shall be amended by (a) deleting the words "and
provided acceptance of the Plan by Classes 3, 4 and 7 of the Plan in accordance
with the provisions of section 1126 of the Bankruptcy Code," and (b)(1) deleting
"two million (2,000,000)" in the fourth line of such Section and (2) inserting
"(a) Two Million Five Hundred Thousand Dollars ($2,500,000.00) and (b) three
million (3,000,000)" in lieu thereof.
15. Section 11.3 of the Plan, entitled "No Distribution", shall be
deleted in its entirety and Sections 11.4 through 11.6 of the Plan shall be
renumbered as Sections 11.3 through 11.5 inclusive.
16. A new Section 11.6, entitled "Payment of Certain Fees and
Expenses", shall be added to the Plan, which Section shall read as follows:
"Payment of Certain Fees and Expenses: On the
Effective Date, the Debtors shall pay directly to such holders
of Allowed Subordinated Debenture Claims arising under the
Subordinated Debentures which have incurred fees and expenses
in connection with the negotiation and preparation of the
Plan, an amount equal to the fees and expenses incurred by
such holders of Allowed Subordinated Debenture Claims during
the period from the Petition Date up to and including August
10, 2000 up to the aggregate amount of One Hundred Twenty-Five
Thousand Dollars ($125,000.00)."
17. Section 12.1 of the Plan, entitled "Treatment of Subordinated
Penalty Claims", shall be amended by (a) deleting "11.4" in the fourth line of
such Section and (b) inserting "11.3" in lieu thereof.
18. Section 12.2 of the Plan, entitled "Contingent
Distribution/Limitation on Recovery", shall be amended by (a) deleting "11.4" in
the third line of such Section and (b) inserting "11.3" in lieu thereof.
19. Section 13.2 of the Plan, entitled "Treatment of Pride Equity
Interests", shall be amended by deleting the words "and provided acceptance of
the Plan by Classes 3, 4, 5, 6, 7, 8, 9 and 10 in accordance with the provisions
of section 1126 of the Bankruptcy Code,".
2
<PAGE>
20. Section 13.3 of the Plan, entitled "No Distribution", shall be
deleted in its entirety.
21. Section 14.2 of the Plan, entitled "Treatment of Statutorily
Subordinated Claims", shall be amended by (a) deleting the words "and provided
acceptance of the Plan by Classes 3, 4, 5, 6, 7, 8, 9 and 10 of the Plan in
accordance with the provisions of section 1126 of the Bankruptcy Code," and (b)
(1) deleting "one million (1,000,000)" in the fourth line of such Section and
(2) inserting "three million (3,000,000)" in lieu thereof.
22. Section 14.3 of the Plan, entitled "Treatment of United Companies
Common Equity Interests", shall be amended by (a) deleting the words "and
subject to acceptance of the Plan by Classes 3, 4, 5, 6, 7, 8, 9 and 10 of the
Plan in accordance with the provisions of section 1126 of the Bankruptcy Code
and (b) (1) deleting "one million (1,000,000)" in the fourth line of such
Section and (2) inserting "three million (3,000,000)" in lieu thereof.
23. Section 14.4 of the Plan, entitled "No Distribution", shall be
deleted in its entirety and Section 14.5 of the Plan shall be renumbered as
Section 14.4.
24. Section 14.4 of the Plan, as renumbered and entitled "Contingent
Distribution/Limitation on Recovery", shall be amended by (a) deleting "11.4" in
the third line of such Section and (b) inserting "11.3" in lieu thereof.
25. Section 27.3 of the Plan, entitled "Funding Expenses of the
Litigation Trust", shall be amended by (a) deleting "One Hundred Thousand
Dollars ($100,000.00)" in the third line of such Section and (b) inserting "One
Million Seven Hundred Fifty Thousand Dollars ($1,750,000.00)" in lieu thereof.
26. Section 27.8 of the Plan, entitled "Annual Distribution;
Withholding", shall be amended as follows:
(a) By (i) deleting "The" in the first line of such Section
and (ii) inserting "(a) Annual Distributions: Except as provided in Section
27.8(b) hereof, the" in lieu thereof.
(b) By inserting the following after the words "provided,
however," in the third line of such Section:
"that the Litigation Trustee shall not be obligated
to make any such distributions unless the aggregate amount of
any such distributions is equal to or greater than One Million
Dollars ($1,000,000.00); and, provided, further,"
(c) By inserting a new Section 27.8(b), entitled "Allocation
of Distributions", which Section shall read as follows:
"Allocation of Distributions: Distributions of net
cash income of the Litigation Trust and all other net
Litigation Trust proceeds shall be made in the following order
of priority and amount:
(i) First, an aggregate amount of Ten
Million Dollars ($10,000,000.00) to holders of
Allowed Bank Claims, Allowed Senior Note Claims and
Allowed General Unsecured Claims in accordance with
their respective share of Litigation Trust Interests;
and
3
<PAGE>
(ii) Second, to each holder of a Litigation
Trust Interest in accordance with such holder's Pro
Rata Share thereof."
27. Section 32.1 of the Plan shall be amended by deleting subsections
(a) and (b) thereof in their entirety and by inserting the following in lieu
thereof:
"(a) Initial Payments: On or as soon as practicable
after the Effective Date, the Disbursing Agent shall
distribute, or cause to be distributed, to the Plan
Administrator on behalf of holders of Disputed
Claims, and to each holder of (i) an Allowed Bank
Claim, (ii) an Allowed Senior Note Claim, (iii) an
Allowed General Unsecured Claim and (iv) an Allowed
Subordinated Debenture Claim, such Creditor's share,
if any, of Creditor Cash as determined pursuant to
Articles VII, VIII, IX and XI hereof, respectively.
"(b) Quarterly Payments: On the first (1st) Business
Day that is after the close of one full calendar
quarter following the date of the initial Effective
Date distributions, and, thereafter, on each first
(1st) Business Day following the close of calendar
quarters, the Disbursing Agent shall distribute, or
cause to be distributed, to the Plan Administrator on
behalf of holders of Disputed Claims, and to each
holder of (i) an Allowed Bank Claim, (ii) an Allowed
Senior Note Claim, (iii) an Allowed General Unsecured
Claim and (iv) an Allowed Subordinated Debenture
Claim, an amount equal to such Creditor's share, if
any, of Creditor Cash as determined pursuant to
Articles VII, VIII, IX and XI hereof, until such time
as there are not longer any potential Creditor Cash."
28. Section 42.3 of the Plan, entitled "Injunction", shall be amended
by (a) deleting the six (6) references to "purchase thereunder" contained
therein and (b) inserting "purchaser thereunder" in lieu thereof.
29. Section 42.5 of the Plan, entitled "Limited Release of Directors,
Officers and Employees", shall be amended by (a) deleting the words "during the
Chapter 11 Cases and on or before the Petition Date" in the fourth line of such
Section and (b) inserting "; and, provided, further, that the foregoing is not
intended, nor shall it be construed to release any of the Debtors' claims that
may exist against Deloitte & Touche" prior to the period at the conclusion of
such Section.
30. Section 42.6 of the Plan, entitled "Exculpation", shall be amended
by inserting "the Equity Committee, Credit Suisse First Boston Management
Corporation," after the words "the Creditors' Committee," in the first line of
such Section.
31. Section 42.14 of the Plan, entitled "Notices", shall be amended by
(a) deleting "4041 Essen Lane" contained therein and (b) inserting "8549 United
Plaza Boulevard" in lieu thereof.
4
<PAGE>
32. Except as expressly set forth herein, the provisions of the Plan
shall remain in full force and effect in the form filed with the Bankruptcy
Court on or about July 7, 2000.
Dated: Baton Rouge, Louisiana
August 10, 2000
UNITED COMPANIES FINANCIAL CORPORATION
By: /s/ Lawrence J. Ramaekers
-------------------------------------
Name: Lawrence J. Ramaekers
Title: Chief Executive Officer
PELICAN MORTGAGE FINANCIAL CORPORATION
By: /s/ Lawrence J. Ramaekers
-------------------------------------
Name: Lawrence J. Ramaekers
Title: Chief Executive Officer
UNITED COMPANIES LENDING GROUP, INC.
By: /s/ Lawrence J. Ramaekers
-------------------------------------
Name: Lawrence J. Ramaekers
Title: Chief Executive Officer
By: /s/ Lawrence J. Ramaekers
-------------------------------------
Name: Lawrence J. Ramaekers
Title: Chief Executive Officer
UNITED COMPANIES LENDING CORPORATION
By: /s/ Lawrence J. Ramaekers
-------------------------------------
Name: Lawrence J. Ramaekers
Title: Chief Executive Officer
ADOBE, INC.
By: /s/ Lawrence J. Ramaekers
-------------------------------------
Name: Lawrence J. Ramaekers
Title: Chief Executive Officer
5
<PAGE>
ADOBE FINANCIAL, INC. I
By: /s/ Lawrence J. Ramaekers
-------------------------------------
Name: Lawrence J. Ramaekers
Title: Chief Executive Officer
GINGER MAE, INC.
By: /s/ Lawrence J. Ramaekers
-------------------------------------
Name: Lawrence J. Ramaekers
Title: Chief Executive Officer
UNICOR MORTGAGE, INC.
By: /s/ Lawrence J. Ramaekers
-------------------------------------
Name: Lawrence J. Ramaekers
Title: Chief Executive Officer
SOUTHERN MORTGAGE ACQUISITION, INC.
By: /s/ Lawrence J. Ramaekers
-------------------------------------
Name: Lawrence J. Ramaekers
Title: Chief Executive Officer
UNITED COMPANIES FUNDING, INC.
By: /s/ Lawrence J. Ramaekers
-------------------------------------
Name: Lawrence J. Ramaekers
Title: Chief Executive Officer
GOPHER EQUITY, INC. I
By: /s/ Lawrence J. Ramaekers
-------------------------------------
Name: Lawrence J. Ramaekers
Title: Chief Executive Officer
UNITED CREDIT CARD, INC.
By: /s/ Lawrence J. Ramaekers
-------------------------------------
Name: Lawrence J. Ramaekers
Title: Chief Executive Officer
6
<PAGE>
EXHIBIT 2
---------
UNITED STATES BANKRUPTCY COURT
DISTRICT OF DELAWARE
In re: Chapter 11
Case Nos. 99-450 (MFW) through
UNITED COMPANIES FINANCIAL 99-461 (MFW)
CORPORATION, ET AL., JOINTLY ADMINISTERED
Debtors.
---------------------------------------
THIRD AMENDED PLAN OF REORGANIZATION
FOR DEBTORS PURSUANT TO CHAPTER 11
OF THE UNITED STATES BANKRUPTCY CODE
WEIL, GOTSHAL & MANGES LLP RICHARDS, LAYTON & FINGER, P.A.
767 Fifth Avenue One Rodney Square
New York, New York 10153 Wilmington, Delaware 19899
Attorneys for Debtors and Attorneys for Debtors and
Debtors in Possession Debtors in Possession
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ARTICLE I DEFINITIONS................................................................................1
1.1 Administrative Expense Claim...............................................................1
1.2 Adobe Financial............................................................................1
1.3 Adobe Financial Common Equity Interest.....................................................1
1.4 Adobe......................................................................................1
1.5 Adobe Common Equity Interest...............................................................1
1.6 Affiliate..................................................................................1
1.7 Agent......................................................................................1
1.8 Allowed Administrative Expense Claim.......................................................1
1.9 Allowed Claim/Allowed Equity Interest......................................................1
1.10 Allowed Bank Claim.........................................................................2
1.11 Allowed Borrower Litigation Claim..........................................................2
1.12 Allowed Convenience Claim..................................................................2
1.13 Allowed General Unsecured Claim............................................................2
1.14 Allowed Pride Equity Interest..............................................................2
1.15 Allowed Priority Non-Tax Claim.............................................................2
1.16 Allowed Priority Tax Claim.................................................................2
1.17 Allowed Secured Claim......................................................................2
1.18 Allowed Senior Note Claim..................................................................2
1.19 Allowed Statutorily Subordinated Claim.....................................................2
1.20 Allowed Subordinated Debenture Claim.......................................................2
1.21 Allowed Subordinated Penalty Claim.........................................................2
1.22 Alternative Residual Sale Agreement........................................................2
1.23 Alternative Residual Sale Transaction......................................................2
1.24 Ballot.....................................................................................2
1.25 Bank Cash Amount...........................................................................3
1.26 Bank Claims................................................................................3
1.28 Bankruptcy Code............................................................................3
1.29 Bankruptcy Court...........................................................................3
1.30 Bankruptcy Rules...........................................................................3
1.31 Banks......................................................................................3
1.32 Biase Litigation...........................................................................3
1.33 Borrower Litigation Claim..................................................................3
1.34 Business Day...............................................................................3
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1.35 Cash.......................................................................................3
1.36 Cash Equivalents...........................................................................3
1.37 Chapter 11 Cases...........................................................................3
1.38 Claim......................................................................................4
1.39 Class......................................................................................4
1.40 Class Actions..............................................................................4
1.41 Collateral.................................................................................4
1.42 Common Equity Interest.....................................................................4
1.43 Confirmation Date..........................................................................4
1.44 Confirmation Hearing.......................................................................4
1.45 Confirmation Order.........................................................................4
1.46 Convenience Claim..........................................................................4
1.47 Credit Agreement...........................................................................4
1.48 Creditor...................................................................................4
1.49 Creditor Cash..............................................................................4
1.50 Creditors' Committee.......................................................................5
1.51 Debtors....................................................................................5
1.52 Debtors in Possession......................................................................5
1.53 Disbursement Account(s)....................................................................5
1.54 Disbursing Agent...........................................................................5
1.55 Disclosure Statement.......................................................................5
1.56 Disputed Claim; Disputed Equity Interest...................................................5
1.57 Disputed Claim Amount......................................................................5
1.58 Documentation Agent........................................................................5
1.59 Effective Date.............................................................................5
1.60 8.375% Notes...............................................................................5
1.61 Entity.....................................................................................5
1.62 Equity Committee...........................................................................6
1.63 Equity Interest............................................................................6
1.65 ESOP Action................................................................................6
1.66 Final Order................................................................................6
1.67 General Unsecured Claim....................................................................6
1.70 Ginger Mae.................................................................................6
1.71 Ginger Mae Common Equity Interest..........................................................6
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1.72 Gopher Equity..............................................................................6
1.73 Gopher Equity Common Equity Interest.......................................................6
1.74 Guaranty...................................................................................6
1.75 Intercompany Affiliate.....................................................................6
1.76 Intercompany Claims........................................................................6
1.77 IRC........................................................................................7
1.78 IRS........................................................................................7
1.79 Lending Subordinated Debentures............................................................7
1.80 Lending Subordinated Indenture.............................................................7
1.81 Lien.......................................................................................7
1.82 Litigation Trust...........................................................................7
1.83 Litigation Trustee.........................................................................7
1.84 Litigation Trust Agreement.................................................................7
1.85 Litigation Trust Board.....................................................................7
1.86 Litigation Trust Claims....................................................................7
1.87 Litigation Trust Interests.................................................................7
1.88 9.35% Notes................................................................................7
1.89 Net Senior Creditor Cash...................................................................7
1.90 New Organizational Documents...............................................................8
1.91 Pelican....................................................................................8
1.92 Pelican Common Equity Interest.............................................................8
1.93 Person.....................................................................................8
1.94 Petition Date..............................................................................8
1.95 Plan.......................................................................................8
1.96 Plan Administration Agreement..............................................................8
1.97 Plan Administrator.........................................................................8
1.98 Plan Supplement............................................................................8
1.99 Pride Equity Interest......................................................................8
1.100 Pride Prospectus...........................................................................8
1.101 Priority Non-Tax Claim.....................................................................8
1.102 Priority Tax Claim.........................................................................8
1.103 Proponents.................................................................................8
1.104 Pro Rata Share.............................................................................8
1.105 Record Date................................................................................9
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1.106 Remaining Assets...........................................................................9
1.107 Reorganized Designated Subsidiaries........................................................9
1.108 Reorganized Designated Subsidiaries Common Stock...........................................9
1.109 Reorganized Designated Subsidiaries Organizational Documents...............................9
1.110 Reorganized UC.............................................................................9
1.111 Reorganized UC By-laws.....................................................................9
1.112 Reorganized UC Certificate of Incorporation................................................9
1.113 Reorganized UC Common Stock................................................................9
1.114 Reorganized UC Lending.....................................................................9
1.115 Reorganized UC Lending Common Stock.......................................................10
1.116 Reorganized UC Lending Organizational Documents...........................................10
1.117 Reorganized UC Subsidiaries...............................................................10
1.118 Residual Agreement........................................................................10
1.119 Sale Transaction..........................................................................10
1.120 Schedules.................................................................................10
1.121 Secured Claim.............................................................................10
1.122 Senior Creditor Cash......................................................................10
1.125 Senior Indenture..........................................................................10
1.126 Senior Indenture Trustee..................................................................11
1.127 Senior Note Cash Amount...................................................................11
1.128 Senior Note Claim.........................................................................11
1.129 Senior Notes..............................................................................11
1.130 Senior Note Interest Amount...............................................................11
1.131 7.7% Notes................................................................................11
1.132 Southern Mortgage.........................................................................11
1.133 Southern Mortgage Common Equity Interest..................................................11
1.134 Statutorily Subordinated Claim............................................................11
1.136 Subordinated Debenture Claim..............................................................11
1.137 Subordinated Debentures...................................................................11
1.138 Subordinated Indenture....................................................................11
1.139 Subordinated Indenture Trustee............................................................11
1.140 Subordinated Penalty Claim................................................................12
1.141 Total Creditor Cash.......................................................................12
1.142 Transfer Date.............................................................................12
iv
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1.143 Unicor....................................................................................12
1.144 Unicor Common Equity Interest.............................................................12
1.145 United Companies..........................................................................12
1.146 United Companies Common Equity Interest...................................................12
1.147 United Funding............................................................................12
1.148 United Funding Common Equity Interest.....................................................12
1.149 United Lending Corp.:.....................................................................12
1.150 United Lending Corp. Common Equity Interest...............................................12
1.151 United Lending Group......................................................................12
1.152 United Lending Group Common Equity Interest...............................................12
1.153 United Credit Card........................................................................12
1.154 United Credit Card Common Equity Interest.................................................12
1.155 Unsecured Claim...........................................................................12
1.156 Whole Loan Agreement......................................................................13
1.157 Other Definitions.........................................................................13
ARTICLE II COMPROMISE AND SETTLEMENT OF DISPUTES; SUBSTANTIVE CONSOLIDATION OF DEBTORS;
ASSUMPTION OF OBLIGATIONS UNDER THE PLAN..................................................13
2.1 Compromise and Settlement.................................................................13
2.2 Substantive Consolidation.................................................................13
2.3 Contribution of Intercompany Claims.......................................................13
ARTICLE III PROVISIONS FOR PAYMENT OF ADMINISTRATIVE EXPENSE CLAIMS AND PRIORITY TAX CLAIMS...........13
3.1 Administrative Expense Claims.............................................................13
3.2 Professional Compensation and Reimbursement Claims........................................14
3.3 Payment of Priority Tax Claims............................................................14
ARTICLE IV CLASSIFICATION OF CLAIMS AND EQUITY INTERESTS.............................................14
ARTICLE V PROVISION FOR TREATMENT OF PRIORITY NON-TAX CLAIMS (CLASS 1)..............................15
5.1 Payment of Allowed Priority Non-Tax Claims................................................15
5.2 Continuation of Employee Medical Benefits.................................................15
ARTICLE VI PROVISION FOR TREATMENT OF SECURED CLAIMS (CLASS 2).......................................15
6.1 Treatment of Secured Claims...............................................................15
ARTICLE VII PROVISION FOR TREATMENT OF BANK CLAIMS (CLASS 3)..........................................15
7.1 Allowance of Bank Claims..................................................................15
7.2 Treatment of Allowed Bank Claims..........................................................15
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7.3 Payment of Senior Creditor Cash...........................................................16
7.4 Limitation on Recovery....................................................................16
ARTICLE VIII PROVISION FOR TREATMENT OF SENIOR NOTE CLAIMS (CLASS 4)...................................16
8.1 Allowance of Certain Senior Note Claims...................................................16
8.2 Treatment of Allowed Senior Note Claims...................................................16
8.3 Payment of Senior Creditor Cash...........................................................16
8.4 Payments to be Made to Senior Indenture Trustee...........................................16
8.5 Closing of Transfer Ledgers for Senior Notes..............................................17
8.6 Limitation on Recovery....................................................................17
ARTICLE IX PROVISION FOR TREATMENT OF GENERAL UNSECURED CLAIMS (CLASS 5).............................17
9.1 Treatment of General Unsecured Claims.....................................................17
9.2 Optional Arbitration of Borrower Litigation Claims........................................17
9.3 Foreclosure Actions.......................................................................18
9.4 Allowed Claims of One Thousand Dollars or More............................................18
9.5 Limitation on Recovery....................................................................18
ARTICLE X PROVISIONS FOR TREATMENT OF CONVENIENCE CLAIMS (CLASS 6)..................................18
10.1 Treatment of Convenience Claims...........................................................18
ARTICLE XI PROVISION FOR TREATMENT OF SUBORDINATED DEBENTURE CLAIMS (CLASS 7)........................18
11.1 Allowance of Certain Subordinated Debenture Claims........................................18
11.2 Treatment of Allowed Subordinated Debenture Claims........................................18
11.3 Contingent Distribution/Limitation on Recovery............................................19
11.4 Payments to be Made to Subordinated Indenture Trustee.....................................19
11.5 Closing of Transfer Ledgers for Subordinated Debentures...................................19
11.6 Payment of Certain Fees and Expenses......................................................19
ARTICLE XII PROVISION FOR TREATMENT OF SUBORDINATED PENALTY CLAIMS (CLASS 8)..........................20
12.1 Treatment of Subordinated Penalty Claims..................................................20
12.2 Contingent Distribution/Limitation on Recovery............................................20
ARTICLE XIII PROVISION FOR TREATMENT OF PRIDE EQUITY INTERESTS (CLASS 9)...............................20
13.1 Conversion of Pride Equity Interests......................................................20
13.2 Treatment of Pride Equity Interests.......................................................20
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ARTICLE XIV PROVISION FOR TREATMENT OF STATUTORILY SUBORDINATED CLAIMS (CLASS 10A) AND UNITED
COMPANIES COMMON EQUITY INTERESTS (CLASS 10B).............................................20
14.1 Cancellation of Existing Equity Interests.................................................20
14.2 Treatment of Statutorily Subordinated Claims..............................................20
14.3 Treatment of United Companies Common Equity Interests.....................................20
14.4 Contingent Distribution/Limitation on Recovery............................................20
ARTICLE XV PROVISION FOR TREATMENT OF ADOBE COMMON EQUITY INTERESTS (CLASS 11).......................21
15.1 Cancellation of Adobe Common Equity Interest..............................................21
ARTICLE XVI PROVISION FOR TREATMENT OF ADOBE FINANCIAL COMMON EQUITY INTERESTS (CLASS 12)............21
16.1 Cancellation of Adobe Financial Common Equity Interest....................................21
ARTICLE XVII PROVISION FOR TREATMENT OF GINGER MAE COMMON EQUITY INTERESTS (CLASS 13)..................21
17.1 Cancellation of Ginger Mae Common Equity Interests........................................21
ARTICLE XVIII PROVISION FOR TREATMENT OF GOPHER EQUITY COMMON EQUITY INTERESTS (CLASS 14)...............21
18.1 Cancellation of Gopher Equity Common Equity Interests.....................................21
ARTICLE XIX PROVISION FOR TREATMENT OF PELICAN COMMON EQUITY INTERESTS (CLASS 15).....................22
19.1 Cancellation of Pelican Common Equity Interests...........................................22
ARTICLE XX PROVISION FOR TREATMENT OF SOUTHERN MORTGAGE COMMON EQUITY INTERESTS (CLASS 16)...........22
20.1 Cancellation of Southern Mortgage Common Equity Interests.................................22
ARTICLE XXI PROVISION FOR TREATMENT OF UNICOR COMMON EQUITY INTERESTS (CLASS 17)......................22
21.1 Cancellation of Unicor Common Equity Interests............................................22
ARTICLE XXII PROVISION FOR TREATMENT OF UNITED FUNDING COMMON EQUITY INTERESTS (CLASS 18)..............22
22.1 Cancellation of United Funding Common Equity Interests....................................22
ARTICLE XXIII PROVISION FOR TREATMENT OF UNITED LENDING CORP. COMMON EQUITY INTERESTS (CLASS 19)........22
23.1 Cancellation of United Lending Corp. Common Equity Interests..............................22
ARTICLE XXIV PROVISION FOR TREATMENT OF UNITED LENDING GROUP COMMON EQUITY INTERESTS (CLASS 20)........23
24.1 Cancellation of United Lending Group Common Equity Interests..............................23
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ARTICLE XXV PROVISION FOR TREATMENT OF UNITED CREDIT CARD COMMON EQUITY INTERESTS (CLASS 21)..........23
25.1 Cancellation of United Credit Card Common Equity Interests................................23
ARTICLE XXVI PROVISIONS FOR TREATMENT OF DISPUTED CLAIMS UNDER THE PLAN................................23
26.1 Objections to Claims; Prosecution of Disputed Claims......................................23
26.2 Estimation of Claims......................................................................23
26.3 Payments and Distributions on Disputed Claims.............................................24
ARTICLE XXVII THE LITIGATION TRUST......................................................................24
27.1 Establishment of the Trust................................................................24
27.2 Purpose of the Litigation Trust...........................................................24
27.3 Funding Expenses of the Litigation Trust..................................................24
27.4 Transfer of Assets........................................................................24
27.5 Valuation of Assets.......................................................................24
27.6 Litigation of Assets; Responsibilities of Litigation Trustee..............................25
27.7 Investment Powers.........................................................................25
27.8 Annual Distribution; Withholding..........................................................25
27.9 Reporting Duties..........................................................................26
27.10 Trust Implementation......................................................................26
27.11 Registry of Beneficial Interests..........................................................27
27.12 Termination...............................................................................27
27.13 Net Litigation Trust Recovery/Affirmative Obligations.....................................27
27.14 Escrow on Account of Disputed Claims and Disputed Equity Interests........................27
27.15 Non-Transferability.......................................................................28
ARTICLE XXVIII PROSECUTION OF CLAIMS HELD BY THE DEBTORS.................................................28
28.1 Prosecution of Claims.....................................................................28
28.2 Net Payment by Defendants.................................................................28
ARTICLE XXIX ACCEPTANCE OR REJECTION OF PLAN; EFFECT OF REJECTION BY ONE OR MORE CLASSES OF
CLAIMS OR EQUITY INTEREST.................................................................29
29.1 Impaired Classes to Vote..................................................................29
29.2 Acceptance by Class of Creditors and Holders of Equity Interests..........................29
29.3 Cramdown..................................................................................29
ARTICLE XXX IDENTIFICATION OF CLAIMS AND EQUITY INTERESTS IMPAIRED AND NOT IMPAIRED BY THE PLAN.......29
30.1 Impaired and Unimpaired Classes...........................................................29
30.2 Impaired Classes to Vote on Plan..........................................................29
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30.3 Controversy Concerning Impairment.........................................................29
ARTICLE XXXI PROVISIONS FOR THE ESTABLISHMENT AND MAINTENANCE OF DISBURSEMENT ACCOUNTS.................29
31.1 Establishment of Disbursement Account.....................................................29
31.2 Maintenance of Disbursement Account(s)....................................................30
ARTICLE XXXII PROVISIONS REGARDING DISTRIBUTIONS........................................................30
32.1 Time and Manner of Payments...............................................................30
32.2 Timeliness of Payments....................................................................30
32.3 Distributions by the Disbursing Agent.....................................................30
32.4 Manner of Payment Under the Plan..........................................................30
32.5 Delivery of Distributions.................................................................30
32.6 Undeliverable Distributions...............................................................31
32.7 Compliance with Tax Requirements/Allocation...............................................31
32.8 Time Bar to Cash Payments.................................................................31
32.9 Distributions After Effective Date........................................................31
32.10 Set-Offs..................................................................................31
32.11 Termination of Certain Subordination Rights and Settlement of Related Claims and
Controversies.............................................................................32
32.12 Post Petition Date Interest...............................................................32
ARTICLE XXXIII COMMITTEES................................................................................32
33.1 Creditors' Committee Composition and Term.................................................32
33.2 Equity Committee Term and Fees............................................................32
ARTICLE XXXIV EXECUTORY CONTRACTS AND UNEXPIRED LEASES..................................................33
34.1 Rejection of Executory Contracts and Unexpired Leases.....................................33
34.2 Cure of Defaults for Assumed Executory Contracts and Unexpired Leases.....................33
34.3 Rejection Damage Claims...................................................................33
34.4 Indemnification and Reimbursement Obligations.............................................33
ARTICLE XXXV RIGHTS AND POWERS OF DISBURSING AGENT.....................................................34
35.1 Exculpation...............................................................................34
35.2 Powers of the Disbursing Agent............................................................34
35.3 Fees and Expenses Incurred From and After the Effective Date..............................34
ARTICLE XXXVI THE PLAN ADMINISTRATOR....................................................................34
36.1 Appointment of Plan Administrator.........................................................34
36.2 Responsibilities of the Plan Administrator................................................34
36.3 Powers of the Plan Administrator..........................................................34
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TABLE OF CONTENTS
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Page
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36.4 Compensation of the Plan Administrator....................................................35
36.5 Termination of Plan Administrator.........................................................35
ARTICLE XXXVII CONDITIONS PRECEDENT TO EFFECTIVE DATE OF THE PLAN; ALTERNATIVE IMPLEMENATION
PROVISIONS................................................................................35
37.1 Conditions Precedent to Effective Date of the Plan........................................35
37.2 Waiver of Conditions Precedent............................................................35
37.3 Alternative Implementation Provisions.....................................................35
ARTICLE XXXVIII RETENTION OF JURISDICTION.................................................................36
38.1 Retention of Jurisdiction.................................................................36
ARTICLE XXXIX MODIFICATION, REVOCATION, OR WITHDRAWAL OF THE PLAN.......................................37
39.1 Modification of Plan......................................................................37
39.2 Revocation or Withdrawal..................................................................38
ARTICLE XL PROVISION FOR MANAGEMENT..................................................................38
40.1 Directors.................................................................................38
ARTICLE XLI ARTICLES OF INCORPORATION AND BY-LAWS OF THE DEBTORS; CORPORATE ACTION....................38
41.1 Amendment of Articles of Incorporation and By-Laws........................................38
41.2 Corporate Action..........................................................................38
ARTICLE XLII MISCELLANEOUS PROVISIONS..................................................................38
42.1 Title to Assets; Discharge of Liabilities.................................................38
42.2 Discharge of Debtors......................................................................38
42.3 Injunction................................................................................39
42.4 Term of Existing Injunctions or Stays.....................................................39
42.5 Limited Release of Directors, Officers and Employees......................................39
42.6 Exculpation...............................................................................40
42.7 Preservation of Rights of Action..........................................................40
42.8 Injunction................................................................................40
42.9 Payment of Statutory Fees.................................................................40
42.10 Retiree Benefits..........................................................................40
42.11 Post-Effective Date Fees and Expenses.....................................................40
42.12 Severability..............................................................................40
42.13 Governing Law.............................................................................41
42.14 Notices...................................................................................41
42.15 Closing of Cases..........................................................................41
42.16 Section Headings..........................................................................41
</TABLE>
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United Companies Financial Corporation, Pelican Mortgage
Company, Inc., United Companies Lending Group, Inc., United Companies Lending
Corporation, Adobe, Inc., Adobe Financial, Inc. I, Ginger Mae, Inc., Unicor
Mortgage, Inc., Southern Mortgage Acquisition, Inc., United Companies Funding,
Inc., Gopher Equity, Inc. I, and United Credit Card, Inc. hereby propose the
following plan of reorganization pursuant to sections 1121(a) and (c) and 1123
of the Bankruptcy Code.
ARTICLE I
DEFINITIONS
As used in the Plan, the following terms shall have the
respective meanings specified below and be equally applicable to the singular
and plural of terms defined:
1.1 Administrative Expense Claim: Any Claim constituting a
cost or expense of administration of the Chapter 11 Cases asserted under section
503(b) 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 businesses of the
Debtors in Possession, any indebtedness or obligations incurred or assumed by
the Debtors in Possession in connection with the conduct of their businesses or
for the acquisition or lease of property or the procurement or rendition of
services, any costs and expenses of the Debtors in Possession for the
management, maintenance, preservation, sale or other disposition of any assets,
the administration and implementation of the Plan, the administration,
prosecution or defense of Claims by or against the Debtors and for distributions
under the Plan, any Claims for compensation and reimbursement of expenses
arising during the period from and after the Petition Date and prior to the
Effective Date or otherwise in accordance with the provisions of the Plan, and
any fees or charges assessed against the Debtors' estates pursuant to section
1930, chapter 123, Title 28, United States Code.
1.2 Adobe Financial: Adobe Financial, Inc. I, a Nevada
corporation.
1.3 Adobe Financial Common Equity Interest: A Common Equity
Interest in Adobe Financial.
1.4 Adobe: Adobe, Inc., a Nevada corporation.
1.5 Adobe Common Equity Interest: A Common Equity Interest in
Adobe.
1.6 Affiliate: Any Entity that is an "affiliate" of the
Debtors within the meaning of section 101(2) of the Bankruptcy Code.
1.7 Agent: First Union National Bank, as administrative agent
for the Banks.
1.8 Allowed Administrative Expense Claim: An Administrative
Expense Claim, to the extent it is or has become an Allowed Claim.
1.9 Allowed Claim/Allowed Equity Interest: Any Claim against
or Equity Interest in the Debtors, (i) proof of which was filed on or before the
date designated by the Bankruptcy Court as the last date for filing proofs of
claim against or equity interests in the Debtors, (ii) if no proof of Claim or
Equity Interest has been timely filed, which has been or hereafter is listed by
the Debtors in their Schedules as liquidated in amount and not disputed or
contingent or (iii) any Equity Interest registered in the stock register
maintained by or on behalf of the Debtors as of the Record Date and, in each
such case in clauses (i), (ii) and (iii) above, a Claim or Equity Interest as to
which no objection to the allowance thereof has been interposed within the
applicable period of limitation fixed by the Plan, the Bankruptcy Code, the
Bankruptcy Rules or a Final Order, or as to which an objection has been
interposed and such Claim or Equity Interest has been allowed in whole or in
part by a Final Order. For purposes of determining the amount of an "Allowed
Claim", there shall be deducted therefrom an amount equal to the amount of any
<PAGE>
claim which the Debtors may hold against the holder thereof, to the extent such
claim may be set off pursuant to section 553 of the Bankruptcy Code.
1.10 Allowed Bank Claim: A Bank Claim, to the extent it is or
has become an Allowed Claim.
1.11 Allowed Borrower Litigation Claim: A Borrower Litigation
Claim, to the extent it is or has become an Allowed Claim.
1.12 Allowed Convenience Claim: A Convenience Claim, to the
extent it is or has become an Allowed Claim.
1.13 Allowed General Unsecured Claim: A General Unsecured
Claim, to the extent it is or has become an Allowed Claim.
1.14 Allowed Pride Equity Interest: A Pride Equity Interest,
to the extent it is or has become an Allowed Equity Interest.
1.15 Allowed Priority Non-Tax Claim: A Priority Non-Tax Claim,
to the extent it is or has become an Allowed Claim.
1.16 Allowed Priority Tax Claim: A Priority Tax Claim, to the
extent it is or has become an Allowed Claim.
1.17 Allowed Secured Claim: A Secured Claim, to the extent it
is or has become an Allowed Claim.
1.18 Allowed Senior Note Claim: A Senior Note Claim, to the
extent it is or has become an Allowed Claim.
1.19 Allowed Statutorily Subordinated Claim: A Statutorily
Subordinated Claim to the extent it is or has become an Allowed Claim.
1.20 Allowed Subordinated Debenture Claim: A Subordinated
Debenture Claim, to the extent it is or has become an Allowed Claim.
1.21 Allowed Subordinated Penalty Claim: A Subordinated
Penalty Claim, to the extent it is or has become an Allowed Claim.
1.22 Alternative Residual Sale Agreement: In the event that a
higher or better offer for the assets set forth in the Residual Agreement is
accepted by the Debtors and approved by the Bankruptcy Court, the asset purchase
agreement or stock purchase agreement, as the case may be, incorporating the
terms and provisions of such higher or better offer.
1.23 Alternative Residual Sale Transaction: In the event that
a higher or better offer for the assets set forth in the Residual Agreement is
accepted by the Debtors and approved by the Bankruptcy Court, the sale, directly
or indirectly, of certain of the Debtors' residual, excess interest and reserve
account interests and other property rights, whether through an alternative
asset purchase agreement or an alternative stock purchase agreement (that may
provide for the sale of the Reorganized UC Lending Common Stock, together with
the transfer of the Reorganized Designated Subsidiaries Common Stock as provided
for in any such alternative stock purchase agreement).
1.24 Ballot: The form distributed to each holder of an
impaired Claim on which is to be indicated acceptance or rejection of the Plan.
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1.25 Bank Cash Amount: The amount of Cash equal to the sum of
(a) the product of (1) to the extent that Total Creditor Cash is equal to or
less than Eight Hundred Fifty Million Dollars ($850,000,000.00), Net Senior
Creditor Cash attributable to Total Creditor Cash, as if such Total Creditor
Cash is equal to or less than Eight Hundred Fifty Million Dollars
($850,000,000.00), times (2) eighty-five and one-half percent (85.5%), plus (b)
to the extent that Total Creditor Cash exceeds Eight Hundred Fifty Million
Dollars ($850,000,000.00), (1) such amount of Net Senior Creditor Cash
attributable to such excess, if any, times (2) ninety-five percent (95%).
1.26 Bank Claims: Any Claims of the Banks arising from or
related to the Credit Agreement, including, without limitation, fees and
expenses associated with rights and remedies thereunder, or the Guaranty.
1.27 Bank Interest Amount: The number of Litigation Trust
Interests equal to the product of (i) eighty-five and one-half percent (85.5%)
times (ii) the Senior Creditor Interest Amount.
1.28 Bankruptcy Code: The Bankruptcy Reform Act of 1978, as
amended, and as codified in Title 11, United States Code, as applicable to the
Chapter 11 Cases.
1.29 Bankruptcy Court: The United States Bankruptcy Court for
the District of Delaware or such other court having jurisdiction over the
Chapter 11 Cases.
1.30 Bankruptcy Rules: 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, as amended.
1.31 Banks: The banks or financial institutions that are
parties to the Credit Agreement and their successors and assigns.
1.32 Biase Litigation: The litigation styled Findim
Investments, S.A., Nicole Biase, Joyce Biase and Nicolas Biase v. J. Terrell
Brown and Dale E. Redman, No. 464-161, currently pending in Division "M", 19th
Judicial District Court, Parish of East Baton Rouge, State of Louisiana.
1.33 Borrower Litigation Claim: Any Claim asserted in
litigation pending on or as of the Petition Date, or that could have been
asserted by any Entity prior to the Petition Date with respect to the servicing
of mortgage loans by the Debtors or Claims associated with the origination of
moneys advanced or mortgages issued by the Debtors prior to the Petition Date.
1.34 Business Day: A day other than a Saturday, a Sunday or
any other day on which commercial banks in Baton Rouge, Louisiana are required
or authorized to close by law or executive order.
1.35 Cash: Lawful currency of the United States of America.
1.36 Cash Equivalents: Equivalents of Cash in the form of
readily marketable securities or instruments issued by a person other than the
Debtors, including, without limitation, readily marketable direct obligations
of, or obligations guaranteed by, the United States of America, commercial paper
of domestic corporations carrying a Moody's Rating of "A" or better, or
equivalent rating of any other nationally recognized rating service, or
interest-bearing certificates of deposit or other similar obligations of
domestic banks or other financial institutions having a shareholders' equity or
equivalent capital of not less than One Hundred Million Dollars
($100,000,000.00), having maturities of not more than one (1) year, at the then
best generally available rates of interest for like amounts and like periods.
1.37 Chapter 11 Cases: The cases commenced under chapter 11 of
the Bankruptcy Code by the Debtors on the Petition Date, styled In re United
Companies Financial Corporation, et al., Chapter 11 Case Nos. 99-450 (MFW)
through 99-461 (MFW), Jointly Administered, currently pending before the
Bankruptcy Court.
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1.38 Claim: Any right to payment from the Debtors, whether or
not such right is reduced to judgment, liquidated, unliquidated, fixed,
contingent, matured, unmatured, disputed, undisputed, legal, equitable, secured,
or unsecured, known or unknown; or any right to an equitable remedy for breach
of performance if such breach gives rise to a right of payment from the Debtors,
whether or not such right to an equitable remedy is reduced to judgment, fixed,
contingent, matured, unmatured, disputed, undisputed, secured, or unsecured.
1.39 Class: A category of holders of Claims or Equity
Interests as set forth in Article IV of the Plan.
1.40 Class Actions: The litigations styled (1) Norman P.
Lasky, on behalf of himself and all others similarly situated v. J. Terrell and
Dale E. Redman, No. 99-1035-B-2, (2) Gary W. Poff, on behalf of himself and all
others similarly situated v. J. Terrell Brown and Dale E. Redman, No.
00-CV-6-B-M1, (3) Linda Wheeler, on behalf of herself and all others similarly
situated v. J. Terrell Brown and Dale E. Redman, No. 99-1049-B-3, (4) Frank
Lopiccolo, on behalf of himself and all others similarly situated v. J. Terrell
Brown, Dale E. Redman, Certain Underwriters at Lloyds Underwriters of London and
AIG Europe (UK) Ltd., No. 00-99-B-M3, all pending before the United States
District Court for the Middle District of Louisiana, and (5) Amy Bergeron, et
al. v. U.S. Trust Company of California, et al.; No C 469196, currently pending
in Division "H", 19th Judicial District Court, Parish of East Baton Rouge, State
of Louisiana.
1.41 Collateral: Any property or interest in property of the
estates of the Debtors that is subject to an unavoidable Lien to secure the
payment or performance of a Claim.
1.42 Common Equity Interest: A common Equity Interest.
1.43 Confirmation Date: The date upon which the Clerk of the
Bankruptcy Court enters the Confirmation Order.
1.44 Confirmation Hearing: The hearing to consider
confirmation of the Plan in accordance with section 1129 of the Bankruptcy Code,
as the same may be adjourned from time to time.
1.45 Confirmation Order: The order of the Bankruptcy Court
confirming the Plan in accordance with the provisions of chapter 11 of the
Bankruptcy Code.
1.46 Convenience Claim: Any Claim, other than a Borrower
Litigation Claim, equal to or less than One Thousand Dollars ($1,000.00) or
greater than One Thousand Dollars ($1,000.00) but with respect to which the
holder thereof voluntarily reduces the Claim to One Thousand Dollars
($1,000.00).
1.47 Credit Agreement: That certain Credit Agreement, dated as
of April 10, 1997, by and among the Debtors, the Agent, the Documentation Agent
and the Banks, as amended and modified from time to time, and any of the
documents and instruments related thereto.
1.48 Creditor: Any Person or Entity that has a Claim against
the Debtors that arose or is deemed to have arisen on or prior to the Petition
Date, including, without limitation, a Claim against the Debtors' chapter 11
estates of a kind specified in sections 502(g), 502(h) or 502(i) of the
Bankruptcy Code.
1.49 Creditor Cash: At any time of determination thereof, the
excess, if any, of (a) all Cash and Cash Equivalents in the Disbursement
Account(s) over (b) such amounts of Cash (i) reasonably determined by the
Disbursing Agent as necessary to satisfy, in accordance with the terms and
conditions of the Plan, Administrative Expense Claims, Priority Non-Tax Claims,
Priority Tax Claims, Convenience Claims, Subordinated Debenture Claims and
Secured Claims, (ii) necessary to fund the Litigation Trust in accordance with
Article XXVII of the Plan, (iii) necessary to make pro rata distributions to
holders of Disputed Claims as if such Disputed Claims were, at such time,
Allowed Claims and (iv) such other amounts reasonably determined by Reorganized
UC as necessary to fund the ongoing operations of Reorganized UC during the
period from the Effective Date up to and including the Transfer Date or such
later date as the Plan Administrator shall reasonably determine.
4
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1.50 Creditors' Committee: The statutory committee of
unsecured creditors appointed in the Chapter 11 Cases pursuant to section 1102
of the Bankruptcy Code, as reconstituted from time to time.
1.51 Debtors: United Companies Financial Corporation, Pelican
Mortgage Company, Inc., United Companies Lending Group, Inc., United Companies
Lending Corporation, Adobe, Inc., Adobe Financial, Inc. I, Ginger Mae, Inc.,
Unicor Mortgage, Inc., Southern Mortgage Acquisition, Inc., United Companies
Funding, Inc., Gopher Equity, Inc. I, and United Credit Card, Inc.
1.52 Debtors in Possession: The Debtors as debtors in
possession pursuant to sections 1107(a) and 1108 of the Bankruptcy Code.
1.53 Disbursement Account(s): The account(s) to be established
by the Debtors on the Effective Date in accordance with Section 32.1 of the
Plan, together with any interest earned thereon.
1.54 Disbursing Agent: Reorganized UC, the Plan Administrator
or such other Entity as may be designated by the Debtors, solely in its capacity
as agent of the Debtors to effectuate the distributions contemplated under the
Plan.
1.55 Disclosure Statement: The disclosure statement related to
the Plan and approved by the Bankruptcy Court in accordance with section 1125 of
the Bankruptcy Code.
1.56 Disputed Claim; Disputed Equity Interest: Any Claim
against or Equity Interest in the Debtors, to the extent the allowance of which
is the subject of a timely objection or request for estimation in accordance
with the Plan, the Bankruptcy Code, the Bankruptcy Rules or the Confirmation
Order, or is otherwise disputed by the Debtors in accordance with applicable
law, which objection, request for estimation or dispute has not been withdrawn
or determined by a Final Order.
1.57 Disputed Claim Amount: The lesser of (a) the liquidated
amount set forth in the proof of claim filed with the Bankruptcy Court relating
to a Disputed Claim, (b) if the Bankruptcy Court has estimated such Disputed
Claim pursuant to section 502(c) of the Bankruptcy Code, the amount of a
Disputed Claim as estimated by the Bankruptcy Court, and (c) the amount of such
Disputed Claim allowed by the Bankruptcy Court pursuant to section 502 of the
Bankruptcy Court, or zero, if such Disputed Claim is disallowed in its entirety
by the Bankruptcy Court pursuant to such section, in either case, regardless of
whether the order or judgment allowing or disallowing such Claim has become a
Final Order; provided, however, that, in the event that such Claim has been
disallowed, but the order of disallowance has not yet become a Final Order, the
Bankruptcy Court may require the Disbursing Agent to reserve and hold in trust
for the benefit of each holder of such Claim, Cash in an amount equal to the pro
rata distributions which the Bankruptcy Court, in its sole and absolute
discretion, determines will protect the rights of such holder under all of the
facts and circumstances relating to the order of disallowance and the appeal of
such holder from such order.
1.58 Documentation Agent: Morgan Stanley Trust Company of New
York.
1.59 Effective Date: The first (1st) Business Day ten (10)
days following the entry of the Confirmation Order.
1.60 8.375% Notes: Those certain debentures issued in the
original aggregate principal amount of One Hundred Fifty Million Dollars
($150,000,000.00) in accordance with the terms and conditions of the
Subordinated Indenture, as supplemented by that certain First Supplemental
Indenture, dated as of June 20, 1997.
1.61 Entity: A person, a corporation, a general partnership, a
limited partnership, a limited liability company, a limited liability
partnership, an association, a joint stock company, a joint venture, an estate,
a trust, an unincorporated organization, a government or any subdivision thereof
or any other entity.
5
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1.62 Equity Committee: The committee of equity interest
holders appointed in the Chapter 11 Cases pursuant to section 1102 of the
Bankruptcy Code, as reconstituted from time to time.
1.63 Equity Interest: Any equity interest in the Debtors
represented by duly authorized, validly issued and outstanding shares of
preferred stock or common stock or any interest or right to convert into such an
equity interest or acquire any equity interest of the Debtors which was in
existence immediately prior to the Petition Date.
1.64 Equity Interest Percentage: Ninety-seven percent (97%),
the percentage that the assumed value of Allowed United Companies Common Equity
Interests bears to the sum of the assumed value of Allowed United Companies
Common Equity Interests plus the assumed value of Allowed Statutorily
Subordinated Claims in Class 10A, or such other percentage as may be established
by the Bankruptcy Court at the Confirmation Hearing.
1.65 ESOP Action: The litigation styled Amy Bergeron, et al.
v. U.S. Trust Company of California, et al., No. C 469196, currently pending in
Division "H", 19th Judicial District Court, Parish of East Baton Rouge, State of
Louisiana.
1.66 Final Order: An order of the Bankruptcy Court 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; and if an appeal,
writ of certiorari, reargument or rehearing thereof has been sought, such order
shall have been affirmed by the highest court to which such order was appealed,
or certiorari shall have been denied or reargument or rehearing shall have been
denied or resulted in no modification of such order, and the time to take any
further appeal, petition for certiorari or move for 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, may be but has not then been filed with respect to
such order, shall not cause such order not to be a Final Order.
1.67 General Unsecured Claim: An Unsecured Claim, other than
an Intercompany Claim, an Administrative Expense Claim, a Priority Non-Tax
Claim, a Priority Tax Claim, a Bank Claim, a Senior Note Claim, a Subordinated
Debenture Claim, a Subordinated Penalty Claim or a Convenience Claim.
1.68 General Unsecured Interest Amount: The number of
Litigation Trust Interests equal to the product of (i) four million (4,000,000)
times (ii) the General Unsecured Interest Fraction.
1.69 General Unsecured Interest Fraction: The fraction (a) the
numerator of which shall be the aggregate amount of Allowed General Unsecured
Claims and (b) the denominator of which shall be the aggregate amount of Allowed
Bank Claims, Allowed Senior Note Claims and Allowed General Unsecured Claims.
1.70 Ginger Mae: Ginger Mae, Inc., a Louisiana corporation.
1.71 Ginger Mae Common Equity Interest: A Common Equity
Interest in Ginger Mae.
1.72 Gopher Equity: Gopher Equity, Inc. I, a Nevada
corporation.
1.73 Gopher Equity Common Equity Interest: A Common Equity
Interest in Gopher Equity.
1.74 Guaranty: That certain Unconditional Guaranty Agreement,
dated as of April 10, 1997, by and among the Debtors, the Agent and the Banks.
1.75 Intercompany Affiliate: Any of the Debtors and any other
direct or indirect subsidiary of United Companies.
1.76 Intercompany Claims: Any Unsecured Claim held by any
Intercompany Affiliate against any Debtor.
6
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1.77 IRC: The Internal Revenue Code of 1986, as amended from
time to time.
1.78 IRS: The Internal Revenue Service, an agency of the
United States Department of Treasury.
1.79 Lending Subordinated Debentures: The promissory notes
issued and delivered by United Lending Corp. in accordance with the terms and
provisions of the Lending Subordinated Indenture.
1.80 Lending Subordinated Indenture: That certain Agreement,
dated May 14, 1993, between United Lending Corp. and United Companies Life
Insurance Company.
1.81 Lien: Any charge against or interest in property to
secure payment of a debt or performance of an obligation.
1.82 Litigation Trust: The trust to be created on the
Effective Date in accordance with the provisions of Article XXVII hereof and the
Litigation Trust Agreement for the benefit of holders of Allowed Bank Claims,
Allowed Senior Note Claims, Allowed General Unsecured Claims, Allowed
Subordinated Debenture Claims, Allowed Subordinated Penalty Claims, Allowed
Statutorily Subordinated Claims and Allowed United Companies Equity Interests.
1.83 Litigation Trustee: The Entity unanimously appointed by
the Litigation Trust Board to administer the Litigation Trust in accordance with
the terms and provisions of Article XXVII hereof and the Litigation Trust
Agreement.
1.84 Litigation Trust Agreement: The Trust Agreement,
substantially in the form in the Plan Supplement, pursuant to which the
Litigation Trustee shall pursue the Litigation Trust Claims, if applicable, and
distribute the proceeds thereof, if any.
1.85 Litigation Trust Board: The group of up to three Persons
appointed prior to the Effective Date by the Bankruptcy Court, one of whom shall
be nominated by each of the Creditors' Committee, the Subordinated Indenture
Trustee and the Equity Committee, respectively, or any replacements thereafter
selected in accordance with the provisions of the Litigation Trust Agreement,
who shall determine in accordance with the Litigation Trust Agreement whether to
prosecute, compromise or discontinue any Litigation Trust Claims.
1.86 Litigation Trust Claims: Those claims and causes of
action of the Debtors, if any, arising from or related to the Debtors' financial
statements and the accounting practices associated therewith; provided, however,
that, under no circumstances shall such claims and causes of action include any
claims waived and released in accordance with the provisions of Section 42.5 of
the Plan.
1.87 Litigation Trust Interests: The ten million (10,000,000)
beneficial interests in the Litigation Trust to be deemed to be distributed to
holders of Allowed Bank Claims, Allowed General Unsecured Claims, Allowed Senior
Note Claims, Allowed Subordinated Debenture Claims, Allowed Subordinated Penalty
Claims, Allowed Statutorily Subordinated Claims and Allowed United Companies
Equity Interests pursuant to the terms and conditions of Article XXVII of the
Plan.
1.88 9.35% Notes: Those certain debentures issued in the
original aggregate principal amount of One Hundred Twenty-Five Million Dollars
($125,000,000.00) in accordance with the terms and provisions of the Senior
Indenture, as supplemented, by that certain First Supplemental Indenture, dated
as of November 2, 1994.
1.89 Net Senior Creditor Cash: At any time of determination
thereof, the amount of Cash equal to (a) Senior Creditor Cash minus (b) the
amount of Cash necessary to satisfy distributions in accordance with Sections
7.3 and 8.3 hereof.
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1.90 New Organizational Documents: In the event that an
Alternative Residual Sale Transaction occurs through consummation of a stock
purchase agreement, at the discretion of the highest or best offeror, the
Reorganized UC Lending Organization Documents and the Reorganized Designated
Subsidiaries Organizational Documents.
1.91 Pelican: Pelican Mortgage Company, Inc., a Delaware
corporation.
1.92 Pelican Common Equity Interest: A Common Equity Interest
in Pelican.
1.93 Person: An individual.
1.94 Petition Date: March 1, 1999, the date on which the
Debtors filed their voluntary petitions for relief commencing the Chapter 11
Cases.
1.95 Plan: This Third Amended Plan of Reorganization for
Debtors Pursuant to Chapter 11 of the United States Bankruptcy Code, including,
without limitation, the exhibits and schedules hereto and the Plan Supplement,
either in its present form or as the same may be amended, modified or
supplemented from time to time in accordance with the terms and provisions
hereof.
1.96 Plan Administration Agreement: The agreement prescribing
the powers, duties and rights of the Plan Administrator in administering the
Plan, which agreement shall be in substantially the form included in the Plan
Supplement.
1.97 Plan Administrator: The Person to be designated by the
Debtors with the consent of the Creditors' Committee (which consent shall not be
unreasonably withheld) and retained, as of the Effective Date, by Reorganized
UC, with the approval of the Bankruptcy Court, as the employee or fiduciary
responsible for, among other things, the matters described in Section 36.2
hereof.
1.98 Plan Supplement: A separate volume, to be filed with the
Clerk of the Bankruptcy Court, containing, among other things, forms of the
Litigation Trust Agreement, Plan Administration Agreement, Reorganized UC
By-laws and Reorganized UC Certificate of Incorporation. The Plan Supplement
(containing drafts or final versions of the foregoing documents) shall be filed
with the Clerk of the Bankruptcy Court as early as practicable (but in no event
later than ten (10) days) prior to the commencement of the hearing to consider
confirmation of the Plan, or on such other date as the Bankruptcy Court may
establish.
1.99 Pride Equity Interest: An Equity Interest represented by
one of the 1,657,770 issued and outstanding shares of Preferred Redeemable
Increased Dividend Equity SecuritiesSM, 6 3/4% PRIDESSM, Convertible Preferred
Stock, par value $2.00 per share, of United Companies as of the Petition Date.
1.100 Pride Prospectus: The prospectus, dated June 12, 1995,
as supplemented, released in connection with the offering of Pride Equity
Interests.
1.101 Priority Non-Tax Claim: Any Claim against the Debtors,
other than an Administrative Expense Claim or a Priority Tax Claim, entitled to
priority in payment under section 507(a) of the Bankruptcy Code, but only to the
extent entitled to such priority.
1.102 Priority Tax Claim: Any Claim against the Debtors
entitled to priority in payment under section 507(a)(8) of the Bankruptcy Code.
1.103 Proponents: Debtors in Possession.
1.104 Pro Rata Share: With respect to Allowed Claims or
Allowed Equity Interests within the same Class or sub-Class, the proportion that
an Allowed Claim or Allowed Equity Interest bears to the sum of (a) all Allowed
Claims and/or Allowed Equity Interests, as the case may be, within such Class or
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sub-Class, and (b) all Disputed Claim Amounts and/or Disputed Equity Interest
Amounts, as the case may be, within such Class or sub-Class.
1.105 Record Date: The date to be established by the
Bankruptcy Court in the Confirmation Order for the purpose of determining the
holders of Allowed Claims and Allowed Equity Interests to receive distributions
pursuant to the Plan.
1.106 Remaining Assets: Upon the consummation of a Sale
Transaction or an Alternative Residual Sale Transaction, as the case may be,
those assets of Reorganized UC, other than the Litigation Trust Claims which are
not included in the Sale Transaction, or an Alternative Residual Sale
Transaction, as the case may be, including, without limitation, the furniture,
fixtures and equipment associated with the business and operations of the
Debtors.
1.107 Reorganized Designated Subsidiaries: In the event that
an Alternative Residual Sale Transaction occurs through consummation of a stock
purchase agreement, at the discretion of the highest or best offeror, Pelican
Mortgage Company, Inc., Adobe, Inc., Adobe Financial, Inc., I, and Gopher
Equity, Inc., I, from and after the Effective Date.
1.108 Reorganized Designated Subsidiaries Common Stock: In the
event that an Alternative Residual Sale Transaction occurs through consummation
of a stock purchase agreement, at the discretion of the highest or best offeror,
the shares of common stock of the Reorganized Designated Subsidiaries currently
authorized and outstanding and currently owned or to be owned by United Lending
Corp. prior to the Effective Date and to be owned by Reorganized UC Lending on
and after the Effective Date, which as to each subsidiary shall (i) be the
number of shares of common stock of such corporation which were issued and
outstanding as of the day prior to the Effective Date, (ii) have the terms
specified in the Reorganized Designated Subsidiaries Organizational Documents
and (iii) have a par value equal to the par value of the common stock of those
corporations the day before the Effective Date.
1.109 Reorganized Designated Subsidiaries Organizational
Documents: In the event that an Alternative Residual Sale Transaction occurs
through consummation of a stock purchase agreement, at the discretion of the
highest or best offeror, the articles or certificates of incorporation and the
bylaws of the Reorganized Designated Subsidiaries in form and substance
acceptable to the relevant purchaser.
1.110 Reorganized UC: United Companies, a Louisiana
corporation, and each of the Reorganized UC Subsidiaries, from and after the
Effective Date.
1.111 Reorganized UC By-laws: The By-laws of Reorganized UC,
which by-laws shall be in substantially the form contained in the Plan
Supplement.
1.112 Reorganized UC Certificate of Incorporation: The
Certificate of Incorporation of Reorganized UC, which certificate of
incorporation shall be in substantially the form included in the Plan
Supplement.
1.113 Reorganized UC Common Stock: The shares of Reorganized
UC Common Stock authorized and to be issued pursuant to the Plan, which shall
have a par value of $0.01 per share, of which five million (5,000,000) shares
shall be authorized and of which one thousand (1,000) shares shall be issued
pursuant to the Plan, and such rights with respect to dividends, liquidation,
voting and other matters as are provided for by applicable nonbankruptcy law or
the Reorganized UC Certificates of Incorporation and the Reorganized UC By-laws.
1.114 Reorganized UC Lending: In the event that an Alternative
Residual Sale Transaction occurs through consummation of a stock purchase
agreement, at the discretion of the highest or best offeror, United Lending
Corp. from and after the Effective Date.
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1.115 Reorganized UC Lending Common Stock: In the event that
an Alternative Residual Sale Transaction occurs through consummation of a stock
purchase agreement, at the discretion of the highest or best offeror, the share
of Reorganized UC Lending Common Stock authorized and to be issued pursuant the
Plan, which shares shall (i) be the number of shares of common stock of UC
Lending which were issued and outstanding as of the day before the Effective
Date, (ii) have the terms specified in the Reorganized UC Lending Organizational
Documents, and (iii) have a par value equal to the par value of the common stock
of UC Lending the day before the Effective Date.
1.116 Reorganized UC Lending Organizational Documents: In the
event that an Alternative Residual Sale Transaction occurs through consummation
of a stock purchase agreement, at the discretion of the highest or best offeror,
the articles or certificates of incorporation and the bylaws of the Reorganized
UC Lending in form and substance acceptable to the relevant purchaser.
1.117 Reorganized UC Subsidiaries: Each subsidiary, along with
United Companies, comprising Reorganized UC; provided, however, that, in the
event that an Alternative Residual Sale Transaction occurs through consummation
of a stock purchase agreement, at the discretion of the highest or best offeror,
then expressly excluding Reorganized UC Lending and the Reorganized Designated
Subsidiaries.
1.118 Residual Agreement: That certain Asset Purchase
Agreement, dated as of May 26, 2000, by and among The Bear Stearns Companies,
Inc., EMC Mortgage Corporation, EMC Mortgage Acquisition Corp., United
Companies, United Lending Corp., UCFC Acceptance Corporation, United Funding,
Pelican, Adobe, Adobe Financial, Gopher Equity, and Gopher Funding, Inc.
1.119 Sale Transaction: The sale of (i) certain of the
Debtors' residual, excess interest and reserve account interests and other
property rights pursuant to the Residual Agreement, or such higher or better
offer as may be submitted, accepted by the Debtors and approved by the
Bankruptcy Court, and (ii) certain of the Debtors' portfolio of mortgage loans
and real properties acquired in connection with the ownership of mortgage loans
pursuant to the Whole Loan Agreement, or such higher or better offer as may be
submitted, accepted by the Debtors and approved by the Bankruptcy Court, which
sales shall be consummated on or prior to the Effective Date.
1.120 Schedules: The respective schedules of assets and
liabilities, the list of Equity Interests, and the statements of financial
affairs filed by the Debtors in accordance with section 521 of the Bankruptcy
Code and the Official Bankruptcy Forms of the Bankruptcy Rules as such schedules
and statements have been or may be supplemented or amended.
1.121 Secured Claim: A Claim against the Debtors that is
secured by a Lien on Collateral or that is subject to setoff under section 553
of the Bankruptcy Code, to the extent of the value of the Collateral or to the
extent of the amount subject to setoff, as applicable, as determined in
accordance with section 506(a) of the Bankruptcy Code.
1.122 Senior Creditor Cash: At any time of determination
thereof, the amount of Cash equal to (a) Creditor Cash minus (b) the amount of
Cash necessary to satisfy distributions to holders of Allowed General Unsecured
Claims in accordance with the provisions of clause (a) of Section 9.1 of the
Plan.
1.123 Senior Creditor Interest Amount: The number of
Litigation Trust Interests equal to the product of (i) four million (4,000,000)
times (ii) the Senior Creditor Interest Fraction.
1.124 Senior Creditor Interest Fraction: The fraction (a) the
numerator of which shall be the aggregate amount of Allowed Bank Claims and
Allowed Senior Note Claims and (b) the denominator of which shall be the
aggregate amount of Allowed Bank Claims, Allowed Senior Note Claims and Allowed
General Unsecured Claims.
1.125 Senior Indenture: That certain Senior Indenture, dated
as of October 1, 1994, between United Companies Financial Corporation, as
Issuer, and the Senior Indenture Trustee, as supplemented.
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1.126 Senior Indenture Trustee: Norwest Bank Minnesota, N.A.
1.127 Senior Note Cash Amount: The amount of Cash equal to the
sum of (a) the product of (1) to the extent that Total Creditor Cash is equal to
or less than Eight Hundred Fifty Million Dollars ($850,000,000.00), Net Senior
Creditor Cash attributable to Total Creditor Cash, as if such Total Creditor
Cash is equal to or less than Eight Hundred Fifty Million Dollars
($850,000,000.00), times (2) fourteen and one-half percent (14.5%), plus (b) to
the extent that Total Creditor Cash exceeds Eight Hundred Fifty Million Dollars
($850,000,000.00), (1) such amount of Net Senior Creditor Cash attributable to
such excess, if any, times (2) five percent (5%).
1.128 Senior Note Claim: Any Claim arising under or relating
to (i) the Senior Indenture and (2) such other document, instrument or agreement
which would constitute Senior Indebtedness, as defined in the Subordinated
Indenture, including, without limitation, the guaranty of certain indebtedness
relating to the employee stock ownership plan of United Companies.
1.129 Senior Notes: Collectively, the 9.35% Notes and the 7.7%
Notes.
1.130 Senior Note Interest Amount: The number of Litigation
Trust Interests equal to the product of (i) fourteen and one-half percent
(14.5%) times (ii) the Senior Creditor Interest Amount.
1.131 7.7% Notes: Those certain debentures issued in the
original aggregate principal amount of One Hundred Million Dollars
($100,000,000.00) in accordance with the terms and provisions of the Senior
Indenture as supplemented by that certain Third Supplemental Indenture, dated as
of December 17, 1996.
1.132 Southern Mortgage: Southern Mortgage Acquisition, Inc.,
a Louisiana corporation.
1.133 Southern Mortgage Common Equity Interest: A Common
Equity Interest in Southern Mortgage.
1.134 Statutorily Subordinated Claim: Any Claim that is
subject to subordination under section 510(b) of the Bankruptcy Code, including,
without limitation, any and all Claims of a holder or former holder of an Equity
Interest for rescission of or damages from the purchase or sale of an Equity
Interest arising from or relating to the Debtors' financial statements and the
accounting practices associated therewith.
1.135 Statutorily Subordinated Percentage: Three percent (3%),
the percentage that the assumed value of Allowed Statutorily Subordinated Claims
bears to the assumed value Allowed Statutorily Subordinated Claims plus the
assumed value of Allowed United Companies Common Equity Interests in Class 10B,
including, without limitation, those Equity Interests deemed to be distributed
to holders of Allowed Pride Equity Interests in accordance with Section 13.2 of
the Plan, or such other percentage as may be established by the Bankruptcy Court
or the Confirmation Hearing.
1.136 Subordinated Debenture Claim: Any Claim arising from or
relating to (i) the Subordinated Debentures and (ii) the Lending Subordinated
Debentures.
1.137 Subordinated Debentures: The 8.375% Notes.
1.138 Subordinated Indenture: That certain Subordinated
Indenture, dated as of February 19, 1997, between United Companies Financial
Corporation, as issuer, and the Subordinated Indenture Trustee, as supplemented.
1.139 Subordinated Indenture Trustee: HSBC Bank USA, in its
capacity as successor indenture trustee under the Subordinated Indenture and any
successor indenture trustee under the Subordinated Indenture.
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1.140 Subordinated Penalty Claim: Any Claim for fines,
penalties, forfeitures, or for multiple, exemplary, or punitive damages, or
other non-pecuniary, direct or non-proximate damages, including, without
limitation, those arising from or related to the Debtors' loan origination and
servicing operations.
1.141 Total Creditor Cash: At any time of determination
thereof, all Cash and Cash Equivalents in the Disbursement Account(s), plus the
sum of Fifteen Million Dollars ($15,000,000.00) or such other amount reasonably
determined by the Debtors on or prior to the Confirmation Date as necessary to
fund the ongoing operations of Reorganized UC during the period up to and
excluding the Transfer Date in accordance with the provisions of Section 31.1
hereof.
1.142 Transfer Date: The later to occur of (a) the date on
which United Lending Corp. transfers the servicing of mortgage loans in
accordance with the provisions of the Residual Agreement, or such higher or
better offer as may be submitted, accepted by the Debtors and approved by the
Bankruptcy Court, and (b) the date on which United Lending Corp. transfers the
servicing of mortgage loans in accordance with the provisions of the Whole Loan
Agreement, or such higher or better offer as may be submitted, accepted by the
Debtors and approved by the Bankruptcy Court, or such other date as may be
determined by the Bankruptcy Court at the Confirmation Hearing.
1.143 Unicor: Unicor Mortgage, Inc., a Louisiana corporation.
1.144 Unicor Common Equity Interest: A Common Equity Interest
in Unicor.
1.145 United Companies: United Companies Financial
Corporation, a Louisiana corporation.
1.146 United Companies Common Equity Interest: An Equity
Interest represented by one of the 28,808,211 issued and outstanding shares of
common stock of United Companies as of the Petition Date or any interest or
right to convert into such an equity interest or acquire any equity interest of
the Debtors which was in existence immediately prior to the Petition Date.
1.147 United Funding: United Companies Funding, Inc., a
Louisiana corporation.
1.148 United Funding Common Equity Interest: A Common Equity
Interest in United Funding.
1.149 United Lending Corp.: United Companies Lending
Corporation, a Louisiana corporation.
1.150 United Lending Corp. Common Equity Interest: A Common
Equity Interest in United Lending Corp.
1.151 United Lending Group: United Companies Lending Group,
Inc., a Louisiana corporation.
1.152 United Lending Group Common Equity Interest: A Common
Equity Interest in United Lending Group.
1.153 United Credit Card: United Credit Card, Inc., a
Louisiana corporation.
1.154 United Credit Card Common Equity Interest: A Common
Equity Interest in United Credit Card.
1.155 Unsecured Claim: Any Claim against the Debtors, other
than an Administrative Expense Claim, a Priority Non-Tax Claim, a Priority Tax
Claim, a Bank Claim, a Senior Note Claim, a Subordinated Debenture Claim, a
Subordinated Penalty Claim or a Convenience Claim.
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1.156 Whole Loan Agreement: That certain Mortgage Loan and REO
Property Purchase Agreement, dated as of May 26, 2000, by and among The Bear
Stearns Companies, Inc., EMC Mortgage Corporation, United Companies, United
Lending Corp., United Funding, Southern Mortgage, United Companies Mortgage of
Tennessee, Unicor and United Companies Second Mortgage of Minnesota.
1.157 Other Definitions: Unless the context otherwise
requires, any capitalized term used and not defined herein or elsewhere in the
Plan but that is defined in the Bankruptcy Code shall have the meaning assigned
to that term in the Bankruptcy Code. Unless otherwise specified, all section,
schedule or exhibit references in the Plan are to the respective section in,
article of, or schedule or exhibit to, the Plan, as the same may be amended,
waived, or modified from time to time. The words "herein," "hereof," "hereto,"
"hereunder," and other words of similar import refer to the Plan as a whole and
not to any particular section, subsection, or clause contained in the Plan.
ARTICLE II
COMPROMISE AND SETTLEMENT OF DISPUTES;
SUBSTANTIVE CONSOLIDATION OF DEBTORS;
ASSUMPTION OF OBLIGATIONS UNDER THE PLAN
2.1 Compromise and Settlement: The Plan incorporates a
proposed compromise and settlement of certain issues which were disputed by the
Proponents, the Creditors' Committee, the holders of Allowed Bank Claims, the
holders of Senior Note Claims, the holders of Subordinated Debenture Claims and
certain other parties in interest. These issues related primarily to whether the
estates of each of the Debtors should be treated separately for purposes of
making payments to Creditors, whether and to what extent proceeds from the Sale
Transaction should be allocated among the Debtors based upon their respective
claims of ownership to certain assets sold thereunder, and the amount and
priority of certain Intercompany Claims. The provisions of the Plan relating to
substantive consolidation of the Debtors, the contribution of Intercompany
Claims, and the treatment of each class of Claims under the Plan reflect this
compromise and settlement, which, upon the Effective Date, shall be binding upon
the Debtors, all Creditors, and all Persons receiving any payments or other
distributions under the Plan.
2.2 Substantive Consolidation: On the Effective Date, the
Chapter 11 Cases shall be deemed to be substantively consolidated for purposes
of the Plan. The assets and liabilities of the Debtors shall be pooled and all
Claims shall be satisfied from the assets of a single consolidated estate. Any
Claims against one or more of the Debtors based upon a guaranty, indemnity,
co-signature, surety or otherwise, of Claims against another Debtor, including,
without limitation, the Guaranty, shall be treated as a single Claim against the
consolidated estate of the Debtors and shall be entitled to distributions under
the Plan only with respect to such single Claim.
2.3 Contribution of Intercompany Claims: On the Effective
Date, all Intercompany Claims shall be contributed to capital.
ARTICLE III
PROVISIONS FOR PAYMENT OF ADMINISTRATIVE EXPENSE CLAIMS AND PRIORITY TAX CLAIMS
3.1 Administrative Expense Claims: On the later to occur of
(a) the Effective Date and (b) the date on which such a Claim shall become an
Allowed Claim, Reorganized UC shall (i) pay to each holder of an Allowed
Administrative Expense Claim, in Cash, the full amount of such Allowed
Administrative Expense Claim, or (ii) satisfy and discharge such Allowed
Administrative Expense Claim in accordance with such other terms as may be
agreed upon by and between the holder thereof and the Debtors or Reorganized UC,
as the case may be; provided, however, that Allowed Administrative Expense
Claims representing liabilities or obligations incurred or assumed by the
Debtors in Possession in the ordinary course of business or liabilities arising
under loans made or advances extended to the Debtors in Possession, whether or
not incurred in the ordinary course of business, shall be assumed and paid by
Reorganized UC in accordance with the terms and conditions of the particular
transaction and any agreements relating thereto.
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3.2 Professional Compensation and Reimbursement Claims: All
Entities that are awarded compensation or reimbursement of expenses by the
Bankruptcy Court in accordance with section 330 or 331 of the Bankruptcy Code or
entitled to the priorities established pursuant to section 503(b)(2), 503(b)(3),
503(b)(4) or 503(b)(5) of the Bankruptcy Code, shall be paid in full, in Cash,
the amounts allowed by the Bankruptcy Court (a) on or as soon as reasonably
practicable following the later to occur of (i) the Effective Date and (ii) the
date upon which the Bankruptcy Court order allowing such Claim becomes a Final
Order or (b) upon such other terms as may be mutually agreed upon between such
holder of an Allowed Administrative Expense Claim and the Debtors.
3.3 Payment of Priority Tax Claims: On the Effective Date,
each holder of an Allowed Priority Tax Claim shall be entitled to receive
distributions in an amount equal to the full amount of such Allowed Priority Tax
Claim. At the sole option and discretion of Reorganized UC, which option shall
be exercised on or prior to the Effective Date, such payment shall be made (a)
in full, in Cash, on the Effective Date, (b) in accordance with section
1129(a)(9)(C) of the Bankruptcy Code, in full, in Cash, in up to twenty-four
(24) equal quarterly installments, commencing on the first (1st) Business Day
following the date of assessment of such Allowed Priority Tax Claim, together
with interest accrued thereon at a rate to be determined by the Bankruptcy
Court, or (c) by mutual agreement of the holder of such Allowed Priority Tax
Claim and Reorganized UC.
ARTICLE IV
CLASSIFICATION OF CLAIMS AND EQUITY INTERESTS
Claims and Equity Interests are classified as follows:
4.1 Class 1 - Priority Non-Tax Claims
4.2 Class 2 - Secured Claims
4.3 Class 3 - Bank Claims
4.4 Class 4 - Senior Note Claims
4.5 Class 5 - General Unsecured Claims
4.6 Class 6 - Convenience Claims
4.7 Class 7 - Subordinated Debenture Claims
4.8 Class 8 - Subordinated Penalty Claims
4.9 Class 9 - Pride Equity Interests
4.10 Class 10A - Statutorily Subordinated Claims
Class 10B - United Companies Common Equity Interests
4.11 Class 11 - Adobe Common Equity Interests
4.12 Class 12 - Adobe Financial Common Equity Interests
4.13 Class 13 - Ginger Mae Common Equity Interests
4.14 Class 14 - Gopher Equity Common Equity Interests
4.15 Class 15 - Pelican Common Equity Interests
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4.16 Class 16 - Southern Mortgage Common Equity Interests
4.17 Class 17 - Unicor Common Equity Interests
4.18 Class 18 - United Funding Common Equity Interests
4.19 Class 19 - United Lending Corp. Common Equity
Interests
4.20 Class 20 - United Lending Group Common Equity
Interests
4.21 Class 21 - United Credit Card Common Equity Interests
ARTICLE V
PROVISION FOR TREATMENT OF PRIORITY NON-TAX CLAIMS (CLASS 1)
5.1 Payment of Allowed Priority Non-Tax Claims: Unless
otherwise mutually agreed upon by the holder of an Allowed Priority Non-Tax
Claim and Reorganized UC, each holder of an Allowed Priority Non-Tax Claim shall
receive Cash in an amount equal to such Allowed Priority Non-Tax Claim on the
later of the Effective Date and the date such Allowed Priority Non-Tax Claim
becomes an Allowed Priority Non-Tax Claim, or as soon thereafter as is
practicable.
5.2 Continuation of Employee Medical Benefits: From the
Effective Date up to and including the first (1st) Business Day eighteen (18)
months following the earlier to occur of (a) the Effective Date and (b) the
transfer of the Debtors' servicing operations pursuant to a Sale Transaction or
otherwise, Reorganized UC shall provide, or cause to be provided through the
deposit of funds reasonably determined by Reorganized UC to be appropriate under
the circumstances, employee medical benefits in a manner and amount consistent
with the Debtors' medical benefits program prior to the Effective Date.
ARTICLE VI
PROVISION FOR TREATMENT OF SECURED CLAIMS (CLASS 2)
6.1 Treatment of Secured Claims: On the Effective Date, each
holder of an Allowed Secured Claim shall receive one of the following
distributions: (a) the payment of such holder's Allowed Secured Claim in full,
in Cash; (b) the sale or disposition proceeds of the property securing any
Allowed Secured Claim to the extent of the value of their respective interests
in such property; (c) the surrender to the holder or holders of any Allowed
Secured Claim of the property securing such Claim; or (d) such other
distributions as shall be necessary to satisfy the requirements of chapter 11 of
the Bankruptcy Code. The manner and treatment of each Allowed Secured Claim
shall be determined by the Debtors, in their sole and absolute discretion, on or
before the Confirmation Date, and upon notice to each Creditor holding a Secured
Claim.
ARTICLE VII
PROVISION FOR TREATMENT OF BANK CLAIMS (CLASS 3)
7.1 Allowance of Bank Claims: On the Effective Date, the Bank
Claims shall be deemed allowed in the aggregate amount of Eight Hundred Forty
Nine Million Nine Hundred Five Thousand One Hundred Sixty One Dollars and
Sixty-Three Cents ($849,905,161.63) plus accrued and unpaid interest relating to
the period up to but not including the Petition Date in the amount of Seven
Million Nine Hundred Ninety One Thousand Forty Four Dollars and Five Cents
($7,991,044.05).
7.2 Treatment of Allowed Bank Claims: Commencing on the
Effective Date, each holder of an Allowed Bank Claim shall be entitled to
receive distributions in an amount equal to (a) such holder's Pro Rata Share of
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the Bank Cash Amount, and (b) the aggregate number of Litigation Trust Interests
equal to such holder's Pro Rata Share of the Bank Interest Amount.
7.3 Payment of Senior Creditor Cash: On the Effective Date,
the Debtors shall pay to the Agent and such holders of Allowed Bank Claims which
have incurred fees and expenses in connection with the negotiation and
preparation of the Plan, an amount equal to the fees and expenses incurred by
the Agent by and on behalf of the holders of Allowed Bank Claims and such
holders of Allowed Bank Claims, as the case may be, during the period from
Petition Date up to and including the Effective Date.
7.4 Limitation on Recovery: Notwithstanding anything contained
herein to the contrary, including, without limitation, the distributions to be
made to a holder of an Allowed Bank Claim in accordance with Section 7.2 hereof,
in the event that the sum of (a) the distributions of Net Bank Cash Amount and
(b) the distributions from the Litigation Trust to such holder are equal to one
hundred percent (100%) of such holder's Allowed Bank Claim, then, the Litigation
Trust Interests attributable to such holder shall be deemed redistributed to
holders of Allowed Claims and Allowed Equity Interests in accordance with the
provisions of Section 32.12 of the Plan and the documents, instruments and
agreements governing such Claims and Equity Interests, including, without
limitation, the contractual subordination provisions set forth therein, and the
Bankruptcy Code.
ARTICLE VIII
PROVISION FOR TREATMENT OF SENIOR NOTE
CLAIMS (CLASS 4)
8.1 Allowance of Certain Senior Note Claims: On the Effective
Date, the Senior Note Claims arising under or relating to the 9.35% Notes and
the 7.7% Notes shall be deemed allowed in the aggregate amounts of One Hundred
Twenty-Five Million Dollars ($125,000,000.00) and One Hundred Million Dollars
($100,000,000.00), respectively, plus accrued and unpaid interest relating to
the period up to but not including the Petition Date.
8.2 Treatment of Allowed Senior Note Claims: Commencing on the
Effective Date, each holder of an Allowed Senior Note Claim shall be entitled to
receive distributions in an amount equal to (a) such holder's Pro Rata Share of
the Senior Note Cash Amount, and (b) the aggregate number of Litigation Trust
Interests equal to such holder's Pro Rata Share of the Senior Note Interest
Amount.
8.3 Payment of Senior Creditor Cash: On the Effective Date,
the Debtors shall pay to the Senior Indenture Trustee and such holders of
Allowed Senior Note Claims arising under the Senior Notes which have incurred
fees and expenses in connection with the negotiation and preparation of the
Plan, an amount equal to the fees and expenses incurred by the Senior Indenture
Trustee by and on behalf of holders of Allowed Senior Note Claims and such
holders of Allowed Senior Note Claims, as the case may be, during the period
from the Petition Date up to and including the Effective Date.
8.4 Payments to be Made to Senior Indenture Trustee: The
payments and distributions to be made under the Plan to holders of Allowed
Senior Note Claims arising under the Senior Note Indenture shall be made to the
Senior Indenture Trustee, which, subject to any rights or claims of the Senior
Indenture Trustee (such as claims for fees and reimbursement of expenses,
including the fees and expenses of its advisors and counsel) under the Senior
Note Indenture, shall transmit such payments and distributions to holders of
such Allowed Senior Note Claims. All payments to holders of Allowed Senior Note
Claims arising under the Senior Note Indenture shall only be made to such
Creditors after the surrender by such Creditors of the certificates representing
such Senior Note Claim, or in the event that such certificate is lost, stolen,
mutilated or destroyed, delivery of evidence satisfactory to the Senior
Indenture Trustee and Reorganized UC of the loss, theft, mutilation or
destruction of such certificate or, in Reorganized UC's sole discretion, an
affidavit of such Creditor in accordance with Article 8 of the Uniform
Commercial Code, or a surety bond, the amount and form of which shall be
satisfactory to the Senior Indenture Trustee and Reorganized UC, from a surety
company satisfactory to the Senior Indenture Trustee and Reorganized UC. Upon
surrender of such certificates, the Senior Indenture Trustee shall cancel such
Senior Notes and deliver such cancelled Senior Notes to Reorganized UC, or
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otherwise dispose of same as Reorganized UC may reasonably request. As soon as
practicable after (a) surrender of certificates evidencing Allowed Senior Note
Claims or (b) delivery of the affidavit or bond, the Senior Indenture Trustee
shall distribute to the holders thereof such holder's Pro Rata Share in
accordance with the respective rights of the Senior Indenture Trustee and such
holder under the terms of the Senior Notes Indenture. If such Creditor has not
complied with the provisions hereof within one (1) year following the Effective
Date, such Creditor shall be deemed to have no further Claim against the
Debtors, the Debtors' estates or Reorganized UC. As soon as practicable after
the date which is one (1) year following the Effective Date of the Plan, the
Senior Indenture Trustee shall deliver to Reorganized UC the distributions which
a Creditor holding an Allowed Senior Note Claim arising under the Senior Note
Indenture would have received had such Creditor surrendered such certificate
evidencing such Senior Note Claim to Reorganized UC, and, upon such delivery,
the Senior Indenture Trustee shall have no further responsibility with respect
to the Senior Indenture or the provisions of the Plan.
8.5 Closing of Transfer Ledgers for Senior Notes: At the close
of business on the Record Date, the transfer ledgers for the Senior Notes shall
be closed, and thereafter there shall be no further registrations or other
changes in the holders of any of the Senior Notes on the books of United
Companies (or of any indenture trustee, transfer agents or registrars it may
have employed in connection therewith), and the Debtors shall have no obligation
to recognize any transfer of the Senior Notes occurring thereafter (but shall be
entitled instead to recognize and deal with, for all purposes under the Plan,
except as otherwise provided herein, only those holders reflected on its books
as of the Effective Date).
8.6 Limitation on Recovery: Notwithstanding anything contained
herein to the contrary, including, without limitation, the distributions to be
made to a holder of an Allowed Senior Note Claim in accordance with Section 8.2
hereof, in the event that the sum of (a) the distributions of Net Senior Note
Cash Amount and (b) the distributions from the Litigation Trust to such holder
are equal to one hundred percent (100%) of such holder's Allowed Senior Note
Claim, then, the Litigation Trust Interests attributable to such holder shall be
deemed redistributed to holders of Allowed Claims and Allowed Equity Interests
in accordance with the provisions of Section 32.12 of the Plan and the
documents, instruments and agreements governing such Claims and Equity
Interests, including, without limitation, the contractual subordination
provisions set forth therein, and the Bankruptcy Code.
ARTICLE IX
PROVISION FOR TREATMENT OF
GENERAL UNSECURED CLAIMS (CLASS 5)
9.1 Treatment of General Unsecured Claims: Commencing on the
Effective Date, each holder of an Allowed General Unsecured Claim shall be
entitled to receive distributions (a) in an aggregate amount equal to thirty-two
percent (32%) of such holder's Allowed General Unsecured Claim and (b) equal to
such holder's Pro Rata Share of the General Unsecured Interest Amount. The
receipt and acceptance of distributions under the Plan by a holder of a Borrower
Litigation Claim or its successors or assigns shall constitute a full release
and waiver of any and all claims which have been or may have been asserted for
actions arising from or related to the origination or servicing of loans, moneys
advanced or mortgages issued by the Debtors, including, without limitation,
claims against the Debtors' successors and assigns for actions arising from or
related to the period prior to the Effective Date.
9.2 Optional Arbitration of Borrower Litigation Claims: In the
event that a Borrower Litigation Claim is not resolved prior to the Effective
Date and the holder thereof does not receive distributions in accordance with
the provisions of Section 9.1 of the Plan, such holder's Borrower Litigation
Claim, wherever located, shall, at the election of such holder, be either (a)
determined by the Bankruptcy Court in accordance with the provisions of Article
XXVI hereof or (b) transferred to an arbitration panel located in or associated
with the United States District Court for the Middle District of Louisiana for
binding arbitration to determine the validity and amount of such Borrower
Litigation Claim and such arbitration panel shall have sole and exclusive
jurisdiction to determine the validity and amount of such Borrower Litigation
Claim; provided, however, nothing contained herein limits, or in any way is
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intended to limit, Reorganized UC's ability to compromise and settle any
Borrower Litigation Claim in accordance with the provisions of Section 26.1 of
the Plan.
9.3 Foreclosure Actions. To the extent that the holder of a
Borrower Litigation Claim (i) has asserted such Borrower Litigation Claim in the
context of, and as a counterclaim to, a foreclosure action commenced by the
Debtors or their successors and assigns and (ii) receives a distribution under
the Plan pursuant to Sections 9.1 or 9.4 thereof, such holder of a Borrower
Litigation Claim shall be deemed to have received such distribution in full and
complete satisfaction of any Borrower Litigation Claim that such holder may have
against any of the Debtors and their successors and assigns and in consideration
for the entry of a judgment in favor of the Debtors or their successors and
assigns in connection with such foreclosure action.
9.4 Allowed Claims of One Thousand Dollars or More:
Notwithstanding the provisions of Section 9.1 of the Plan, any holder of an
Allowed General Unsecured Claim whose Allowed General Unsecured Claim is more
than One Thousand Dollars ($1,000.00), and who elects to reduce the amount of
such Allowed Claim to One Thousand Dollars ($1,000.00), shall, at such holder's
option, be entitled to receive, based on such Allowed Claim as so reduced,
distributions pursuant to Article X hereof, in full settlement, satisfaction,
release and discharge of such Allowed Claim. Such election must be made on the
Ballot and be received by the Debtors on or prior to the Ballot Date. Any
election made after the Ballot Date shall not be binding upon the Debtors unless
the Ballot Date is expressly waived, in writing, by the Debtors.
9.5 Limitation on Recovery: Notwithstanding anything contained
herein to the contrary, including, without limitation, the distributions to be
made to a holder of an Allowed General Unsecured Claim in accordance with
Section 9.1 hereof, in the event that the sum of (a) the distributions of Cash
in accordance with Section 9.1 hereof and (b) the distributions from the
Litigation Trust to such holder are equal to one hundred percent (100%) of such
holder's Allowed General Unsecured Claim, then, the Litigation Trust Interests
distributed to such holder shall be deemed redistributed to holders of Allowed
Claims and Allowed Equity Interests in accordance with the provisions of Section
32.12 of the Plan and the documents, instruments and agreements governing such
Claims and Equity Interests, including, without limitation, the contractual
subordination provisions set forth therein, and the Bankruptcy Code.
ARTICLE X
PROVISIONS FOR TREATMENT OF CONVENIENCE
CLAIMS (CLASS 6)
10.1 Treatment of Convenience Claims: On the Effective Date,
each holder of an Allowed Convenience Claim shall receive Cash in an amount
equal to one hundred percent (100%) of such Allowed Convenience Claim.
ARTICLE XI
PROVISION FOR TREATMENT OF SUBORDINATED DEBENTURE
CLAIMS (CLASS 7)
11.1 Allowance of Certain Subordinated Debenture Claims: On
the Effective Date, the Subordinated Debenture Claims arising under or relating
to the Subordinated Debentures shall be deemed allowed in the aggregate amount
of One Hundred Fifty Million Dollars ($150,000,000.00) plus accrued and unpaid
interest relating to the period up to but not including the Petition Date.
11.2 Treatment of Allowed Subordinated Debenture Claims: On
the Effective Date, each holder of an Allowed Subordinated Debenture Claim shall
be entitled to receive such holder's Pro Rata Share of (a) Two Million Five
Hundred Thousand Dollars ($2,500,000.00) and (b) three million (3,000,000)
Litigation Trust Interests.
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11.3 Contingent Distribution/Limitation on Recovery:
Notwithstanding anything contained herein to the contrary, in the event that (a)
Litigation Trust Interests are deemed redistributed to a holder of an Allowed
Subordinated Debenture Claim in accordance with the provisions of Sections 7.4,
8.6 and 9.5 hereof and (b) the sum of the distributions from the Litigation
Trust to such holder are equal to one hundred percent (100%) of such holder's
Allowed Subordinated Debenture Claim, then, the Litigation Trust Interests
distributable to such holder shall be deemed redistributed to holders of Allowed
Claims and Allowed Equity Interests in accordance with the provisions of Section
32.12 of the Plan and the documents, instruments and agreements governing such
Claims and Equity Interests, including, without limitation, the contractual
subordination provisions set forth therein, and the Bankruptcy Code.
11.4 Payments to be Made to Subordinated Indenture Trustee:
The payments and distributions to be made under the Plan to holders of Allowed
Subordinated Debenture Claims arising under the Subordinated Indenture shall be
made to the Subordinated Indenture Trustee, which, subject to any rights or
claims of Subordinated Indenture Trustee (such as claims for fees and
reimbursement of expenses, including the fees and expenses of its advisors and
counsel) under the Subordinated Indenture, shall transmit such payments and
distribution to holders of such Allowed Subordinated Debenture Claims. All
payment to holders of Allowed Subordinated Debenture Claims arising under the
Subordinated Indenture shall only be made to such Creditors after the surrender
by such Creditor of the certificates representing such Subordinated Debenture
Claim, or in the event that such certificate is lost, stolen, mutilated or
destroyed, delivery of evidence satisfactory to the Subordinated Indenture
Trustee and Reorganized UC of the loss, theft, mutilation or destruction of such
certificate or, in Reorganized UC's sole discretion, an affidavit of such
Creditor in accordance with Article 8 of the Uniform Commercial Code, or a
surety bond, the amount and form of which shall be satisfactory to the
Subordinated Indenture Trustee and Reorganized UC, from a surety company
satisfactory to the Subordinated Indenture Trustee and Reorganized UC. Upon
surrender of such certificates, the Subordinated Indenture Trustee shall cancel
such Subordinated Debentures and deliver such cancelled Subordinated Debentures
to Reorganized UC or otherwise dispose of same as Reorganized UC may reasonably
request. As soon as practicable after (a) surrender of certificates evidencing
Subordinated Debenture Claims or (b) delivery of the affidavit or bond, the
Subordinated Indenture Trustee shall distribute to the holders thereof such
holder's Pro Rata Share in accordance with the respective rights of the
Subordinated Indenture Trustee and such holder under the terms of the
Subordinated Indenture. If such Creditor has not complied with the provisions
hereof within one (1) year following the Effective Date, such Creditor shall be
deemed to have no further Claim against the Debtors, the Debtors' estates or
Reorganized UC. As soon as practicable after the date which is one (1) year
following the Effective Date of the Plan, the Subordinated Indenture Trustee
shall deliver to Reorganized UC the distributions which a Creditor holding an
Allowed Subordinated Debenture Claim arising under the Subordinated Indenture
would have received had such Creditor surrendered such certificate evidencing
such Subordinated Debenture Claim to Reorganized UC, and, upon such delivery,
the Subordinated Indenture Trustee shall have no further responsibility with
respect to the Subordinated Indenture or the provisions of the Plan.
11.5 Closing of Transfer Ledgers for Subordinated Debentures:
At the close of business on the Record Date, the transfer ledgers for the
Subordinated Debentures shall be closed, and thereafter there shall be no
further registrations or other changes in the holders of any of the Subordinated
Debentures on the books of United Companies (or of any indenture trustee,
transfer agents or registrars it may have employed in connection therewith), and
the Debtors shall have no obligation to recognize any transfer of the
Subordinated Debentures occurring thereafter (but be entitled instead to
recognize and deal with, for all purposes under the Plan, except as otherwise
provided herein, only those holders reflected on its books as of the Effective
Date).
11.6 Payment of Certain Fees and Expenses: On the Effective
Date, the Debtors shall pay directly to such holders of Allowed Subordinated
Debenture Claims arising under the Subordinated Debentures which have incurred
fees and expenses in connection with the negotiation and preparation of the
Plan, an amount equal to the fees and expenses incurred by such holders of
Allowed Subordinated Debenture Claims during the period from the Petition Date
up to and including August 10, 2000 up to the aggregate amount of One Hundred
Twenty-Five Thousand Dollars ($125,000.00).
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ARTICLE XII
PROVISION FOR TREATMENT OF SUBORDINATED PENALTY CLAIMS (CLASS 8)
12.1 Treatment of Subordinated Penalty Claims: Commencing on
the Effective Date, each holder of an Allowed Subordinated Penalty Claim shall
be entitled to receive such holder's Pro Rata Share of Litigation Trust
Interests to be deemed redistributed in accordance with the provisions of
Sections 7.4, 8.6, 9.5 and 11.3 of the Plan.
12.2 Contingent Distribution/Limitation on Recovery: In the
event that (a) Litigation Trust Interests are deemed redistributed to a holder
of an Allowed Subordinated Penalty Claim in accordance with the provisions of
Sections 7.4, 8.6, 9.5, 11.3 and 12.1 hereof and (b) the sum of the
distributions from the Litigation Trust to such holder are equal to one hundred
percent (100%) of such holder's Allowed Subordinated Penalty Claim, then the
Litigation Trust Interests distributable to such holder shall be deemed
redistributed to holders of Allowed Claims and Allowed Equity Interests in
accordance with the provisions of Section 32.12 of the Plan and the documents,
instruments and agreements governing such Claims and Equity Interests,
including, without limitation, the contractual subordination provisions set
forth therein, and the Bankruptcy Code.
ARTICLE XIII
PROVISION FOR TREATMENT OF PRIDE EQUITY INTERESTS (CLASS 9)
13.1 Conversion of Pride Equity Interests: On the Effective
Date, each Pride Equity Interest shall be deemed to be converted to two (2)
shares of common stock of United Companies for each Pride Equity Interest.
13.2 Treatment of Pride Equity Interests: On the Effective
Date, each holder of an Allowed Pride Equity Interest shall receive such
holder's Pro Rata Share of distributions in accordance with provisions of
Section 14.3 of the Plan.
ARTICLE XIV
PROVISION FOR TREATMENT OF STATUTORILY SUBORDINATED CLAIMS (CLASS 10A)
AND UNITED COMPANIES COMMON EQUITY INTERESTS (CLASS 10B)
14.1 Cancellation of Existing Equity Interests: On the
Effective Date, all United Companies Equity Interests shall be deemed
extinguished and the certificates and all other documents representing such
Equity Interests shall be deemed cancelled and of no force and effect.
14.2 Treatment of Statutorily Subordinated Claims: On the
Effective Date, each holder of an Allowed Statutorily Subordinated Claim shall
receive such holder's Pro Rate Share of the Statutorily Subordinated Claim
Percentage of three million (3,000,000) Litigation Trust Interests.
14.3 Treatment of United Companies Common Equity Interests: On
the Effective Date, each holder of an Allowed United Companies Common Equity
Interests shall receive such holder's Pro Rata Share of the Equity Interest
Percentage of three million (3,000,000) Litigation Trust Interests.
14.4 Contingent Distribution/Limitation on Recovery:
Notwithstanding anything contained herein to the contrary, in the event that (a)
Litigation Trust Interests are deemed redistributed to a holder of an Allowed
Statutorily Subordinated Claim in accordance with the provisions of Sections
7.4, 8.6, 9.5 and 11.3 hereof and (b) the sum of the distributions from the
Litigation Trust to such holder are equal to one hundred percent (100%) of such
holder's Allowed Statutorily Subordinated Claim then, the Litigation Trust
Interests distributable to such holder shall be deemed redistributed to holders
of Allowed United Companies Equity Interests in accordance with the provisions
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of the documents, instruments and agreements governing such Equity Interests,
including, without limitation, the contractual subordination provisions set
forth therein, and the Bankruptcy Code.
ARTICLE XV
PROVISION FOR TREATMENT OF ADOBE
COMMON EQUITY INTERESTS (CLASS 11)
15.1 Cancellation of Adobe Common Equity Interest: On the
Effective Date, (a) all Adobe Common Equity Interests shall be deemed
extinguished and the certificates and all other documents representing such
Equity Interests shall be deemed cancelled and of no force and effect and (b)
the Plan Administrator shall administer the assets of such Entity in accordance
with the provisions of Article XXXVI hereof; provided, however, that, in the
event that the Alternative Residual Sale Transaction is consummated through a
stock purchase agreement, the provisions of Section 37.3 of the Plan shall apply
and the Adobe Common Equity Interests shall be transferred to the relevant
purchaser in accordance with the Alternative Residual Sale Transaction.
ARTICLE XVI
PROVISION FOR TREATMENT OF ADOBE FINANCIAL
COMMON EQUITY INTERESTS (CLASS 12)
16.1 Cancellation of Adobe Financial Common Equity Interest:
On the Effective Date, (a) all Adobe Financial Common Equity Interests shall be
deemed extinguished and the certificates and all other documents representing
such Equity Interests shall be deemed cancelled and of no force and effect and
(b) the Plan Administrator shall administer the assets of such Entity in
accordance with the provisions of Article XXXVI hereof; provided, however, that,
in the event that the Alternative Residual Sale Transaction is consummated
through a stock purchase agreement, the provisions of Section 37.3 of the Plan
shall apply and the Adobe Financial Common Equity Interests shall be transferred
to the relevant purchaser in accordance with the Alternative Residual Sale
Transaction.
ARTICLE XVII
PROVISION FOR TREATMENT OF GINGER MAE
COMMON EQUITY INTERESTS (CLASS 13)
17.1 Cancellation of Ginger Mae Common Equity Interests: On
the Effective Date, (a) all Ginger Mae Common Equity Interests shall be deemed
extinguished and the certificates and all other documents representing such
Equity Interests shall be deemed cancelled and of no force and effect and (b)
the Plan Administrator shall administer the assets of such Entity in accordance
with the provisions of Article XXXVI hereof.
ARTICLE XVIII
PROVISION FOR TREATMENT OF GOPHER EQUITY
COMMON EQUITY INTERESTS (CLASS 14)
18.1 Cancellation of Gopher Equity Common Equity Interests: On
the Effective Date, (a) all Gopher Equity Common Equity Interests shall be
deemed extinguished and the certificates and all other documents representing
such Equity Interests shall be deemed cancelled and of no force and effect and
(b) the Plan Administrator shall administer the assets of such Entity in
accordance with the provisions of Article XXXVI hereof; provided, however, that,
in the event that the Alternative Residual Sale Transaction is consummated
through a stock purchase agreement, the provisions of Section 37.3 of the Plan
shall apply and the Gopher Equity Common Equity Interests shall be transferred
to the relevant purchaser in accordance with the Alternative Residual Sale
Transaction.
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ARTICLE XIX
PROVISION FOR TREATMENT OF PELICAN
COMMON EQUITY INTERESTS (CLASS 15)
19.1 Cancellation of Pelican Common Equity Interests: On the
Effective Date, (a) all Pelican Common Equity Interests shall be deemed
extinguished and the certificates and all other documents representing such
Equity Interests shall be deemed cancelled and of no force and effect and (b)
the Plan Administrator shall administer the assets of such Entity in accordance
with the provisions of Article XXXVI hereof; provided, however, that, in the
event that the Alternative Residual Sale Transaction is consummated through a
stock purchase agreement, the provisions of Section 37.3 of the Plan shall apply
and the Pelican Common Equity Interests shall be transferred to the relevant
purchaser in accordance with the Alternative Residual Sale Transaction.
ARTICLE XX
PROVISION FOR TREATMENT OF SOUTHERN MORTGAGE
COMMON EQUITY INTERESTS (CLASS 16)
20.1 Cancellation of Southern Mortgage Common Equity
Interests: On the Effective Date, (a) all Southern Mortgage Common Equity
Interests shall be deemed extinguished and the certificates and all other
documents representing such Equity Interests shall be deemed cancelled and of no
force and effect and (b) the Plan Administrator shall administer the assets of
such Entity in accordance with the provisions of Article XXXVI hereof.
ARTICLE XXI
PROVISION FOR TREATMENT OF UNICOR
COMMON EQUITY INTERESTS (CLASS 17)
21.1 Cancellation of Unicor Common Equity Interests: On the
Effective Date, (a) all Unicor Common Equity Interests shall be deemed
extinguished and the certificates and all other documents representing such
Equity Interests shall be deemed cancelled and of no force and effect and (b)
the Plan Administrator shall administer the assets of such Entity in accordance
with the provisions of Article XXXVI hereof.
ARTICLE XXII
PROVISION FOR TREATMENT OF UNITED FUNDING
COMMON EQUITY INTERESTS (CLASS 18)
22.1 Cancellation of United Funding Common Equity Interests:
On the Effective Date, (a) all United Funding Common Equity Interests shall be
deemed extinguished and the certificates and all other documents representing
such Equity Interests shall be deemed cancelled and of no force and effect and
(b) the Plan Administrator shall administer the assets of such Entity in
accordance with the provisions of Article XXXVI hereof.
ARTICLE XXIII
PROVISION FOR TREATMENT OF UNITED LENDING CORP.
COMMON EQUITY INTERESTS (CLASS 19)
23.1 Cancellation of United Lending Corp. Common Equity
Interests: On the Effective Date, (a) All United Lending Corp. Common Equity
Interests shall be deemed extinguished and the certificates and all other
documents representing such Equity Interests shall be deemed cancelled and of no
force and effect and (b) the Plan Administrator shall administer the assets of
such Entity in accordance with the provisions of Article XXXVI hereof; provided,
however, that, in the event that an Alternative Residual Sale Transaction occurs
through consummation of a stock purchase agreement, at the discretion of the
highest or best offeror, (1) the Equity Interests represented by United Lending
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Corp. Common Equity Interests shall be extinguished and the certificates and all
other documents representing such Equity Interests shall be deemed cancelled and
of no force and effect and (2) the certificates representing Reorganized UC
Lending Common Stock shall be issued to such higher or better offeror in
accordance with the terms and conditions of the Alternative Residual Sale
Agreement.
ARTICLE XXIV
PROVISION FOR TREATMENT OF UNITED LENDING GROUP
COMMON EQUITY INTERESTS (CLASS 20)
24.1 Cancellation of United Lending Group Common Equity
Interests: On the Effective Date, (a) all United Lending Group Common Equity
Interests shall be deemed extinguished and the certificates and all other
documents representing such Equity Interests shall be deemed cancelled and of no
force and effect and (b) the Plan Administrator shall administer the assets of
such Entity in accordance with the provisions of Article XXXVI hereof.
ARTICLE XXV
PROVISION FOR TREATMENT OF UNITED CREDIT CARD
COMMON EQUITY INTERESTS (CLASS 21)
25.1 Cancellation of United Credit Card Common Equity
Interests: On the Effective Date, (a) all United Credit Card Common Equity
Interests shall be deemed extinguished and the certificates and all other
documents representing such Equity Interests shall be deemed cancelled and of no
force and effect and (b) the Plan Administrator shall administer the assets of
such Entity in accordance with the provisions of Article XXXVI hereof.
ARTICLE XXVI
PROVISIONS FOR TREATMENT OF DISPUTED CLAIMS UNDER THE PLAN
26.1 Objections to Claims; Prosecution of Disputed Claims: The
Debtors' Reorganized UC or the Plan Administrator shall object to the allowance
of Claims or Equity Interests filed with the Bankruptcy Court with respect to
which they dispute liability or allowance in whole or in part. All objections
shall be litigated to Final Order; provided, however, that Reorganized UC
(within such parameters as may be established by the Board of Directors of
Reorganized UC) shall have the authority to file, settle, compromise or withdraw
any objections to Claims or Equity Interests, without approval of the Bankruptcy
Court. Unless otherwise ordered by the Bankruptcy Court, the Debtors'
Reorganized UC or the Plan Administrator shall file and serve all objections to
Claims or Equity Interests as soon as practicable, but in no event later than
the Effective Date or such later date as may be approved by the Bankruptcy
Court.
26.2 Estimation of Claims: The Debtors, Reorganized UC or the
Plan Administrator may at any time request that the Bankruptcy Court estimate
any contingent or Disputed Claim pursuant to section 502(c) of the Bankruptcy
Code regardless of whether the Debtors' Reorganized UC or the Plan Administrator
previously have objected to such Claim or whether the Bankruptcy Court has ruled
on any such objection, and the Bankruptcy Court will retain jurisdiction to
estimate any Claim at any time during litigation concerning any objection to any
Claim, including, without limitation, during the pendency of any appeal relating
to any such objection. Subject to the provisions of section 502(j) of the
Bankruptcy Code, in the event that the Bankruptcy Court estimates any contingent
or Disputed Claim, the amount so estimated shall constitute the allowed amount
of such Claim. If the estimated amount constitutes a maximum limitation on the
amount of such Claim, the Debtors' Reorganized UC or the Plan Administrator may
pursue supplementary proceedings to object to the allowance of such Claim. All
of the aforementioned objection, estimation and resolution procedures are
intended to be cumulative and not necessarily exclusive of one another. Claims
may be estimated and subsequently compromised, settled, withdrawn or resolved by
any mechanism approved by the Bankruptcy Court.
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26.3 Payments and Distributions on Disputed Claims: At such
time as a Disputed Claim becomes, in whole or in part, an Allowed Claim, the
Plan Administrator shall distribute to the holder thereof the distributions, if
any, to which such holder is then entitled under the Plan. Such distribution, if
any, shall be made as soon as practicable after the date that the order or
judgment of the Bankruptcy Court allowing such Disputed Claim becomes a Final
Order but in no event more than thirty (30) days thereafter. No interest shall
be paid on Disputed Claims that later become Allowed or with respect to any
distribution to such holder. No distribution shall be made with respect to all
or any portion of any Disputed Claim pending the entire resolution thereof in
the manner prescribed in Section 26.1 hereof.
ARTICLE XXVII
THE LITIGATION TRUST
27.1 Establishment of the Trust: On the Effective Date, the
Debtors, on their own behalf and on behalf of holders of Allowed Claims and
Allowed Equity Interests in Classes 3, 4, 5, 7, 8, 9 and 10 shall execute the
Litigation Trust Agreement and shall take all other steps necessary to establish
the Litigation Trust. On the Effective Date, and in accordance with and pursuant
to the terms of Section 27.4 of the Plan, the Debtors shall transfer to the
Litigation Trust all of their right, title, and interest in the Litigation Trust
Claims. In connection with the above-described rights and causes of action, any
attorney-client privilege, work-product privilege, or other privilege or
immunity attaching to any documents or communications (whether written or oral)
transferred to the Litigation Trust shall vest in the Litigation Trustee and its
representatives, and the Debtors and the Litigation Trustee are authorized to
take all necessary actions to effectuate the transfer of such privileges.
27.2 Purpose of the Litigation Trust: The Litigation Trust
shall be established for the sole purpose of liquidating its assets, in
accordance with Treasury Regulation Section 301.7701-4(d), with no objective to
continue or engage in the conduct of a trade or business.
27.3 Funding Expenses of the Litigation Trust: In accordance
with the Litigation Trust Agreement and any agreements entered into in
connection therewith, on the Effective Date, the Debtors shall transfer One
Million Seven Hundred Fifty Thousand Dollars ($1,750,000.00) to the Litigation
Trust. The Debtors and Reorganized UC shall have no further obligation to
provide any funding with respect to the Litigation Trust.
27.4 Transfer of Assets:
(a) The transfer of the Litigation Trust Claims to the
Litigation Trust shall be made, as provided herein, for the benefit of the
holders of Allowed Claims and Allowed Equity Interests in Classes 3, 4, 5, 7, 8,
9 and 10 in each case, only to the extent such holders in such Classes are
entitled to distributions under the Plan. In this regard, in partial
satisfaction of Allowed Claims and Allowed Equity Interests in Classes 3, 4, 5,
7, 8, 9 and 10 the Litigation Trust Claims will be transferred to such holders
of Allowed Claims and Allowed Equity Interests, to be held by the Debtors on
their behalf. Immediately thereafter, on behalf of the holders of Allowed Claims
and Allowed Equity Interests in Classes 3, 4, 5, 7, 8, 9 and 10, respectively,
the Debtors shall transfer such Litigation Trust Claims to the Litigation Trust
in exchange for Litigation Trust Interests for the benefit of holders of Allowed
Claims and Allowed Equity Interests in Classes 3, 4, 5, 7, 8, 9 and 10,
respectively, in accordance with the Plan. Upon the transfer of the Litigation
Trust Claims, the Debtors shall have no interest in or with respect to the
Litigation Trust Claims or the Litigation Trust.
(b) For all federal income tax purposes, all parties
(including, without limitation, the Debtors, the Litigation Trustee and the
beneficiaries of the Litigation Trust) shall treat the transfer of assets to the
Litigation Trust in accordance with the terms of the Plan, as a transfer to the
holders of Allowed Claims and Allowed Equity Interests in Classes 3, 4, 5, 7, 8,
9 and 10, respectively, followed by a transfer by such holders to the Litigation
Trust and the beneficiaries of the Litigation Trust shall be treated as the
grantors and owners thereof.
27.5 Valuation of Assets: As soon as possible after the
Effective Date, but in no event later than thirty (30) days thereafter, the
Litigation Trust Board shall inform, in writing, the Litigation Trustee of the
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value of the assets transferred to the Litigation Trust, based on the good faith
determination of the Litigation Trust Board, and the Litigation Trustee shall
apprise, in writing, the beneficiaries of the Litigation Trust of such
valuation. The valuation shall be used consistently by all parties (including
the Debtors, Reorganized UC, the Litigation Trustee and the beneficiaries of the
Litigation Trust) for all federal income tax purposes.
27.6 Litigation of Assets; Responsibilities of Litigation
Trustee:
(a) The Litigation Trustee, upon direction by the
Litigation Trust Board and the exercise of their collective reasonable business
judgment, shall, in an expeditious but orderly manner, liquidate and convert to
Cash the assets of the Litigation Trust, make timely distributions and not
unduly prolong the duration of the Litigation Trust. The liquidation of the
Litigation Trust Claims may be accomplished either through the prosecution,
compromise and settlement, abandonment or dismissal of any or all claims, rights
or causes of action, or otherwise. The Litigation Trustee, upon direction by the
Litigation Trust Board, shall have the absolute right to pursue or not to pursue
any and all claims, rights, or causes of action, as it determines is in the best
interests of the beneficiaries of the Litigation Trust, including, without
limitation, taking into account the indemnification and contribution obligations
of Reorganized UC and the diminution in value of Reorganized UC, and consistent
with the purposes of the Litigation Trust, and shall have no liability for the
outcome of its decision. The Litigation Trustee may incur any reasonable and
necessary expenses in liquidating and converting the assets to Cash.
(b) The Litigation Trustee shall be named in the
Confirmation Order or in the Litigation Trust Agreement and shall have the power
(i) to prosecute for the benefit of the Litigation Trust all claims, rights and
causes of action transferred to the Litigation Trust (whether such suits are
brought in the name of the Litigation Trust or otherwise), and (ii) to otherwise
perform the functions and take the actions provided for or permitted herein or
in any other agreement executed by the Litigation Trustee pursuant to the Plan.
Any and all proceeds generated from such claims, rights, and causes of action
shall be the property of the Litigation Trust.
27.7 Investment Powers: The right and power of the Litigation
Trustee to invest assets transferred to the Litigation Trust, the proceeds
thereof, or any income earned by the Litigation Trust, shall be limited to the
right and power to invest such assets (pending periodic distributions in
accordance with Section 26.8 of the Plan) in Cash Equivalents; provided,
however, that (a) the scope of any such permissible investments shall be limited
to include only those investments, or shall be expanded to include any
additional investments, as the case may be, that a liquidating trust, within the
meaning of Treasury Regulation Section 301.7701-4(d) may be permitted to hold,
pursuant to the Treasury Regulations, or any modification in the IRS guidelines,
whether set forth in IRS rulings, other IRS pronouncements or otherwise, and (b)
the Litigation Trustee may expend the assets of the Litigation Trust (i) as
reasonably necessary to meet contingent liabilities and to maintain the value of
the assets of the Litigation Trust during liquidation, (ii) to pay reasonable
administrative expenses (including, but not limited to, any taxes imposed on the
Litigation Trust or fees and expenses in connection with litigation), and (iii)
to satisfy other liabilities incurred or assumed by the Litigation Trust (or to
which the assets are otherwise subject) in accordance with the Plan or the
Litigation Trust Agreement; and, provided, further, that, under no
circumstances, shall the Litigation Trust segregate the assets of the Litigation
Trust on the basis of classification of the holders of Litigation Trust
Interests, other than with respect to distributions to be made on account of
Disputed Claims and Disputed Equity Interests in accordance with the provisions
hereof.
27.8 Annual Distribution; Withholding:
(a) Annual Distributions: Except as provided in Section
27.8(b) hereof, the Litigation Trustee shall distribute at least annually to the
holders of Litigation Trust Interests all net cash income plus all net cash
proceeds from the liquidation of assets (including as Cash for this purpose, all
Cash Equivalents); provided, however, that the Litigation Trustee shall not be
obligated to make any such distributions unless the aggregate amount of any such
distributions is equal to or greater than One Million Dollars ($1,000,000.00);
and, provided, further, that the Litigation Trust may retain such amounts (i) as
are reasonably necessary to meet contingent liabilities and to maintain the
value of the assets of the Litigation Trust during liquidation, (ii) to pay
reasonable administrative expenses (including any taxes imposed on the
Litigation Trust or in respect of the assets of the Litigation Trust or the
escrow created in accordance with Section 27.14 hereof), and (iii) to satisfy
other liabilities incurred or assumed by the Litigation Trust (or to which the
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assets are otherwise subject) in accordance with the Plan or the Litigation
Trust Agreement. All such distributions shall be pro rata based on the number of
Litigation Trust Interests held by a holder compared with the aggregate number
of Litigation Trust Interests outstanding, subject to the terms of the Plan and
the Litigation Trust Agreement; provided, further, that of the net amount
distributable, the Litigation Trustee shall transfer to an escrow, in accordance
with Section 27.14 hereof, such amounts as would be distributable in respect of
Disputed Claims and Disputed Equity Interests (treating such Claims and Equity
Interests, for this purpose, as if they were Allowed Claims or Allowed Equity
Interests, respectively). The Litigation Trustee may withhold from amounts
distributable to any Person any and all amounts, determined in the Litigation
Trustee's reasonable sole discretion, to be required by any law, regulation,
rule, ruling, directive or other governmental requirement.
(b) Allocation of Distributions: Distributions of net
Litigation Trust proceeds shall be made in the following order of priority and
amount:
(i) First, an aggregate amount of Ten Million Dollars
($10,000,000.00) to holders of Allowed Bank Claims, Allowed Senior Note Claims
and Allowed General Unsecured Claims in accordance with their respective Pro
Rata Share of Litigation Trust Interests; and
(ii) Second, to each holder of Litigation Trust
Interest in accordance with such holder's Pro Rata Share thereof.
27.9 Reporting Duties:
(a) Federal Income Tax: Subject to definitive guidance
from the IRS or a court of competent jurisdiction to the contrary (including the
receipt by the Litigation Trustee of a private letter ruling if the Litigation
Trustee so requests one, or the receipt of an adverse determination by the IRS
upon audit if not contested by the Litigation Trustee), the Litigation Trustee
shall file returns for the Litigation Trust as a grantor trust pursuant to
Treasury Regulation Section 1.671-4(a). The Litigation Trustee shall also
annually send to each holder of a Litigation Trust Interest a separate statement
setting forth the holder's share of items of income, gain, loss, deduction or
credit and will instruct all such holders to report such items on their federal
income tax returns.
(b) Allocations of Litigation Trust Taxable Income:
Allocations of Litigation Trust taxable income shall be determined by reference
to the manner in which an amount of cash equal to such taxable income would be
distributed (without regard to any restrictions on distributions described
herein) if, immediately prior to such deemed distribution, the Litigation Trust
had distributed all of its other assets (valued for this purpose at their tax
book value) to the holders of the Litigation Trust Interests (treating any
holder of a Disputed Claim or a Disputed Equity Interest, for this purpose, as a
current holder of a Litigation Trust Interest entitled to distributions), taking
into account all prior and concurrent distributions from the Litigation Trust
(including all distributions held in escrow pending the resolution of Disputed
Claims and Disputed Equity Interests). Similarly, taxable loss of the Litigation
Trust will be allocated by reference to the manner in which an economic loss
would be borne immediately after a liquidating distribution of the remaining
Litigation Trust Claims. The tax book value of the Litigation Trust Claims for
this purpose shall equal their fair market value on the Effective Date or, if
later, the date such assets were acquired by the Litigation Trust, adjusted in
either case in accordance with tax accounting principles prescribed by the IRC,
the regulations and other applicable administrative and judicial authorities and
pronouncements.
(c) Other: The Litigation Trustee shall file (or cause
to be filed) any other statements, returns or disclosures relating to the
Litigation Trust, including, without limitation, all statements, returns and
disclosures relating to the escrow to be established pursuant to Section 27.14
hereof, that are required by any governmental unit.
27.10 Trust Implementation: On the Effective Date, the
Litigation Trust will be established and become effective for the benefit of
Allowed Claims and Allowed Equity Interests in Classes 3, 4, 5, 7, 8, 9 and 10.
The Litigation Trust Agreement shall be filed in the Plan Supplement and shall
contain provisions customary to trust agreements utilized in comparable
circumstances, including, but not limited to, any and all provisions necessary
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to ensure the continued treatment of the Litigation Trust as a grantor trust for
federal income tax purposes. All parties (including the Debtors, the Litigation
Trustee and holders of Allowed Claims and Allowed Equity Interests in Classes 3,
4, 5, 7, 8, 9 and 10 shall execute any documents or other instruments as
necessary to cause title to the applicable assets to be transferred to the
Litigation Trust.
27.11 Registry of Beneficial Interests: The Litigation Trustee
shall maintain a registry of the holders of Litigation Trust Interests.
27.12 Termination: The Litigation Trust will terminate no
later than the third (3rd) anniversary of the Effective Date; provided, however,
that, on or prior to the date six (6) months prior to such termination, the
Bankruptcy Court, upon motion by a party in interest, may extend the term of the
Litigation Trust if it is necessary to the liquidation of the Litigation Trust
Claims. Notwithstanding the foregoing, multiple extensions can be obtained so
long as Bankruptcy Court approval is obtained at least six (6) months prior to
the expiration of each extended term; provided, however, that the aggregate of
all such extensions shall not exceed three (3) years, unless the Litigation
Trustee receives a favorable ruling from the IRS that any further extension
would not adversely affect the status of the Litigation Trust as a grantor trust
for federal income tax purposes.
27.13 Net Litigation Trust Recovery/Affirmative Obligations:
(a) Net Judgment: Notwithstanding anything contained
herein to the contrary, in the event that a defendant in a litigation brought by
the Litigation Trustee for and on behalf of the Litigation Trust (i) is required
by a Final Order to make payment to the Litigation Trust (the "Judgment
Amount"), and (ii) has a right of setoff under section 553 of the Bankruptcy
Code or applicable non-bankruptcy law, has a claim for contribution,
indemnification or reimbursement or has incurred costs and expenses which would
give rise to an enforceable claim against the Debtors or Reorganized UC, as the
case may be (the aggregate amount of all such rights, claims, costs and expenses
being referred to herein as the "Indemnified/Contribution Amount"), (x) such
defendant shall be obligated to pay only the excess, if any, of the amount of
the Judgment Amount over the Indemnified/Contribution Amount, (y) none of the
Litigation Trust, the holders or beneficiaries of the Litigation Trust Interests
shall be entitled to assert a claim against the Debtors or Reorganized UC with
respect to the Indemnified/Contribution Amount, and (z) the Debtors and
Reorganized UC shall have no liability with respect to such
Indemnified/Contribution Amount.
(b) Affirmative Obligations: Notwithstanding anything
contained herein to the contrary, in the event that a defendant in a litigation
brought by the Litigation Trustee for and on behalf of the Litigation Trust (1)
has an Indemnified/Contribution Amount and (2) the Indemnified/Contribution
Amount is in excess of the Judgment Amount, if any, (i) the Judgment Amount
shall be offset against the Indemnified/Contribution Amount and shall not be
paid to the Litigation Trust by such defendant, (ii) the Litigation Trust shall
reimburse Reorganized UC immediately for the payment of the difference between
the Indemnified/Contribution Amount and any Judgment Amount, (iii), none of the
Litigation Trust, the holders or beneficiaries of the Litigation Trust Interests
shall be entitled to assert a claim against the Debtors or Reorganized UC with
respect to the Indemnified/Contribution Amount, and (iv) the Debtors and
Reorganized UC shall have no liability with respect to such
Indemnified/Contribution Amount.
27.14 Escrow on Account of Disputed Claims and Disputed Equity
Interests:
(a) General: The Litigation Trustee shall maintain, in
accordance with the Litigation Trustee's powers and responsibilities under this
Article XXVII and the Litigation Trust Agreement, an escrow of any distributable
amounts required to be set aside on account of Disputed Claims and Disputed
Equity Interests pursuant to Section 27.8. Such amounts (net of any expenses,
including any taxes, of the escrow relating thereto) shall be distributed, as
provided herein, as such Disputed Claims and Disputed Equity Interests are
resolved by Final Order, and shall be distributable in respect of such
Litigation Trust Interests as such amounts would have been distributable had the
Disputed Claims and Disputed Equity Interests been Allowed Claims and Allowed
Equity Interests, respectively, as of the Effective Date. There shall be
distributed together with such amounts any net earnings of the escrow related
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thereto. Distributions from the escrow shall be made at least annually
concurrent with other distributions from the Litigation Trust.
(b) Taxable Income of Litigation Trust Allocable to
Disputed Claims and Disputed Equity Interests: As more fully set forth in
Section 27.14(c), the escrow shall be responsible for payment of certain taxes
attributable to the taxable income of the Litigation Trust allocable to
Litigation Trust Interests relating to such Disputed Claims and Disputed Equity
Interests. In the event, and to the extent the escrow has insufficient funds to
pay such taxes (or no escrow has been established at such time due to the
absence of any distributable proceeds pursuant to Section 27.8), such taxes
shall be borne by the Litigation Trust and either (i) reimbursed by the escrow
from any subsequent amounts transferred by the Litigation Trustee to the escrow
pursuant to Section 27.8 hereof in respect of such Disputed Claims and Disputed
Equity Interests or (ii) to the extent such Claims and Equity Interests have
subsequently been resolved, may be deducted from any increased amounts
distributable by the Litigation Trust as a result of the resolutions of such
Claims on a fair and equitable basis.
(c) Tax Treatment of Escrow: Subject to definitive
guidance from the IRS or a court of competent jurisdiction to the contrary
(including the receipt by the Litigation Trustee of a private letter ruling if
the Litigation Trustee so requests one, or the receipt of an adverse
determination by the IRS upon audit if not contested by the Litigation Trustee),
and except as otherwise provided in Section 27.9(d) hereof, the Litigation
Trustee shall (i) treat the escrow as a discrete trust for federal income tax
purposes, consisting of separate and independent shares to be established in
respect of each Disputed Claim and Disputed Equity Interest, in accordance with
the trust provisions of the IRC (Sections 641 et seq.), (ii) treat as taxable
income or loss of the escrow with respect to any given taxable year the portion
of the taxable income or loss of the Litigation Trust that would have been
allocated to the holders of Disputed Claims and Disputed Equity Interests had
such Claims and Equity Interests been Allowed on the Effective Date (but only
for the portion of the taxable year with respect to which such Claims and Equity
Interests are unresolved), (iii) treat as a distribution from the escrow any
increased amounts distributed by the Litigation Trust as a result of any
Disputed Claims and Disputed Equity Interests resolved earlier in the taxable
year, to the extent such distributions relate to taxable income or loss of the
escrow determined in accordance with the provisions hereof, and (iv) to the
extent permitted by applicable law, shall report consistent with the foregoing
for state and local income tax purposes. All holders of Allowed Claims and
Allowed Equity Interests in Classes 3, 4, 5, 7, 8, 9 and 10 shall report, for
tax purposes, consistent with the foregoing.
27.15 Non-Transferability: Upon issuance thereof, the
Litigation Trust Interests shall be non-transferable except through descent or
distribution.
ARTICLE XXVIII
PROSECUTION OF CLAIMS HELD BY THE DEBTORS
28.1 Prosecution of Claims: Except with respect to Litigation
Trust Claims, from and after the Confirmation Date, Reorganized UC shall, as a
representative of the estates of the Debtors, litigate any avoidance or recovery
actions under sections 544, 545, 547, 548, 549, 550, 551 and 553 of the
Bankruptcy Code and any other causes of action, rights to payments of claims
that belong to the Debtors or Debtors in Possession, that may be pending on the
Confirmation Date or instituted by Debtors thereafter, to a Final Order, and
Reorganized UC may compromise and settle such claims, without approval of the
Bankruptcy Court (but with approval of, or within parameters established by, the
Board of Directors of Reorganized UC). The net proceeds of any such litigation
or settlement (after satisfaction of all costs and expenses incurred in
connection therewith) shall be remitted to the Disbursing Agent for inclusion in
Creditor Cash.
28.2 Net Payment by Defendants: Notwithstanding anything to
the contrary herein, in the event that a defendant in a litigation of the kind
described in Section 28.1 hereof is required by a Final Order to make payment (a
"Disgorgement Payment") to Reorganized UC, and such Disgorgement Payment (if so
made) would give rise to a Claim, (a) such defendant will be required to pay (a
"Net Payment") in Cash (and will have no Claim in respect thereof) only the
excess, if any, of (i) the amount of such Disgorgement Payment over (ii) the
fair market value of the distributions ("Initial Distributions") on such Claim
pursuant to this Plan that would have been received by such defendant if such
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defendant had made such Disgorgement Payment (which fair market value shall be
determined as of the date of such Net Payment by agreement between Reorganized
UC and such defendant, or by Final Order) and (b) if any distributions
("Subsequent Distributions") are made hereunder after such defendant makes such
Net Payment, such defendant shall receive such defendant's Pro Rata Share of
such Subsequent Distributions (or, at Reorganized UC's election, the fair market
value thereof determined as of the date of such Subsequent Distributions by
agreement between Reorganized UC and such defendant, or by Final Order), which
Pro Rata Share shall be calculated as if such defendant had made such
Disgorgement Payment and received Initial Distributions in respect thereof.
ARTICLE XXIX
ACCEPTANCE OR REJECTION OF PLAN; EFFECT OF REJECTION
BY ONE OR MORE CLASSES OF CLAIMS OR EQUITY INTEREST
29.1 Impaired Classes to Vote: Each holder of a Claim or
Equity Interest in an impaired Class shall be entitled to vote separately to
accept or reject the Plan.
29.2 Acceptance by Class of Creditors and Holders of Equity
Interests: An impaired Class of holders of Claims shall have accepted the Plan
if the Plan is accepted by at least two-thirds (2/3) in dollar amount and more
than one-half (1/2) in number of the Allowed Claims of such Class that have
voted to accept or reject the Plan. An impaired Class of holders of Equity
Interests shall have accepted the Plan if the Plan is accepted by at least
two-thirds (2/3) in amount of the Allowed Equity Interests of such Class that
have voted to accept or reject the Plan.
29.3 Cramdown: In the event that any impaired Class of Claims
or Equity Interests shall fail to accept the Plan in accordance with section
1129(a) of the Bankruptcy Code, the Debtors reserves the right to request that
the Bankruptcy Court confirm the Plan in accordance with section 1129(b) of the
Bankruptcy Code or amend the Plan.
ARTICLE XXX
IDENTIFICATION OF CLAIMS AND EQUITY INTERESTS
IMPAIRED AND NOT IMPAIRED BY THE PLAN
30.1 Impaired and Unimpaired Classes: Claims in Classes 1 and
2 of the Plan are not impaired under the Plan. Claims and Equity Interests in
Classes 3, 4, 5, 6, 7, 8, 9, 10, 11, 12, 13, 14, 15, 16, 17, 18, 19, 20 and 21
are impaired under the Plan.
30.2 Impaired Classes to Vote on Plan: The Claims and Equity
Interests included in Classes 3, 4, 5, 6, 7, 8, 9 and 10 of the Plan are
impaired and are therefore entitled to vote to accept or reject the Plan. The
Claims and Equity Interests included in Classes 11, 12, 13, 14, 15, 16, 17, 18,
19, 20 and 21 of the Plan are deemed to have rejected the Plan in accordance
with the provisions of section 1126 (g) of the Bankruptcy Code.
30.3 Controversy Concerning Impairment: In the event of a
controversy as to whether any Class of Claims or Equity Interests is impaired
under the Plan, the Bankruptcy Court shall, after notice and a hearing,
determine such controversy.
ARTICLE XXXI
PROVISIONS FOR THE ESTABLISHMENT
AND MAINTENANCE OF DISBURSEMENT ACCOUNTS
31.1 Establishment of Disbursement Account: On or before the
Effective Date, the Debtors shall establish one or more segregated bank accounts
in the name of Reorganized UC as Disbursing Agent under the Plan, which accounts
shall be trust accounts for the benefit of Creditors pursuant to the Plan and
utilized solely for the investment and distribution of Cash consistent with the
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terms and conditions of the Plan. On or before the Effective Date, the Debtors
shall deposit into such Disbursement Account(s) all Cash and Cash Equivalents of
the Debtors (other than those amounts of Cash held (i) by the Debtors in
accounts for and on account of escrow payments to be made on behalf of borrowers
and (ii) in accounts for and on behalf of securitization trustees and relating
to principal and interest payments made by borrowers), less the sum of Fifteen
Million Dollars ($15,000,000.00) or such other amount reasonably determined by
the Debtors on or prior to the Confirmation Date as necessary to fund the
ongoing operations of Reorganized UC during the period up to and including the
Transfer Date.
31.2 Maintenance of Disbursement Account(s): Disbursement
Account(s) shall be maintained at one or more domestic banks or financial
institutions of Reorganized UC's choice having a shareholder's equity or
equivalent capital of not less than One Hundred Million ($100,000,000.00).
Reorganized UC shall invest Cash in Disbursement Account(s) in Cash Equivalents;
provided, however, that sufficient liquidity shall be maintained in such account
or accounts to (a) make promptly when due all payments upon Disputed Claims if,
as and when they become Allowed Claims and (b) make promptly when due the other
payments provided for in the Plan.
ARTICLE XXXII
PROVISIONS REGARDING DISTRIBUTIONS
32.1 Time and Manner of Payments: Payments under the Plan
shall be made to each holder of an Allowed Unsecured Claim as follows:
(a) Initial Payments: On or as soon as practicable after
the Effective Date, the Disbursing Agent shall distribute, or cause to be
distributed, to the Plan Administrator on behalf of holders of Disputed Claims,
and to each holder of (i) an Allowed Bank Claim, (ii) an Allowed Senior Note
Claim, (iii) an Allowed General Unsecured Claim and (iv) an Allowed Subordinated
Debenture Claim, such Creditor's share, if any, of Creditor Cash as determined
pursuant to Articles VII, VIII, IX and XI hereof, respectively.
(b) Quarterly Payments: On the first (1st) Business Day
that is after the close of one full calendar quarter following the date of the
initial Effective Date distributions, and, thereafter, on each first (1st)
Business Day following the close of calendar quarters, the Disbursing Agent
shall distribute, or cause to be distributed, to the Plan Administrator on
behalf of holders of Disputed Claims, and to each holder of (i) an Allowed Bank
Claim, (ii) an Allowed Senior Note Claim, (iii) an Allowed General Unsecured
Claim and (iv) an Allowed Subordinated Debenture Claim, an amount equal to such
Creditor's share, if any, of Creditor Cash as determined pursuant to Articles
VII, VIII, IX and XI hereof, until such time as there are not longer any
potential Creditor Cash.
32.2 Timeliness of Payments: Any payments or distributions to
be made by the Debtors pursuant to the Plan shall be deemed to be timely made if
made within twenty (20) days after the dates specified in the Plan. Whenever any
distribution to be made under this Plan shall be due on a day other than a
Business Day, such distribution shall instead be made, without interest, on the
immediately succeeding Business Day, but shall be deemed to have been made on
the date due.
32.3 Distributions by the Disbursing Agent: All distributions
under the Plan shall be made by the Disbursing Agent at the direction of the
Plan Administrator. The Disbursing Agent shall be deemed to hold all property to
be distributed hereunder in trust for the Persons entitled to receive the same.
The Disbursing Agent shall not hold an economic or beneficial interest in such
property.
32.4 Manner of Payment Under the Plan: Unless the Entity
receiving a payment agrees otherwise, any payment in Cash to be made by
Reorganized UC shall be made, at the election of Reorganized UC, by check drawn
on a domestic bank or by wire transfer from a domestic bank.
32.5 Delivery of Distributions: Subject to the provisions of
Rule 9010 of the Bankruptcy Rules, and except as provided in Sections 8.4 and
11.5 of the Plan, distributions and deliveries to holders of Allowed Claims
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shall be made at the address of each such holder as set forth on the Schedules
filed with the Bankruptcy Court unless superseded by the address set forth on
proofs of claim filed by such holders, or at the last known address of such a
holder if no proof of claim is filed or if the Debtors has been notified in
writing of a change of address.
32.6 Undeliverable Distributions:
(a) Holding of Undeliverable Distributions: If any
distribution to any holder is returned to Reorganized UC as undeliverable, no
further distributions shall be made to such holder unless and until Reorganized
UC is notified, in writing, of such holder's then-current address. Undeliverable
distributions shall remain in the possession of Reorganized UC until such time
as a distribution becomes deliverable. All Entities ultimately receiving
undeliverable Cash shall not be entitled to any interest or other accruals of
any kind. Nothing contained in the Plan shall require Reorganized UC to attempt
to locate any holder of an Allowed Claim or an Allowed Equity Interest.
(b) Failure to Claim Undeliverable Distributions: On or
about the second (2nd) anniversary of the Effective Date, Reorganized UC shall
file a list with the Bankruptcy Court setting forth the names of those Entities
for which distributions have been made hereunder and have been returned as
undeliverable as of the date thereof. Any holder of an Allowed Claim or an
Allowed Equity Interest that does not assert its rights pursuant to the Plan to
receive a distribution within three (3) years from and after the Effective Date
shall have its Claim or Equity Interest for such undeliverable distribution
discharged and shall be forever barred from asserting any such Claim or Equity
Interest against Reorganized UC or its property. In such case, any consideration
held for distribution on account of such Claim or Equity Interest shall revert
to Reorganized UC.
32.7 Compliance with Tax Requirements/Allocation: To the
extent applicable, Reorganized UC shall comply with all tax withholding and
reporting requirements imposed on it by any governmental unit, and all
distributions pursuant to the Plan shall be subject to such withholding and
reporting requirements. For tax purposes, distributions received in respect of
Allowed Claims will be allocated first to the principal amount of such Claims,
with any excess allocated to unpaid accrued interest.
32.8 Time Bar to Cash Payments: Checks issued by Reorganized
UC on account of Allowed Claims shall be null and void if not negotiated within
ninety (90) days from and after the date of issuance thereof. Requests for
reissuance of any check shall be made directly to Reorganized UC by the holder
of the Allowed Claim with respect to which such check originally was issued. Any
claim in respect of such a voided check shall be made on or before the later of
(a) the second (2nd) anniversary of the Effective Date or (b) ninety (90) days
after the date of issuance of such check, if such check represents a final
distribution hereunder on account of such Claim. After such date, all Claims in
respect of voided checks shall be discharged and forever barred and Reorganized
UC shall retain all moneys related thereto.
32.9 Distributions After Effective Date: Distributions made
after the Effective Date to holders of Claims that are not Allowed Claims as of
the Effective Date, but which later become Allowed Claims shall be deemed to
have been made on the Effective Date.
32.10 Set-Offs: Reorganized UC may, pursuant to section 553 of
the Bankruptcy Code or applicable nonbankruptcy law, set off against any Allowed
Claim and the distributions to be made pursuant to the Plan on account thereof
(before any distribution is made on account of such Claim), the claims, rights
and causes of action of any nature that the Debtors or Reorganized UC may hold
against the holder of such Allowed Claim; provided, however, that neither the
failure to effect such a set-off nor the allowance of any Claim hereunder shall
constitute a waiver or release by the Debtors or Reorganized UC of any such
claims, rights and causes of action that the Debtors or Reorganized UC may
possess against such holder; and, provided, further, that nothing contained
herein is intended to limit the rights of any Creditor to effectuate a setoff
prior to the Effective Date in accordance with the provisions of sections 362
and 553 of the Bankruptcy Code.
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32.11 Termination of Certain Subordination Rights and
Settlement of Related Claims and Controversies: The classification and manner of
satisfying all Claims and Equity Interests under the Plan (i) take into
consideration all contractual, legal and equitable subordination rights, whether
arising under general principles of equitable subordination, sections 510(b) and
(c) of the Bankruptcy Code or otherwise, that a holder of a Claim or Equity
Interest may have against other Claim or Equity Interest holders with respect to
any distribution made pursuant to the Plan and (ii) are the result of
discussions between the Debtors and other parties in interest and take into
account their respective positions with respect to (a) the extent and validity
of the Guaranty and (b) the objections of the Banks to the treatment of the
Debtors' chapter 11 estates as substantively consolidated for purposes of the
Plan, on the grounds that such treatment would result in severe prejudice to the
Banks. Pursuant to Bankruptcy Rule 9019 and in consideration for the
distributions and other benefits provided under the Plan, the provisions of this
Section 32.11 shall constitute a good faith compromise and settlement of all
claims or controversies relating to the contractual, legal and subordination
rights that a holder of a Bank Claim or a Senior Note Claim may have with
respect to any Allowed Claim with respect thereto, or any distribution to be
made on account of such an Allowed Claim. The entry of the Confirmation Order
shall constitute the Bankruptcy Court's approval of the compromise or settlement
of all such claims or controversies and the Bankruptcy Court's finding that such
compromise or settlement is in the best interests of the Debtors, Reorganized
UC, and their respective property and holders of Claims and is fair, equitable
and reasonable. With respect to all other Claims, including, without limitation,
Lending Subordinated Debenture Claims and Subordinated Debenture Claims, the
provisions of the Plan regarding distributions with respect thereto apply all
applicable contractual, legal and subordination rights that holders of Bank
Claims and Senior Note Claims maintain and, from and after the Effective Date,
the holders of Allowed Bank Claims and Allowed Senior Note Claims shall be
entitled to rely upon the validity and enforceability of any such provisions in
accordance with the provisions of section 510(a) of the Bankruptcy Code.
32.12 Post Petition Date Interest: Upon payment in full of all
Allowed Claims, and prior to the deemed redistribution of Litigation Trust
Interests to holders of Allowed Pride Equity Interests, Allowed Statutorily
Subordinated Claims and Allowed United Companies Common Equity Interests,
Litigation Trust Interests shall be deemed redistributed for and on behalf of
holders of Allowed Claims, subject to the applicable legal and contractual
rights of the respective holders thereof, for and on account of the payment of
interest, accrued at the applicable contract or legal rate, for the period from
the Petition Date up to and including the date on which a particular Allowed
Claim shall have been paid in full.
ARTICLE XXXIII
COMMITTEES
33.1 Creditors' Committee Composition and Term: From the
Confirmation Date up to and including the Effective Date, the members of the
Creditors' Committee, if any, appointed pursuant to section 1102 of the
Bankruptcy Code, and their duly appointed successors, shall continue to serve.
Upon the disallowance by Final Order of the Claim held by a Creditor that is a
member of the Creditors' Committee, such membership shall terminate and no
replacement shall be appointed. Upon the resignation, death or disability of a
member of the Creditors' Committee, the Creditor having appointed such member
shall have the right to designate a replacement. In the event such Creditor
shall fail to designate a replacement, no other replacement may be appointed to
the Creditors' Committee. Members of the Creditors' Committee shall serve
without compensation but shall be entitled to reimbursement of their reasonable
out-of-pocket expenses which are attributable to their attendance at Creditors'
Committee meetings, Bankruptcy Court hearings or negotiation sessions. The
Creditors' Committee shall be entitled to retain legal counsel and such other
professionals as may be authorized by the Bankruptcy Court, the fees and
expenses of which shall be entitled to payment as Administrative Expense Claims.
On the Effective Date, the Creditors' Committee shall be dissolved and the
members thereof and the professionals retained by the Creditors' Committee in
accordance with section 1103 of the Bankruptcy Code shall be released and
discharged from their respective fiduciary obligations.
33.2 Equity Committee Term and Fees: From the Confirmation
Date up to and including the Effective Date, the members of the Equity
Committee, if any, appointed pursuant to section 1102 of the Bankruptcy Code,
and their duly appointed successors, shall continue to serve. Members of the
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Equity Committee shall serve without compensation but shall be entitled to
reimbursement of their reasonable out-of-pocket expenses which are attributable
to their attendance at Equity Committee meetings. The Equity Committee shall be
entitled to retain legal counsel and such other professionals as may be
authorized by the Bankruptcy Court, the fees and expenses of which shall be
entitled to payment as Administrative Expense Claims. On the Effective Date, the
Equity Committee shall be dissolved and the members thereof and the
professionals retained by the Equity Committee in accordance with section 327 of
the Bankruptcy Code shall be released and discharged from their respective
fiduciary obligations, if the same has not occurred prior to the Effective Date.
ARTICLE XXXIV
EXECUTORY CONTRACTS AND UNEXPIRED LEASES
34.1 Rejection of Executory Contracts and Unexpired Leases:
Any executory contracts or unexpired leases which have not expired by their own
terms on or prior to the Effective Date, which have not been assumed and
assigned or rejected with the approval of the Bankruptcy Court, or which are not
the subject of a motion to assume the same pending as of the Effective Date
shall be deemed rejected by the Debtors in Possession on the Effective Date and
the entry of the Confirmation Order by the Bankruptcy Court shall constitute
approval of such rejections pursuant to sections 365(a) and 1123 of the
Bankruptcy Code.
34.2 Cure of Defaults for Assumed Executory Contracts and
Unexpired Leases: Any monetary amounts required as cure payments on each
executory contract and unexpired lease to be assumed pursuant to the Plan shall
be satisfied, pursuant to section 365(b)(1) of the Bankruptcy Code, by payment
of the cure amount in Cash on the Effective Date or upon such other terms and
dates as the parties to such executory contracts or unexpired leases otherwise
may agree. In the event of a dispute regarding (a) the amount of any cure
payment, (b) the ability of the Debtors or any assignee to provide "adequate
assurance of future performance" (within the meaning of section 365 of the
Bankruptcy Code) under the contract or lease to be assumed or (c) any other
matter pertaining to assumption, the cure payments required by section 365(b)(1)
of the Bankruptcy Code shall be subject to the jurisdiction of the Bankruptcy
Court and made following the entry of a Final Order resolving such dispute.
34.3 Rejection Damage Claims: Not later than ten (10) days
prior to the Confirmation Date, the Debtors shall file with the Bankruptcy Court
a list of executory contracts and unexpired leases to be assumed by the Debtors
pursuant to the Plan as of the Effective Date, and such executory contracts and
unexpired leases shall be deemed assumed as of the Effective Date. If the
rejection of an executory contract or unexpired lease by the Debtors results in
damages to the other party or parties to such contract or lease, any claim for
such damages, if not heretofore evidenced by a filed proof of claim, shall be
forever barred and shall not be enforceable against the Debtors, or its
properties or agents, successors, or assigns, unless a proof of claim is filed
with the Bankruptcy Court and served upon counsel for the Debtors on or before
fifteen (15) days after the later to occur of (a) the Confirmation Date and (b)
the date of entry of an order by the Bankruptcy Court authorizing rejection of a
particular executory contract or unexpired lease.
34.4 Indemnification and Reimbursement Obligations: For
purposes of the Plan, the obligations of the Debtors to indemnify and reimburse
its directors or officers that were directors or officers, respectively, on or
before the Petition Date or who became directors or officers after the Petition
Date against and for any obligations pursuant to articles of incorporation,
codes of regulations, bylaws, 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 in accordance with section 1141 of the
Bankruptcy Code, irrespective of whether indemnification or reimbursement is
owed in connection with an event occurring before, on, or after the Petition
Date; provided, however, that, notwithstanding the foregoing, such obligations
shall not be extended to any directors or officers whose term in all such
capacities expired or was terminated prior to the Petition Date; and, provided,
further, that, the foregoing is not intended, nor shall it be construed, to
constitute the assumption of, or obligation to indemnify or reimburse any Person
with respect to, any Statutorily Subordinated Claim.
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ARTICLE XXXV
RIGHTS AND POWERS OF DISBURSING AGENT
35.1 Exculpation: From and after the Effective Date, the
Disbursing Agent shall be exculpated by all Persons and Entities, including,
without limitation, holders of Claims and Equity Interests and other parties in
interest, from any and all claims, causes of action and other assertions of
liability arising out of the discharge of the powers and duties conferred upon
such Disbursing Agent by the Plan or any order of the Bankruptcy Court entered
pursuant to or in furtherance of the Plan, or applicable law, except for actions
or omissions to act arising out of the gross negligence, willful misconduct or
breach of fiduciary duty of such Disbursing Agent. No holder of a Claim or an
Equity Interest or other party in interest shall have or pursue any claim or
cause of action against the Disbursing Agent for making payments in accordance
with the Plan or for implementing the provisions of the Plan.
35.2 Powers of the Disbursing Agent: Except to the extent that
the responsibility for the same is vested in the Plan Administrator pursuant to
the Plan Administration Agreement, the Disbursing Agent shall be empowered to
(a) take all steps and execute all instruments and documents necessary to
effectuate the Plan, (b) make distributions contemplated by the Plan, (c) comply
with the Plan and the obligations thereunder, (d) employ professionals to
represent it with respect to its responsibilities, and (e) exercise such other
powers as may be vested in the Disbursing Agent pursuant to order of the
Bankruptcy Court, pursuant to the Plan, or as deemed by the Disbursing Agent to
be necessary and proper to implement the provisions of the Plan.
35.3 Fees and Expenses Incurred From and After the Effective
Date: Except as otherwise ordered by the Bankruptcy Court, the amount of any
fees and expenses incurred by the Disbursing Agent from and after the Effective
Date (including taxes) and any compensation and expense reimbursement claims,
including, without limitation, reasonable fees and expenses of counsel, made by
the Disbursing Agent, shall be paid in Cash by Reorganized UC.
ARTICLE XXXVI
THE PLAN ADMINISTRATOR
36.1 Appointment of Plan Administrator: On the Effective Date,
compliance with the provisions of the Plan shall become the general
responsibility of the Plan Administrator (subject to the supervision of the
Board of Directors of Reorganized UC) pursuant to and in accordance with the
provisions of the Plan and the Plan Administration Agreement.
36.2 Responsibilities of the Plan Administrator: The
responsibilities of the Plan Administrator shall include (a) facilitating
Reorganized UC's prosecution or settlement of objections to and estimations of
Claims, (b) calculating and assisting the Disbursing Agent in implementing all
distributions in accordance with the Plan, (c) filing all required tax returns
and paying taxes and all other obligations on behalf of Reorganized UC from
funds held by Reorganized UC, (d) periodic reporting to the Bankruptcy Court, of
the status of the Claims resolution process, distributions on Allowed Claims and
prosecution of causes of action, (e) liquidating the Remaining Assets and
providing for the distribution of the net proceeds thereof in accordance with
the provisions of the Plan, (f) managing the Debtors servicing operations during
the period from the Effective Date up to and including the Transfer Date, (g)
owning the capital stock of Reorganized UC, and (h) such other responsibilities
as may be vested in the Plan Administrator pursuant to the Plan, the Plan
Administration Agreement or Bankruptcy Court order or as may be necessary and
proper to carry out the provisions of the Plan.
36.3 Powers of the Plan Administrator: The powers of the Plan
Administrator shall, without any further Bankruptcy Court approval in each of
the following cases, include (a) the power to invest funds in, and withdraw,
make distributions and pay taxes and other obligations owed by Reorganized UC
from funds held by the Plan Administrator and/or Reorganized UC in accordance
with the Plan, (b) the power to engage employees and professional persons to
assist the Plan Administrator with respect to its responsibilities, (c) the
power to compromise and settle claims and causes of action on behalf of or
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against Reorganized UC, and (d) such other powers as may be vested in or assumed
by the Plan Administrator pursuant to the Plan, the Plan Administration
Agreement or as may be necessary and proper to carry out the provisions of the
Plan.
36.4 Compensation of the Plan Administrator: In addition to
reimbursement for actual out-of-pocket expenses incurred by the Plan
Administrator, the Plan Administrator shall be entitled to receive reasonable
compensation for services rendered on behalf of Reorganized UC in an amount and
on such terms as may be agreed to by the Debtors for Reorganized UC as reflected
in the Plan Administration Agreement. Any dispute with respect to such
compensation shall be resolved by agreement among the parties or, if the parties
are unable to agree, determined by the Bankruptcy Court.
36.5 Termination of Plan Administrator: The duties,
responsibilities and powers of the Plan Administrator shall terminate on the
date set forth in the Plan Administration Agreement.
ARTICLE XXXVII
CONDITIONS PRECEDENT TO EFFECTIVE DATE OF
THE PLAN; ALTERNATIVE IMPLEMENATION PROVISIONS
37.1 Conditions Precedent to Effective Date of the Plan: The
occurrence of the Effective Date and the substantial consummation of the Plan
are subject to satisfaction of the following conditions precedent:
(a) Entry of the Confirmation Order: The Clerk of the
Bankruptcy Court shall have entered the Confirmation Order, in form and
substance satisfactory to the Debtors and the Creditors' Committee and the
Confirmation Order shall have become a Final Order and be in full force and
effect.
(b) Execution of Documents; Other Actions: All other
actions and documents necessary to implement the Plan shall have been effected
or executed.
(c) Sale Transaction: Consummation of the Sale
Transaction or, in the event that an Alternative Residual Sale Transaction is
accepted by the Debtors and approved by the Bankruptcy Court, consummation of
such Alternative Residual Sale Transaction.
(d) Class 4 Claims. The aggregate amount of Allowed
Senior Note Claims shall not exceed the sum of (i) Allowed Claims arising under
the Senior Note Indenture, plus (ii) Allowed Claims arising under or related to
the guaranty of certain indebtedness relating to the employee stock ownership
plan of United Companies, plus (iii) Two Million Dollars ($2,000,000.00).
37.2 Waiver of Conditions Precedent: To the extent practicable
or legally permissible, each of the conditions precedent in Section 37.1 hereof,
may be waived, in whole or in part, by the Debtors in their sole discretion;
provided, however, that, with respect to the condition precedent set forth in
Section 37.1(d) of the Plan, the Debtors' waiver thereof must be with the
consent of the Senior Indenture Trustee, upon direction of the holders of Senior
Notes in accordance with the provisions of the Senior Indenture. Any such waiver
of a condition precedent may be effected at any time, without notice or leave or
order of the Bankruptcy Court and without any formal action.
37.3 Alternative Implementation Provisions: In the event that
a higher or better offer for the assets set forth in the Residual Agreement is
accepted by the Debtors and approved by the Bankruptcy Court, at the discretion
of such higher or better offeror, the following provisions may apply:
(a) Stock Purchase Agreement Permissible: The
Alternative Residual Sale Transaction may be consummated through either an asset
purchase agreement or a stock purchase agreement, as the case may be. To the
extent that the Alternative Residual Sale Transaction, or part thereof, occurs
by operation of a stock purchase agreement, then the provisions of this Section
37.3 shall be operative under the Plan.
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(b) Issuance of Reorganized UC Lending Common Stock and
Transfer of Reorganized Designated Subsidiaries Common Stock. On the Effective
Date, (i) the Reorganized UC Lending Common Stock shall be issued to the
relevant purchaser pursuant to the consummation of the Alternative Residual Sale
Transaction, and (ii) the Reorganized Designated Subsidiaries Common Stock as
direct or indirect assets of Reorganized UC Lending shall be transferred to the
control of the relevant purchaser pursuant to the consummation of the
Alternative Residual Sale Transaction. On the Effective Date, Reorganized UC
Lending and the Reorganized Designated Subsidiaries shall only own the assets
and retain the liabilities that are provided for in the relevant stock purchase
agreement for the Alternative Residual Sale Transaction. The Debtors shall be
authorized and shall make any divestiture of assets and transfer of assets as
between the Debtors prior to the closing of the Alternative Residual Sale
Transaction as are necessary and appropriate to achieve the result stated in the
preceding sentence.
(c) Corporate Organization of Reorganized UC Lending and
the Reorganized Designated Subsidiaries. On the Effective Date, the adoption of
the New Organization Documents shall be authorized and approved in all respects,
in each case without further action under applicable law, regulation, order or
rule, including, without limitation, any action by United Funding, Reorganized
UC, the stockholders of the Debtors, or Reorganized UC Lending and/or the
Reorganized Designated Subsidiaries. On the Effective Date, the issuance of the
Reorganized UC Lending Common Stock and the transfer of control of Reorganized
Designated Subsidiaries Common Stock and the cancellation of the Equity
Interests of United Lending Corp. set forth in Section 22.1 hereof and other
matters involving the corporate structure of the Reorganized UC Lending and/or
the Reorganized Designated Subsidiaries shall be deemed to have occurred, be
authorized, and shall be in effect from and after the Effective Date without
requiring further action under applicable law, regulation, order or rule,
including, without limitation, any action by United Funding, Reorganized UC, the
stockholders of the Debtors, Reorganized UC Lending and/or the Reorganized
Designated Subsidiaries.
(d) Post Effective Date Subservicing or Rental
Agreement. On the Effective Date, Reorganized UC, through one or more of the
Reorganized UC Subsidiaries, shall be authorized to provide subservicing or to
rent facilities, employees and other aspects of a servicing platform to
Reorganized UC Lending or to an entity designated as subservicer by Reorganized
UC Lending, as may be provided for in any stock purchase agreement or related
agreement governing the Alternative Residual Sale Transaction.
ARTICLE XXXVIII
RETENTION OF JURISDICTION
38.1 Retention of Jurisdiction: The Bankruptcy Court shall
retain and have exclusive jurisdiction over any matter arising under the
Bankruptcy Code, arising in or related to the Chapter 11 Cases or the Plan, or
that relates to the following:
(a) to resolve any matters related to the assumption,
assumption and assignment or rejection of any executory contract or unexpired
lease to which the Debtors is a party or with respect to which the Debtors may
be liable and to hear, determine and, if necessary, liquidate, any Claims
arising therefrom, including those matters related to the amendment after the
Effective Date of the Plan, to add any executory contracts or unexpired leases
to the list of executory contracts and unexpired leases to be rejected;
(b) to enter such orders as may be necessary or
appropriate to implement or consummate the provisions of the Plan and all
contracts, instruments, releases, and other agreements or documents created in
connection with the Plan;
(c) to determine any and all motions, adversary
proceedings, applications and contested or litigated matters that may be pending
on the Effective Date or that, pursuant to the Plan, may be instituted by
Reorganized UC after the Effective Date;
(d) to ensure that distributions to holders of Allowed
Claims and Allowed Equity Interests are accomplished as provided herein;
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(e) to hear and determine any timely objections to
Administrative Expense Claims or to proofs of Claim and Equity Interests filed,
both before and after the Confirmation Date, including any objections to the
classification of any Claim or Equity Interest, and to allow, disallow,
determine, liquidate, classify, estimate or establish the priority of or secured
or unsecured status of any Claim, in whole or in part;
(f) to enter and implement such orders as may be
appropriate in the event the Confirmation Order is for any reason stayed,
revoked, modified, reversed or vacated;
(g) to issue such orders in aide of execution of the
Plan, to the extent authorized by section 1142 of the Bankruptcy Code;
(h) to consider any modifications of the Plan, to cure
any defect or omission, or reconcile any inconsistency in any order of the
Bankruptcy Court, including the Confirmation Order;
(i) to hear and determine all applications for awards of
compensation for services rendered and reimbursement of expenses incurred prior
to the Effective Date;
(j) to hear and determine disputes arising in connection
with or relating to the Plan or the interpretation, implementation, or
enforcement of the Plan or the extent of any Entity's obligations incurred in
connection with or released under the Plan;
(k) to issue injunctions, enter and implement other
orders or take such other actions as may be necessary or appropriate to restrain
interference by any Entity with consummation or enforcement of the Plan;
(l) to determine any other matters that may arise in
connection with or are related to the Plan, the Disclosure Statement, the
Confirmation Order or any contract, instrument, release or other agreement or
document created in connection with the Plan or the Disclosure Statement;
(m) to hear and determine matters concerning state,
local and federal taxes in accordance with sections 346, 505, and 1146 of the
Bankruptcy Code;
(n) to hear any other matter or for any purpose
specified in the Confirmation Order that is not inconsistent with the Bankruptcy
Code;
(o) to hear and determine any matters that may arise in
connection with the Sale Transaction, the Residual Agreement, the Whole Loan
Agreement, the Alternative Residual Sale Transaction and any order of the
Bankruptcy Court with respect to any of the foregoing; and
(p) to enter a final decree closing the Chapter 11
Cases.
ARTICLE XXXIX
MODIFICATION, REVOCATION, OR WITHDRAWAL OF THE PLAN
39.1 Modification of Plan: The Debtors reserve the right, in
accordance with the Bankruptcy Code and the Bankruptcy Rules, to amend or modify
the Plan at any time prior to the entry of the Confirmation Order. Upon entry of
the Confirmation Order, the Debtors may, upon order of the Bankruptcy Court,
amend or modify the Plan, in accordance with section 1127(b) of the Bankruptcy
Code, or remedy any defect or omission or reconcile any inconsistency in the
Plan in such manner as may be necessary to carry out the purpose and intent of
the Plan. A holder of a Claim that has accepted the Plan shall be deemed to have
accepted the Plan as modified if the proposed modification does not materially
and adversely change the treatment of the Claim of such holder.
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39.2 Revocation or Withdrawal:
(a) The Plan may be revoked or withdrawn prior to the
Confirmation Date by the Debtors.
(b) If the Plan is revoked or withdrawn prior to the
Confirmation Date, then the Plan shall be deemed null and void. In such event,
nothing contained herein shall be deemed to constitute a waiver or release of
any claims by the Debtors or any other Entity or to prejudice in any manner the
rights of the Debtors or any other Entity in any further proceedings involving
the Debtors.
ARTICLE XL
PROVISION FOR MANAGEMENT
40.1 Directors: On the Effective Date, the board of directors
of Reorganized UC shall be comprised of the Plan Administrator and such other
individuals designated by the Plan Administrator (with the consent of the
Creditors' Committee, which consent shall not be unreasonably withheld), all of
which shall be disclosed prior to a hearing to consider confirmation of the Plan
pursuant to section 1129 of the Bankruptcy Code. Thereafter, the terms and
manner of selection of the directors of Reorganized UC shall be as provided in
the Reorganized UC Certificate of Incorporation and the Reorganized UC By-laws,
as the same may be amended.
ARTICLE XLI
ARTICLES OF INCORPORATION AND BY-LAWS OF THE DEBTORS; CORPORATE ACTION
41.1 Amendment of Articles of Incorporation and By-Laws: The
articles of incorporation and by-laws of the Debtors shall be amended as of the
Effective Date to provide substantially as set forth in the Reorganized UC
Certificate of Incorporation and the Reorganized UC By-laws.
41.2 Corporate Action: On the Effective Date, the adoption of
the Reorganized UC Certificate of Incorporation and the Reorganized UC By-laws
shall be authorized and approved in all respects, in each case without further
action under applicable law, regulation, order, or rule, including, without
limitation, any action by the stockholders of the Debtors or Reorganized UC. On
the Effective Date, the cancellation of all Equity Interests, employment
agreements, and other matters provided under the Plan involving the corporate
structure of Reorganized UC or corporate action by Reorganized UC shall be
deemed to have occurred, be authorized, and shall be in effect from and after
the Effective Date without requiring further action under applicable law,
regulation, order, or rule, including, without limitation, any action by the
stockholders of the Debtors or Reorganized UC.
ARTICLE XLII
MISCELLANEOUS PROVISIONS
42.1 Title to Assets; Discharge of Liabilities: Except as
otherwise provided by the Plan, including, without limitation, in connection
with a Sale Transaction or an Alternative Residual Sale Transaction, on the
Effective Date, title to all assets and properties encompassed by the Plan shall
vest in Reorganized UC, Reorganized UC Lending, or the Reorganized Designated
Subsidiaries, as the case may be, in accordance with section 1141 of the
Bankruptcy Code, and the Confirmation Order shall be a judicial determination of
discharge of the Debtors' liabilities except as provided in the Plan.
42.2 Discharge of Debtors: In the event that an Alternative
Residual Sale Transaction is consummated through implementation of a stock
purchase agreement, the rights afforded in the Plan and the treatment of all
holders of Claims or Equity Interests herein shall be in exchange for and in
complete satisfaction, discharge and release of all Claims and Equity Interests
of any nature whatsoever, known or unknown, including any interest accrued or
expenses incurred thereon from and after the Petition Date against the Debtors
and Debtors in Possession, or any of their estates, properties, assets or
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interests in property. Except as otherwise provided herein, upon the Effective
Date, all Claims against and Equity Interests in the Debtors and Debtors in
Possession, shall be satisfied, discharged and released in full. All Persons and
Entities shall be precluded from asserting against the Debtors, Debtors-in
Possession, their successors or assigns, including, without limitation,
Reorganized UC, Reorganized UC Lending, the Reorganized Designated Subsidiaries,
their agents and employees, or their respective assets properties or interests
in property, any other or further Claims based upon any act or omission,
transaction or other activity of any kind or nature that occurred prior to the
Confirmation Date, whether or not the facts or legal bases therefor were known
or existed prior to the Confirmation Date.
42.3 Injunction: Except as otherwise expressly provided in the
Plan, all Persons or Entities who have held, hold or may hold Claims or Equity
Interests are permanently enjoined, from and after the Effective Date, from (a)
commencing or continuing in any manner any action or other proceeding of any
kind on any such Claim or Equity Interest against the Debtors or Reorganized UC
(and in the event of (1) the Sale Transaction, the purchaser thereunder, and (2)
an Alternative Residual Sale Transaction consummated through a stock purchase
agreement, Reorganized UC Lending and the Reorganized Designated Subsidiaries),
(b) the enforcement, attachment, collection or recovery by any manner or means
of any judgment, award, decree or order against the Debtors or Reorganized UC
(and in the event of (1) the Sale Transaction, the purchaser thereunder, and (2)
an Alternative Residual Sale Transaction consummated through a stock purchase
agreement, Reorganized UC Lending and the Reorganized Designated Subsidiaries),
(c) creating, perfecting, or enforcing any encumbrance of any kind against the
Debtors or Reorganized UC or against the property or interests in property of
the Debtors or Reorganized UC (and in the event of (1) the Sale Transaction, the
purchaser thereunder, and (2) an Alternative Residual Sale Transaction
consummated through a stock purchase agreement, Reorganized UC Lending and the
Reorganized Designated Subsidiaries), and (d) asserting any right of setoff,
subrogation or recoupment of any kind against any obligation due from the
Debtors or Reorganized UC (and in the event of (1) the Sale Transaction, the
purchaser thereunder, and (2) an Alternative Residual Sale Transaction
consummated through a stock purchase agreement, Reorganized UC Lending and the
Reorganized Designated Subsidiaries) or against the property or interests in
property of the Debtors or Reorganized UC (and in the event of (1) the Sale
Transaction, the purchaser thereunder, and (2) an Alternative Residual Sale
Transaction consummated through a stock purchase agreement, Reorganized UC
Lending and the Reorganized Designated Subsidiaries), with respect to any such
Claim or Equity Interest; provided, however, that such injunction shall not
preclude the United States of America of any of its police or regulatory
agencies from enforcing their police or regulatory powers; and, provided,
further, that, except in connection with a properly filed proof of claim, the
foregoing proviso does not permit the United States of America or any of its
police or regulatory agencies from obtaining any monetary recovery from United
Companies or Reorganized UC (and in the event of (1) the Sale Transaction, the
purchaser thereunder, and (2) an Alternative Residual Sale Transaction
consummated through a stock purchase agreement, Reorganized UC Lending and the
Reorganized Designated Subsidiaries) or their respective property or interests
in property with respect to any such Claim or Equity Interest, including,
without limitation, any monetary claim or penalty in furtherance of a police or
regulatory power.
42.4 Term of Existing Injunctions or Stays: Unless otherwise
provided, all injunctions or stays provided for in the Chapter 11 Cases pursuant
to sections 105, 362 or 525 of the Bankruptcy Code, or otherwise, and in
existence on the Confirmation Date, shall remain in full force and effect until
the Effective Date.
42.5 Limited Release of Directors, Officers and Employees: As
of the Effective Date, the Debtors shall be deemed to have waived and released
its present and former directors, officers, employees, consultants and agents
who were directors, officers, employees, consultants or agents, respectively, at
any time, from any and all claims of the Debtors, including, without limitation,
claims which the Debtors or Debtors in Possession otherwise has legal power to
assert, compromise or settle in connection with the Chapter 11 Cases, arising on
or prior to the Effective Date; provided, however, that this provision shall not
operate as a waiver or release of any claim (i) with respect to any loan,
advance or similar payment by the Debtors to any such person, (ii) with respect
to any contractual obligation owed by such person to the Debtors, (iii) relating
to such person's knowing fraud, or (iv) to the extent based upon or attributable
to such person gaining in fact a personal profit to which such person was not
legally entitled, including, without limitation, profits made from the purchase
or sale of equity securities of the Debtors which are recoverable by the Debtors
pursuant to section 16(b) of the Securities Exchange Act of 1934, as amended;
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and, provided, further, that the foregoing is not intended, nor shall it be
construed, to release any of the Debtors' claims that may exist against the
Debtors' directors and officers liability insurance; and, provided, further,
that the foregoing is not intended, nor shall it be construed to release any of
the Debtors' claims that may exist against Deloitte & Touche LLP.
42.6 Exculpation: None of the Debtors, Reorganized UC, the
Creditors' Committee, the Equity Committee, Credit Suisse First Boston
Management Corporation, any indenture trustee responsible for making
distributions under the Plan, and any of their respective directors, officers,
employees, members, attorneys, consultants, advisors and agents (acting in such
capacity), shall have or incur any liability to any Entity for any act taken or
omitted to be taken in the formulation, preparation, dissemination,
implementation, confirmation or approval of the Plan, the Disclosure Statement
related thereto or any contract, instrument, release or other agreement or
document provided for or contemplated in connection with the consummation of the
transactions set forth in the Plan; provided, however, that the foregoing
provisions of this Section 42.6 shall not affect the liability of any Entity
that otherwise would result from any such act or omission to the extent that
such act or omission is determined in a Final Order to have constituted gross
negligence, willful misconduct or breach of fiduciary duty. Any of the foregoing
parties in all respects shall be entitled to rely upon the advice of counsel
with respect to their duties and responsibilities under the Plan.
42.7 Preservation of Rights of Action: Except as otherwise
provided in the Plan, including, without limitation, Article XXVII of the Plan,
or in any contract, instrument, release of other agreement entered into in
connection with the Plan, in accordance with section 1123(b) of the Bankruptcy
Code, Reorganized UC shall retain sole and exclusive authority to enforce any
claims, rights or causes of action that the Debtors or their chapter 11 estates
may hold against any entity, including any claims, rights or causes of action
arising under sections 544, 547, 548, 549 and 550 of the Bankruptcy Code.
Reorganized UC may pursue such retained rights or causes of action, as
appropriate, in accordance with the best interests of Reorganized UC.
42.8 Injunction: Except as provided in the Plan, as of the
Effective Date, all non-Debtors entities are permanently enjoined from
commencing or continuing in any manner, any action or proceeding, whether
directly, derivatively, on account of or respecting any claim, debt, right or
cause of action of the Debtors or Reorganized UC which the Debtors or
Reorganized UC, as the case may be, retain sole and exclusive authority to
pursue in accordance with Section 42.7 of the Plan or which has been released
pursuant to the Plan.
42.9 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.
42.10 Retiree Benefits: From and after the Effective Date,
other than with respect to individuals with whom the Debtors have agreed to lump
sum claim amounts in respect of future retiree benefits, pursuant to section
1129(a)(13) of the Bankruptcy Code, Reorganized UC shall continue to pay all
retiree benefits (within the meaning of section 1114 of the Bankruptcy Code), at
the level established in accordance with subsection (e)(1)(B) or (g) of section
1114 of the Bankruptcy Code, at any time prior to the Confirmation Date, and for
the duration of the period during which the Debtors have obligated themselves to
provide such benefits.
42.11 Post-Effective Date Fees and Expenses: From and after
the Effective Date, Reorganized UC shall, in the ordinary course of business and
without the necessity for any approval by the Bankruptcy Court, pay the
reasonable professional fees and expenses incurred by Reorganized UC related to
implementation and consummation of the Plan.
42.12 Severability: If, prior to the Confirmation Date, any
term or provision of the Plan shall be held by the Bankruptcy Court to be
invalid, void or unenforceable, the Bankruptcy Court shall, with the consent of
the Debtors, have the power to alter and interpret such term or provision to
make it valid or enforceable to the maximum extent practicable, consistent with
the original purpose of the term or provision held to be invalid, void or
unenforceable, and such term or provision shall then be applicable as altered or
interpreted. Notwithstanding any such holding, alteration or interpretation, the
remainder of the terms and provisions of the Plan shall remain in full force and
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effect and shall in no way be affected, impaired or invalidated by such holding,
alteration or interpretation. The Confirmation Order shall constitute a judicial
determination and shall provide that each term and provision of the Plan, as it
may have been altered or interpreted in accordance with the foregoing, is valid
and enforceable pursuant to its terms.
42.13 Governing Law: Except to the extent that the Bankruptcy
Code or other federal law is applicable, or to the extent that an exhibit hereto
or document contained in the Plan Supplement provides otherwise, the rights,
duties and obligations arising under this Plan shall be governed by, and
construed and enforced in accordance with, the Bankruptcy Code and, to the
extent not inconsistent therewith, the laws of the State of New York, without
giving effect to principles of conflicts of laws.
42.14 Notices: All notices, requests, and demands to or upon
the Debtors or Reorganized UC to be effective shall be in writing, including by
facsimile transmission, and, unless otherwise expressly provided herein, shall
be deemed to have been duly given or made when actually delivered or, in the
case of notice by facsimile transmission, when received and telephonically
confirmed, addressed as follows:
United Companies Financial Corporation
P.O. Box 1591
8549 United Plaza Boulevard
Baton Rouge, LA 70809
Attention: Lawrence J. Ramaekers
Telecopier: (225) 987-4231
Telephonic Confirmation: (225) 924-6007
With a copy to:
Weil, Gotshal & Manges LLP
767 Fifth Avenue
New York, New York 10153
Attention: Marcia L. Goldstein, Esq.
Brian S. Rosen, Esq.
Telecopier: (212) 310-8007
Telephonic Confirmation: (212) 310-8888
-and-
Richards, Layton & Finger, P.A.
One Rodney Square
Wilmington, Delaware 19899
Attention: Mark D. Collins, Esq.
Telecopier: (302) 658-6548
Telephonic Confirmation: (302) 658-6541
42.15 Closing of Cases: Reorganized UC shall, promptly upon
the full administration of the Chapter 11 Cases, file with the Bankruptcy Court
all documents required by Bankruptcy Rule 3022 and any applicable order of the
Bankruptcy Court.
42.16 Section Headings: The section headings contained in this
Plan are for reference purposes only and shall not affect in any way the meaning
or interpretation of the Plan.
41
<PAGE>
Dated: Baton Rouge, Louisiana
August 10, 2000
UNITED COMPANIES FINANCIAL CORPORATION
By: /s/ Lawrence J. Ramaekers
-------------------------------------
Name: Lawrence J. Ramaekers
Title: Chief Executive Officer
PELICAN MORTGAGE FINANCIAL CORPORATION
By: /s/ Lawrence J. Ramaekers
-------------------------------------
Name: Lawrence J. Ramaekers
Title: Chief Executive Officer
UNITED COMPANIES LENDING GROUP, INC.
By: /s/ Lawrence J. Ramaekers
-------------------------------------
Name: Lawrence J. Ramaekers
Title: Chief Executive Officer
By: /s/ Lawrence J. Ramaekers
-------------------------------------
Name: Lawrence J. Ramaekers
Title: Chief Executive Officer
UNITED COMPANIES LENDING CORPORATION
By: /s/ Lawrence J. Ramaekers
-------------------------------------
Name: Lawrence J. Ramaekers
Title: Chief Executive Officer
ADOBE, INC.
By: /s/ Lawrence J. Ramaekers
-------------------------------------
Name: Lawrence J. Ramaekers
Title: Chief Executive Officer
42
<PAGE>
ADOBE FINANCIAL, INC. I
By: /s/ Lawrence J. Ramaekers
-------------------------------------
Name: Lawrence J. Ramaekers
Title: Chief Executive Officer
GINGER MAE, INC.
By: /s/ Lawrence J. Ramaekers
-------------------------------------
Name: Lawrence J. Ramaekers
Title: Chief Executive Officer
UNICOR MORTGAGE, INC.
By: /s/ Lawrence J. Ramaekers
-------------------------------------
Name: Lawrence J. Ramaekers
Title: Chief Executive Officer
SOUTHERN MORTGAGE ACQUISITION, INC.
By: /s/ Lawrence J. Ramaekers
-------------------------------------
Name: Lawrence J. Ramaekers
Title: Chief Executive Officer
UNITED COMPANIES FUNDING, INC.
By: /s/ Lawrence J. Ramaekers
-------------------------------------
Name: Lawrence J. Ramaekers
Title: Chief Executive Officer
GOPHER EQUITY, INC. I
By: /s/ Lawrence J. Ramaekers
-------------------------------------
Name: Lawrence J. Ramaekers
Title: Chief Executive Officer
43
<PAGE>
UNITED CREDIT CARD, INC.
By: /s/ Lawrence J. Ramaekers
-------------------------------------
Name: Lawrence J. Ramaekers
Title: Chief Executive Officer
44
