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FORM 8-K
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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
CURRENT REPORT
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Pursuant to Section 13 or 15(d)
of the Securities Exchange Act of 1934
Date of Report (date of earliest event Reported) November 15, 1995
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THE COLUMBIA GAS SYSTEM, INC.
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(Exact name of registrant as specified in its charter)
Delaware 1-1098 13-1594808
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(State of other jurisdiction (Commission (IRS Employer
of incorporation) File Number) Identification No.)
20 Montchanin Road, Wilmington, Delaware 19807
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(Address of principal executive offices)
Registrant's telephone number, including area code (302) 429-5000
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Item 3. Bankruptcy or Receivership
The United States Bankruptcy Court for the District of
Delaware (Bankruptcy Court) on November 15, 1995, issued orders confirming the
Third Amended Plan of Reorganization for The Columbia Gas System, Inc.
(Registrant) dated July 27, 1995, and Second Amended Plan of Reorganization of
the Columbia Gas Transmission Corporation, (a wholly-owned subsidiary of
Registrant) as further amended, dated July 17, 1995. The Bankruptcy Court
orders confirming these amended plans of reorganization (Plans) are filed
herewith as Exhibits B and C.
A summary of material features of the Plans was published in a
news release dated November 15, 1995, which is also filed herewith as Exhibit D
and a more detailed discussion of the material features of the Plans was
included in the report on Form 10-Q for the third quarter of 1995, as filed
with the Commission on November 9, 1995.
The following unaudited condensed consolidated balance sheet for the
registrant, which was included in the quarterly report on Form 10-Q for the
third quarter of 1995, gives the effect of the Plans as confirmed which are
substantially the same as the Plans filed with the Commission under cover of
Form 8-K on August 4, 1995. This pro forma statement assumed that the
effective date was September 30, 1995. The actual effective date will follow a
ten day waiting period from the date of the confirmation order, during which
time appeals may be filed in the United States District Court for the District
of Delaware, as ordered by the Bankruptcy Court.
The balance sheet adjustments primarily reflect the satisfaction of
approximately $4 billion of non-affiliated claims made against the Registrant
and Columbia Transmission in the bankruptcy proceedings and the issuance of
approximately $3 billion of associated new debt or preferred stock. The pro
forma consolidated balance sheet also includes other adjustments and
reclassifications to eliminate bankruptcy-related items and the anticipated
readoption of Statement of Financial Accounting Standard No. 71 by Columbia
Transmission and Columbia Gulf Transmission Company upon emergence. Management
believes that these adjustments fairly represent the effect of emergence from
bankruptcy on the consolidated balance sheet.
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Consolidated Balance Sheet
Actual and Pro Forma
As of
September 30, 1995
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(millions)
<TABLE>
<CAPTION>
Pro Forma
Actual Entries Pro Forma
---------- -------------- ---------
<S> <C> <C> <C>
Assets
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Net Property, Plant and Equipment . . . . . . . . . . . $ 4,132.1 $ 18.0 $ 4,150.1
------------ ------------ -----------
Investments and Other Assets . . . . . . . . . . . . . 297.7 (91.0) 206.7
------------ ------------ -----------
Current Assets
Cash and temporary cash investments . . . . . . . 1,759.6 (1,758.2) 1.4
Other . . . . . . . . . . . . . . . . . . . . . . 779.1 198.2 977.3
------------ ------------- -----------
Total Current Assets . . . . . . . . . . . . . . . . . 2,538.7 (1,560.0) 978.7
------------ ------------ -----------
Deferred Charges . . . . . . . . . . . . . . . . . . . 287.2 188.3 475.5
------------ ------------ -----------
Total Assets . . . . . . . . . . . . . . . . . . . . . $ 7,255.7 $ (1,444.7) $ 5,811.0
============= ============= ===========
Capitalization and Liabilities
- - ------------------------------
Capitalization
Common Stock Equity . . . . . . . . . . . . . . . . 1,647.5 (524.3) 1,123.2
Preferred Stock . . . . . . . . . . . . . . . . . . - 400.0 400.0
Long-term debt . . . . . . . . . . . . . . . . . . . 3.8 2,000.0 2,003.8
------------- ------------ -----------
Total Capitalization . . . . . . . . . . . . . . . . . 1,651.3 1,875.7 3,527.0
------------ ------------ -----------
Current Liabilities
Short-term debt . . . . . . . . . . . . . . . . . . - 538.0 538.0
Other . . . . . . . . . . . . . . . . . . . . . . . 734.0 17.9 751.9
------------ ------------ -----------
Total Current Liabilities . . . . . . . . . . . . . . . 734.0 555.9 1,289.9
------------ ------------ -----------
Liabilities Subject to Chapter 11 Proceedings . . . . . 3,981.9 (3,981.9) -
------------ ------------ ------------
Other Liabilities and Deferred Credits
Deferred income taxes, noncurrent . . . . . . . . . 424.0 (67.4) 356.6
Postretirement benefits other than pensions . . . . 220.3 2.2 222.5
Other . . . . . . . . . . . . . . . . . . . . . . . 244.2 170.8 415.0
------------ ------------ -----------
Total Other Liabilities and Deferred Credits . . . . . 888.5 105.6 994.1
------------ ------------ -----------
Total Capitalization and Liabilities . . . . . . . . . $ 7,255.7 $ (1,444.7) $ 5,811.0
============ ============ ===========
</TABLE>
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Item 5. Other Events
On November 20, 1995, Registrant published certain factors which can
be used to estimate distributions upon emergence with respect to outstanding
prepetition debt of Registrant. A copy of that release is filed herewith as
Exhibit E.
On November 21, 1995, Registrant published the projected interest and
dividend rates for debentures and preferred stock to be issued upon emergence
assuming that emergence occurs on November 28, 1995, the first day following
the 10-day appeal period. A copy of that release is filed herewith as Exhibit
F.
Item 7. Financial Statements and Exhibits
A. Amended Plans of Reorganization and Disclosure Statements for
Registrant and Columbia Transmission are incorporated by
reference to Form 8-K filed with the Commission on August 8,
1995. Omitted from this filing were Exhibits 2 through 6 for
both the Registrant and Columbia Transmission. Exhibit 2 for
Registrant (Exhibit 4 for Columbia Transmission) is
Registrant's 1994 Form 10-K. Exhibit 3 for Registrant
(Exhibit 5 for Columbia Transmission) is Registrant's 1995
First and Second Quarter Form 10-Qs. These documents were
previously filed with the Commission. Copies of the remaining
exhibits will be provided to the Commission upon request.
B. Confirmation Order of Registrant's Plan which includes certain
amendments to its Plan. Omitted is Exhibit A (Stipulation and
Order of Dismissal). Copies of this exhibit will be
provided to the Commission upon request.
C. Confirmation Order of Columbia Transmission's Plan which
includes certain amendments to its Plan. Omitted is Exhibit A
(Appalachian and Southwest producers, Creditor Classes 3.1 and
3.3); Exhibit B (Other Unsecured Claims, Creditor Classes 3.1
and 3.4) and Exhibit C (Listing of Assumed Executory
Contracts). Copies of these exhibits will be provided to the
Commission upon request.
D. News Release dated November 15, 1995, regarding confirmation
orders for Registrant and Columbia Transmission.
E. News Release dated November 20, 1995, regarding certain
factors which can be used to estimate distributions upon
emergence with respect to outstanding prepetition debt of
Registrant.
F. News Release dated November 21, 1995, regarding projected
interest and debenture rates to be issued upon emergence.
<PAGE> 5
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of
1934, the Registrant has duly caused this report to be signed on its behalf by
the undersigned hereunto duly authorized.
The Columbia Gas System, Inc.
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(Registrant)
By /s/ R. E. Lowe
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Vice President &
Controller
Date: November 22, 1995
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FORM 8-K, EXHIBIT B, REGISTRANT'S CONFIRMATION ORDER DATED NOVEMBER 15, 1995
UNITED STATES BANKRUPTCY COURT
FOR THE DISTRICT OF DELAWARE
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In re Chapter 11
THE COLUMBIA GAS SYSTEM, INC., Case No. 91-803(HSB)
Debtor.
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ORDER CONFIRMING THE THIRD AMENDED
PLAN OF REORGANIZATION OF THE
COLUMBIA GAS SYSTEM, INC. DATED JULY 27, 1995
The Columbia Gas System, Inc. ("Columbia"), debtor and
debtor-in-possession, having filed the Third Amended Plan of Reorganization of
The Columbia Gas System, Inc. dated July 27, 1995 (the "Plan") in accordance
with Section 1121 of Title 11 of the United States Code (the "Bankruptcy
Code"), 11 U.S.C. Section 1121; and Columbia having filed its Disclosure
Statement for the Plan pursuant to Section 1125 of the Bankruptcy Code (the
"Disclosure Statement"); and hearings having been held before this Court on
July 18, 1995 and July 27, 1995 (collectively, the "Hearing") to consider the
adequacy of the Disclosure Statement and the amendments and revisions thereto
set forth on the record at the Hearing; and the Court by Order dated July 27,
1995 having approved the Disclosure Statement as modified to comport with the
record of the Hearing, the rulings of the Court and agreements reached with
parties that objected to the Disclosure Statement (the "Disclosure Statement
Order"); and the Court having entered an Order dated July 27, 1995 (the
"Confirmation Procedures Order") establishing and approving,
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inter alia, procedures for the solicitation and tabulation of votes to accept
or reject the Plan, setting deadlines for objecting to confirmation and setting
November 13, 1995 at 10:00 a.m. as the date and time for the commencement of
the hearing pursuant to Section 1129 of the Bankruptcy Code, 11 U.S.C. Section
1129, to consider confirmation of the Plan; and the Court having approved by
order dated October 10, 1995, the form of Class 7 Notice(1) and other material
to be transmitted to the holders of Class 7 Claims (the "Class 7 Procedures
Order"); and the Disclosure Statement (with a copy of the Plan annexed thereto
as Exhibit 1), the Disclosure Statement Order, the report on the Plan dated
August 25, 1995 issued by the Securities and Exchange Commission (the "SEC
Report"), a Ballot or Non-Voting Status Notice, as appropriate, and related
material having been transmitted to all known holders of Claims and/or
Interests in accordance with the Confirmation Procedures Order and the Class 7
Procedures Order; and the solicitation of acceptances from holders of Claims
and/or Interests entitled to vote on the Plan having been made within the time
and in the manner required by the Confirmation Procedures Order; and Ballots
indicating acceptance or rejection of the Plan by holders of Claims and/or
Interests having been received and tallied by Poorman-Douglas (the "Balloting
Agent"), the
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1 All capitalized terms not otherwise defined herein have the
meanings set forth in the Plan or, to the extent not
inconsistent therewith, in the Confirmation Procedures
Order.
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Court-authorized balloting agent; and affidavits of publication having been
filed with the Court verifying that the Confirmation Procedures Notice was
published in accordance with the provisions of the Confirmation Procedures
Order (collectively, the "Publication Affidavits"); and affidavits of service
having been filed with respect to the mailing of the Confirmation Procedures
Notice to those parties-in-interest having requested notice pursuant to Rule
2002 of the Federal Rules of Bankruptcy Procedure (the "Bankruptcy Rules") and
with respect to the transmittal of the Class 7 Notice and related material in
accordance with the Class 7 Procedures Order (the "Mailing Affidavits"); and
objections to confirmation of the Plan having been filed by (i) the Wain Family
Trust, (ii) Gerson Werner and Harry Lewis, named plaintiffs in the Derivative
Action (the "Werner Lewis Objection") and (iii) the United States of America on
behalf of the Internal Revenue Service (the "IRS Objection") (collectively, the
"Confirmation Objections"); and it appearing that the IRS Objection and the
Werner Lewis Objection have been withdrawn; and hearings having been held from
November 13, 1995 through November 15, 1995 with respect to the Court's
consideration of (i) confirmation of the Plan, (ii) the Confirmation Objections
not previously withdrawn or settled, (iii) Columbia's proposed settlement of
(a) the Class Action (the "Class Action Settlement") and (b) the Intercompany
Claims Litigation, and (iv) the Columbia Omnibus Settlement and other
settlements
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embodied in the Plan (the "Confirmation Hearing"); and upon the entire record
of the Reorganization Case, including, without limitation, the record made at
the Confirmation Hearing; and the Court having reviewed, inter alia, the Plan,
the Disclosure Statement, the Plan Vote Certification (as defined below), the
Publication Affidavits, the Mailing Affidavits, the Debtor's Memorandum of Law
In Support of Confirmation of Its Third Amended Plan of Reorganization (the
"Confirmation Memorandum"), and all Confirmation Objections and responses to,
and statements and comments regarding confirmation of the Plan; and the Court
having taken judicial notice of the transcript of the trial on the Intercompany
Claims and the proposed findings of fact and conclusions of law submitted by
the parties after the conclusion of the trial; and after due deliberation, the
Court makes the following findings of fact and conclusions of law:(2)
FINDINGS OF FACT AND CONCLUSIONS OF LAW:
a. The Court has jurisdiction over the Reorganization
Case pursuant to 28 U.S.C Section Section 1334(a) and 157(1). Venue of these
proceedings and the Reorganization
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2 This Confirmation Order constitutes the Court's
findings of fact and conclusions of law under Fed. R.
Civ. P. 52, as made applicable by Bankruptcy Rules 7052
and 9014. Any finding of fact shall constitute a
finding of fact even if it is stated as a conclusion of
law, and any conclusion of law shall constitute a
conclusion of law even if it is stated as a finding of
fact when necessary and appropriate.
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Case in this district is proper pursuant to 28 U.S.C. Section Section 1408 and
1409.
b. By order dated September 29, 1995, the District
Court, inter alia, confirmed that this Court has jurisdiction to (i) confirm
the Plan and the TCO Plan in all respects including, without limitation, the
settlement of the Intercompany Claims Litigation, (ii) review the settlement of
the Intercompany Claims Litigation in conjunction with the Court's hearings to
consider confirmation of the Plan and the TCO Plan, to the extent judicial
review of such settlement is required, (iii) approve the settlement of the
Intercompany Claims Litigation, and (iv) authorize the release of the
Intercompany Claims as provided for in the TCO Plan.
COMPLIANCE WITH CHAPTER 11 REQUIREMENTS
c. Due, sufficient and adequate notice of the Plan, the
Confirmation Hearing, the Class Action Settlement, the settlement of the
Intercompany Claims Litigation, the Columbia Omnibus Settlement and the other
settlements and compromises embodied in the Plan, and the deadlines for voting
and filing Confirmation Objections has been given to all known holders of
Claims and/or Interests and other parties-in-interest in accordance with the
Confirmation Procedures Order and the Class 7 Procedures Order.
d. The solicitation by Columbia of votes for accepting
or rejecting the Plan was conducted in good faith and complied with Sections
1125 and 1126 of the Bankruptcy
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Code, Bankruptcy Rules 3017 and 3018, the Confirmation Procedures Order, all
other applicable provisions of the Bankruptcy Code and all other applicable
laws, rules and regulations.
e. The procedures by which the Ballots were distributed
to holders of Claims against and/or Interests in Columbia and tabulated were
fair, properly conducted and in accordance with the Bankruptcy Code, the
Bankruptcy Rules, the local rules of this Court, the Confirmation Procedures
Order and all other applicable laws, rules and regulations.
f. As evidenced by the Declaration of Edward L. Erb
dated November 7, 1995 certifying the method and results of the ballot
tabulation for the Voting Classes (the "Plan Vote Certification"): (i) at
least two-thirds in amount and more than one-half in number of holders of
Borrowed Money Claims in Class 3.2 that voted on the Plan accepted the Plan
without including the vote of insiders; and (ii) at least two-thirds in amount
of the aggregate number of shares of Common Stock held by holders of Class 8
Interests that voted on the Plan accepted the Plan without including the votes
of insiders.
g. Classes 1, 2, 3.1, 4, 5, 6.1, 6.2, 6.3 and 7 are not
impaired under the Plan and, therefore, such Classes are deemed to have
accepted the Plan pursuant to Section 1126(f) of the Bankruptcy Code.
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h. As required by Section 1129(a)(1) of the Bankruptcy
Code, the Plan complies with all applicable provisions of the Bankruptcy Code.
i. As required by and in compliance with Sections
1123(a)(1),(2) and (3) of the Bankruptcy Code, the Plan identifies the Classes
of Claims against Columbia that are not impaired under the Plan, the Classes of
Claims against and Interests in Columbia that are impaired under the Plan, and
specifies the treatment of Allowed Claims and Interests in each such Class.
j. Consistent with Section 1123(a)(4) of the Bankruptcy
Code, the Plan provides the same treatment for each Allowed Claim or Interest
in a particular Class, except in instances where the holder of a particular
Allowed Claim or Interest has agreed to less favorable treatment of its Allowed
Claim or Interest.
k. The classification of Claims against and Interests in
Columbia under the Plan is reasonable, not discriminatory and consistent with
Section 1122(a) of the Bankruptcy Code in that each Claim against or Interest
in Columbia has been placed in a particular Class only if such Claim or
Interest is substantially similar to the other Claims or Interests in such
Class. Further, such classification is proper under Section 1122(a) because
such Claims and Interests have differing rights among each other and against
the assets of Columbia or differing interests in Columbia. Additionally, in
accordance with Section 1122(b)
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of the Bankruptcy Code, the Plan as modified by this Confirmation Order
provides for a Class of Borrowed Money Claims the members of which are those
beneficial owners of such Claims that together with their affiliates hold
Borrowed Money Claims in the aggregate principal amount of $20,000 or less, as
of the (i) Ledger Closing Date, or (ii) as of the Record Date, to the extent
not duplicative of the Claims in (i) above. This Class is reasonable and
necessary for administrative convenience.
l. As required by Section 1123(a)(5) of the Bankruptcy
Code, the Plan provides adequate means for its execution and implementation
including, inter alia, (i) the vesting in Reorganized Columbia of all property
of the Estate and any property and assets acquired by Columbia or Reorganized
Columbia under the Plan, (ii) the cancellation of each of the Borrowed Money
Instruments, the $500 Million Credit Agreement, the $750 Million Credit
Agreement, the 1961 Indenture, the Rate Swap Agreement, the Commercial Paper
Master Note for the Commercial Paper and the LESOP Indenture, and the issuance
by Reorganized Columbia of New Indenture Securities and shares of New Preferred
Stock and DECS, and (iii) the adoption by Reorganized Columbia of an Amended
and Restated Certificate of Incorporation, and the filing of the Amended and
Restated Certificate of Incorporation and certificates of designation with
respect to the New Preferred Stock and the DECS pursuant to Section IV.A of the
Plan, and (iv) entry by Reorganized Columbia
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into one or more banking facilities as described at the Confirmation Hearing in
amounts sufficient to fund Reorganized Columbia's cash needs under the Plan and
to provide ongoing working capital.
m. As required by Section 1123(a)(6) of the Bankruptcy
Code, the Plan provides for the inclusion in the Amended and Restated
Certificate of Incorporation of Reorganized Columbia of a provision prohibiting
the issuance of non-voting equity securities.
n. As required by Section 1123(a)(7) of the Bankruptcy
Code, the selection of directors and officers who will serve in such capacities
upon the Effective Date is in a manner consistent with the interests of holders
of Claims and Interests and public policy. The Plan provides that subject to
changes in the ordinary course of business, the initial directors and officers
of Reorganized Columbia shall be the same individuals who were serving in those
capacities as of July 27, 1995.
o. As required by Section 1123(b) of the Bankruptcy
Code, the Plan (i) impairs or leaves unimpaired, as the case may be, each Class
of Claims or Interests, and (ii) provides for the assumption, rejection or
other disposition of each of Columbia's executory contracts which had not been
expressly assumed or rejected pursuant to Section 365 of the Bankruptcy Code by
prior order of the Court as of the Confirmation Hearing.
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p. As required by Section 1123(b)(3), the Plan provides
for either (i) the settlement or adjustment, or (ii) the retention and
enforcement by Reorganized Columbia, of any claims, demands, rights and causes
of action that Columbia or the Estate may hold against any Person.
q. As required by Section 1129(a)(2) of the Bankruptcy
Code, Columbia has complied with all applicable provisions of title 11
including the disclosure and solicitation requirements of Sections 1125 and
1126 of the Bankruptcy Code. Columbia transmitted solicitation materials
including Ballots to its Creditors and Stockholders entitled to vote on the
Plan only after the Court approved the Disclosure Statement as containing
adequate information and in compliance with the requirements of the
Confirmation Procedures Order.
r. As required by Section 1129(a)(3) of the Bankruptcy
Code, the Plan has been proposed in good faith, for the valid business purpose
of resolving disputes and restructuring or paying in full substantial
obligations of Columbia, and has not been proposed by any means forbidden by
law.
s. As required by Section 1129(a)(4) of the Bankruptcy
Code, any payment made or to be made by Columbia for professional services or
for costs and expenses in connection with the Plan or incident to the
Reorganization
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Case, has been disclosed to and approved by, or is subject to the approval of,
this Court as being reasonable.
t. As required by Section 1129(a)(5) of the Bankruptcy
Code, Columbia has disclosed the identity and affiliations of the individuals
who are proposed to serve after confirmation of the Plan as directors and
executive officers of Reorganized Columbia. The continuance of such
individuals in such offices, subject to changes in the normal course, is
consistent with the interests of the holders of Claims against and Interests in
Columbia and with public policy. In addition, Columbia has disclosed the
identity of any insider presently known to it who will be employed or retained
by Reorganized Columbia, and the nature of any compensation to be paid to such
insider.
u. Section 1129(a)(6) of the Bankruptcy Code is not
applicable as Columbia's current business does not involve the establishment of
rates over which any regulatory commission has jurisdiction. As a public
utility holding company, Columbia is however, registered and regulated by the
SEC under the HCA. The SEC, exercising its authority under Sections 11(f) and
(y) of HCA, has issued a "Memorandum Opinion and Order Approving Plan of
Reorganization of Registered Holding Company Under Section 11(f) and Registered
Holding Company's Participation in Subsidiary's Plan of Reorganization and
Related Transactions", dated August 25, 1995. Entry of this Order
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followed extensive public notice in accordance with the SEC's procedures, and
no objections were received.
v. As required by Section 1129(a)(7) of the Bankruptcy
Code, with respect to each impaired or deemed impaired Class of Claims against
or Interests in Columbia, each holder of a Claim or Interest in such impaired
or deemed impaired Class has accepted the Plan, or will receive or retain under
the Plan on account of such Claim or Interest property of a value, as of the
Effective Date, that is not less than the amount such holder would receive or
retain if Columbia were liquidated on the Effective Date under Chapter 7 of the
Bankruptcy Code.
w. As indicated by the Plan Vote Certification and as
established on the record at the Confirmation Hearing, each impaired or deemed
impaired Class of Claims or Interests has voted to accept the Plan in
accordance with Sections 1124 and 1126 of the Bankruptcy Code, with the result
that Section 1129(a)(8) of the Bankruptcy Code is satisfied and the "cram down"
provisions of Section 1129(b) of the Bankruptcy Code are not applicable.
x. The Plan provides for treatment of Allowed
Administrative Claims, and Allowed Priority Tax Claims pursuant to Sections
507(a)(1) and 507(a)(8) of the Bankruptcy Code in accordance with Section
1129(a)(9) of the Bankruptcy Code, except to the extent that the holder of a
particular Claim has agreed to a different treatment.
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y. With respect to the Priority Tax Claims of the IRS
which are the subject of the IRS Order, Columbia shall pay such Claims over a
period not to exceed six years from the date of assessment of such Claims,
together with interest, pursuant to the terms of the IRS Settlement Agreement
and the IRS Order. The Plan specifically sets forth the terms of payment on
such Claims.
z. As required by Section 1129(a)(10) of the Bankruptcy
Code, and as demonstrated by the Plan Vote Certification, at least one Class of
Claims or Interests that is impaired under the Plan has accepted the Plan,
determined without including any acceptance of the Plan by any insider.
aa. The Plan is feasible. Based on the record
established at the Confirmation Hearing, Columbia has demonstrated its ability
to meet its financial obligations under the Plan and continue its business in
the ordinary course. As required by Section 1129(a)(11) of the Bankruptcy
Code, confirmation of the Plan is not likely to be followed by the liquidation
or the need for further financial reorganization of Columbia.
bb. As required by Section 1129(a)(12) of the Bankruptcy
Code, Section III.A.1.d of the Plan provides that all Administrative Claims for
fees payable pursuant to Section 1930 of title 28 of the United States Code, 28
U.S.C. Section 1930, which are unpaid as of the Effective Date will be paid in
cash on the Effective Date.
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cc. Consistent with Section 1129(a)(13) of the Bankruptcy
Code, Section IV.K of the Plan provides for all employee and retiree benefit
plans and programs in existence as of the Petition Date including the
Retirement Plan, but excluding the LESOP portion of the employee thrift plan,
to continue in existence after the Effective Date, and Columbia shall continue
to pay retiree benefits (as defined in Section 1114(a) of the Bankruptcy Code)
at the level established by the terms of such retiree benefit plans for the
duration of the period Columbia has obligated itself to provide such benefits.
dd. The Plan is the only plan of reorganization for
Columbia pending before this or any other Court.
ee. The primary purpose of the Plan is not the avoidance
of taxes or the avoidance of the application of Section 5 of the Securities Act
of 1933, as amended (15 U.S.C. Section 77e).
ff. The record established at the Confirmation Hearing
demonstrates that all conditions precedent to confirmation of the Plan have
been satisfied, are concurrently satisfied either by entry of this Confirmation
Order and an order of this Court confirming the TCO Plan, and as applicable, an
order of the District Court, or have been modified with the necessary consents,
if any, having been obtained from the Equity Committee and/or the Creditors'
Committee.
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gg. Columbia has stated that it believes that all
conditions precedent to the Effective Date of the Plan, as set forth in Section
VIII.B of the Plan, will occur or be duly waived.
hh. Pursuant to Section 1125(e) of the Bankruptcy Code,
Columbia shall not be liable on account of its solicitation of acceptances of
the Plan and its issuance and distribution of New Indenture Securities, DECS,
New Preferred Stock and Common Stock pursuant to the Plan in good faith and in
compliance with the applicable provisions of the Bankruptcy Code, for any
violation of applicable law, rule or regulation governing the solicitation of
acceptances of a plan of reorganization or the offer, issuance, sale or
purchase of securities.
ii. Pursuant to Section 1145(a)(1) of the Bankruptcy
Code, the offering, issuance and distribution of New Indenture Securities,
DECS, New Preferred Stock and Common Stock by Columbia in exchange for Claims
against and Interests in Columbia shall be exempt from Section 5 of the
Securities Act, and any state or local law requiring registration prior to the
offering, issuance, distribution or sale of securities.
jj. Pursuant to and to the fullest extent permitted by
Section 1145 of the Bankruptcy Code, the resale of any New Indenture
Securities, DECS, New Preferred Stock and Common Stock shall be exempt from
Section 5 of the Securities Act and any state or local law requiring
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registration prior to the offering, issuance, distribution or sale of
securities.
SETTLEMENT AGREEMENTS
kk. Pursuant to Section 1123(b)(3) of the Bankruptcy Code
and Bankruptcy Rule 9019(a), the Plan provides for the settlement of Claims
against Columbia and its Estate, the approval of which are either conditions to
confirmation of the Plan or otherwise sought by Columbia in connection with
confirmation (the "Settlement Agreements"). The Settlement Agreements include
but are not limited to (i) the settlement of the Intercompany Claims Litigation
and other TCO creditor-related disputes through the Columbia Omnibus
Settlement, (ii) the settlement of disputes relating to the calculation and
allowance of post-petition interest on Borrowed Money Claims and related
issues, (iii) the settlement of the LESOP Action, and (iv) the Class Action
Settlement.
ll. In determining that the Settlement Agreements
embodied in the Plan represent fair, equitable and reasonable compromises of
Claims filed or asserted against Columbia, are in the best interests of the
Estate, and are hereby approved, the Court has considered the following
factors: (i) the probability of ultimate success on the merits if settled
issues were instead litigated; (ii) the difficulties, if any, to be encountered
in the matter of collection; (iii) the complexity of the litigation involved,
and the expense, inconvenience and delay necessarily
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attendant to continued litigation; (iv) the paramount interest of creditors as
evidenced by, inter alia, the limited number, and nature of objections filed,
if any, to the Settlement Agreements and the acceptance of the Plan by an
overwhelming majority of the holders of Claims and Interests; (v) that the
Settlement Agreements are, in each instance, the product of extensive
arms-length negotiations among Columbia, the Equity Committee, the Creditors'
Committee and, as applicable to the specific Settlement Agreement, numerous
other parties-in-interest, and (vi) whether the value of the Settlement
Agreement falls within the reasonable range of litigation possibilities. See,
e.g., In re Allegheny Int'l, Inc., 118 B.R. 282, 309-310 (Bankr. W.D. Pa.
1990); Protective Comm. Stockholders of TMT Trailer Ferry, Inc. v. Anderson,
390 U.S. 414, 424-45 (1968); In re Justice Oaks II, Ltd., 898 F.2d 1544, 1549
(11th Cir.), cert. denied, 498 U.S. 959 (1990). With respect to the Class
Action Settlement, on November 3, 1995 the District Court for the District of
Delaware following due notice and a full hearing, signed an order approving the
Class Action Settlement as fair, reasonable and adequate.
mm. In determining that each of the Settlement Agreements
embodied in the Plan is fair and equitable and should be approved, the Court
considered, inter alia, the record of the Confirmation Hearing and the record
of this Reorganization Case.
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<PAGE> 18
SETTLEMENT OF THE INTERCOMPANY CLAIMS LITIGATION
AND OTHER TCO CREDITOR RELATED DISPUTES THROUGH
THE COLUMBIA OMNIBUS SETTLEMENT
nn. On March 18, 1992, the TCO Creditors' Committee,
pursuant to the terms of a stipulation approved by this Court during the
preceding month, filed on behalf of TCO a complaint against Columbia and CNR
(the "Intercompany Complaint") which sought, inter alia, (i) the equitable
subordination of Columbia's claims against the TCO estate to the claims of
TCO's other creditors, (ii) the recharacterization of Columbia's secured
advances to TCO during the subject period as equity contributions, (iii) the
avoidance of certain transfers made to CNR, and of liens granted to Columbia
and (iv) the avoidance of dividends and debt paid by TCO to Columbia. The TCO
Customers' Committee joined with the TCO Creditors' Committee in the
prosecution of the Intercompany Claims. A proof of claim was filed on behalf
of TCO by the TCO Creditors' Committee against Columbia based upon the
Intercompany Claims.
oo. Columbia vigorously contested the allegations
asserted in the Intercompany Complaint. The Equity Committee and the
Creditors' Committee intervened as defendants in the litigation. The ensuing
litigation and disputes over the issues raised in the Intercompany Claims
Litigation prolonged and complicated the reorganization cases of both Columbia
and TCO. Those cases are linked principally because Columbia requires the
resumption of payments due to it on its claims against TCO in order for
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<PAGE> 19
Columbia to meet its own debt service requirements. As a result of the
Intercompany Claims Litigation, the validation of Columbia's claims against TCO
was delayed. The position of the parties at trial presented a potential range
of outcomes of the Intercompany Claims Litigation with a range of loss of value
by Columbia from zero to in excess of $1.0 billion. The actual benefit of any
such recovery by TCO to unaffiliated creditors of TCO however, would be
dependent upon other aspects of the plans of reorganization for TCO, and
Columbia, including the tax consequences thereof, and upon fluctuating market
conditions. Given the magnitude of the amounts at stake, appeals from any
decision by the District Court would be almost certain and would further delay
the achievement of reorganization for Columbia and TCO. Accordingly, only a
global settlement of all issues relating to the Intercompany Claims will permit
a prompt emergence of Columbia and TCO from Chapter 11 proceedings.
pp. A trial on the Intercompany Claims was completed
before the District Court in October 1994. While District Court Judge Farnan
was preparing his decision, he was asked by the parties not to issue his ruling
pending these confirmation proceedings.
qq. Pursuant to the Columbia Omnibus Settlement, which is
defined in Section I.A.31 of the Plan, the numerous legal and factual issues
raised by the Intercompany Claims Litigation are settled, and the Intercompany
Claims are fully satisfied, released and discharged. The approval of
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<PAGE> 20
the Columbia Omnibus Settlement is a condition precedent to confirmation of the
Plan for Columbia, and of the TCO Plan, and is the cornerstone of both the Plan
and the TCO Plan. The Columbia Omnibus Settlement facilitates the
reorganization of Columbia and TCO without further extended delay.
rr. In addition to settling the Intercompany Claims
Litigation, the Columbia Omnibus Settlement provides other substantial benefits
to Columbia including, inter alia, (i) the retention by Columbia of the equity
of Reorganized TCO, and (ii) a basis for the resolution of other significant
issues affecting the TCO estate, including a basis for TCO's producer creditors
and customer creditors to settle their respective Claims.
ss. The settlement of the Intercompany Claims Litigation
and the Columbia Omnibus Settlement are collectively the result of arduous
arms-length negotiations among Columbia, TCO, their respective official
committees and certain other interested parties. As evidenced by the arguments
of counsel at the Confirmation Hearing, the TCO Committees and the Creditors'
Committee and Equity Committee fully support the resolution of all issues
raised by the Intercompany Claims Litigation, and other TCO creditor-related
disputes in the manner provided for by the Columbia Omnibus Settlement.
Columbia has demonstrated that the terms of the settlement of the Intercompany
Claims Litigation and the Columbia Omnibus Settlement are fair,
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<PAGE> 21
equitable and reasonable and that the benefits of these settlements greatly
outweigh the risks and any rewards inherent in continuing to litigate these
issues.
tt. In accordance with Section 1123(b)(3) of the
Bankruptcy Code and Bankruptcy Rule 9019(a), approval of the settlement of the
Intercompany Claims Litigation and the Columbia Omnibus Settlement is in the
best interests of Columbia, its Estate, its Creditors and Stockholders.
SETTLEMENT OF BORROWED MONEY CLAIMS
uu. The majority of the Claims filed against Columbia are
unsecured Claims for amounts due under a number of short-term and long-term
borrowing arrangements, including: (i) Debenture Claims and Medium Term Note
Claims under the 1961 Indenture, (ii) Claims under the $500 Million Credit
Agreement (other than the Auction Note Debt Claims), (iii) Claims under the
$750 Million Credit Agreement, (iv) Commercial Paper Claims, (v) Auction Note
Debt Claims, (vi) Bid Note Claims, (vii) Claims under the Rate Swap Agreement,
and (viii) Claims by the holders of the LESOP Debentures issued in connection
with the LESOP, including claims under the LESOP Guaranty (collectively, the
"Borrowed Money Claims").
vv. During the course of the Reorganization Case,
disputes arose among Columbia and its Professionals, the Equity Committee, the
Creditors' Committee, certain individual creditors, and their respective
professional advisors regarding the quantification and treatment of the
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<PAGE> 22
Borrowed Money Claims against Columbia in respect of, inter alia, (i) the
entitlement of the holders of such Claims to post-petition interest and
interest on interest, (ii) the rate and applicability of compounding to any
post-petition interest and interest on interest to be distributed, and (iii)
the entitlement of the holders of certain issues of Medium Term Notes and
Debentures to call premiums or pre-payment penalties.
ww. Section III.C.3 and Exhibit G of the Plan set forth a
proposed settlement of the issues raised with respect to the Borrowed Money
Claims (the "Borrowed Money Claims Issues"), which will avoid costly and
protracted litigation likely to cause a significant delay in Columbia's
reorganization. The proposed compromise embodied in the Plan provides for
distributions in respect of post-petition interest and interest on interest to
be made on Allowed Borrowed Money Claims in the manner set forth in Exhibit G
to the Plan. No distributions are to be made in respect of call premiums or
pre-payment penalties.
xx. The settlement of these issues is the result of
arms-length negotiations and the benefits of the settlement far outweigh the
risks, costs and delays inherent in litigating these issues. Additionally, by
virtue of their acceptance of the Plan (as evidenced by the Plan Vote
Certification), the holders of Borrowed Money Claims in Class 3.2 have
overwhelmingly consented to the treatment
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<PAGE> 23
provided to them under the Plan, as such treatment is reflected in Sections
III.C.3 and Exhibit G to the Plan.
yy. In accordance with Section 1123 (b)(3) of the Bankruptcy
Code and Bankruptcy Rule 9019(a), Columbia has demonstrated that the terms of
the settlement of the Borrowed Money Claims Issues as set forth in Section
III.B.3 and Exhibit G to the Plan are fair, equitable, reasonable and in the
best interests of Columbia, the Estate, its Creditors and Stockholders.
THE LESOP ACTION SETTLEMENT
zz. The LESOP Indenture Trustee filed a proof of claim
against Columbia in February 1992 based on Columbia's obligations under the
LESOP Guaranty. In March 1993, the LESOP Indenture Trustee commenced a lawsuit
against Columbia alleging, inter alia, tortious interference with contract and
breach of its duty. The complaint asserts that Columbia contravened the
Employees' Thrift Plan of Columbia Gas System, as Amended and Restated
Effective July 1, 1994 (the "Thrift Plan") for eligible employees of Columbia's
subsidiaries, by directing the LESOP Thrift Plan Trustee to use contributions
from participating employers for purposes other than to pay the debt service on
the LESOP Debentures (the "LESOP Action").
aaa. Columbia filed a motion for summary judgment which
was denied in its entirety by this Court in a Memorandum Opinion and Order
dated March 24, 1994. The
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<PAGE> 24
District Court has affirmed this Court's denial of Columbia's summary judgment
motion.
bbb. Columbia and the LESOP Indenture Trustee have
negotiated a settlement of all of the issues raised by the LESOP Action (the
"LESOP Action Settlement"), the terms of which are set forth in Section V.H of
the Plan.
ccc. The LESOP Action Settlement avoids the continuation
of litigation over difficult legal issues and has been negotiated at
arms-length by the parties. Additionally, by virtue of their acceptance of the
Plan (as evidenced by the Plan Vote Certification) the overwhelming majority of
Columbia's Creditors and Stockholders that voted on the Plan, including the
holders of LESOP Debentures, have consented to the terms of the LESOP Action
Settlement.
ddd. In accordance with Section 1123(b)(3) of the
Bankruptcy Code and Bankruptcy Rule 9019(a), Columbia has demonstrated that the
terms of the LESOP Action Settlement as set forth in Section V.H of the Plan
are fair, equitable, reasonable and in the best interests of Columbia, its
Estate, its Creditors and Stockholders.
THE CLASS ACTION SETTLEMENT AND
DISMISSAL OF THE DERIVATIVE CLAIMS
eee. After the June 19, 1991 announcement of Columbia's
financial difficulties, seventeen complaints including suits purporting to be
class actions or alleging claims common to the purported class actions were
filed in the District Court. These actions were eventually
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<PAGE> 25
consolidated before the District Court (the "Class Action"). Although sixteen
of seventeen complaints purported to be class actions, as of the Petition Date,
no class had been certified with respect to the Class Action. The Class Action
complaints named as defendants Columbia, members of Columbia's board of
directors as of June 1991, certain officers, Columbia's independent public
accountants and Columbia's underwriters for its 1990 common stock offering
(collectively, the "Defendants").
fff. The complaints alleged violations of Sections 11,
12(2) and 15 of the Securities Act of 1933, Sections 10(b), 20(a) and Rule
10b-5 of the Securities Exchange Act of 1934, negligent misrepresentations, and
state and common law fraud and deceit. The complaints generally asserted that
the Defendants publicly made material misleading statements during the relevant
class periods (from February 28, 1990 to June 18, 1991) concerning Columbia's
financial condition and failed to disclose material facts which rendered other
statements misleading. Litigation of the Class Action before the District
Court as to Columbia was stayed by operation of the automatic stay, and as to
the non-Columbia Defendants by virtue of a series of stipulations.
Approximately 29 individual proofs of claim were filed against Columbia based
upon allegations described in the complaints filed in the Class Action. Three
related proofs of claim on behalf of purported classes of shareholders and
debenture holders injured during the
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<PAGE> 26
class period, including two class proofs of claim filed by lead counsel for the
plaintiffs in the Class Action ("Lead Class Action Counsel") were also filed
against Columbia. Various of the Defendants also filed Claims against
Columbia for indemnification relating to the Class Action.
ggg. Columbia has denied any liability on its part or on
the part of other Defendants in the Class Action with respect to any Claims
asserted against Columbia, or other claims based on the same or similar
allegations giving rise to the Class Action. Litigation over the issues
related to the Class Action has prolonged and complicated resolution of the
Reorganization Case and will continue to do so unless there is a global
settlement of all issues relating to the Class Action.
hhh. In addition to the Securities Claims, three
derivative suits were filed in the Court of Chancery in and for New Castle
County, Delaware (the "Delaware Chancery Court") in mid-1991. These suits,
which were subsequently consolidated, allege that certain present and former
directors of Columbia breached their fiduciary duties to Columbia in the events
preceding June 1991 (collectively, the "Derivative Action").
iii. Sections III.B.4, III.D and V.I of the Plan embody
the terms of the Class Action Settlement as set forth in the Stipulation of
Settlement negotiated at arms-length by the parties to the Class Action and the
Agreement Among Contributors dated as of July 18, 1995, providing for
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<PAGE> 27
contributions to the Settlement Fund for the Class Action Settlement. Pursuant
to those agreements and subject to this Court's approval of Columbia's
participation in the Class Action Settlement and Agreement Among Contributors,
Columbia and certain other Defendants will establish a Settlement Fund of $36.5
million (approximately $16.5 million of which will be contributed by Columbia).
Columbia's primary D&O Insurance carrier has agreed to make a substantial
contribution toward the Settlement Fund subject to this Court authorizing and
directing, inter alia, (i) Columbia and the plaintiffs to the Derivative Action
to undertake to dismiss with prejudice the Derivative Action and (ii) Columbia
and the officers and directors releasing the D&O Insurance carriers from their
policy obligations in respect of the Class Action and the Derivative Action.
Columbia has agreed to the proposed Class Action Settlement, inter alia, (i) to
facilitate its emergence from reorganization at the lowest cost, (ii) to permit
the continued operation of Reorganized Columbia's businesses unhindered by
expensive litigation and by the distractions relating to the continued
prosecution of the Class Action, and (iii) to avoid the potential for an
adverse judgment.
jjj. Section V.F of the Plan provides for the dismissal by
the Debtor of the Derivative Action, for the execution of Mutual Releases by
and between the Debtor and the defendants in the Derivative Action, and for an
injunction preventing all named plaintiffs from pursuing or
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<PAGE> 28
prosecuting the Derivative Claims. In addition, the D&O insurance carriers are
to be released from their policy obligations in respect of the subject matters
of the Class Action and the Derivative Action, and Reorganized Columbia is to
execute the Hold Harmless Agreement and the Undertaking. After balancing the
benefits received pursuant to the Class Action Settlement, the costs likely to
be incurred by Columbia and the benefits from continuation of the Derivative
Action, and it appearing that the plaintiffs to the Derivative Action consent
to the relief requested, the Court finds that continuation of the Derivative
Action is unlikely to lead to any additional net benefit to the Estate, and
that the dismissal of the Derivative Action, and the execution of the Mutual
Releases, the Hold Harmless Agreement and the Undertaking are in the best
interests of the Estate.
kkk. This Court entered an order dated July 17, 1995
lifting the automatic stay of the Class Action against Columbia to, inter alia,
permit proceedings in the District Court to go forward in respect of
implementing the Class Action Settlement. A District Court-approved Notice of
Class Action Certification, Proposed Settlement of Class Action, Fairness
Hearing, Right to Appear and Notice of Nominees dated August 1, 1995 was
subsequently disseminated. Notice of the Class Action Settlement was widely
published. It is a condition to confirmation and consummation of the Plan that
pursuant to Rule 23 of the Federal Rules of Civil
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<PAGE> 29
Procedure, the District Court shall have entered or shall concurrently enter an
order and judgment (which has not been vacated, reversed or stayed) approving
the Class Action Settlement.
lll. Pursuant to an order of the District Court dated
November 2, 1995 (the "Fairness Order"), following a full hearing in that Court
on October 16, 1995, the terms of the Class Action Settlement have been
determined to be fair, reasonable and adequate. Further, Columbia has
demonstrated to this Court that pursuant to Section 1123(b)(3) of the
Bankruptcy Code and Bankruptcy Rule 9019(a), approval of Columbia's
participation in and implementation of the Class Action Settlement is in the
best interests of Columbia, its Estate, its Creditors and Stockholders.
mmm. The Stipulation of Settlement has not been terminated
by Columbia and the other Defendants to the Class Action.
nnn. Each holder of a Securities Claim that timely submits
a Proof of Claim and Release Form in the District Court in compliance with and
as described in the Class Action Settlement Documents is a member of Class 4
under the Plan, a Class which is unimpaired under the Plan as each member of
the Class will be entitled to receive, in complete compromise, release, and
full satisfaction of its Securities Claims, its share of the Settlement Fund
remaining after the payment of counsel fees and costs of administration in
accordance with the Fairness Order.
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<PAGE> 30
STATUS OF OPT-OUT SECURITIES CLAIMS
ooo. As of October 6, 1995, the Claims Administrator under
the Class Action Settlement Documents has received ninety-one (91) Opt-out
Forms purporting to be complete and properly submitted in compliance with the
procedures established by the Class Action Settlement Documents. Of the forms
timely received, there appear to be only seven claimants representing holdings
of approximately 742 shares of Columbia Common Stock, who, assuming their
Opt-out Forms are determined to be complete and properly submitted, are members
of Class 7.
ppp. The motion of Columbia filed with the Court, dated
October 10, 1995, seeking approval of the proposed form of Notice of the
Confirmation Hearing to be transmitted to holders of Class 7 Claims, sets forth
Columbia's election to (i) pay each holder of a Class 7 Claim, when and if such
Claim is ultimately Allowed, in cash and (ii) treat Class 7 as an unimpaired
Class of Claims under the Plan. Holders of Class 7 Claims are, therefore, not
entitled to vote on the Plan.
qqq. As required by the Bankruptcy Code, and in
accordance with the Confirmation Procedures Order and the Class 7 Procedures
Order, holders of Class 7 Claims received adequate notice and disclosure in
connection with (i) the Confirmation Hearing, (ii) the treatment afforded to
such creditors under the Plan and (iii) the deadline for objecting to
confirmation of the Plan.
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<PAGE> 31
MODIFICATIONS TO THE PLAN
rrr. The modifications to the Plan proposed by Columbia
prior to, at or in connection with the Confirmation Hearing (the "Plan
Modifications") have been reviewed and consented to by the Equity Committee and
the Creditors' Committee. The Plan Modifications do not adversely change the
treatment of the Claim of any Creditor or the Interest of any Stockholder who
has not in writing accepted the proposed Plan Modifications. Therefore, in
accordance with Section 1127 of the Bankruptcy Code and Bankruptcy Rule 3019,
the Plan is deemed accepted by all Creditors and Stockholders who have
previously accepted the Plan.
FINDING THAT THE PLAN IS CONFIRMABLE BASED ON ALL OF THE
FOREGOING FINDINGS OF FACT AND CONCLUSIONS OF LAW, THE COURT ORDERS THAT:
1. The Plan and each of its provisions, as modified to
the limited extent set forth herein, are hereby confirmed in accordance with
Section 1129 of the Bankruptcy Code.
2. The Plan is hereby deemed modified as follows:
(a) Section I; Defined Terms, Rules of
Interpretation, Computation of Time
and Governing Law; Defined Terms
Section I.A.30 of the Plan is hereby amended and modified by
deleting the text thereof and by replacing it with the following text:
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<PAGE> 32
"'Columbia Guaranty' means the guaranty by Columbia
and Reorganized Columbia of the full and prompt
payment by TCO and Reorganized TCO of any and all
distributions required to be made under the TCO Plan
as the same has been modified by the order of this
Court confirming the TCO Plan, other than payments in
respect of post-petition operational liabilities
incurred by TCO in the ordinary course of business
during the pendency of the TCO Proceeding and Class 4
claims under the TCO Plan."
(b) Section II.C.3.a; Classes of Claims and
Interests; Borrowed Money Claims; Other
Borrowed Money Claims.
Section II.C.3.a. of the Plan is hereby amended and modified
by deleting the text thereof and by replacing it with the following text:
a. Class 3.1 - Borrowed Money Convenience Claims
"Class 3.1 consists of all Claims (i) the principal
amount of which, as of the Ledger Closing Date, did
not exceed $20,000 and that, but for such monetary
limitation, would be classified in Class 3.2;
provided, however, that Class 3.1 shall also consist
of those Claims (ii) the principal amount of which,
as of the Record Date, did not exceed $20,000, to the
extent not duplicative of a Claim in (i) above."
(c) Section III.A.1.b; Treatment of Unclassified
Claims; Administrative Claims; Post-Petition
Operational Claims
Section III.A.1.b of the Plan is hereby amended and modified
by deleting "." at the end of the paragraph and by adding the following text at
the conclusion of Section III.A.1.b as follows:
"; provided, however, that each Administrative Claim
of the IRS for taxes shall be paid on the later of
(i) the Effective Date, (ii) the 30th day after the
date such Administrative Claim becomes an Allowed
Claim, or
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<PAGE> 33
(iii) as otherwise agreed between Reorganized
Columbia and the IRS."
(d) Section X.B; Discharges, Releases, Settlement
of Claims and Injunction; Injunction
Section X.B of the Plan is hereby amended and modified by
adding the following text to the end of the first full paragraph thereof:
"In the event of a default under the Plan with
respect to payments to the IRS, nothing in the Plan
or the Confirmation Order shall be construed as
prohibiting the IRS from enforcing any rights it may
have under applicable law, provided, however, that
this provision shall not be deemed to define or
expand any such rights that may be held by the IRS."
(e) Section X.D; Discharges, Releases, Settlement
of Claims and Injunction; Releases
Section X.D of the Plan is hereby amended and modified by
deleting the words "that, such releases shall not be effective as to" after the
words "provided, however," in the ninth line from the end of the first full
paragraph thereof, and replacing such text with the following text:
"that nothing herein shall be construed to release
the Releasees from. . ."
(f) Exhibit F. to the Plan; New Indenture
Securities Pricing Formula; Pricing.
Section G. of Exhibit F to the Plan is hereby amended and
modified by deleting the second full paragraph thereof and replacing it with
the following text:
"The specific debt issues in each Basket shall be
identified to the Pricing Agents no later than 4
business days before the commencement of Basket
pricing. Prices of each Issue shall be the average
(mean) of
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<PAGE> 34
prices provided by the agents after the highest price
and the lowest price are excluded."
3. For the reasons set forth on the record of the
Confirmation Hearing, each and every Confirmation Objection, to the extent not
withdrawn, is overruled.
4. Pursuant to Section 1141(a) of the Bankruptcy Code,
the Plan and its provisions are binding upon Columbia, Reorganized Columbia,
any entity acquiring property under the Plan, any holder of a Claim against or
Interest in Columbia, and any other party-in-interest in the Reorganization
Case, and any heir, executor, administrator, successor and assign thereof,
regardless of whether the Claim or Interest of such holder or obligation of any
party-in-interest is in a Class that is impaired under the Plan, regardless of
whether such Creditor, Stockholder or other party-in-interest has accepted the
Plan, and regardless of whether such Creditor, Stockholder or other
party-in-interest has filed a proof of claim.
5. Subject to the provisions of the Plan and this
Confirmation Order, Columbia will, as Reorganized Columbia, continue to exist
after the Effective Date, as a Delaware corporation with all the powers of a
corporation under applicable law and without prejudice to any right to alter or
terminate such existence (whether by merger or otherwise) under Delaware law.
6. Consistent with the Plan, the following agreements
and documents, substantially in the form of the
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<PAGE> 35
agreement and documents which are annexed as Exhibits to the Plan or which were
introduced into evidence at the Confirmation Hearing in substantially final
form, including all the exhibits, attachments and schedules annexed thereto,
and all terms and provisions thereof (collectively, the "Reorganization
Documents"), are hereby approved in all respects:
a. Restated Certificate of Incorporation of The
Columbia Gas System, Inc.;
b. The New Indenture and Forms of Supplemental
Indenture;
c. Certificate of the Powers, Designations,
Preferences and Rights of the [$ ]
Convertible Preferred Stock;
d. Certificate of the Powers, Designations,
Preferences and Rights of the [ ] %
Preferred Stock;
e. Form of Mutual Release referred to in Section
V.F of the Plan;
f. Stipulation of Settlement dated as of July
18, 1995 and the related Agreement Among
Contributors dated as of July 18, 1995;
g. The Hold Harmless Agreement;
h. The Undertaking;
i. The Federal Release Agreement dated as of
July 18, 1995;
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<PAGE> 36
j. The Underwriters Agreement.
7. Columbia and Reorganized Columbia, and their
directors, officers and agents are hereby authorized to enter into, execute,
deliver, file and/or implement the Reorganization Documents and other documents
and instruments substantially consistent therewith or incidental thereto and
any amendments, supplements or modifications to such Reorganization Documents
as therein provided, and to take such other steps and perform such other acts
as may be necessary to implement and effectuate the Reorganization Documents,
the Plan, all other related instruments and documents and this Confirmation
Order, and to satisfy all other conditions precedent to the implementation and
effectiveness of the Plan.
8. Without affecting the generality of the preceding
paragraph, Columbia is hereby authorized to (a) issue (i) the DECS, New
Preferred Stock and the New Indenture Securities pursuant to the Plan, (ii)
additional securities which may be used to provide funds to redeem some or all
of the DECS and New Preferred Stock within the 120 day period following the
Effective Date and (iii) equity securities that might be issued pursuant to the
Plan or the TCO Plan; and (b) to implement the transactions contemplated by
Sections III.B.3.d and III.B.3.e of the TCO Plan, as amended by the order of
this Court confirming the TCO Plan.
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<PAGE> 37
APPROVAL AND IMPLEMENTATION OF SETTLEMENTS
9. The settlement and release of the Intercompany Claims
in the manner provided for by the Plan, and more specifically, in accordance
with the Columbia Omnibus Settlement embodied in the Plan and the TCO Plan is
hereby approved as being fair, equitable and in the best interests of Columbia
and its Estate. Columbia or Reorganized Columbia, as applicable, Columbia
Natural Resources, Inc., the plaintiffs and the intervenors in the Intercompany
Claims Litigation are authorized and directed to perform their obligations
under the settlement of the Intercompany Claims, including but not limited to
filing the Stipulation of Dismissal with Prejudice with the District Court, and
taking such actions as may be necessary by its terms to obtain District Court
approval thereof.
10. As of the Effective Date, and subject to confirmation
of the TCO Plan and the Stipulation of Dismissal with Prejudice becoming
effective according to its terms, the Intercompany Claims and all claims
arising from or related to the transactions which are the subject of the
Intercompany Claims shall be settled, released and discharged in their
entirety, provided, however, that the entry of this Confirmation Order shall
not affect the District Court's retention of jurisdiction with respect to the
order of the District Court dated October 4, 1995 rendered on the Motion to
Unseal Judicial Records filed by the TCO Customers' Committee.
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<PAGE> 38
11. The Columbia Omnibus Settlement is hereby approved as
being fair and equitable and in the best interests of Columbia and its Estate.
Columbia and Reorganized Columbia, as applicable, are authorized and directed
to perform their obligations under the Columbia Omnibus Settlement including
but not limited to (i) providing the Columbia Customer Guaranty and the
Columbia Guaranty, and (ii) as provided for by Section V.E of the Plan,
authorizing the issuance and sale of such shares of Common Stock to or for the
account of Reorganized TCO as may be required by Reorganized TCO to fulfill
distribution obligations to certain creditors under the TCO Plan and enter into
one or more Facilities (as defined and described below).
12. In accordance with the Borrowed Money Claims
Settlement, the specific method of calculating post-petition interest for each
category of Borrowed Money Claim as set forth in Exhibit G to the Plan is
approved. The Allowed amount of each category of Borrowed Money Claim shall be
the sum of (a) the principal amount of each Borrowed Money Claim, plus (b)
accrued pre-petition interest (or earned discount) thereon to the Petition
Date, if any, in the manner articulated in Exhibit G to the Plan (the "Allowed
Borrowed Money Claim Amount").
13. The amount upon which each holder of an Allowed
Borrowed Money Claim shall be entitled to receive distributions is the
aggregate of the Allowed Borrowed Money
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<PAGE> 39
Claim Amount and the amount of post-petition interest accrued thereon in the
manner articulated in Exhibit G to the Plan (the "Borrowed Money Claim
Distribution Amount"). The value of the aggregate of the Cash Consideration,
if any, New Indenture Securities, DECS and New Preferred Stock to be
distributed to each holder of an Allowed Borrowed Money Claim as provided by
the Plan in respect of the Borrowed Money Claim Distribution Amount of such
holder, shall constitute substantially equivalent value to the Borrowed Money
Claim Distribution Amount of such holder.
14. The LESOP Action Settlement is hereby approved as
being fair, equitable, reasonable and in the best interests of Columbia and its
Estate, and Columbia is authorized and directed to perform its obligations
under the LESOP Action Settlement as set forth in Section V.H of the Plan. As
of the Effective Date, the LESOP Action shall be dismissed and the LESOP Action
Claims shall be discharged.
15. Without limiting the generality of the preceding
paragraph, Reorganized Columbia is hereby authorized to terminate the LESOP and
to purchase the shares of Common Stock held by the LESOP Thrift Plan Trustee in
Fund E of the LESOP Trust for cash in the manner provided for in Section V.H of
the Plan.
16. The LESOP Indenture Trustee shall have an Allowed
Administrative Claim for fees and expenses incurred under the LESOP Indenture
in an aggregate amount not to exceed $300,000. Pursuant to the LESOP Action
Settlement,
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<PAGE> 40
the LESOP Indenture Trustee waives all rights to seek further payment of fees
and expenses in connection with or related to the LESOP Indenture, including,
but not limited to, the right to seek payment through an application pursuant
to Section 503(b) of the Bankruptcy Code or through the exercise of the LESOP
Indenture Trustee's lien rights and the right to post-petition interest on its
claim beyond the $300,000 amount.
17. The Class Action Settlement and the release of the
Derivative Action Claims are hereby approved as being reasonable and in the
best interests of Columbia and its Estate, and Columbia is authorized and
directed to perform its obligations under the Stipulation of Settlement, the
Agreement Among Contributors, the Federal Release Agreement, the Hold Harmless
Agreement and the Undertaking.
18. As of the Effective Date, each holder of a Securities
Claim, and their respective agents, heirs, executors, administrators,
representatives, trustees, successors and assigns, shall release and forever
discharge Columbia, the other Defendants to the Class Action and all officers
or directors of Columbia or TCO who were incumbent during any part of the Class
Period, whether or not named as Defendants as set forth in the Stipulation of
Settlement, provided, however, that such releases shall not be effective until
such Claims have been paid, satisfied or otherwise disposed of in accordance
with the Stipulation of Settlement and the Plan, and provided further, that
this release shall not
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<PAGE> 41
preclude any holder of a Class 7 Claim (Opt-out Securities Claim) from pursuing
any rights it may have in respect of the subject matter of the Class Action
against the Defendants in the Class Action other than Columbia, or any rights
against Columbia that it may have under the Plan.
19. Each holder of a Securities Claim that is not a
holder of a Class 7 Claim shall not be entitled to any distribution under the
Plan. The entitlement of any such holder to receive distributions from the
Settlement Fund shall be made in the amounts, at the times and in the manner
provided for in the Class Action Settlement Documents, which documents govern
all other matters concerning the Class Action and the Class Action Settlement
other than as specifically provided for in the Plan, the Stipulation of
Settlement and in this Confirmation Order. Pursuant to the Stipulation of
Settlement and the Fairness Order, the Settlement Fund shall be administered by
and be subject to the jurisdiction of the District Court.
20. Each holder of a Securities Claim that does not
submit a Proof of Claim and Release Form or an Opt-out Form in accordance with
the procedures established pursuant to the Class Action Settlement Documents
(each, a "Non-Complying Securities Claimant"), shall have its Claim released
and discharged against Columbia under the Plan and released against the other
Defendants in the Class Action and all officers or directors of Columbia or TCO
who were incumbent during any part of the Class Period whether or not
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<PAGE> 42
named as Defendants, and each Non-Complying Securities Claimant shall be
forever barred from asserting any Securities Claims against Columbia and the
persons identified in this paragraph.
21. Pursuant to Section 541 of the Bankruptcy Code,
Columbia is authorized to terminate and dismiss the Derivative Action and any
and all causes of action alleged or asserted therein, or which could have been
alleged or asserted therein, based on facts known or that should have been
known prior to Confirmation, such termination being in the best interests of
Columbia and the Estate. On or after the Effective Date, the Derivative Action
shall be dismissed with prejudice and without costs, and each defendant in the
Derivative Action shall execute and deliver to Columbia or Reorganized Columbia
a Mutual Release (a "Releasing Defendant"). On and after the Effective Date,
Reorganized Columbia shall execute each Mutual Release executed and delivered
to Columbia or Reorganized Columbia by a Releasing Defendant. Gerson Werner,
Harry Lewis, Columbia and the individual Defendants in the Derivative Action
(the "Derivative Parties") are hereby authorized, directed and ordered to enter
into a stipulation in the form attached hereto as Exhibit "A". The Derivative
Parties are further ordered and directed to file the stipulation with the
Chancery Court of Delaware seeking dismissal of the Derivative Action
immediately upon entry of this Confirmation Order and shall promptly take all
actions that
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<PAGE> 43
may be necessary and appropriate to execute, deliver and file such documents
and instruments necessary to fully implement and effectuate the dismissal of
the Derivative Action.
22. Except as otherwise provided in the Plan, the Class
Action Settlement Documents, or this Confirmation Order, on the Effective Date
the underwriters of Columbia's D&O Insurance shall be released from their
respective policy obligations in respect of the claims and causes of action
which arise from the transactions which are the subject of the Class Action and
the Derivative Action.
23. Pursuant to Section V.F of the Plan, and Sections
105, 1123 and 1129 of the Bankruptcy Code, in order to preserve, facilitate and
implement the Class Action Settlement contemplated by and provided for in the
Plan, effective after the Effective Date, upon dismissal of the Derivative
Action, all named plaintiffs in the Derivative Action and their respective
attorneys, servants, agents and representatives shall be permanently enjoined,
stayed and restrained from pursuing or prosecuting the Derivative Action
against each such Releasing Defendant.
24. In addition to the settlements and compromises
specifically referred to in this Confirmation Order, all other Settlement
Agreements and all other agreements provided for under the Plan, and all
transactions, documents, instruments and agreements referred to therein,
contemplated thereunder or executed and delivered
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<PAGE> 44
therewith, and any amendments or modifications thereto in substantial
conformity therewith, are hereby approved, and Columbia and the other parties
thereto are hereby authorized and directed to enter into them and to perform
thereunder according to their respective terms.
25. Columbia or Reorganized Columbia, as applicable, is
hereby authorized to enter into one or more banking facilities and obtain
additional financing contemplated by or consistent with the Plan (collectively,
the "Facilities") including, but not limited to, the Revolving Credit Facility
With Citibank, N.A. and other lenders, and to execute, deliver and/or implement
such Facilities and all other documents and instruments substantially
consistent therewith or incidental thereto, and to take such other actions as
may be necessary and appropriate to implement such Facilities.
26. In accordance with the Canada Sale Agreement, and as
provided for by Section IV.A.9 of the Plan, Columbia is hereby authorized to
add an additional $25 million (Cdn) to the Kotaneelee Escrow upon confirmation
of the Plan, and to replace on or after the Effective Date the cash in the
Kotaneelee Escrow with one or more letters of credit.
27. In accordance with the Setoff Stipulation, and as
provided for by Section IV.A.8 of the Plan, on the Effective Date, the Setoff
Funds shall be distributed by Morgan Guaranty Trust Company of New York
("Morgan Guaranty") to the applicable Disbursing Agent and the
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<PAGE> 45
balance of the interest earned and accrued on the Setoff Funds shall be
distributed by Morgan Guaranty to Reorganized Columbia.
28. Columbia or Reorganized Columbia, as applicable, is
hereby authorized to release the lien it has pursuant to the TCO Indenture of
Mortgage and Deed of Trust dated August 30, 1985 and the Security Agreement
dated as of June 19, 1985 on those certain oil and gas properties which were
owned by TCO but subsequently transferred by TCO to CNR in 1990.
29. Except as otherwise provided for in the Plan or this
Confirmation Order, consistent with Section IV.K of the Plan, all employee and
retiree benefit plans or programs in existence as of the Petition Date,
including, but not limited to, the Retirement Plan, but excluding the LESOP
portion of the employee thrift plan, shall continue in full force and effect
after the Effective Date, subject to any right to amend, modify or terminate
such retiree benefits under the terms of the applicable retiree benefit plan or
applicable non-bankruptcy law.
30. Except as otherwise provided in the Plan, or in any
contract, instrument, release, indenture or other agreement or document entered
into or created in connection with the Plan, or this Confirmation Order, on or
after the Effective Date, all property of the Estate, and any property acquired
by Columbia or Reorganized Columbia under any provisions of the Plan not being
held for distribution
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<PAGE> 46
pursuant to the terms of the Plan shall vest in and be retained by Reorganized
Columbia free and clear of all claims and interests in accordance with Sections
1141(b) and (c) of the Bankruptcy Code. On and after the Effective Date,
Reorganized Columbia may operate its business and may use, acquire and dispose
of property and compromise or settle any claims against it without supervision
or approval by the Bankruptcy Court and free of any restrictions of the
Bankruptcy Code or Bankruptcy Rules, other than those restrictions expressly
imposed by the Plan and this Confirmation Order.
31. Distributions required to be made to the holders of
Allowed Claims against and to the holders of Allowed Interests in Columbia
shall be made to such Persons as provided in the Plan. Without affecting the
generality of the foregoing, or the authorization set forth above, Reorganized
Columbia is hereby authorized to make distributions in respect of post-petition
interest to holders of Allowed Claims to the extent and in the manner expressly
provided for under Section III of the Plan. The record date for determining
which holders of Allowed Borrowed Money Claims are entitled to participate in
the distributions pursuant to the Plan (the "Ledger Closing Date") is set at
5:00 p.m. Eastern Time on November 1, 1995. The record date for determining
which holders of Allowed Unclassified Claims or Class 1, Class 2, Class 6.1 or
Class 7 Claims are entitled to participate in the distributions
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<PAGE> 47
pursuant to the Plan is set at 5:00 p.m. Eastern Time on November 1, 1995.
32. Columbia and Reorganized Columbia are hereby
authorized to recognize and deal with for all purposes under the Plan, only
those Persons that are holders of Borrowed Money Instruments or any Borrowed
Money Claim arising therefrom or in connection therewith as reflected on all
transfer books, registers and any other records maintained by the designated
transfer agents on the Ledger Closing Date.
33. Except as otherwise provided in the Plan, as of the
Effective Date, upon the delivery by Reorganized Columbia to the appropriate
Disbursing Agent of all distributions to be made to holders of Allowed Claims
in Classes 3.1 and 3.2, the following will be terminated, deemed null and void
and of no further force and effect without further action: (i) the Borrowed
Money Instruments, (ii) the $500 Million Credit Agreement, (iii) the $750
Million Credit Agreement, (iv) the 1961 Indenture, (v) the Rate Swap Agreement,
(vi) the Commercial Paper Master Note, (vii) the Bid Notes, (viii) the LESOP
Indenture, and (viii) any other instrument or document evidencing any Claim in
Class 3.1 or Class 3.2.
34. Columbia and Reorganized Columbia are hereby
authorized to make appropriate arrangements for either crediting to brokerage
accounts, or facilitating the creation of new brokerage accounts, for the
purpose of
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<PAGE> 48
distributing the New Indenture Securities and any other securities to be issued
under the Plan in non-certificated form to the Persons entitled to receive such
securities under the Plan that do not hold accounts with participants of The
Depository Trust Company.
35. This Confirmation Order and the SEC Report shall
constitute all approvals and consents required, if any, by the laws, rules or
regulations of any state or any other governmental authority with respect to
the implementation or consummation of the Plan and any other documents,
instruments or agreements, and other acts referred to in or contemplated by the
Plan, the Reorganization Documents, and any other documents, instruments or
agreements, any amendments or modifications thereto and any other acts that may
be necessary or appropriate for the implementation or consummation of the Plan.
36. Subject to changes in the ordinary course of
Columbia's business, pursuant to Section V.B.2 of the Plan, on the Effective
Date the following persons shall serve as members of the board of directors of
Reorganized Columbia:
(a) Richard F. Albosta
(b) Robert H. Beeby
(c) Wilson K. Cadman
(d) James P. Heffernan
(e) Donald P. Hodel
(f) Malcolm T. Hopkins
(g) Malcolm Jozoff
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<PAGE> 49
(h) William E. Lavery
(i) Gerald E. Mayo
(j) Douglas E. Olesen
(k) Ernesta G. Procope
(l) James R. Thomas, II
(m) William R. Wilson
(n) Oliver G. Richard III
Such directors shall remain in office until their successors are duly elected
and qualified, or until their earlier resignation, removal or death, subject to
the terms of the Restated and Amended Certificate of Incorporation, Columbia's
by-laws as amended, and the corporate laws of the State of Delaware.
EXECUTORY CONTRACTS
37. Pursuant to Section VII.A of the Plan, and in
accordance with Section 1123(b)(2) of the Bankruptcy Code, Columbia will be
deemed to have assumed as of the Effective Date each of its executory contracts
which have not been previously rejected by order of this Court, including those
contracts listed as being assumed on Exhibit E to the Plan, and excluding those
contracts on Exhibit E to the Plan designated as contracts to be rejected. In
accordance with Section 1123(a)(5)(G) of the Bankruptcy Code, Columbia is
directed to cure all defaults respecting each assumed executory contract, other
than those set forth in Section 365(b)(2) of the Bankruptcy Code.
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<PAGE> 50
38. The executory contracts listed on Exhibit E to the
Plan as contracts to be rejected shall be deemed rejected as of the Effective
Date.
OBJECTIONS TO CLAIMS
39. Pursuant to Section VII.C of the Plan, any Claim for
damages arising by reason of the rejection of an executory contract will be
forever barred and will not be enforceable against Columbia, Reorganized
Columbia or its successors or assigns or the properties of any of them unless
(with respect to an Administrative Claim), a request for payment, or (with
respect to any other Claim), a proof of claim is filed with Poorman-Douglas, in
its capacity as official claims agent, and served on Reorganized Columbia no
later than thirty (30) days after the Effective Date. Columbia reserves its
right to object to any request for payment or any proof of claim filed,
provided, however, that Columbia shall file any objection to the allowance of
the Claim no later than sixty (60) days after the Effective Date or as such
time may be further extended by the Court.
40. Except as otherwise provided in Section VI or VII.C
of the Plan or this Confirmation Order, after the Effective Date, only
Reorganized Columbia shall have the authority to file objections, and to
settle, compromise, withdraw and/or litigate to judgment objections to claims,
including but not limited to Non-Ordinary Course Administrative Claims as set
forth in Section VI.B.3 of the Plan, filed by Columbia or Reorganized Columbia,
as
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<PAGE> 51
applicable. Reorganized Columbia shall file all such objections to claims no
later than one hundred and twenty (120) days after the Effective Date or as
such time may be further extended by the Court.
PROFESSIONAL FEES
41. Applications for final allowance of compensation and
reimbursement of expenses by Professionals or other Persons pursuant to
Sections 330, 331 or 503(b) of the Bankruptcy Code for services rendered before
the Effective Date, including compensation requested pursuant to Section
503(b)(4) for making a substantial contribution in the Reorganization Case
("Final Fee Applications") shall be filed within sixty (60) days after the
Effective Date, provided, however, that any Professional or other Person that
fails to timely file an application for final allowance shall be forever barred
from asserting such Claims against Columbia or Reorganized Columbia, provided
further, that any Professional that is subject to the Administrative Fee Order
or other such order of the Bankruptcy Court as of the Effective Date may
continue to receive compensation and reimbursement of expenses as provided
therein for services rendered prior to the Effective Date. Objections to such
fees filed by Reorganized Columbia, the Equity Committee, the Creditors'
Committee and/or any party-in-interest to any Final Fee Application shall be
due and hearings shall be held at such time and in such manner as shall be
established
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<PAGE> 52
by a further order of the Court. No applications for compensation need be
filed for post-Effective Date services.
42. Except as otherwise expressly provided in the Plan or
this Confirmation Order, the issuance of this Confirmation Order operates as a
discharge, pursuant to Section 1141(d) of the Bankruptcy Code, as of the
Effective Date, of all debts of, Claims against and Interests in Columbia that
arose prior to the Confirmation Date including, without limitation, any Claims
for interest accrued on Claims from the Petition Date, any Securities Claims,
any LESOP Action Claims, and any Intercompany Claims. Without limiting the
generality of the foregoing, on the Effective Date, Columbia shall be
discharged from any debt that arose prior to the Confirmation Date and from all
debts of the kind specified in Sections 502(g), 502(h) or 502(i) of the
Bankruptcy Code, whether or not (i) a proof of claim based on such debt was
filed or deemed filed pursuant to Section 501 of the Bankruptcy Code, (ii) a
Claim based on such debt is an Allowed Claim pursuant to Section 502 of the
Bankruptcy Code or (iii) the holder of a Claim on such debt has voted to accept
the Plan.
43. As to every discharged Claim, all Persons shall be
precluded from asserting against Columbia, Reorganized Columbia, or their
respective successors or assigns, or the properties of any of them, any other
or further Claims, debts, rights, causes of action, liabilities or equity
interests based upon any act, omission, transaction
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<PAGE> 53
or other activity of any kind or nature that occurred prior to the Confirmation
Date.
44. Except to the extent otherwise provided for by
decretal paragraph 2 of this Confirmation Order, pursuant to Section X.B of the
Plan, and Sections 105, 1123 and 1129 of the Bankruptcy Code, in order to
preserve and implement the settlements contemplated by and provided for in the
Plan, effective on the Effective Date, all Persons that have held, currently
hold or may hold a Claim, or other debt or liability that is discharged
pursuant to the terms of the Plan shall be permanently enjoined to the fullest
extent permitted by law from taking any of the following actions on account of
any such discharged Claims, debts or liabilities, other than actions brought to
enforce any rights or obligations under the Plan or appeals, if any, from this
Confirmation Order: (i) commencing or continuing, in any manner, any action or
other proceeding against Columbia, Reorganized Columbia or their respective
properties; (ii) enforcing, attaching, collecting or recovering in any manner
any judgment, award, decree or order against Columbia, Reorganized Columbia or
their respective properties; (iii) creating, perfecting or enforcing any lien
or encumbrance against Columbia, Reorganized Columbia or their respective
properties; (iv) asserting a setoff, right of subrogation or recoupment of any
kind against any debt, liability or obligation due to Columbia, Reorganized
Columbia or their respective properties; and (v) commencing or continuing, in
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<PAGE> 54
any manner or in any place, any action that does not comply with or is
inconsistent with the provisions of the Plan or this Confirmation Order.
45. The Court hereby approves and authorizes the releases
provided in Section X.D of the Plan. Except as otherwise provided in the Plan
or this Confirmation Order, pursuant to Section X.D of the Plan, and Sections
105, 1123 and 1129 of the Bankruptcy Code, effective on the Effective Date, any
Person will be enjoined from prosecuting, whether directly, derivatively or
otherwise, any claim, debt, right, cause of action or liability which was or
could have been asserted against the Releasees.
46. Nothing in the Plan, this Confirmation Order or the
discharge, injunction or release provisions contained therein shall be
construed as discharging, releasing or relieving Columbia, Reorganized
Columbia, or any other party, in any capacity, from liability with respect to
the Retirement Plan to which such party is subject under any law or regulatory
provision, provided, however, that nothing contained in the Plan or this
Confirmation Order shall preclude Reorganized Columbia from exercising its
right to amend, modify, or terminate the Retirement Plan following the
Effective Date in accordance with then existing provisions of applicable law.
47. In accordance with that certain Settlement Agreement
dated October 31, 1995 among Columbia and Mountaineer Gas Company and its
parent or affiliated com-
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<PAGE> 55
panies, Allegheny & Western Energy Corporation, Eastern American Energy
Corporation, Eastern Systems Corporation and Energy Corporation of America
(collectively, "Mountaineer") approved by this Court by order dated November
13, 1995 (the "Mountaineer Settlement"), the Disputed Claims asserted against
Columbia by Mountaineer have been compromised and settled subject to
consummation of the Plan and the TCO Plan, and the execution by Mountaineer and
TCO of that certain Settlement Agreement dated as of October 31, 1995 approved
by the Court. Notwithstanding anything to the contrary in the Plan or this
Confirmation Order, in accordance with the Mountaineer Settlement, inter alia,
(i) Claim Nos. 14667 and 14670 are being treated as Class 2 Claims under the
Plan in the aggregate amount of $100,000, provided, however, that Mountaineer's
Class 2 Claim shall not be entitled to post-petition interest and (ii) the two
other proofs of Claims filed against Columbia are being withdrawn.
48. It shall be a condition to the making of any
distribution to any Person holding any mortgage, deed of trust, statutory lien,
lien or other security interest against the property or assets of Columbia or
its Estate that such Person, or that Person's agent, shall have tendered to
Columbia, Reorganized Columbia or their designated representative, a
file-stamped copy of a release of lien or equivalent release document which has
been recorded at the appropriate recorder's office in the jurisdiction of
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<PAGE> 56
the liened property or shall have delivered to Columbia, Reorganized Columbia
or their designated representative, any property so held.
49. Pursuant to Section X.C of the Plan, Columbia,
Reorganized Columbia, their affiliates and their respective directors,
officers, employees, agents, representatives and Professionals (acting in such
capacity), and the Creditors' Committee, the Equity Committee and their
respective members, agents and Professionals (acting in such capacity), and
their respective heirs, executors, administrators, successors and assigns and
the Equity Committee's invitees (including their professionals) shall neither
have nor incur any liability to any Person with respect to their actions or
omissions in connection with the Reorganization Case, the Plan, the Disclosure
Statement and related transactions and agreements, provided, however, that this
limitation of liability shall not extend to (i) any act or omission which is
determined in a Final Order to have constituted gross negligence or wilful
misconduct, or (ii) any violation of the securities laws except to the extent
that such Person would not be liable for such violation under Section 1125(e)
of the Bankruptcy Code, or would be exempt from compliance with such securities
laws pursuant to Section 1145 of the Bankruptcy Code.
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<PAGE> 57
RETENTION OF JURISDICTION
50. Notwithstanding the entry of this Confirmation Order
or the occurrence of the Effective Date, in accordance with Section XI of the
Plan and the Bankruptcy Code, the Court shall retain jurisdiction for the
following purposes:
a. To allow, disallow, determine, liquidate, classify,
estimate, or establish the priority or secured or unsecured status of, any
Claim, including the resolution of any request for payment of any
Administrative Claim, the resolution of any disputes concerning any Disbursing
Agent Agreement and the resolution of any and all objections to the allowance
or priority of Claims (including the Opt-out Securities Claims) and of
post-petition interest on such Claims (including any Administrative Claim and
any Priority Tax Claim);
b. To grant or deny any application for allowance of
compensation or reimbursement of expenses authorized pursuant to the Bankruptcy
Code or the Plan, for periods ending on or before the Effective Date;
c. To resolve any matters related to the assumption or
rejection of any executory contract or unexpired lease to which Columbia is a
party or with respect to which Columbia may be liable and to hear, determine
and, if necessary, Allow any Claim arising therefrom;
d. To resolve any determinations which may be requested
by Columbia or Reorganized Columbia of unpaid or
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<PAGE> 58
potential tax liability or any matters relating thereto under Sections 505 and
1146(d) of the Bankruptcy Code, including tax liability or such related matters
for any taxable year or portion thereof ending on or before the Effective Date;
e. To resolve any issues relating to distributions to
Holders of Allowed Claims pursuant to the provisions of the Plan, including the
redemption of or resetting of rates and other matters with respect to the DECS
and the New Preferred Stock and assertion of set-off rights by or against
Columbia;
f. To decide or resolve any motions, adversary
proceedings, contested or litigated matters and any other matters and grant or
deny any applications that may be pending on or commenced after the Effective
Date, that arise in or relate to the Reorganization Case or the Plan, including
any determination concerning the Allowed amount, if any, of the Opt-out
Securities Claims.
g. To enter such orders as may be necessary or
appropriate to implement or consummate the provisions of the Plan and all
contracts, instruments, releases, indentures and other agreements or documents
created in connection with or referred to in the Plan or the Disclosure
Statement;
h. To resolve any cases, controversies, suits or
disputes that may arise in connection with the consummation, interpretation or
enforcement of the Plan or any Person's obligations under or in connection with
the Plan, including
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<PAGE> 59
determinations relating to the enforceability of the Columbia Customer Guaranty
and the Columbia Guaranty and any disputes regarding compensation for those
post-Effective Date services referenced in Section XII.A of the Plan, except
that such retention of jurisdiction shall not apply to any cases,
controversies, suits or disputes that may arise in connection with FERC
regulatory matters;
i. To modify the Plan before, on or after the Effective
Date pursuant to Section 1127 of the Bankruptcy Code or modify the Disclosure
Statement or any contract, instrument, release, indenture or other agreement or
document created in connection with the Plan or the Disclosure Statement, or
remedy any defect or omission or reconcile any inconsistency in any Bankruptcy
Court order, the Plan, the Disclosure Statement or any contract, instrument,
release, indenture or other agreement or document created in connection with
the Plan or the Disclosure Statement, in such manner as may be necessary or
appropriate to consummate the Plan, to the extent authorized by the Bankruptcy
Code;
j. To issue injunctions, enter and implement other
orders or take such other actions as may be necessary or appropriate to
restrain interference by any Person with consummation or enforcement of the
Plan;
k. To enter and implement such orders as are necessary
or appropriate if this Confirmation Order is for
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<PAGE> 60
any reason modified, stayed, reversed, revoked or vacated and as may be
necessary or appropriate between the Confirmation Date and the Effective Date;
l. To determine any other matters that may arise in
connection with or relate to the Plan, the Disclosure Statement, this
Confirmation Order, any Claim or any contract, instrument, release, indenture
or other agreement or document created in connection with the Plan or the
Disclosure Statement, except as otherwise provided herein;
m. To resolve any disputes or any other matters relating
to the Securities Claims and the Derivative Claims; and
n. To enter a final decree closing the Reorganization
Case.
51. To the extent provided in Section XII.A of the Plan,
the Creditors' Committee and the Equity Committee may continue in existence
after the Confirmation Date and the Professionals retained by the Creditors'
Committee and the Equity Committee may continue to be employed after the
Confirmation Date. Upon dissolution of the Equity Committee on the Effective
Date and the Creditors' Committee on the Effective Date or such later date as
permitted by Section XII.A of the Plan, the members of the Creditors' Committee
and the Equity Committee, together with the invitees of the Equity Committee,
shall be released and discharged from all rights and duties arising from or
related to the Reorganization Case.
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<PAGE> 61
52. Reorganized Columbia shall remain liable to pay the
reasonable costs and expenses of the members of and the Professionals retained
by the Creditors' Committee with respect to each of the services permitted to
be rendered after the Effective Date by Section XII.A of the Plan and the
reasonable costs and expenses arising from the pursuit of and objections to
final fee applications filed by Professionals for the Equity Committee and the
Creditors' Committee as provided in paragraph 41 hereof, upon the submission of
monthly bills to Reorganized Columbia describing in reasonable detail the
services provided and disbursements incurred ("Post-Effective Date Fee
Requests"). The Court shall retain jurisdiction to determine any disputes
concerning Post-Effective Date Fee Requests.
53. The failure to reference or discuss any particular
provision of the Plan in this Confirmation Order shall have no effect on the
validity, binding effect and enforceability of such provision and such
provision shall have the same validity, binding effect and enforceability as
every other provision of the Plan.
54. Except with respect to the modifications to the Plan
set forth herein, to the extent of any
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<PAGE> 62
inconsistency between the terms of the Plan and this Confirmation Order, the
terms of the Plan shall govern.
Dated: Wilmington, Delaware
November 15, 1995
\s\ Helen S. Balick
--------------------------------
THE HONORABLE HELEN S. BALICK
CHIEF UNITED STATES BANKRUPTCY JUDGE
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<PAGE> 1
FORM 8-K, EXHIBIT C, COLUMBIA TRANSMISSION'S CONFIRMATION ORDER
DATED NOVEMBER 15, 1995
UNITED STATES BANKRUPTCY COURT
FOR THE DISTRICT OF DELAWARE
- - --------------------------------------
In re Chapter 11
COLUMBIA GAS TRANSMISSION CORPORATION, Case No. 91-804(HSB)
Debtor.
- - ---------------------------------------
ORDER CONFIRMING THE SECOND AMENDED
PLAN OF REORGANIZATION OF
COLUMBIA GAS TRANSMISSION CORPORATION,
AS FURTHER AMENDED, DATED JULY 17, 1995
Columbia Gas Transmission Corporation ("TCO"), debtor and
debtor-in-possession, having filed its Second Amended Plan of Reorganization of
Columbia Gas Transmission Corporation, As Further Amended, dated July 17, 1995
(the "Plan") in accordance with Section 1121 of Title 11 of the United States
Code (the "Bankruptcy Code"), 11 U.S.C. Section 1121; and TCO having filed its
Amended Disclosure Statement for the Plan pursuant to Section 1125 of the
Bankruptcy Code (the "Disclosure Statement"); and a hearing having been held
before this Court on July 18, 1995 (the "Hearing") to consider the adequacy of
the Disclosure Statement and the amendments and revisions thereto set forth on
the record at the Hearing; and the Court by Order dated July 18, 1995 having
approved the Disclosure Statement (the "Disclosure Statement Order"); and the
Court having entered an Order dated July 27, 1995 (the "Confirmation Procedures
Order") establishing and approving, inter alia, procedures for the solicitation
and tabulation of votes to accept or reject the Plan; and the Disclosure
Statement (with a copy of the Plan
<PAGE> 2
annexed thereto as Exhibit 1), the Disclosure Statement Order, a Ballot(3) and
related material having been transmitted to all known holders of Claims and/or
Interests entitled to vote on the Plan in accordance with the Confirmation
Procedures Order; and the Disclosure Statement (with a copy of the Plan annexed
thereto as Exhibit 1), the Disclosure Statement Order, a Non-Voting Status
Notice and/or a Settlement Amount Form, and related material having been
transmitted to each holder of a Claim in the Non-Voting Classes; and the
solicitation of acceptances from holders of Claims and/or Interests having been
made within the time and in the manner required by the Confirmation Procedures
Order; and affidavits of publication having been filed with the Court
evidencing that the Confirmation Procedures Notice was published in accordance
with the provisions of the Confirmation Procedures Order (collectively, the
"Publication Affidavits"); and an affidavit of service having been filed with
respect to the mailing of the Confirmation Procedures Notice (the "Mailing
Affidavit") to those parties-in-interest having requested notice pursuant to
Rule 2002 of the Federal Rules of Bankruptcy Procedure (the "Bankruptcy
Rules"); and objections to confirmation of the Plan having been filed by (i)
Joseph H. Hager, Seneca-Upshur Petroleum, Inc., Belden & Blake Operating
Company and Belden & Blake Corporation,
- - --------------------
3 All capitalized terms not otherwise defined herein have the
meanings set forth in the Plan or, to the extent not
inconsistent therewith, in the Confirmation Procedures
Order.
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<PAGE> 3
(ii) Belden & Blake Operating Co., Belden & Blake Corp., Boggs Natural Gas Co.,
Joseph H. Hager, New Bremen Corporation, New Ulm Gas, Ltd., Phillips Petroleum
Co., and Seneca-Upshur Petroleum, Inc. (the "Producer Objection"), (iii) Ozark
Gas Transmission System, (iv) Enterprise Energy Corporation Class Members (the
"Enterprise Energy Objection"), (v) the United States of America on behalf of
the Internal Revenue Service (the "IRS Objection"), (vi) Rolls-Royce (Canada)
Limited (the "Rolls Royce Objection"), (vii) Trailblazer Pipeline Company,
(viii) Overthrust Pipeline Company, and (ix) VJI Natural Resources Inc.
(collectively, the "Confirmation Objections"); and it appearing that the Rolls
Royce Objection and the IRS Objection have been withdrawn; and hearings having
been held from November 13, 1995 through November 15, 1995 with respect to the
Court's consideration of (i) confirmation of the Plan, (ii) the settlement by
agreement of Confirmation Objections, (iii) the Confirmation Objections not
previously withdrawn or settled, and (iv) the fairness and reasonableness of
(a) the settlement of the Intercompany Claims Litigation, (b) the Columbia
Omnibus Settlement, (c) the Customer Settlement Proposal, (d) the settlement of
Producer Claims and Disputed General Unsecured Claims not otherwise approved by
the Court and other settlements embodied in the Plan (the "Confirmation
Hearing"); and upon the entire record of the Reorganization Case, including,
without limitation, the record made at the Confirmation Hearing; and the
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<PAGE> 4
Court having reviewed, inter alia, the Plan, the Disclosure Statement, the Plan
Vote Certification (described below), the Publication Affidavits, the Mailing
Affidavit, TCO's Memorandum of Law In Support of Confirmation of the Second
Amended Plan of Reorganization, As Further Amended, Dated July 17, 1995 (the
"Confirmation Memorandum"), and all Confirmation Objections not previously
withdrawn and responses thereto, and statements and comments regarding
confirmation of the Plan; and after finding that due, sufficient and adequate
notice of the Confirmation Hearing, the Customer Settlement Proposal, the
settlement of the Intercompany Claims Litigation, the Columbia Omnibus
Settlement, the settlement of Producer Claims and Disputed General Unsecured
Claims and the other settlements and compromises embodied in the Plan has been
given to all interested persons and parties-in-interest; and after due
deliberation, the Court makes the following findings of fact and conclusions of
law:(4)
FINDINGS OF FACT AND CONCLUSIONS OF LAW:
a. The Court has jurisdiction over the Reorganization
Case pursuant to 28 U.S.C Section Section 1334(a) and 157(b)(1). Venue of
these proceedings and the Reorganization Case in
- - --------------------
4 This Confirmation Order constitutes the Court's findings of
fact and conclusions of law under Fed. R. Civ. P. 52., as
made applicable by Bankruptcy Rules 7052 and 9014. Any
finding of fact shall constitute a finding of fact even if
it is stated as a conclusion of law, and any conclusion of
law shall constitute a conclusion of law even if it is
stated as a finding of fact when necessary and appropriate.
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<PAGE> 5
this district is proper pursuant to 28 U.S.C. Section Section 1408 and 1409.
b. By order dated September 29, 1995, the District
Court, inter alia, confirmed that this Court has jurisdiction to (i) confirm
the Plan and the Columbia Plan in all respects including, without limitation,
the settlement of the Intercompany Claims Litigation, (ii) review the
settlement of the Intercompany Claims Litigation in conjunction with the
Court's hearings to consider confirmation of the Plan and the Columbia Plan, to
the extent judicial review of such settlement is required, (iii) approve the
settlement of the Intercompany Claims Litigation, and (iv) authorize the
release of the Intercompany Claims as provided for in the Plan.
COMPLIANCE WITH CHAPTER 11 REQUIREMENTS
c. Due and sufficient notice of the Plan, the
Confirmation Hearing, the settlement of the Intercompany Claims Litigation, the
Columbia Omnibus Settlement, the Customer Settlement Proposal, the settlement
of Producer Claims and Disputed General Unsecured Claims and the other
settlements and compromises embodied in the Plan, and the deadlines for voting
and filing Confirmation Objections has been given to all known holders of
Claims against TCO and other parties-in-interest in accordance with the
Confirmation Procedures Order.
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<PAGE> 6
d. The solicitation by TCO of votes for accepting or
rejecting the Plan was conducted in good faith and complied with Sections 1125
and 1126 of the Bankruptcy Code, Bankruptcy Rules 3017 and 3018, the
Confirmation Procedures Order, all other applicable provisions of the
Bankruptcy Code and all other applicable laws, rules and regulations.
e. The procedures by which the Ballots were distributed
to holders of Claims against and/or Interests in TCO and received and tabulated
by Poorman-Douglas (the "Balloting Agent"), the Court-authorized balloting
agent, were fair, properly conducted and in accordance with the Bankruptcy
Code, the Bankruptcy Rules, the local rules of this Court, the Confirmation
Procedures Order and all other applicable laws, rules and regulations.
f. As evidenced by the Declaration of Edward L. Erb
dated November 7, 1995 certifying the method and results of the ballot
tabulation for the Voting Classes (the "Plan Vote Certification"), (i) at least
two-thirds in amount and more than one-half in number of holders of Claims in
Classes 3.2, 3.3 and 3.4 that voted on the Plan accepted the Plan, without
counting the votes of insiders, (ii) the sole Creditor in each of Classes 2.1
and 3.5 voted to accept the Plan, and (iii) the sole stockholder in Class 5
voted to accept the Plan.
g. Classes 1.1, 1.2, 1.3, 3.1, 4.1, 4.2, 4.3, 4.4 and
4.5 are not impaired under the Plan and, therefore,
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<PAGE> 7
such Classes are deemed to have accepted the Plan pursuant to Section 1126(f)
of the Bankruptcy Code.
h. As required by Section 1129(a)(1) of the Bankruptcy
Code, the Plan complies with all applicable provisions of the Bankruptcy Code.
i. As required by and in compliance with Sections
1123(a)(1),(2) and (3) of the Bankruptcy Code, the Plan identifies the Classes
of Claims against TCO that are not impaired under the Plan, the Classes of
Claims against and the Class of Interests in TCO that are impaired under the
Plan and specifies the treatment of Allowed Claims and Interests in each such
Class.
j. Consistent with Section 1123(a)(4) of the Bankruptcy
Code, the Plan as modified by this Confirmation Order provides the same
treatment for each Allowed Claim in a particular Class, except in instances
where the holder of a particular Allowed Claim has agreed to less favorable
treatment of its Allowed Claim.
k. The Classification of Claims against TCO under the
Plan as modified by this Confirmation Order is consistent with Section 1122(a)
of the Bankruptcy Code in that each Claim against TCO has been placed in a
particular Class only if such Claim is substantially similar to the other
Claims in such Class.
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<PAGE> 8
l. Specifically, with regard to the classification
scheme embodied within the Plan in respect of Classes 3.1, 3.2, 3.3 and 3.4,
there is a reasonable basis for the separate classification of those Claims,
since they have unique legal and factual issues attached to the allowance and
payment of their respective Claim amounts. The inclusion of Unsecured Claims
Allowed in amounts of $25,000 or less in Class 3.1, the Convenience Class under
the Plan, is consistent with considerations of fairness to small creditors and
administrative efficiency. In determining that the classification of Claims in
the Plan is reasonable, appropriate and not designed to manipulate the results
of voting, the Court further considered that (i) the Customers in Class 3.2
have distinct issues attached to the allowance and payment of Refund Claims
including the fact that such Claims arise from TCO's provision of services to
Customers subject to regulation by the FERC and such Customers' participation
in the Customer Settlement Proposal, a comprehensive settlement of claims and
issues between TCO and its Customers, which provides for substantial recoveries
by TCO from Customers, (ii) the Producer Claims in Class 3.3 all arise from or
are related to natural gas purchase contracts, for which this Court has
established special Claims Estimation Procedures, the Claims, particularly
contract rejection Claims, constitute the largest unaffiliated Claims against
the Estate, many of which are subject to Settlement Agreements conditioned on
the treatment provided to Producers
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<PAGE> 9
under the Plan, and which are otherwise subject to large swings in potential
outcome and allowance amounts; and (iii) the separate classification of Class
3.4 Claims reflects the distinction that such Claims are neither regulatory in
nature nor arise from gas purchase contracts and thus are not subject to
comprehensive Claims' liquidation procedures or to the risk-sharing mechanisms
applicable to Producer Claims, are for the most part trade Creditor Claims by
ongoing suppliers in the ordinary course of TCO's business, are largely
liquidated or not subject to wide variations in potential outcome, and
represent less than 5% of the total distribution to Creditors under the Plan.
m. The potential use of Columbia Common Stock and
distribution of additional cash, if necessary, to pay that portion of the
ultimately Allowed amounts of Rejecting Producer and General Unsecured Creditor
Claims in excess of the Original Settlement Values or Allowance Amounts, as
applicable, proposed for such Claims in the manner provided for by Sections
III.B.3.d and III.B.3.e of the Plan as modified by this Confirmation Order,
constitutes substantially similar non-discriminatory treatment, and is
necessary to the reorganization of Columbia and TCO.
n. The evidence and arguments presented at the
Confirmation Hearing and the Disclosure Statement Hearing demonstrate that the
classification of Unsecured Claims set forth in the Plan as modified by this
Confirmation Order appropriately classifies substantially similar Claims
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<PAGE> 10
together, does not discriminate unfairly in the treatment of those Claims and
does not support an argument that voting on the Plan has been gerrymandered.
Consequently, TCO falls squarely within the latitude given to the proponent of
a plan in respect of the classification of Claims as permitted by the Third
Circuit. See, e.g., In re Jersey City Medical Center, 817 F.2d 1055, 1060-61
(3rd Cir. 1987); John Hancock Life Insurance Company v. Route 37 Business Park
Associates, 987 F.2d 154 (3rd Cir. 1993).
o. As required by Section 1123(a)(5) of the Bankruptcy
Code, the Plan provides adequate means for its execution and implementation
including, inter alia, (i) the vesting in Reorganized TCO of all property of
the Estate and any property and assets acquired by TCO or Reorganized TCO under
the Plan, (ii) the utilization of available cash on hand plus funding which, if
necessary, can be provided to TCO by Columbia to satisfy payments due under the
Plan, (iii) the cancellation or modification of existing liens on the Effective
Date, (iv) the adoption by Reorganized TCO of an Amended and Restated
Certificate of Incorporation, and the filing of the Amended and Restated
Certificate of Incorporation pursuant to Section V.B.1 of the Plan, and (v) the
issuance by Reorganized TCO of new secured debt securities in respect of the
Class 2.1 Claim.
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<PAGE> 11
p. As required by Section 1123(a)(6) of the Bankruptcy
Code, the Plan provides for the inclusion in the Amended and Restated
Certificate of Incorporation of Reorganized TCO of a provision prohibiting the
issuance of non-voting equity securities.
q. As required by Section 1123(a)(7) of the Bankruptcy
Code, the selection of directors and officers who will serve in such capacities
upon the Effective Date is in a manner consistent with the interests of holders
of Claims and public policy. The Plan provides that, subject to changes in the
ordinary course of business, the directors and officers of Reorganized TCO
shall be the same individuals who were serving in those capacities as of July
17, 1995.
r. As required by Section 1123(b) of the Bankruptcy
Code, the Plan (i) impairs or leaves unimpaired, as the case may be, each Class
of Claims or Interests, and (ii) provides for the assumption, rejection or
other disposition of each of TCO's executory contracts or unexpired leases
which had not been expressly assumed or rejected pursuant to Section 365 of the
Bankruptcy Code by prior order of the Court as of the Confirmation Hearing.
s. As required by Section 1123(b)(3), the Plan provides
for either (i) the settlement or adjustment, or (ii) the retention and
enforcement by Reorganized TCO, of
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<PAGE> 12
any claims, demands, rights and causes of action that TCO or the Estate may
hold against any Person.
t. As required by Section 1129(a)(2) of the Bankruptcy
Code, TCO has complied with all applicable provisions of title 11 including the
disclosure and solicitation requirements of Sections 1125 and 1126 of the
Bankruptcy Code. TCO transmitted solicitation materials including Ballots to
its Creditors entitled to vote on the Plan and its stockholder only after the
Court approved the Disclosure Statement as containing adequate information and
in compliance with the requirements of the Confirmation Procedures Order.
u. As required by Section 1129(a)(3) of the Bankruptcy
Code, the Plan has been proposed in good faith, for the valid business purpose
of resolving disputes and restructuring or paying in full substantial
obligations of TCO and has not been proposed by any means forbidden by law.
v. As required by Section 1129(a)(4) of the Bankruptcy
Code, any payment made or to be made by TCO for professional services or for
costs and expenses in connection with the Plan or incident to the
Reorganization Case, has been disclosed to and approved by, or is subject to
the approval of, this Court as being reasonable.
w. As required by Section 1129(a)(5) of the Bankruptcy
Code, TCO has disclosed the identity and affiliations of the individuals who
are proposed to serve after confirmation of the Plan as directors and executive
officers
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<PAGE> 13
of Reorganized TCO. The continuance of such individuals in such offices,
subject to changes in the normal course, is consistent with the interests of
the holders of Claims against and Interests in TCO and with public policy. In
addition, TCO has disclosed the identity of any insider presently known to it
who will be employed or retained by Reorganized TCO, and the nature of any
compensation to be paid to such insider.
x. As required by Section 1129(a)(6) of the Bankruptcy
Code, FERC, a governmental regulatory commission which has jurisdiction over
TCO's interstate gas pipeline rates, has either approved rate changes provided
for in the Plan or any such rate changes are expressly subject to the approval
of FERC.
y. As required by Section 1129(a)(7) of the Bankruptcy
Code, with respect to each impaired Class of Claims against or Interests in
TCO, each holder of a Claim or Interest in such impaired Class has accepted the
Plan, or will receive or retain under the Plan on account of such Claim or
Interest property of a value, as of the Effective Date, that is not less than
the amount such holder would receive or retain if TCO was liquidated on the
Effective Date under Chapter 7 of the Bankruptcy Code.
z. As indicated by the Plan Vote Certification and as
established on the record at the Confirmation Hearing, each impaired Class of
Claims or Interests has voted to accept the Plan in accordance with Sections
1124 and 1126 of
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<PAGE> 14
the Bankruptcy Code, with the result that Section 1129(a)(8) of the Bankruptcy
Code is satisfied and the "cram down" provisions of Section 1129(b) of the
Bankruptcy Code are not applicable.
aa. The Plan provides for the treatment of Allowed
Administrative Claims and Allowed Priority Tax Claims pursuant to Sections
507(a)(1) and 507(a)(8) of the Bankruptcy Code in accordance with Section
1129(a)(9) of the Bankruptcy Code, except to the extent that the holder of a
particular Claim has agreed to a different treatment. Each holder of an
Allowed Claim of a kind specified in Section 507(a)(1) of the Bankruptcy Code
on the Effective Date will receive cash equal to the Allowed amount of such
Claim on the Effective Date. Each holder of an Allowed Priority Tax Claim of a
kind specified in Section 507(a)(8) of the Bankruptcy Code, other than the
Claim which is the subject of the IRS Order, will on the Effective Date
receive cash equal to the Allowed amount of such Claim, in compliance with
Section 1129(a)(9)(C).
bb. With respect to the Priority Tax Claims of the IRS
which are the subject of the IRS Order, the Plan provides alternative methods
by which such Claims will be paid. Each of the methods is in accordance with
the requirements of Section 1129(a)(9)(C). TCO shall either pay such Claims in
installments over a period not to exceed six years from the date of assessment
of such Claims together with interest, pursuant to the terms of the IRS
Settlement
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<PAGE> 15
consents, Reorganized TCO may pay such Claims of the IRS, or any remaining
balance of such Claims, in full on the Effective Date. The Plan further
provides that Columbia or Reorganized Columbia may pay, as parent of the
Columbia Group, all of the Allowed Priority Tax Claims of the IRS and the
post-petition interest thereon.
cc. As required by Section 1129(a)(10) of the Bankruptcy
Code, and as demonstrated by the Plan Vote Certification, at least one Class of
Claims or Interests that is impaired under the Plan has accepted the Plan,
determined without including any acceptance of the Plan by any insider.
dd. The Plan is feasible. TCO has demonstrated its
ability to meet its financial obligations under the Plan and continue its
business in the ordinary course. As required by Section 1129(a)(11) of the
Bankruptcy Code, confirmation of the Plan is not likely to be followed by the
liquidation or the need for further financial reorganization of TCO.
ee. As required by Section 1129(a)(12) of the Bankruptcy
Code, Section III.A.1.d of the Plan provides that all Administrative Claims for
fees payable pursuant to Section 1930 of Title 28 of the United States Code, 28
U.S.C. Section 1930, which are unpaid as of the Effective Date will be paid in
cash on the Effective Date.
ff. Consistent with Section 1129(a)(13) of the Bankruptcy
Code, Section IV.H of the Plan provides for all
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<PAGE> 16
employee and retiree benefit plans and programs in existence as of the Petition
Date, including the Retirement Plan, to continue in existence after the
Effective Date and TCO shall continue to pay retiree benefits (as defined in
Section 1114(a) of the Bankruptcy Code).
gg. The Plan is the only plan of reorganization for TCO
pending before this or any other court.
hh. The primary purpose of the Plan is not the avoidance
of taxes or the avoidance of the application of Section 5 of the Securities Act
of 1933, as amended (15 U.S.C. Section 77e).
ii. The record established at the Confirmation Hearing
demonstrates that all conditions precedent to confirmation of the Plan have
been satisfied, or are concurrently satisfied by entry of this Confirmation
Order.
jj. TCO has stated that it believes that all conditions
precedent to the Effective Date of the Plan, as set forth in Section VIII.B of
the Plan, will occur or be duly waived.
kk. Pursuant to Section 1125(e) of the Bankruptcy Code,
TCO shall not be liable on account of TCO's solicitation of acceptances of the
Plan and its issuance and/or distribution of new secured debt securities of
Reorganized TCO, and publicly traded securities of Reorganized Columbia
pursuant to the Plan in good faith and in compliance with the applicable
provisions of the Bankruptcy Code, for any violation of applicable law, rule or
regulation governing
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<PAGE> 17
the solicitation of acceptances of a plan of reorganization or the offer,
issuance, sale or purchase of securities.
ll. Pursuant to Section 1145(a)(1) of the Bankruptcy
Code, the offering and distribution of securities of Reorganized Columbia by
TCO in exchange for certain Claims against TCO shall be exempt from Section 5
of the Securities Act, and any state or local law requiring registration prior
to the offering, issuance, distribution or sale of securities.
mm. Pursuant to and to the fullest extent permitted by
Section 1145 of the Bankruptcy Code, the resale of any new securities of
Reorganized Columbia initially distributed pursuant to the Plan, shall be
exempt from Section 5 of the Securities Act and any state or local law
requiring registration prior to the offering, issuance, distribution or sale of
securities.
SETTLEMENT AGREEMENTS
nn. Pursuant to Section 1123(b)(3) of the Bankruptcy Code
and Bankruptcy Rule 9019(a), the Plan provides for the settlement or compromise
of Claims against TCO and its Estate, the approval of which are either
conditions to confirmation of the Plan or otherwise sought by TCO in connection
with confirmation (the "Settlement Agreements"). The Settlement Agreements
include but are not limited to (i) the settlement of the Intercompany Claims
Litigation and other TCO creditor-related disputes through the Columbia Omnibus
Settlement, (ii) the Customer Settlement Proposal,
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<PAGE> 18
(iii) the settlement of Claims of Producers and General Unsecured Creditors
that have accepted the Settlement Values or Allowance Amounts offered to them
by so indicating on their Ballots or Settlement Amount Forms, as applicable,
and (iv) other settlements.
oo. In determining that the Settlement Agreements
embodied in the Plan represent fair, equitable and reasonable compromises of
Claims filed or asserted by or against TCO, are in the best interests of the
Estate, and are hereby approved, the Court has considered the following
factors: (i) the probability of ultimate success on the merits if settled
issues were instead litigated; (ii) the difficulties, if any, to be encountered
in the matter of collection; (iii) the complexity of the litigation involved,
and the expense, inconvenience and delay necessarily attendant to continued
litigation; (iv) the paramount interest of creditors as evidenced by, inter
alia, the absence of any Confirmation Objections filed in respect of any of the
Settlement Agreements and the acceptance of the Plan by an overwhelming
majority of the holders of Claims and Interests; (v) that the Settlement
Agreements are, in each instance, the product of extensive arms-length
negotiations among TCO, Columbia, the Creditors' Committee, the Customers'
Committee and, as applicable to the specific Settlement Agreement, numerous
other parties-in-interest, and (vi) whether the value of the Settlement
Agreement falls within the reasonable range of litigation possibilities.
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<PAGE> 19
See, e.g., In re Allegheny Int'l., Inc., 118 B.R. 282, 309-310 (Bankr. W.D. Pa.
1990); Protective Comm. Stockholders of TMT Trailer Ferry, Inc. v. Anderson,
390 U.S. 414, 424-45 (1968); In re Justice Oaks II, Ltd., 898 F.2d 1544, 1549
(11th Cir.), cert. denied, 498 U.S. 959 (1990).
pp. In determining that each of the Settlement Agreements
embodied in the Plan is fair and equitable and should be approved, the Court
considered, inter alia, the record of the Confirmation Hearing and the record
of this Reorganization Case.
SETTLEMENT OF THE INTERCOMPANY CLAIMS LITIGATION AND
OTHER TCO CREDITOR-RELATED DISPUTES THROUGH THE COLUMBIA
OMNIBUS SETTLEMENT
qq. On March 18, 1992, the TCO Creditors' Committee,
pursuant to the terms of a stipulation approved by this Court during the
preceding month, filed on behalf of TCO a complaint against Columbia and CNR
asserting that actions taken by Columbia during the period from 1985 through to
the filing of TCO's bankruptcy petition in 1991 had conferred an unfair
advantage on Columbia, as TCO's sole stockholder, over TCO's other Creditors
and had caused injury to TCO and its Creditors (the "Intercompany Complaint").
The Intercompany Complaint sought, inter alia, (i) the equitable subordination
of Columbia's Claims against the Estate to the Claims of TCO's other Creditors,
(ii) the recharacterization of Columbia's secured advances to TCO during the
subject period as equity contributions, (iii) the avoidance of certain
transfers made to CNR, and of liens
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<PAGE> 20
granted to Columbia and (iv) the avoidance of dividends and debt paid by TCO to
Columbia. The Customers' Committee joined with the TCO Creditors' Committee in
the prosecution of the Intercompany Claims. A proof of claim on behalf of TCO
was filed by the TCO Creditors' Committee against Columbia based upon the
Intercompany Claims.
rr. Columbia vigorously contested the allegations
asserted in the Intercompany Complaint. The Columbia Equity and Creditors'
Committees intervened as defendants in the litigation. The ensuing litigation
and disputes over the issues raised in the Intercompany Claims Litigation
prolonged and complicated the reorganization cases of both TCO and Columbia.
Those cases are linked principally because Columbia requires the resumption of
payments due to it on its Claims against TCO in order for Columbia to meet its
own debt service requirements. As a result of the Intercompany Claims
Litigation, determination of the nature and characterization of TCO's
obligation to Columbia was delayed. Further, an understanding of the value of
the Estate available to unaffiliated Creditors, dependent upon the Intercompany
Claims, was necessary before substantial progress could be made in the
consensual quantification of the substantial Claims by Producers against TCO.
The positions of the parties at trial presented a potential range of outcomes
of the Intercompany Claims Litigation varying from a loss of value to Columbia
of zero to an amount in excess of $1.0 billion, and the benefit of any
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<PAGE> 21
such recovery by TCO to the unaffiliated Creditors of TCO would be dependent
upon other aspects of the plans of reorganization for TCO and Columbia,
including tax consequences, and upon fluctuating market conditions.
ss. A trial on the Intercompany Claims was completed
before the District Court in October 1994. While District Court Judge Farnan
was preparing his decision, the parties asked the Court not to rule pending
these confirmation proceedings. Given the positions of the parties, appeals
from any decision by the District Court would be certain to further delay the
achievement of reorganization for TCO and Columbia. Accordingly, only a global
settlement of all issues relating to the Intercompany Claims will permit a
prompt emergence of TCO and Columbia from Chapter 11 proceedings.
tt. Pursuant to the Columbia Omnibus Settlement, which is
defined in Section I.A.34 of the Plan, the numerous legal and factual issues
raised by the Intercompany Claims Litigation are settled and the Intercompany
Claims are fully satisfied, released and discharged. The approval of the
Columbia Omnibus Settlement is both a condition precedent to and the
cornerstone of the Plan and the Columbia Plan. The Columbia Omnibus Settlement
permits Columbia to retain ownership of TCO, provides TCO's Creditors an
opportunity to receive substantial cash payments upon the Effective Date and
permits TCO and Columbia to emerge from bankruptcy proceedings without further
extended delay.
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<PAGE> 22
uu. In addition to settling the Intercompany Claims
Litigation, the Columbia Omnibus Settlement provides other substantial benefits
to TCO including, inter alia, (i) Columbia's assistance in monetizing the TCO
Plan; (ii) Columbia's provision of a guaranty of payment of the distributions
to be made to the holders of Allowed Claims under the Plan; (iii) Columbia's
provision of the Columbia Customer Guaranty and (iv) the settlement of
contentious litigation with TCO's Customer Creditors, Producer Creditors and
other Creditors.
vv. The settlement of the Intercompany Claims Litigation
and the Columbia Omnibus Settlement are collectively the result of arduous
arms-length negotiations among TCO, Columbia, their respective official
committees and various other interested parties. As evidenced by the arguments
of counsel at the Confirmation Hearing, the TCO Creditors' Committee and
Customers' Committee and the Columbia Creditors' Committee and Equity Committee
fully support the resolution of all issues raised by the Intercompany Claims
Litigation, and of other TCO Creditor-related disputes in the manner provided
for by the Columbia Omnibus Settlement. TCO and its Creditors' Committee have
demonstrated that the terms of the settlement of the Intercompany Claims
Litigation and the Columbia Omnibus Settlement are fair, equitable and
reasonable, and that the benefits of these settlements greatly outweigh the
risks and any rewards inherent in continuing to litigate these issues.
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<PAGE> 23
ww. In accordance with Section 1123(b)(3) of the
Bankruptcy Code and Bankruptcy Rule 9019(a), approval of the settlement of the
Intercompany Claims Litigation and the Columbia Omnibus Settlement are in the
best interests of TCO, its Estate, its Creditors and Columbia.
THE CUSTOMER SETTLEMENT PROPOSAL
xx. Approximately 450 Claims were filed against the
Estate relating to or arising from TCO's contracts with its Customers for
sales, transportation, gas storage and similar services, totalling
approximately $550 million plus unliquidated amounts. In addition, TCO
scheduled other Customer-related Claims. Customers have asserted trust fund,
recoupment, setoff and other regulatory-based theories as a basis for obtaining
priority over General Unsecured non-Customer Claims.
yy. TCO meanwhile has asserted its entitlement to recover
significant costs from its Customers under FERC Order No. 636 and on other
grounds. TCO has and continues to assert that these obligations owing from its
Customers include exit fees paid by TCO pursuant to settlements for the
termination of transportation agreements with its upstream pipeline suppliers,
gas supply realignment costs associated with contracts TCO rejected in its
Reorganization Case and other pre- and/or post-petition costs TCO is authorized
to recover under the regulatory scheme of the Natural Gas Act and the Natural
Gas Policy Act.
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<PAGE> 24
zz. Since November 1, 1993, TCO has negotiated
settlements with its upstream pipeline suppliers including Tennessee Gas
Pipeline Company, Transcontinental Pipe Line Corporation, Natural Gas Pipeline
Company, Ozark Gas Transmission System, Wyoming Interstate Company, Ltd.,
Trailblazer Pipeline Company, and Overthrust Pipeline Company (collectively,
the "Settling Upstream Pipelines") whereby each of the parties' respective
pre-petition upstream contracts would be terminated, in whole or in part, and
TCO would pay exit fees and other costs (the "Exit Fees") to each Settling
Upstream Pipeline (the "Exit Fee Settlements"). TCO has also negotiated
settlements with upstream pipeline suppliers Texas Eastern Transmission
Corporation, Panhandle Eastern Pipe Line Company, Texas Gas Transmission
Corporation and Transcontinental Pipe Line Corporation whereby TCO assumed
such contracts and assigned them to its Customers without the payment of exit
fees and contract rejection costs (the "Assumption and Assignment
Settlements"). Each of the Exit Fee Settlements and Assumption and Assignment
Settlements has been approved by prior orders of the Court and, in the case of
the Exit Fee Settlements, by FERC. Each of the Exit Fee Settlements is
subject to TCO's recovery of the full amount of the Exit Fees, and FERC's
issuance of a final order approving such settlements which is not subject to
appeal. On October 3, 1995, TCO notified the Creditors' Committee, the
Customers' Committee and four of the Settling Upstream Pipelines of
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<PAGE> 25
TCO's intention to assume the Exit Fee Settlements and to perform under such
agreements pursuant to the provisions of their Exit Fee Settlements. TCO's
Creditors' and Customers' Committees have conditionally objected to such
assumption, but such objections will be withdrawn if the Customer Settlement
Proposal is approved and the Plan is confirmed.
aaa. Customers' Claims against TCO and TCO's assertion of
its entitlement to recover costs against Customers, including the Exit Fees, in
TCO's compliance filings with FERC in respect of Order No. 636 and other orders
issued by the FERC, have generated prolonged and extensive litigation before
this Court, the FERC and various levels of appellate courts during the course
of the Reorganization Case.
bbb. The Customer Settlement Proposal, the terms of which
are embodied in that certain Stipulation and Agreement dated as of April 17,
1995 annexed to the Plan as Exhibit E, reflects a comprehensive settlement of
the Customer Claims asserted against the Estate and the cost recovery issues
asserted by TCO against Customers, including, but not limited to, a settlement
of substantially all Refund Disputes, an agreement that all but $11.5 million
of the Exit Fees and other upstream pipeline costs will be recoverable by TCO
from Customers and, in a modified form, the 1990 Rate Case Settlement. TCO
does not view the provision that it absorb $11.5 million of Exit Fees and other
upstream pipeline costs as inconsistent with, or requiring
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<PAGE> 26
modification of, the Exit Fee Settlements. The Customer Settlement Proposal
contains numerous schedules which reflect, among other matters, the principal
amount and, where applicable, the pre- and post-petition interest components of
the Refund Claim to be Allowed for each Customer under the Customer Settlement
Proposal and the Plan. The schedules also reflect the costs to be collected or
recovered by TCO from each Customer.
ccc. Approval of the Customer Settlement Proposal by the
FERC and this Court is a condition precedent to confirmation of the Plan, as is
approval of the settlement of the Refund Disputes with Accepting 3.2 Claimants
and the 1990 Rate Case Settlement as modified, both of which settlements are
embodied within the Customers Settlement Proposal. On June 15, 1995, the FERC
entered an order approving those aspects of the Customer Settlement Proposal
subject to its jurisdiction.
ddd. The Customer Settlement Proposal is a result of the
arms-length negotiations conducted in numerous settlement meetings held over an
extended period of time among TCO, the Customers' Committee, TCO's Customers,
and many state regulatory and consumer agencies. The Proposal represents a
delicate balancing of multiple and diverse interests that will likely collapse
if its provisions are modified or conditioned. It significantly facilitates
the viability of the Plan and TCO's emergence from Chapter 11 proceedings as it
resolves burdensome and costly disputes
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<PAGE> 27
that would otherwise take years to resolve through litigation. As to all
Accepting Class 3.2 Claimants (and all other Supporting Parties as defined in
the Customer Settlement Proposal) the Proposal will resolve, inter alia, the
amount and priority of substantially all of the hundreds of millions of dollars
of regulatory Refund Claims asserted by Customers against TCO, and the Estate's
entitlement to recover hundreds of millions of dollars of costs from Customers.
eee. Pursuant to Section 1123(b)(3) of the Bankruptcy Code
and Bankruptcy Rule 9019(a), TCO has demonstrated that the Customer Settlement
Proposal as embodied in the treatment to be provided to Customers under the
Plan is fair and equitable and in the best interests of TCO, its Estate, its
Creditors and Stockholder.
SETTLEMENT OF PRODUCER CLAIMS
fff. Producers filed approximately 2,500 proofs of claim
against TCO asserting, inter alia, damages resulting from TCO's rejection of
over 5,000 gas purchase contracts pursuant to which TCO had purchased natural
gas for resale to its Customers. In the aggregate, the proofs of claim assert
Claims in excess of $13.0 billion. Producers have also filed other Claims
against TCO based on pre-petition contractual disputes relating to, inter alia,
pricing, take-or-pay obligations, underpayments for gas taken by TCO,
production-related cost reimbursements, and other issues. Many Producer Claims
were filed with unliquidated amounts,
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<PAGE> 28
or without setting forth the basis for the liability asserted or for the
amounts claimed as owed by TCO.
ggg. Throughout the Reorganization Case, TCO has taken the
position that many of the Producer Claims significantly overstated the value of
their respective Claims and that, as a general matter, the Claims as filed were
premised upon a variety of different theories as to the appropriate measure of
damages which contained conflicting assumptions as to common facts or generally
applicable legal principles.
hhh. In March 1992, TCO filed with the Court an objection
to the Producer Claims and a motion which sought to have the Court establish
procedures for the quantification of Producer Claims, both contract rejection
and other, on a fair, consistent and efficient basis. By orders entered on
August 27, 1992 and October 9, 1992 (collectively, the "Estimation Orders") the
Court established procedures for the estimation of Producer Claims and
appointed a Claims Mediator. The two-stage Claims Estimation Procedures
expressly invited settlement negotiations and the liquidation of Claims based
on agreements between the parties, subject to supervision by the Claims
Mediator and the de novo review and approval of the Bankruptcy Court.
iii. On October 13, 1994, following extensive discovery,
briefing and numerous evidentiary hearings with respect to identifying and
resolving issues generic to all or certain kinds of Producer Claims, the Claims
Mediator issued his initial report regarding the recommended determi-
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<PAGE> 29
nation of generic issues for, and the methodology for recalculating and
quantifying, contract rejection Claims (the "Initial Report"). The Initial
Report did not address Claim specific issues unique to each individual
Producer's Claims, determinations which were required to be resolved in order
to finally estimate and recommend Allowed Claim amounts for each Producer's
Claims. The Claims Mediator issued a Supplement to his Initial Report in
February 1995.
jjj. Commencing in February 1995, TCO and Columbia engaged
in a series of meetings with individual Producer Creditors holding the larger
Claims against TCO to present the concepts for a global settlement of Producer
Claims. As a result of these meetings, Producers asserting Claims in the
aggregate amount of $10.0 billion and representing in the aggregate over 80% of
TCO and Columbia's estimate of the aggregate Allowed amount of all Producer
Claims (the "Initial Accepting Producers") reached an agreement with TCO and
Columbia with respect to, inter alia, the Allowed amount of the Claims of each
Initial Accepting Producer and the proposed treatment of their Claims under a
reorganization plan (the "Initial Producer Settlement"). The Initial Producer
Settlement, which was approved by this Court by order dated June 16, 1995, is
contingent upon confirmation and consummation of the Plan occurring no later
than June 28, 1996.
kkk. With respect to each Producer Creditor which is not a
party to the Initial Producer Settlement (each, a
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<PAGE> 30
"Non-Settling Producer"), the Plan reflects at Schedule I thereof ("Schedule of
Original Settlement Values"), an offer made by TCO to settle the Claims of each
such Producer by proposing a specific Allowed Claim amount for such Producer's
Claims (each, a "Settlement Value"). TCO and the Creditors' Committee
negotiated the principles and methodology utilized to generate the Settlement
Values proposed for each Non-Settling Producer. The record before this Court
demonstrates that the Settlement Values with respect to contract rejection
Claims utilize parameters and assumptions generated by or based upon the Claims
Mediator and incorporate proposed compromises with respect to a number of
complex, disputed issues which have not yet been fully resolved by the Claims
Estimation Procedures.
lll. Since the Court's approval of the Initial Producer
Settlement, additional Producers have signed settlement agreements with TCO
agreeing to Settlement Values at the level proposed in Schedule III to the
Plan, or, in certain instances, at different levels negotiated by the parties
("Producer Settlement Agreements"). By orders dated August 22, 1995, September
29, 1995 and November 2, 1995, this Court has approved 293 Producer Settlement
Agreements which have resolved Disputed Producer Claims of in excess of 300
Producers. With the Initial Producer Settlement, this Court has approved
agreements between TCO and Producers
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<PAGE> 31
representing in the aggregate approximately 91.7% of the Original Settlement
Values proposed for all Producers.
mmm. In addition, pursuant to the Confirmation Procedures
Order and as reflected on the form of (i) the Class 3.3 Ballot transmitted to
Producers entitled to vote on the Plan, and (ii) the Settlement Amount Form
transmitted to Producers holding Claims not entitled to vote on the Plan, each
holder of a Disputed Producer Claim was provided with the opportunity to accept
or reject the Settlement Value proposed by TCO through the Plan solicitation
process. As demonstrated by TCO at the Confirmation Hearing, and consistent
with the Plan Vote Certification, Producers representing an additional 1% of
the Original Settlement Values proposed for all Producers have elected on their
Class 3.3 Ballots or Settlement Amount Forms, as applicable, to accept their
proposed Settlement Values.
nnn. Pursuant to Section 1123(b)(3) of the Bankruptcy Code
and Bankruptcy Rule 9019(a), TCO has demonstrated that these settlements with
Producers of their Disputed Claims are fair and equitable and in the best
interests of TCO, its Estate, its Creditors and stockholder.
SETTLEMENT OF DISPUTED GENERAL UNSECURED CLAIMS
ooo. The Plan contains at Schedule II thereof an offer to
settle at specific Allowed Claim amounts (each, an "Allowance Amount") each
Disputed General Unsecured Claim. The Allowance Amount proposed for each
General Unsecured Claim that had not become an Allowed Claim prior to the
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<PAGE> 32
Voting Record Date reflects TCO's extensive review of its books and records,
discussions with a representative of virtually every Creditor holding a
Disputed General Unsecured Claim, and appropriate legal analysis.
ppp. Pursuant to the Confirmation Procedures Order, and as
reflected on the form of (i) the Class 3.4 Ballot transmitted to holders of
Disputed General Unsecured Claims entitled to vote on the Plan, and (ii) the
Settlement Amount Form transmitted to such Creditors not entitled to vote on
the Plan, each such Disputed General Unsecured Creditor was provided with the
opportunity to accept or reject the Allowance Amount proposed by TCO. As
demonstrated by TCO at the Confirmation Hearing, and consistent with the Plan
Vote Certification, 89 Creditors holding Disputed General Unsecured Claims
elected on their Class 3.4 Ballot or Settlement Amount Form, as applicable, to
accept the proposed Allowance Amount.
qqq. Pursuant to Section 1123(b)(3) of the Bankruptcy Code and
Bankruptcy Rule 9019(a), TCO has demonstrated that these settlements with
General Unsecured Creditors of their Disputed Claims are fair and equitable and
in the best interests of TCO, its Estate, its Creditors and stockholder.
MODIFICATIONS TO THE PLAN
rrr. The modifications to the Plan proposed by TCO prior to,
at or in connection with the Confirmation Hearing (the "Plan Modifications")
have been reviewed by and
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<PAGE> 33
consented to by the Creditors' Committee, the Customers' Committee, Columbia
and the Columbia Equity and Creditors' Committees. The Plan Modifications do
not adversely change the treatment of the Claim of any Creditor who has not in
writing accepted the proposed Plan Modifications. Therefore, in accordance
with Section 1127 of the Bankruptcy Code and Bankruptcy Rule 3019, the Plan is
deemed accepted by all Creditors who have previously accepted the Plan.
FINDING THAT THE PLAN IS CONFIRMABLE BASED UPON, INTER ALIA,
ALL OF THE FOREGOING FINDINGS OF FACT AND CONCLUSIONS OF LAW, THE COURT ORDERS
THAT:
1. The Plan and each of its provisions, as modified to
the limited extent set forth herein, are hereby confirmed in accordance with
Section 1129 of the Bankruptcy Code.
2. The Plan is hereby deemed modified as follows:
(a) Section III.A.1.b; Treatment of Unclassified
Claims; Administrative Claims; Post-Petition
Operational Claims
Section III.A.1.b of the Plan is hereby amended and modified
by deleting "." at the end of the paragraph and by adding the following text at
the conclusion of Section III.A.1.b as follows:
"; provided, however, that each Administrative Claim
of the IRS for taxes shall be paid on the later of
(i) the Effective Date, (ii) the 30th day after the
date such Administrative Claim becomes an Allowed
Claim, or (iii) as otherwise agreed between
Reorganized TCO and the IRS."
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<PAGE> 34
(b) Section III.B.3.d; Treatment of Classified
Claims; Class 3 Claims - Unsecured Claims;
Class 3.3 - Producer Claims
Section III.B.3.d of the Plan is hereby amended and modified
by deleting the last full paragraph of Section III.B.3.d in its entirety and
replacing it with the following text:
"All distributions to holders of Allowed Class 3.3
Claims shall be made in cash, except that Reorganized
TCO, with the prior consent of Reorganized Columbia,
shall have the option to pay any amount due to any
Rejecting Producer in excess of the Target
Distribution Percentage of the Original Settlement
Value proposed for its Claim (the "Excess Amount"),
in the form of freely marketable common stock of
Reorganized Columbia having a fair market value equal
to the amount of the distribution that Reorganized
TCO has elected not to pay in cash.
Reorganized TCO and Reorganized Columbia shall
determine on the last day of each Calendar Quarter
following the Effective Date whether to pay the
Excess Amount due to any Rejecting Producer whose
Claim has become Allowed during that Calendar Quarter
by issuing such above-referenced common stock (the
"Securities Election"). Within five (5) days after
the end of such Calendar Quarter, Reorganized TCO and
Reorganized Columbia shall deliver a written notice
by facsimile transmission and by overnight Federal
Express delivery to each Rejecting Producer as to
whom Reorganized TCO and Reorganized Columbia have
made the Securities Election, with a copy to counsel
for the Creditors' Committee. Each such Rejecting
Producer shall then deliver a written notice
(executed by a duly-authorized representative) by
facsimile transmission with a copy to counsel for the
Creditors' Committee, within twelve (12) days after
the end of such Calendar Quarter (or, if the twelfth
day is not a Business Day, then on the next Business
Day) to Reorganized TCO and Reorganized Columbia
indicating by irrevocable election (the "Election
Notice") whether such Rejecting Producer intends to
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<PAGE> 35
retain the common stock to be delivered, or elects to
sell that common stock. If a Rejecting Producer
fails to deliver the Election Notice within the time
specified, it shall be deemed to have elected to
retain such common stock.
If any such Rejecting Producer elects to sell the
common stock, it thereby authorizes Reorganized
Columbia and Reorganized TCO to deliver the amount of
common stock necessary to pay the Excess Amount to a
broker- dealer designated by Reorganized Columbia and
Reorganized TCO for the account of such Rejecting
Producer. The broker-dealer shall sell for the
account of the Rejecting Producer (in one or more
lots) or purchase from the Rejecting Producer the
common stock in a single lot, on or prior to the
twenty-seventh day after the end of that Calendar
Quarter and deliver the net proceeds of such sale or
sales or the purchase price of such lot or lots, in
cash, up to the Excess Amount, to the Rejecting
Producer on the applicable settlement date or dates,
but not later than the thirtieth day after the end of
that Calendar Quarter (or, if the thirtieth day is
not a Business Day, then on the next Business Day).
If there is any deficiency between the amount of such
net proceeds or such purchase price and the Excess
Amount due, Reorganized Columbia and Reorganized TCO
shall be jointly and severally obligated to pay the
Rejecting Producer, in cash, such deficiency amount
on the thirtieth day after the end of such Calendar
Quarter (or, if the thirtieth day is not a Business
Day, then on the next Business Day). If there is any
excess of such net proceeds or purchase price over
the Excess Amount, Reorganized Columbia and
Reorganized TCO shall be entitled to receive such
excess.
If any such Rejecting Producer elects to retain the
common stock, the amount of common stock to be
delivered to such Rejecting Producer shall be
delivered on the thirtieth day after the end of the
applicable Calendar Quarter (or, if the thirtieth day
is not a Business Day, then on the next Business
Day), and shall be determined as follows: The fair
market value of such common stock shall be deemed to
be the midpoint between the high
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<PAGE> 36
and the low price for Reorganized Columbia common
stock as reported on the consolidated tape of the New
York Stock Exchange on the last New York Stock
Exchange trading day prior to the date of
distribution."
(c) Section III.B.3.e; Treatment of Classified
Claims; Class 3 Claims - Unsecured Claims;
Class 3.4 - General Unsecured Claims
Section III.B.3.e of the Plan is hereby amended and modified
by deleting the last full paragraph of Section III.B.3.e in its entirety and by
replacing it with the following text:
"All distributions to holders of Allowed Class 3.4
Claims shall be made in cash, except that Reorganized
TCO, with the prior consent of Reorganized Columbia,
shall have the option to pay any amount due to any
holder of a General Unsecured Claim that does not
accept the Allowance Amount proposed for its Claim (a
"Rejecting General Unsecured Creditor") in excess of
the Target Distribution Percentage of the Allowance
Amount proposed for its Claim (the "Class 3.4 Excess
Amount"), in the form of freely marketable common
stock of Reorganized Columbia having a fair market
value equal to the amount of the distribution that
Reorganized TCO has elected not to pay in cash.
Reorganized TCO and Reorganized Columbia shall
determine on the last day of each Calendar Quarter
following the Effective Date whether to pay the
Excess Amount due to any Rejecting General Unsecured
Creditor whose Claim has become Allowed during that
Calendar Quarter by issuing such above-referenced
common stock (the "Securities Election"). Within
five (5) days after the end of such Calendar Quarter,
Reorganized TCO and Reorganized Columbia shall
deliver a written notice by facsimile transmission
and by overnight Federal Express delivery to each
Rejecting General Unsecured Creditor as to whom
Reorganized TCO and Reorganized Columbia have made
the Securities Election, with a copy to counsel for
the Creditors' Committee. Each such Rejecting
General Unsecured
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<PAGE> 37
Creditor shall then deliver a written notice
(executed by a duly-authorized representative) by
facsimile transmission with a copy to counsel for the
Creditors' Committee, within twelve (12) days after
the end of such Calendar Quarter (or, if the twelfth
day is not a Business Day, then on the next Business
Day) to Reorganized TCO and Reorganized Columbia
indicating by irrevocable election (the "Election
Notice") whether such Rejecting General Unsecured
Creditor intends to retain the common stock to be
delivered, or elects to sell that common stock. If a
Rejecting General Unsecured Creditor fails to deliver
the Election Notice within the time specified, it
shall be deemed to have elected to retain such common
stock.
If any such Rejecting General Unsecured Creditor
elects to sell the common stock, it thereby
authorizes Reorganized Columbia and Reorganized TCO
to deliver the amount of common stock necessary to
pay the Class 3.4 Excess Amount to a broker-dealer
designated by Reorganized Columbia and Reorganized
TCO for the account of such Rejecting General
Unsecured Creditor. The broker-dealer shall sell for
the account of the Rejecting General Unsecured
Creditor (in one or more lots) or purchase from the
Rejecting General Unsecured Creditor the common stock
in a single lot, on or prior to the twenty-seventh
day after the end of that Calendar Quarter and
deliver the net proceeds of such sale or sales or the
purchase price of such lot or lots, in cash, up to
the Claim 3.4 Excess Amount, to the Rejecting General
Unsecured Creditor on the applicable settlement date
or dates, but not later than the thirtieth day after
the end of that Calendar Quarter (or, if the
thirtieth day is not a Business Day, then on the next
Business Day). If there is any deficiency between
the amount of such net proceeds or such purchase
price and the Class 3.4 Excess Amount due,
Reorganized Columbia and Reorganized TCO shall be
jointly and severally obligated to pay the Rejecting
General Unsecured Creditor, in cash, such deficiency
amount on the thirtieth day after the end of such
Calendar Quarter (or, if the thirtieth day is not a
Business Day, then on the next Business Day). If
there is any excess of such net proceeds or purchase
price over the
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<PAGE> 38
Class 3.4 Excess Amount, Reorganized Columbia and
Reorganized TCO shall be entitled to receive such
excess.
If any such Rejecting General Unsecured Creditor
elects to retain the common stock, the amount of
common stock to be delivered to such Rejecting
General Unsecured Creditor shall be delivered on the
thirtieth day after the end of the applicable
Calendar Quarter (or, if the thirtieth day is not a
Business Day, then on the next Business Day), and
shall be determined as follows: The fair market
value of such common stock shall be deemed to be the
midpoint between the high and the low price for
Reorganized Columbia common stock as reported on the
consolidated tape of the New York Stock Exchange on
the last New York Stock Exchange trading day prior to
the date of distribution."
(d) Section X.B; Discharges, Releases, Settlement
of Claims and Injunction; Injunction
Section X.B of the Plan is hereby amended and modified by
adding the following text to the end of the first full paragraph thereof:
"In the event of a default in the Plan with respect
to payments to the IRS, nothing in the Plan or the
Confirmation Order shall be construed as prohibiting
the IRS from enforcing any rights it may have under
applicable law, provided, however, that this
provision shall not be deemed to define or expand any
such rights that may be held by the IRS."
Section X.B of the Plan is hereby amended and modified by
deleting the last sentence of the second full paragraph of Section X.B in its
entirety and by replacing it with the following text:
"Notwithstanding the foregoing, nothing contained in
the Plan shall preclude Reorganized TCO from
exercising any rights it may have under applicable
law to amend, modify or terminate the Retirement
Plan."
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<PAGE> 39
(e) Section X.D; Discharges, Releases, Settlement
of Claims and Injunctions; Releases
Section X.D of the Plan is hereby amended and modified by
deleting the last sentence of the second full paragraph of Section X.D in its
entirety and by replacing it with the following text:
"Notwithstanding the foregoing, nothing contained in
the Plan shall preclude Reorganized TCO from
exercising any rights it may have under applicable
law to amend, modify or terminate the Retirement
Plan."
(f) Section X.D; Discharges, Releases, Settlement of
Claims and Injunction; Releases
Section X.D of the Plan is hereby amended and modified by
inserting after the words "Refund Disputes" in the tenth line from the end of
the first full paragraph thereof, the following text:
"; provided further, however, that nothing herein
shall be construed to release the Releasees from . .
."
3. For the reasons set forth on the record of the
Confirmation Hearing, each and every Confirmation Objection, except for the
Enterprise Energy Objection and the objection asserted in the Producer
Objection with respect to the potential payment of the Excess Amount (as
defined in paragraph 2 hereof) by the distribution of freely marketable common
stock of Reorganized Columbia, to the extent not withdrawn, is hereby
overruled.
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<PAGE> 40
4. The Enterprise Energy Objection is sustained. The
Bank One Ohio/Vorys Sater Claim is hereby reclassified and treated under the
Plan as a Class 3.4 Claim.
5. Pursuant to Section 1141(a) of the Bankruptcy Code,
the Plan and its provisions are binding upon TCO, Reorganized TCO, any entity
acquiring property under the Plan, any holder of a Claim against or Interest in
TCO, and any other party-in-interest in the Reorganization Case, and any heir,
executor, administrator, successor and assign thereof, regardless of whether
the Claim or Interest of such holder or obligation of any party-in-interest is
in a Class that is impaired under the Plan, regardless of whether such
Creditor, stockholder or other party-in-interest has accepted the Plan, and
regardless of whether such Creditor, stockholder or other party-in-interest has
filed a proof of claim.
6. Subject to the provisions of the Plan and this
Confirmation Order, TCO will, as Reorganized TCO, continue to exist after the
Effective Date, as a Delaware corporation with all the powers of a corporation
under applicable law and without prejudice to any right to alter or terminate
such existence (whether by merger or otherwise) under Delaware Law.
7. Consistent with the Plan, the following agreements
and documents, substantially in the form of the agreements and documents which
are annexed as Exhibits to the Plan or which were introduced into evidence at
the
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<PAGE> 41
Confirmation Hearing in substantially final form, including all the exhibits,
attachments and schedules annexed thereto, and all terms and provisions thereof
(collectively, the "Reorganization Documents"), are hereby approved in all
respects:
a. Amended and Restated Certificate of
Incorporation of Columbia Gas Transmission
Corporation;
b. The Customer Settlement Proposal;
c. The Amended and Restated Indenture dated
______________________, 1995 (the "Restated
Indenture").
8. TCO and Reorganized TCO, and their directors,
officers and agents are hereby authorized to (i) modify the TCO Indenture of
Mortgage and Deed of Trust dated August 30, 1985, and (ii) enter into, execute,
deliver, file and/or implement the Reorganization Documents and other documents
and instruments substantially consistent therewith or incidental thereto and
any amendments, supplements or modifications to such Reorganization Documents
as may be appropriate, and to take such other steps and perform such other acts
as may be necessary to implement and effectuate the Reorganization Documents,
the Plan, all other related instruments and documents and this Confirmation
Order, and to satisfy all other conditions precedent to the implementation and
effectiveness of the Plan.
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<PAGE> 42
9. The total amount of the Class 2.1 Claim as of the
Effective Date shall include the sum of (i) the unpaid principal amount of the
Columbia Secured Claim in respect of the First Mortgage Bonds, (ii) the unpaid
principal amount plus accrued and unpaid pre-petition interest in respect of
the Inventory Financing Agreement, (iii) all amounts to which Columbia is
entitled under the Cash Collateral Orders, (iv) all amounts for reasonable
costs, fees and charges pursuant to Section 506 of the Bankruptcy Code approved
by the Court and (v) post-petition interest on the unpaid principal and
interest identified in subsections (i) and (ii) of this paragraph 8 in the
manner articulated in Exhibit B to the Plan. The payment of post-petition
interest and the specific method of calculating post-petition interest as set
forth in Exhibit B are hereby approved.
10. TCO is hereby authorized to issue new secured debt
securities in respect of the Class 2.1 Claim under the Plan on the terms set
forth on that certain Restated Indenture which terms are hereby approved.
11. The settlement and release of the Intercompany Claims
in the manner provided for by the Plan, and more specifically, in accordance
with the Columbia Omnibus Settlement embodied in the Plan and the Columbia Plan
are hereby approved as being fair and equitable and in the best interests of
TCO and its Estate. TCO or Reorganized TCO, as applicable, is authorized and
directed
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<PAGE> 43
to perform its obligations under the settlement of the Intercompany Claims,
including but not limited to filing the Stipulation of Dismissal with Prejudice
with the District Court, and taking such actions as may be necessary by its
terms to obtain District Court approval thereof.
12. As of the Effective Date, and subject to both (i)
confirmation of the Plan, and (ii) the Stipulation of Dismissal with Prejudice
becoming effective according to its terms, the Intercompany Claims and all
claims arising from or related to the transactions which are the subject of the
Intercompany Claims shall be settled, released and discharged in their
entirety, pursuant to the terms of the Plan, provided, however, that the entry
of this Order shall not affect the District Court's retention of jurisdiction
with respect to its order dated October 4, 1995 (the "October 4 Order")
rendered on the Motion to Unseal Judicial Records filed by the Customers'
Committee and any further order of the District Court relating thereto.
13. The Columbia Omnibus Settlement is hereby approved as
being fair and equitable and in the best interests of TCO and its Estate. TCO
and Reorganized TCO, as applicable, are authorized and directed to perform
their obligations under the Columbia Omnibus Settlement.
14. The Customer Settlement Proposal is hereby approved
as being fair and equitable and in the best interests of TCO and its Estate.
TCO and Reorganized TCO, as applicable, are authorized and directed to perform
their
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<PAGE> 44
obligations under the Customer Settlement Proposal including but not limited to
(i) TCO's distribution of funds in the RIA Account to Accepting 3.2 Claimants
in the manner provided for in the Customer Settlement Proposal, and (ii) TCO's
dissolution of the RIA Account.
15. Without limiting the generality of the preceding
paragraph, the settlement of (i) the Refund Disputes with Accepting 3.2
Claimants and (ii) the 1990 Rate Case, as modified by and in accordance with
the Customer Settlement Proposal and the Plan, are hereby approved.
16. This Court's prior approval of each of the Exit Fee
Settlements is hereby affirmed provided, however, that TCO shall absorb $11.5
million of Exit Fees and other upstream pipeline costs, in accordance with the
provisions of the Customer Settlement Proposal. TCO is authorized to assume
each of the Exit Fee Settlements as being in the best interests of TCO and its
Estate. TCO and Reorganized TCO, as applicable, are authorized and directed to
perform their obligations under each of the Exit Fee Settlements including but
not limited to the payment in full of the Exit Fees as described therein. The
objections filed related to the assumption of the Exit Fee Settlements are
hereby overruled to the extent not otherwise withdrawn.
17. Pursuant to the Customer Settlement Proposal and the
Plan, the Allowed Refund Claim amount of each Accepting 3.2 Claimant shall be
the sum of the principal amount and, where applicable, pre-and post-petition
interest
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<PAGE> 45
components of each such Customer's Allowed Refund Claim as reflected on the
schedules annexed to the Customer Settlement Proposal.
18. In accordance with the Customer Settlement Proposal,
the Waiver Agreement and the Plan, each Accepting 3.2 Claimant agrees, inter
alia, to accept the treatment provided to such claimant under the Plan in full
settlement, satisfaction, discharge and termination of each and every one of
such Accepting 3.2 Claimant's Refund Claims and Refund Disputes.
19. In accordance with the Customer Settlement Proposal,
the Waiver Agreement and the Plan (each, a "Nullification Condition"), each
Accepting 3.2 Claimant shall be entitled to nullify and void the Waiver
Agreement executed by such Claimant and rescind the release granted thereby, by
providing written notification thereof (the "Nullification Notice") not later
than forty-five (45) days after service by TCO on each Accepting 3.2 Claimant
of a notice stating that a Nullification Condition has occurred, and setting
forth the person to whom the Nullification Notice should be sent.
20. Reorganized TCO is authorized pursuant to Section
III.B.3.c of the Plan to make the following payments within 45 days after the
Effective Date solely from post-Effective Date income of Reorganized TCO: (i) a
lump sum payment in the amount of $1.3 million to the members of the Customers'
Committee on July 17, 1995 (the "Eligible
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<PAGE> 46
Customers' Committee Members") in recognition, inter alia, of the substantial
and valuable services and contributions the Customers' Committee has made to
the formulation and structure of the Plan, provided, that such payment will be
shared pro rata solely among the Eligible Customers' Committee Members, and
(ii) a payment in the amount of $225,000 to UGI Utilities Inc. ("UGI"), a
former member of the Customers' Committee in respect of 50% of the expenses
incurred by UGI while serving on the Customers' Committee.
21. As of the Effective Date, TCO shall withdraw, dismiss
and waive its rights to recover or to seek recovery of any additional gas
supply realignment costs, and certain other costs from Supporting Parties to
the Customer Settlement Proposal in the manner and to the extent expressly
provided for in the Customer Settlement Proposal.
22. Each Producer that accepted the Settlement Value
proposed by TCO as the Allowed amount for such Producer's Claim by properly
executing a Class 3.3 Ballot or Settlement Amount Form, as applicable, and
returning the same to the Balloting Agent whether prior to the Voting Deadline
or subsequent to the Voting Deadline but prior to the date hereof, shall have
an Allowed Claim against the Estate for all purposes under the Plan including
distributions, in an amount equal to the Settlement Value, which Settlement
Value shall represent a settlement of all of the Claims, listed by number, and
all of the contracts, listed by number, with respect to such Producer on
Schedule
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<PAGE> 47
III to the Plan. The Schedule of Accepting Producers annexed hereto as Exhibit
"A" lists each such Producer. The Settlement Values accepted by Producers
through the Plan solicitation process are hereby approved as being fair and
reasonable and in the best interests of TCO and the Estate.
23. Each Disputed General Unsecured Creditor that
accepted the Allowance Amount proposed by TCO as the Allowed Amount for such
Creditor's Claim by properly executing a Class 3.4 Ballot or Settlement Amount
Form, as applicable, and returning the same to the Balloting Agent whether
prior to the Voting Deadline or subsequent to the Voting Deadline but prior to
the date hereof, shall have an Allowed Claim against the Estate for all
purposes under the Plan including distributions, in an amount equal to the
Allowance Amount, which Allowance Amount shall represent a settlement of all of
the Claims, listed by number, with respect to such General Unsecured Creditor
on Schedule II to the Plan. The Schedule of Accepting General Unsecured
Creditors annexed hereto as Exhibit "B" lists each such General Unsecured
Creditor. The Allowance Amounts accepted by Disputed General Unsecured
Creditors through the Plan solicitation process are hereby approved as being
fair and reasonable and in the best interests of TCO and the Estate.
24. In addition to the settlements and compromises
referred to in this Confirmation Order, all other settlements, agreements and
compromises provided for under the Plan, and all transactions, documents,
instruments
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<PAGE> 48
and agreements referred to therein, contemplated thereunder or executed and
delivered therewith, and any amendments or modifications thereto in substantial
conformity therewith, are hereby approved, and TCO and the other parties
thereto are authorized and directed to enter into them and to perform
thereunder according to their respective terms.
25. In accordance with Section III.B.3 of the Plan, if
the Plan is not consummated, each Producer or General Unsecured Creditor that
voluntarily reduced the amount of its Claim by accepting the Settlement Value
or Allowance Amount proposed in settlement of each such Creditor's Claim (each
a "Claim Reducing Creditor"), shall be entitled to nullify and void such Claim
reduction by providing written notification thereof (the "Claims Reduction
Nullification Notice") not later than forty-five (45) days after service by TCO
on each Claim Reducing Creditor of a notice stating that the Plan shall not be
consummated, and setting forth the person to whom the Claims Reduction
Nullification Notice should be sent.
26. Except as otherwise provided for in the Plan or this
Confirmation Order, pursuant to Section IV.H of the Plan, all employee and
retiree benefit plans or programs in existence as of the Petition Date,
including, but not limited to, the Retirement Plan, shall continue in full
force and effect after the Effective Date at the level established by the terms
of such retiree benefit plans for the duration of the period TCO has obligated
itself to
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<PAGE> 49
provide such benefits, subject to any right to amend, modify or terminate such
retiree benefits under the terms of the applicable retiree benefit plan or
applicable non-bankruptcy law.
27. Pursuant to Section II.B.3 of the Plan, TCO or
Reorganized TCO, as applicable, is hereby authorized and directed to turn over
the East Lynn Condemnation Award to CNR on the Effective Date.
28. Except as otherwise provided in (i) the Plan, or in
any contract, instrument, release, indenture or other agreement or document
entered into or created in connection with the Plan, or this Confirmation
Order, on or after the Effective Date, all property of the Estate, and any
property acquired by TCO or Reorganized TCO under any provisions of the Plan
not being held for distribution pursuant to the terms of the Plan shall vest in
and be retained by Reorganized TCO free and clear of all Claims and interests
in accordance with Sections 1141(b) and (c) of the Bankruptcy Code. On and
after the Effective Date, Reorganized TCO may operate its business and may use,
acquire and dispose of property and compromise or settle any claims against it
without supervision or approval by this Court and free of any restrictions of
the Bankruptcy Code or Bankruptcy Rules, other than those restrictions
expressly imposed by the Plan and this Confirmation Order.
29. Distributions required to be made to the holders of
Allowed Claims against, and to the holder of
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<PAGE> 50
Allowed Interests in, TCO shall be made to such Persons as provided (i) in the
Plan, including the Settlement Agreements embodied therein, and this
Confirmation Order, and (ii) any other orders entered by this Court governing
the timing of distributions and the procedures for resolving multiple Claims or
disputes over ownership of Claims and entitlements to distributions. The
record date for determining which holders of Allowed Claims and the Allowed
Interest are entitled to participate in the distributions pursuant to the Plan
shall be 5:00 p.m. Eastern Time on November 15, 1995 (the "Distribution Record
Date"), provided, however, that the distribution record date for Producer
Claims which are the subject of that certain Motion for an Order Authorizing
TCO to Withdraw Payment of Disputed Producer Claims and Consolidating Such
Claims Until the Proper Payee Has Been Determined shall be the first date on
which (i) the Claim is allowed, and (ii) there shall have been either (a) a
final determination made by this Court or another court of competent
jurisdiction as to the proper payee or payees or as to the proper allocation of
payment among the disputing parties, or (b) a submission by the disputing
parties to TCO of a binding written agreement or letter of direction among all
of the parties to the dispute stipulating as to the proper payee or payees or
otherwise providing for a reasonable method of payment for the disputed funds.
TCO and Reorganized TCO are hereby authorized to recognize and deal with for
all purposes under
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<PAGE> 51
the Plan, only those Persons that are holders of Allowed Claims as reflected,
as of the Distribution Record Date, on (i) the proofs of claim or any
amendments thereto filed with Poorman-Douglas, TCO's claims agent, (ii) if no
proof of claim was filed in respect of such Claim, TCO's Schedule of
Liabilities or other books and records, or (iii) any transfers of Claims filed
pursuant to Bankruptcy Rule 3001(e) on or prior to the Distribution Record Date
of which Poorman-Douglas has received written notice as of the Distribution
Record Date.
30. This Confirmation Order shall constitute all
approvals and consents required, if any, by the laws, rules or regulations of
any state or any other governmental authority with respect to the
implementation or consummation of the Plan and any other documents, instruments
or agreements, and other acts referred to in or contemplated by the Plan, the
Reorganization Documents, and any other documents, instruments or agreements,
any amendments or modifications thereto and any other acts that may be
necessary or appropriate for the implementation or consummation of the Plan.
31. Subject to changes in the ordinary course of TCO's
business, pursuant to Section V.B.2 of the Plan, on the Effective Date the
following persons shall serve as members of the board of directors of
Reorganized TCO:
(a) Oliver G. Richard III
(b) Peter M. Schwolsky
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<PAGE> 52
(c) Michael W. O'Donnell
(d) James P. Holland
(e) R. Larry Robinson, and
(f) Mark P. O'Flynn
Such directors shall remain in office until their successors are duly elected
and qualified, or until their earlier resignation, removal or death, subject to
the terms of the Amended and Restated Certificate of Incorporation, TCO's
by-laws and the corporate law of the State of Delaware.
EXECUTORY CONTRACTS
32. Pursuant to Section VII.A of the Plan, and except as
otherwise provided in the Plan or in any contract, instrument, release,
indenture, agreement or document entered into in connection with the Plan, and
in accordance with Section 1123(b)(2) of the Bankruptcy Code, TCO will be
deemed to have assumed as of the Effective Date each of its executory contracts
which are identified on Exhibit "C" to this Order, which exhibit amends and
modifies Exhibit 3A to the Disclosure Statement. Notwithstanding the
foregoing, the treatment of executory contracts between TCO and its Customers
shall be consistent with the treatment provided in Article XII of the Customer
Settlement Proposal. In accordance with Section 1123(a)(5)(G) of the
Bankruptcy Code, TCO is directed to cure all defaults respecting each assumed
executory contract and unexpired lease, other than those set forth in Section
365(b)(2) of the Bankruptcy Code.
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<PAGE> 53
32. The executory contracts listed on Exhibit "C" to this
Order as contracts to be rejected, which exhibit amends and modifies Exhibit 3B
to the Disclosure Statement, and all other executory contracts not listed on
Exhibit 3 to the Disclosure Statement, or Exhibit "C" hereto, or otherwise
previously disposed of by this Court or by operation of law, shall be deemed
rejected as of the Effective Date.
OBJECTIONS TO CLAIMS
33. Pursuant to Section VII.C of the Plan, any Claim for
damages arising by reason of the rejection of an executory contract or
unexpired lease will be forever barred and will not be enforceable against TCO,
Reorganized TCO or its successors or assigns or the properties of any of them
unless with respect to an Administrative Claim, a request for payment, or with
respect to any other Claim, a proof of claim is filed and served on Reorganized
TCO not later than thirty (30) days after the Effective Date. Reorganized TCO
reserves its right to object to any request for payment or any proof of claim
filed, provided, however, that Reorganized TCO shall file any objection to the
allowance of the Claim not later than sixty (60) days after the Effective Date
or as such time may be further extended by the Court.
34. Except as otherwise provided in Sections VI, VII. C
or XII.A of the Plan, or this Confirmation Order, after the Effective Date,
only Reorganized TCO shall have the authority to file objections, and shall
have authority
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<PAGE> 54
to settle, compromise, withdraw and/or litigate to judgment objections to
Claims, including but not limited to Non-Ordinary Course Administrative Claims
as set forth in Section VI.B.3 of the Plan, filed by TCO or Reorganized TCO, as
applicable, subject to this Court's approval, provided, however, that the
Creditors' Committee and Producers shall also have the right after the
Effective Date to (i) file objections to Producer Claims held by Rejecting
Producers, (ii) file objections to any proposed compromise or settlement of the
Claim of any Producer, (iii) settle, compromise, withdraw, or litigate to
judgment such objections, and (iv) participate in appeals from any such
objections, subject to appropriate approvals of this Court, and provided
further, however, that the Customers' Committee shall have the right after the
Effective Date to (i) represent Customers' interests with respect to any appeal
taken from the Confirmation Order, (ii) review proposed settlements of Customer
Regulatory Claims held by Dissenting 3.2 Claimants, (iii) oversee the
implementation of the Customer Settlement Proposal, and (iv) engage in such
other activity on behalf of Customers' interest as agreed to by Reorganized
TCO. Reorganized TCO shall file all such objections to Claims (other than
Producer Claims) not later than one hundred and twenty (120) days after the
Effective Date or as such time may be further extended by the Court.
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<PAGE> 55
35. Without affecting the generality of the foregoing,
with respect to all Rejecting Producer's Claims which are subject to the Claims
Estimation Procedures: (i) all objections by TCO, Reorganized TCO and all other
parties-in-interest to such Claims shall be governed by the Claims Estimation
Procedures, or other orders of the Court, and (ii) the liquidation of such
Claims before this Court shall be governed by the Claims Estimation Procedures,
or by settlements or such other procedures as may be approved by this Court.
PROFESSIONAL FEES
36. Applications for final allowance of compensation and
reimbursement of expenses by Professionals or other entities pursuant to
Sections 330, 331 or 503(b) of the Bankruptcy Code for services rendered before
the Effective Date, including compensation requested pursuant to Section
503(b)(4) for making a substantial contribution in the Reorganization Case
("Final Fee Applications") shall be filed with the Court and served on
Reorganized TCO, the U.S. Trustee and the Fee Examiner (the "Notice Entities")
not later than sixty (60) days after the Effective Date, provided, however,
that any Professional or other entity that fails to timely file an application
for final allowance shall be forever barred from asserting such Claims against
TCO or Reorganized TCO, provided, further, that any Professional that is
subject to the Administrative Fee Order or other such order of the Bankruptcy
Court as of the
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<PAGE> 56
Effective Date may continue to receive compensation and reimbursement of
expenses as provided therein for services rendered prior to the Effective Date.
Objections to such fees filed by Reorganized TCO, the Customers' Committee, the
Creditors' Committee and/or any party-in-interest to any Final Fee Application
shall be due and hearings shall be held at such time and in such manner as
shall be established by a further order of this Court. No applications for
compensation need be filed for post-Effective Date services.
37. Except as otherwise expressly provided in the Plan or
this Confirmation Order, the issuance of this Confirmation Order operates as a
discharge, pursuant to Section 1141(d) of the Bankruptcy Code, as of the
Effective Date, of all debts of, Claims against and Interests in TCO that arose
prior to the Confirmation Date including, without limitation, any Claims for
interest accrued on Claims from the Petition Date, so long as the distributions
to Creditors which are payable under the Plan on the Effective Date are made as
provided in the Plan, provided, however, that TCO shall not be discharged from
Claims of Accepting Class 3.2 Claimants arising prior to the Confirmation Date
solely to the extent those Claims are permitted to survive pursuant to the
provisions of the Customer Settlement Proposal. Without limiting the
generality of the foregoing, on the Effective Date, except as otherwise
specifically provided for in the Plan or this Confirmation Order, TCO shall be
discharged from any debt that arose prior to the Confirmation Date and
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<PAGE> 57
from all debts of the kind specified in Sections 502(g), 502(h) or 502(i) of
the Bankruptcy Code, whether or not (i) a proof of claim based on such debt was
filed or deemed filed pursuant to Section 501 of the Bankruptcy Code, (ii) a
Claim based on such debt is an Allowed Claim pursuant to Section 502 of the
Bankruptcy Code or (iii) the holder of a Claim on such debt has voted to accept
the Plan.
38. As to every discharged Claim, all entities, including
third parties claiming rights under any contract between TCO and any Creditor,
shall be precluded from asserting against TCO, Reorganized TCO, or their
respective successors or assigns, or the properties of any of them, any other
or further Claims, debts, rights, causes of action, liabilities or equity
interests based upon any act, omission, transaction or other activity of any
kind or nature that occurred prior to the Confirmation Date, provided, however,
the Customers' Committee or any of its members in the event that the Customers'
Committee has been dissolved, expressly reserves its right to participate in
any appeals from the October 4 Order and any related Order issued in respect of
that certain Motion to Unseal Judicial Records filed in the Intercompany Claims
Litigation.
39. Except to the extent otherwise provided for by
decretal paragraph 2 of this Confirmation Order, pursuant to Section X.B of the
Plan, and Sections 105, 1123 and 1129 of the Bankruptcy Code, in order to
preserve and implement the settlements contemplated by and provided for in the
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<PAGE> 58
Plan, effective on the Effective Date, all entities that have held, currently
hold or may hold a Claim, or other debt or liability that is discharged
pursuant to the terms of the Plan shall be permanently enjoined to the fullest
extent permitted by law from taking any of the following actions on account of
any such discharged Claims, debts or liabilities, other than actions brought to
enforce any rights or obligations under the Plan or appeals, if any, from this
Confirmation Order: (i) commencing or continuing in any manner any action or
other proceeding against TCO, Reorganized TCO or their respective properties;
(ii) enforcing, attaching, collecting or recovering in any manner any judgment,
award, decree or order against TCO, Reorganized TCO or their respective
properties; (iii) creating, perfecting or enforcing any lien or encumbrance
against TCO, Reorganized TCO or their respective properties; (iv) asserting a
Setoff, right of subrogation or recoupment of any kind against any debt,
liability or obligation due to TCO, Reorganized TCO or their respective
properties; and (v) commencing or continuing, in any manner or in any place,
any action that does not comply with or is inconsistent with the provisions of
the Plan or this Confirmation Order.
40. Except to the extent otherwise provided for by
decretal paragraph 2 of this Confirmation Order, as of the Effective Date, TCO,
Reorganized TCO and all holders of Claims shall release unconditionally and are
hereby deemed to release unconditionally (i) each of TCO's and Reorganized
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<PAGE> 59
TCO's officers, directors, shareholders, employees, consultants, financial
advisors, affiliates, attorneys, accountants and other representatives and each
of their respective successors, executors, administrators, heirs and assigns,
(ii) the Creditors' Committee and, solely in their capacity as members or
representatives of the Creditors' Committee, each member, consultant, financial
advisor, attorney, accountant or other representative of the Creditors'
Committee, and each of their respective successors, executors, administrators,
heirs and assigns, (iii) the Customers' Committee, and, solely in their
capacity as members or representatives of the Customers' Committee, each
member, consultant, financial advisor, attorney, accountant or other
representative of the Customers' Committee, and each of their respective
successors, executors, administrators, heirs and assigns, (iv) the Official
Committee of Unsecured Creditors and the Official Committee of Equity Holders
of Columbia (collectively, the "Columbia Committees") and, in their capacity as
members, invitees or representatives of the Columbia Committees, each member,
invitee (including its professionals), consultant, financial advisor, attorney,
accountant or other representative of the Columbia Committees, and each of
their respective successors, executors, administrators, heirs and assigns, and
(v) Columbia, Reorganized Columbia, CNR and each of their respective officers,
directors, shareholders, employees, consultants, financial advisors, attorneys,
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<PAGE> 60
accountants or other representatives and each of their respective successors,
executors, administrators, heirs and assigns (the entities referred to in
clauses (i), (ii), (iii), (iv) and (v) are collectively referred to as the
"Releasees"), from any and all claims, obligations, suits, judgments, damages,
rights, causes of action or liabilities whatsoever, whether known or unknown,
foreseen or unforeseen, existing or hereafter arising, in law, equity or
otherwise based in whole or in part upon any act or omission, transaction,
event or other occurrence taking place on or prior to the Effective Date in any
way relating to TCO, the Reorganization Case, or the Plan, including, without
limitation, (a) the Intercompany Claims and all claims arising from or related
to the transactions which are the subject of the Intercompany Claims as set
forth in Section X.E of the Plan (provided, however, that the release of such
Intercompany Claims shall not be effective unless and until the Stipulation of
Dismissal with Prejudice becomes effective pursuant to its terms) and (b)
Refund Claims and Refund Disputes and any claims arising from or related to the
transactions that are the subject of such Refund Claims and Refund Disputes,
and provided, however, that, such releases shall not be effective as to (i) any
claim for Professional Fees sought by any of the Releasees until such claim has
been paid, satisfied or otherwise disposed of, (ii) any claim asserted against
TCO or Columbia arising in the normal course of business after the Petition
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<PAGE> 61
Date between TCO's Creditors or TCO and Columbia until such claim has been
paid, satisfied or otherwise disposed of, and (iii) any claim asserted against
CNR arising in the normal course of business after the Petition Date between
TCO's Creditor or TCO and CNR until such claim has been paid, satisfied or
otherwise disposed of, and (iv) any claims preserved pursuant to the Customer
Settlement Proposal.
41. In accordance with that certain Settlement Agreement
dated as of October 31, 1995 among TCO and Mountaineer Gas Company
("Mountaineer") approved by this Court by order dated November 13, 1995 (the
"Mountaineer Settlement"), specific Claims of Mountaineer against TCO for
certain liabilities have been compromised and settled subject to consummation
of the Plan and the Columbia Plan. Under the terms of the Mountaineer
Settlement, inter alia, notwithstanding anything to the contrary in the Plan or
this Confirmation Order, Mountaineer shall not be barred by TCO's discharge
from seeking legal and/or equitable relief from TCO for environmental matters
provided, however, that TCO has preserved all of its rights (except assertion
of its discharge) to oppose any such environmental Claim asserted by
Mountaineer and provided further, if it is determined that TCO has a liability
to Mountaineer which would have been (i) a pre-petition Claim in TCO's
Reorganization Case, such pre-petition Claim shall be paid as if it were a
Class 3.4 Claim under the Plan, discounted in the manner set forth in the
Mountaineer Settlement, or (ii) a post-petition, pre-
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Confirmation Date Claim in TCO's Reorganization Case, such post-petition Claim
shall be treated as a Miscellaneous Administrative Claim under the Plan,
provided, however, that Mountaineer shall not be required to file an
Administrative Claim against TCO.
42. Nothing in the Plan, this Confirmation Order or the
discharge, injunction or release provisions contained therein shall be
construed as discharging, releasing or relieving TCO, Reorganized TCO, or any
other party, in any capacity, from liability with respect to the Retirement
Plan to which such party is subject under any law or regulatory provision.
43. On the Effective Date, except as otherwise provided
in the Plan, or in any contract, instrument, release, indenture or other
agreement or document created in connection with the Plan, all mortgages, deeds
of trust, statutory liens, liens or other security interests against the
property or assets of TCO or the Estate, shall be deemed discharged and
satisfied, and the right, title and interest of any holder of any such
mortgage, deed of trust, statutory lien, lien or other security interest
against the property or assets of TCO or its Estate shall revert to Reorganized
TCO and its successors and assigns.
44. Except to the extent that TCO has agreed otherwise at
the Confirmation Hearing or in writing to the contrary, it shall be a condition
to the making of any distribution to any entity holding any such mortgage, deed
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of trust, statutory lien, lien or other security interest against the property
or assets of TCO or its Estate that such entity, or that entity's agent, shall
have tendered to TCO, Reorganized TCO or their designated representative, a
file-stamped copy of a release of lien or equivalent release document which has
been recorded at the appropriate recorder's office in the jurisdiction of the
liened property or shall have delivered to TCO, Reorganized TCO or their
designated representative, any property so held.
45. Pursuant to Section X.C of the Plan, TCO,
Reorganized TCO, Columbia, Reorganized Columbia, their affiliates and their
respective directors, officers, employees, agents, representatives and
professionals (acting in such capacity), and the Creditors' Committee, and the
Customers' Committee and their respective members and Professionals (acting in
such capacity), the Columbia Committees and their respective members, invitees
and professionals (acting in such capacity), and their respective heirs,
executors, administrators, successors and assigns shall neither have nor incur
any liability to any entity for any act taken or omitted to be taken in
connection with, inter alia, the formulation and dissemination of the Plan, the
Disclosure Statement and related transactions and agreements, provided,
however, that this limitation of liability shall not extend to (i) any act or
omission which is determined in a Final Order to have constituted gross
negligence or wilful misconduct, or (ii)
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<PAGE> 64
any violation of the securities laws except to the extent that such person
would not be liable for such violation under Section 1125(e) of the Bankruptcy
Code, or would be exempt from compliance with such securities laws pursuant to
Section 1145 of the Bankruptcy Code.
RETENTION OF JURISDICTION
46. Notwithstanding the entry of this Confirmation Order
or the occurrence of the Effective Date, in accordance with Section XI of the
Plan and the Bankruptcy Code, the Court shall retain jurisdiction for the
following purposes:
a. To allow, disallow, determine, liquidate, classify,
estimate, or establish the priority or secured or unsecured status of, any
Claim, including the resolution of any request for payment of any
Administrative Claim, and the resolution of any and all objections to the
allowance or priority of Claims (including any Administrative Claim and any
Priority Tax Claim);
b. To grant or deny any application for allowance of
compensation or reimbursement of expenses authorized pursuant to the Bankruptcy
Code or the Plan, for periods ending on or before the Effective Date;
c. To resolve any matters related to the assumption or
rejection of any executory contract or unexpired lease to which TCO is a party
or with respect to which TCO may be liable and to hear, determine and, if
necessary, Allow any Claim arising therefrom;
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<PAGE> 65
d. To decide or resolve any matter arising out of the
Claims Estimation Procedures;
e. To resolve any determinations which may be requested
by TCO or Reorganized TCO of unpaid or potential tax liability or any matters
relating thereto under Sections 505 and 1146(d) of the Bankruptcy Code,
including tax liability or such related matters for any taxable year or portion
thereof ending on or before the Effective Date;
f. To resolve any issues relating to distributions to
Holders of Allowed Claims pursuant to the provisions of the Plan, including the
assertion of setoff rights by or against TCO;
g. To decide or resolve any motions, adversary
proceedings, contested or litigated matters and any other matters and grant or
deny any applications that may be pending on or commenced after the Effective
Date, that arise in or relate to the Reorganization Case or the Plan;
h. To enter such orders as may be necessary or
appropriate to implement or consummate the provisions of the Plan and all
contracts, instruments, releases, indentures and other agreements or documents
created in connection with or referred to in the Plan or the Disclosure
Statement;
i. To resolve any cases, controversies, suits or
disputes that may arise in connection with the consummation, interpretation or
enforcement of the plan or any entity's obligations under or in connection with
the Plan, including determinations relating to the enforceability of the
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<PAGE> 66
Columbia Customer Guaranty and the Columbia Guaranty and any disputes regarding
compensation for those post-Effective Date services referenced in Section XII.A
of the Plan, except that such retention of jurisdiction shall not apply to any
cases, controversies, suits or disputes that may arise in connection with FERC
regulatory matters;
j. To modify the Plan before, on or after the Effective
Date pursuant to Section 1127 of the Bankruptcy Code or modify the Disclosure
Statement or any contract, instrument, release, indenture or other agreement or
document created in connection with the Plan or the Disclosure Statement, or
remedy any defect or omission or reconcile any inconsistency in any Bankruptcy
Court order, the Plan, the Disclosure Statement or any contract, instrument,
release, indenture or other agreement or document created in connection with
the Plan or the Disclosure Statement, in such manner as may be necessary or
appropriate to consummate the Plan, to the extent authorized by the Bankruptcy
Code;
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 enter and implement such orders as are necessary
or appropriate if this Confirmation Order is for
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<PAGE> 67
any reason modified, stayed, reversed, revoked or vacated and as may be
necessary or appropriate between the Confirmation Date and the Effective Date;
m. To determine any other matters that may arise in
connection with or relate to the Plan, the Disclosure Statement, this
Confirmation Order, any Claim or any contract, instrument, release, indenture
or other agreement or document created in connection with the Plan or the
Disclosure Statement, except as otherwise provided herein; and
n. To enter a final decree closing the Reorganization
Case.
47. Except to the extent otherwise provided by this
Confirmation Order, the Creditors' Committee and the Customers' Committee may
continue in existence after the Effective Date and the Professionals retained
by the Creditors' Committee or the Customers' Committee may continue to be
employed after the Effective Date in accordance with and to the extent provided
in Section XII.A of the Plan. Upon dissolution of the Creditors' Committee and
the Customers' Committee after the Effective Date as permitted by Section XII.A
of the Plan, the members of the Creditors' Committee and the Customers'
Committee, as
- 67 -
<PAGE> 68
applicable, shall be released and discharged from all rights and duties arising
from or related to the Reorganization Case.
48. Reorganized TCO shall remain liable to pay the
reasonable costs and expenses of the members of and the Professionals retained
by the Creditors' Committee and the Customers' Committee in accordance with
Section XII.A of the Plan, and with respect to services rendered and expenses
incurred in connection with any applications for allowance of compensation and
reimbursement of expenses pending on the Effective Date or filed and served
after the Effective Date in accordance with Section VI.B.1 of the Plan and
paragraph 37 hereof, after the submission of monthly bills to Reorganized TCO
describing in reasonable detail the services provided and disbursements
incurred ("Post-Effective Date Fee Requests"). The Court shall retain
jurisdiction to determine any disputes concerning Post-Effective Date Fee
Requests.
49. The failure to reference or discuss any particular
provision of the Plan in this Confirmation Order shall have no effect on the
validity, binding effect and enforceability of such provision and such
provision shall have the same validity, binding effect and enforceability as
every other provision of the Plan.
- 68 -
<PAGE> 69
50. Except with respect to the modifications to the Plan
set forth herein and as provided in paragraph 40 hereof, to the extent of any
inconsistency between the terms of the Plan and this Confirmation Order, the
terms of the Plan shall govern. To the extent of any inconsistency between the
terms of the Plan and the terms of the Customer Settlement Proposal, the terms
of the Customer Settlement Proposal shall govern.
Dated: Wilmington, Delaware
November 15, 1995
/s/ Helen S. Balick
------------------------------------
THE HONORABLE HELEN S. BALICK
CHIEF UNITED STATES BANKRUPTCY JUDGE
- 69 -
<PAGE> 1
FORM 8-K, EXHIBIT D, NEWS RELEASE DATED NOVEMBER 15, 1995
Contacts: Media - H. W. Chaddock (302) 429-5261
W. R. McLaughlin (302) 429-5443
Analysts - T. L. Hughes (302) 429-5363
K. P. Murphy (302) 429-5471
FOR IMMEDIATE RELEASE November 15, 1995
BANKRUPTCY COURT CONFIRMS COLUMBIA REORGANIZATION PLANS;
CLEARS WAY FOR COMPANIES TO EMERGE FROM CHAPTER 11
WILMINGTON, DEL. -- Chapter 11 reorganization plans for The
Columbia Gas System, Inc., (NYSE:CG) and Columbia Gas Transmission Corp., its
principal pipeline subsidiary, were confirmed here today by U. S. Bankruptcy
Court Judge Helen Balick.
The rulings will permit the companies to implement the terms
of their reorganization plans and emerge from Chapter 11 protection soon after
a 10-day waiting period during which appeals may be filed with the Federal
District Court in Delaware, provided no stay is issued.
Columbia System Chairman Oliver G. Richard III said he was
elated with the rulings. "We're anxious to get the bankruptcy proceedings
behind us and will make every effort to expedite the implementation of the
plans. We want to pay our creditors as soon as possible so that we can begin
to take advantage of the many opportunities that are becoming available in
today's energy marketplace."
Richard said the continuing profitability of Columbia's
business units throughout the bankruptcy demonstrates the basic soundness of
their operations. He also pointed to the recent investment grade ratings
accorded Columbia's new debt to be issued upon emergence as testimony to the
financial strength of the Corporation. He added that the average interest rate
on Columbia's new debt is expected to be among the lowest of any company in the
gas industry.
As confirmed by the Court, the Corporation's reorganization
plan provides for a total distribution of approximately $3.6 billion to its
creditors, including approximately $2.3 billion in payment of the debt the
Corporation owed prior to filing for Chapter 11 and approximately $1.1 billion
of interest on that debt.
The Corporation's reorganization plan will pay its creditors
the principal balances of their pre-petition debt in full and accrued
pre-petition interest, post-petition interest and interest on overdue interest.
This distribution will include almost $1 billion in cash to be funded in part
by new bank debt; about $2 billion in new debt securities
<PAGE> 2
with maturities that range from five to 30 years; and about $200 million in
preferred stock and $200 million in dividend enhanced convertible stock.
Columbia Transmission's confirmed reorganization plan provides
for a total distribution of approximately $3.9 billion to its creditors. Of
this, about $2.2 billion will be paid to the Corporation to resolve its secured
and unsecured debt claims. About $1.2 billion will be paid to producers to
resolve claims resulting from gas purchase contracts that the company rejected
during the proceedings, and the remaining $500 million will pay other
third-party and administrative claims.
Columbia Transmission will pay 100 percent of all priority and
administrative claims, the Corporation's secured debt and all unsecured claims
of $25,000 or less. Other creditors, including the producers whose contracts
were rejected, will initially receive 68.875 percent and subsequently could
receive up to 72.5 percent of their allowed claims. Customer creditors'
claims will be accorded the treatment provided in a comprehensive settlement
approved by the Federal Energy Regulatory Commission and included in the
confirmed plan of reorganization.
The Columbia Gas System, Inc., is one of the nation's largest
natural gas systems. Its 17 operating subsidiaries are engaged in the
exploration, production, purchase, marketing, storage, transmission and
distribution of natural gas as well as electric power generation and other
energy operations. The Corporation and Columbia Transmission have been
operating as debtors-in-possession since July 31, 1991, after a combination of
events forced them to file separate petitions for protection under Chapter 11.
# # #
<PAGE> 1
FORM 8-K, EXHIBIT E, NEWS RELEASE DATED NOVEMBER 20, 1995
Columbia Gas System Claim Estimation Factors
Preliminary - Prepared as of 11/16/95 The following Claim Estimation
Factors are being provided to creditors of The Columbia Gas System, Inc.
("Columbia") so as to allow such creditors to estimate the consideration to be
received as Class 3.2 Borrowed Money Claimants in connection with the Third
Amended Plan of Reorganization for Columbia dated July 27, 1995 (the "Plan").
THE PURPOSE OF THIS INFORMATION IS TO PROVIDE CLASS 3.2 CREDITORS WITH AN
ESTIMATE OF THE CONSIDERATION TO BE RECEIVED FOR THEIR CLAIMS AND MAY NOT BE
RELIED UPON FOR ANY OTHER PURPOSE.
The following six-month LIBOR rates were used in calculating the factors for
the bank loans, bid notes, auction notes and commercial paper:
<TABLE>
<CAPTION>
REPRICING DATE RATE(%)
<S> <C>
07/31/91 6.310
01/31/92 4.310
07/31/92 3.620
01/31/93 3.370
07/31/93 3.500
01/31/94 3.380
07/31/94 5.190
01/31/95 6.690
07/31/94 5.880
</TABLE>
The factors for the LESOP debentures include and apportioned amount of
post-petition interest based upon the proceeds from the sale of the unallocated
LESOP common stock shares. The price of the common shares at the close of
business Friday, November 17, 1995, was $41 per share. The final price of these
shares will be determined after the close of business on November 20, 1995 under
the assumption of an effective date of November 28, 1995.
THE FACTORS PROVIDED ARE BASED UPON AN ASSUMED EFFECTIVE DATE OF THE PLAN OF
NOVEMBER 28, 1995. THE ACTUAL EFFECTIVE DATE COULD BE DIFFERENT FOR SEVERAL
REASONS INCLUDING, BUT NOT LIMITED TO, A MATERIAL ADVERSE CHANGE IN COLUMBIA'S
BUSINESS OR THE FILING OF AN APPEAL OF THE ORDER OF THE U.S. BANKRUPTCY COURT OF
THE DISTRICT OF DELAWARE CONFIRMING THE PLAN.
<PAGE> 2
Preliminary - Prepared as of 11/16/95
The Columbia Gas System, Inc. - November 28, 1995 Emergence Date
Claim Estimation Factors
(Interest Calculated through November 27, 1995)
Debenture Claims
<TABLE>
<CAPTION>
CUSIP # Issue Factor (1)
<S> <C> <C>
197648AW8 6.250% due 10/1991 1.4232
197648AX6 6.625% due 10/1992 1.4082
197648AY4 7.250% due 5/1993 1.4068
197648AZ1 7.000% due 10/1993 1.4035
197648BA5 9.000% due 10/1994 1.4713
197648BB3 8.750% due 4/1995 1.4662
197648BC1 9.125% due 10/1995 1.4842
197648BD9 8.375% due 3/1996 1.4618
197648BE7 8.250% due 9/1996 1.4563
197648BF4 7.500% due 3/1997 1.4194
197648BG2 7.500% due 6/1997 1.3925
197648BH0 7.500% due 10/1997 1.4102
197648BJ6 7.500% due 5/1998 1.4010
197648BK3 9.875% due 6/1999 1.5040
197648BM9 10.125% due 11/1995 1.4834
197648BN7 9.125% due 5/1996 1.4616
197648BP2 10.250% due 5/1999 1.5049
197648BU1 10.250% due 8/2011 1.5804
197648BT4 9.000% due 8/1993 1.4846
197648BV9 10.500% due 6/2012 1.5422
197648BW7 10.150% due 11/2013 1.5392
</TABLE>
Total
LESOP Claims
<TABLE>
<CAPTION>
CUSIP # Issue Factor (1)(2)
<S> <C> <C>
292168AA9 LESOP 1.4516
</TABLE>
(1) To calculate estimated claim through November 27, 1995
multiply factor by principal amount held.
(2) The claim amount includes an apportioned amount of post-petition interest
based upon the proceeds from the sale of the suspended LESOP common stock
shares at $41.00/share.
<PAGE> 3
Preliminary - Prepared as of 11/16/95
The Columbia Gas System, Inc. - November 28, 1995 Emergence Date
Claim Estimation Factors
(Interest Calculated through November 27, 1995)
Medium-Term Note Claims
<TABLE>
<CAPTION>
CUSIP # Issue Factor (1)
<S> <C> <C>
19765AAA0 9.30% MTN A due 9/1999 1.5266
19765AAB8 9.30% MTN A due 9/2019 1.5266
19765AAC6 9.25% MTN A due 9/2000 1.5237
19765AAD4 9.32% MTN A due 9/2001 1.5277
19765AAE2 9.35% MTN A due 9/2001 1.5294
19765AAF9 9.25% MTN A due 9/1999 1.5237
19765AAG7 9.40% MTN A due 9/2009 1.5322
19765AAH5 9.39% MTN A due 9/2009 1.5317
19765AAJ1 9.27% MTN A due 9/2000 1.5249
19765AAK8 9.40% MTN A due 9/2019 1.5322
19765AAK8 9.40% MTN A due 9/2019 1.5322
19765AAL6 9.34% MTN A due 10/2009 1.5288
19765AAM4 9.20% MTN A due 9/1998 1.5209
19765AAN2 9.25% MTN A due 9/2004 1.5237
19765AAP7 9.20% MTN A due 9/2004 1.5209
19765AAR3 9.40% MTN A due 10/1999 1.5322
19765AAQ5 9.40% MTN A due 10/2000 1.5322
19765AAS1 9.50% MTN A due 10/2014 1.5379
19765AAT9 9.50% MTN A due 10/2019 1.5379
19765AAU6 9.43% MTN A due 10/2019 1.5339
19765AAV4 9.22% MTN B due 12/2019 1.5220
19765AAW2 9.30% MTN B due 12/2019 1.5266
19765AAX0 8.98% MTN B due 12/1998 1.5084
19765AAY8 8.98% MTN B due 12/1999 1.5084
19765AAZ5 8.95% MTN B due 12/1998 1.5067
19765ABA9 9.18% MTN B due 1/2010 1.5198
19765ABB7 9.24% MTN B due 12/2014 1.5232
19765ABC5 9.07% MTN B due 1/2000 1.5135
19765ABD3 9.53% MTN B due 2/2005 1.5396
19765ABE1 9.50% MTN B due 2/2002 1.5379
19765ABF8 9.49% MTN B due 2/2004 1.5373
19765ABG6 9.48% MTN B due 2/2003 1.5368
19765ABH4 9.95% MTN B due 5/2020 1.5634
19765ABJ0 9.95% MTN B due 5/2020 1.5634
19765ABK7 9.90% MTN B due 6/2005 1.5605
19765ABL5 9.90% MTN B due 5/2005 1.5605
19765ABM3 9.90% MTN B due 6/2010 1.5605
19765ABN1 9.91% MTN B due 5/2020 1.5611
19765ABP6 9.72% MTN B due 6/2000 1.5503
19765ABQ4 9.70% MTN B due 6/2000 1.5492
</TABLE>
<PAGE> 4
<TABLE>
<S> <C> <C>
19765ABV3 9.80% MTN B due 6/2010 1.5549
19765ABR2 9.86% MTN B due 6/2005 1.5583
19765ABS0 9.86% MTN B due 6/2005 1.5583
19765ABT8 9.98% MTN B due 6/2020 1.5651
19765ABU5 9.90% MTN B due 6/2007 1.5605
19765AEW1 9.62% MTN C due 6/2005 1.5447
19765ABX9 9.74% MTN C due 6/2020 1.5515
19765ABY7 9.70% MTN C due 6/2020 1.5492
19765ABZ4 9.55% MTN C due 6/2000 1.5407
19765ACA8 9.60% MTN C due 6/2002 1.5436
</TABLE>
Total
(1) To calculate estimated claim through November 27, 1995
multiply factor by principal amount held.
Preliminary - Prepared as of 11/16/95
The Columbia Gas System, Inc. - November 28, 1995 Emergence Date
Claim Estimation Factors
(Interest Calculated through November 27, 1995)
$750 Million Credit Agreement Claims
<TABLE>
<CAPTION>
Original Issuance Maturity
CUSIP # Rate Date Date Factor (1)
<S> <C> <C> <C> <C>
N/A N/A N/A N/A 1.3398
</TABLE>
$500 Million Credit Agreement Claims
<TABLE>
<CAPTION>
Original Issuance Maturity
CUSIP # Rate Date Date Factor (1)
<S> <C> <C> <C> <C>
N/A 6.438% 6/14/91 8/14/91 1.2992
</TABLE>
Auction Note Claims
<TABLE>
<CAPTION>
Original Issuance Maturity
ID Rate Date Date Factor (1)
<S> <C> <C> <C> <C>
AN1 6.949% 2/21/91 6/20/91 1.3311
AN2 6.929% 2/21/91 6/20/91 1.3311
AN3 6.250% 6/6/91 8/5/91 1.3420
AN4 6.300% 6/6/91 8/5/91 1.3421
AN5 6.420% 6/6/91 10/4/91 1.3423
</TABLE>
Total
<PAGE> 5
Bid Note Claims
<TABLE>
<CAPTION>
Original Issuance Maturity
ID Rate Date Date Factor (1)
<S> <C> <C> <C> <C>
BN1 6.090% 5/1/91 6/24/91 1.3309
BN2 6.130% 5/2/91 7/19/91 1.3309
BN3 6.150% 5/21/91 7/23/91 1.3309
BN4 6.240% 5/7/91 9/20/91 1.3487
BN5 6.540% 4/10/91 10/7/91 1.3560
BN6 6.700% 3/12/91 7/10/91 1.3310
BN7 6.180% 5/6/91 8/5/91 1.3487
BN8 6.200% 5/22/91 8/20/91 1.3452
BN9 6.200% 5/22/91 8/20/91 1.3452
BN10 6.220% 5/28/91 9/19/91 1.3439
</TABLE>
Total
(1) To calculate estimated claim through November 27, 1995
multiply factor by principal amount held.
Preliminary - Prepared as of 11/16/95
The Columbia Gas System, Inc. - November 28, 1995 Emergence Date
Claim Estimation Factors
(Interest Calculated through November 27, 1995)
Commercial Paper Claims
<TABLE>
<CAPTION>
Original Issuance Maturity
CUSIP # Discount Date Date Factor (1)
<S> <C> <C> <C> <C>
19765CTL2 6.100% 5/7/91 6/20/91 1.3309
19765CU89 6.070% 5/28/91 7/8/91 1.3309
19765CUK2 6.050% 4/30/91 7/19/91 1.3309
19765CUK2 6.070% 5/2/91 7/19/91 1.3309
19765CUN6 6.050% 4/30/91 7/22/91 1.3309
19765CV70 6.750% 2/28/91 8/7/91 1.3276
19765CVD7 6.700% 2/22/91 8/13/91 1.3259
19765CVG0 6.700% 2/22/91 8/16/91 1.3250
19765CVG0 6.200% 6/17/91 8/16/91 1.3250
19765CVK1 6.250% 6/11/91 8/19/91 1.3242
19765CVP0 6.200% 6/17/91 8/23/91 1.3230
19765CWC8 6.650% 3/14/91 9/12/91 1.3173
19765CWJ3 6.700% 3/21/91 9/18/91 1.3155
19765CX11 6.050% 4/30/91 10/1/91 1.3118
19765CYN2 6.500% 4/3/91 11/22/91 1.2968
19765CV54 6.100% 5/6/91 8/5/91 1.3282
19765CVC9 6.250% 6/12/91 8/12/91 1.3262
19765CVL9 6.240% 6/14/91 8/20/91 1.3239
19765CVN5 6.240% 6/14/91 8/22/91 1.3233
</TABLE>
<PAGE> 6
<TABLE>
<S> <C> <C> <C> <C>
19765CVP0 6.200% 6/18/91 8/23/91 1.3230
19765CX86 6.170% 4/9/91 10/8/91 1.3098
19765CYF9 6.300% 6/6/91 11/15/91 1.2988
19765CYT9 6.300% 6/6/91 11/27/91 1.2953
</TABLE>
Total
Rate Swap Claims
<TABLE>
<CAPTION>
Issuance Issuance Maturity
ID Rate Date Date Factor (1)
<S> <C> <C> <C> <C>
RS1 N/A N/A N/A 1.2569
</TABLE>
(1) To calculate estimated claim through November 27, 1995
multiply factor by principal amount held.
<PAGE> 1
FORM 8-K, EXHIBIT F, NEWS RELEASE DATED NOVEMBER 21, 1995
Contacts:Media --H. W. Chaddock (302) 429-5261
W. R. McLaughlin (302) 429-5443
Analysts --T. L. Hughes (302) 429-5363
K. P. Murphy (302) 429-5471
FOR IMMEDIATE RELEASE November 21, 1995
COLUMBIA GAS PROJECTS NEW DEBENTURE INTEREST RATES
ASSUMING EMERGENCE FROM CHAPTER 11 ON NOVEMBER 28, 1995
WILMINGTON, DEL. -- The Columbia Gas System, Inc. (NYSE:CG)
today published the projected interest rates that could be applicable to the $2
billion of new debentures the company will issue upon emergence from Chapter
11.
The projected rates are based on the pricing formula contained
in its plan of reorganization and assume that Columbia will emerge from Chapter
11 on November 28, 1995, the first day following the expiration of the appeal
period for the Bankruptcy Court's November 15 order confirming the plan of
reorganization.
The new debt securities have been rated BBB by Standard &
Poors and Fitch Investment Service and Baa3 by Moodys.
The securities, projected interest rates and CUSIP numbers
are:
/ / 6.39% Series A Debentures due November 28, 2000 -- CUSIP No.
197648BY3
/ / 6.61% Series B Debentures due November 28, 2002 -- CUSIP No.
197648BZ0
/ / 6.80% Series C Debentures due November 28, 2005 -- CUSIP No.
197648CA4
/ / 7.05% Series D Debentures due November 28, 2007 -- CUSIP No.
197648CB2
/ / 7.32% Series E Debentures due November 28, 2010 -- CUSIP No.
197648CC0
/ / 7.42% Series F Debentures due November 28, 2015 -- CUSIP No.
197648CD8
/ / 7.62% Series G Debentures due November 28, 2025 -- CUSIP No.
197648CE6
