SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
--------------------
FORM 8-K
CURRENT REPORT
Pursuant to section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report (Date of earliest event
reported): August 8, 1996
ELSINORE CORPORATION
(Exact name of registrant as specified in its charter)
STATE OF NEVADA 1-7831 88 0117544
(State or other (Commission File (IRS Employer
jurisdiction) Number) of Incorporation
Identification No.)
202 Fremont Street 89101
Las Vegas, Nevada (Zip Code)
(Address of principal
executive offices)
Registrant's telephone, including area code: (702) 385-4011
Item 3(b). Bankruptcy or Receivership
On October 31, 1995, Elsinore Corporation and certain subsidiaries filed
voluntary petitions (the "Chapter 11 filing") in the United States
Bankruptcy Court for the District of Nevada (the "Bankruptcy Court"), Case
No. 95-24685RCJ seeking to reorganize under Chapter 11 of the United States
Bankruptcy Code (the "Bankruptcy Code"). On November 10, 1995, Olympia
Gaming Corporation, a wholly-owned subsidiary, filed a voluntary Chapter 11
petition in the same court. The Company is operating as a
debtor-in-possession under the supervision of the Bankruptcy Court. As a
debtor-in-possession, the Company is authorized to operate its business but
may not engage in transactions outside its ordinary course of business
without the approval of the Bankruptcy Court.
Subject to certain exceptions under the Bankruptcy Code, the Company's
filing for reorganization automatically enjoined the continuation of any
judicial or administrative proceedings against the Company. Any creditor
actions to obtain possession of property from the Company or to create,
perfect or enforce any lien against the property of the Company are also
enjoined. As a result, the creditors of the Company are precluded from
collecting pre-petition debts without the approval of the Bankruptcy Court.
On February 28, 1996, the last day of the 120 day period within which the
Company had the exclusive right to do so, the Company filed a plan of
reorganization (the "Plan") and accompanying disclosure statements (see
below). The Company then had 60 days to obtain necessary acceptances of the
Plan. The disclosure statement was approved on May 13, 1996 subject to the
insertion of certain language acceptable to the 1993 bondholders.
On July 16, 1996, the Bankruptcy Court conducted a hearing regarding
confirmation of the plan as submitted by the Company. At that time, the
Bankruptcy Court considered the various objections to the plan raised by
certain creditors and equity holders. On July 18, 1996, the Bankruptcy Court
conducted further proceedings with respect to the plan of reorganization
submitted by the Company. At the July 18 hearing, the Bankruptcy Court
concluded that certain modifications to the plan would be necessary for its
confirmation. These modifications included, among others, making no
distribution to the existing equity holders.
Following the July 18 confirmation hearing , but before the entry of an
order incorporating the Bankruptcy Court's ruling on the plan submitted by
the Company, certain of the Company's creditors filed a motion for
reconsideration based upon their withdrawal of objections to the plan. These
creditors agreed to withdraw their objections in return for a reallocation
of equity interests in the reorganized Elsinore.
On August 5, 1996, the Bankruptcy Court conducted a hearing on the
reconsideration motion. After that hearing, the Bankruptcy Court determined
that the relief sought by that motion should be granted and determined that
the confirmation date for the plan should be moved up so that, among other
things, the management transition provided under the plan would not be
delayed. Accordingly, on August 8, 1996, the Bankruptcy Court entered an
order confirming the plan of reorganization submitted by the Company as
modified by that order (the "Plan").
Information regarding the assets and liabilities as of June 30, 1996 were
contained in the Company's Quarterly Report on Form 10-Q filed with the
Securities and Exchange Commission on August 19, 1996. As of August 7, there
were 15,891,793 shares of the Company's Common Stock issued and outstanding.
Plan of Reorganization
The Plan provides for the continuation of Elsinore and at least three of its
subsidiaries (Four Queens, Inc., ElSub Management Corporation and Palm
Springs East Limited Partnership) as going concerns. Under the Plan, the
old common stock interests in Elsinore Corporation will be canceled and
Elsinore, as reorganized, will issue 5,000,000 shares of new common stock
(the "New Common Stock"). On the effective date of the Plan, 80% of the New
Common Stock will be distributed to the following creditors and equity
holders in the following proportions:
Interest Percentage
12.5% First Mortgage noteholders 87.5%
7.5% Convertible Subordinated noteholders 3.5%
Unsecured creditors of Four Queens, Inc 2.5%
Unsecured creditors of Elsinore Corporation 1.0%
Internal Revenue Service 1.9%
Old common stockholders 3.6%
100.0%
The remaining 20% of the New Common Stock will be issued through a rights
offering to raise $5,000,000 to assist in funding the Plan. Initially, the
entire amount of the rights offering will be made available for subscription
to the following creditors and equity holders in the percentages enumerated
below:
Interest Percentage
12.5% First Mortgage noteholders 87.5%
7.5% Convertible Subordinated noteholders 3.5%
Unsecured creditors of Four Queens, Inc 2.5%
Old common stockholders 6.5%
100.0%
Each member of the above classes of creditors and equity holders will be
required to elect whether they will exercise the right to purchase the New
Common Stock allocated and whether they intend to purchase additional shares
of New Common Stock if one or more holders of that class do not fully
exercise their right to purchase New Common Stock. The subscription rights
of non-exercising members of the above classes will be automatically
reallocated among the other members of the class electing to exercise their
rights to purchase additional shares of New Common Stock. If any of the
members of any class do not elect to exercise all of the rights allocated to
that class, the unexercised rights will be automatically distributed to the
members of the unofficial committee of the First Mortgage noteholders (the
Bondholder Committee") The Bondholder Committee has guaranteed a 100%
subscription for the $5 million rights offering, in the event the
percentages enumerated above are not otherwise fully subscribed. After
distribution of the New Common Stock and completion of the rights offering,
there will be approximately 5,000,000 issued and outstanding shares of New
Common Stock.
The effective date of the Plan will be after all regulatory approvals
required by the State of Nevada, including approvals by the gaming
authorities, have been obtained and Elsinore has sufficient cash to fund all
distributions. Currently it is expected that the Plan will be fully
effective by the end of 1996.
Proposed Treatment of Creditors and Equity Interests
The Plan is expected to be funded principally from cash generated from
operations and the $5,000,000 proceeds from the rights offering.
Specifically, the proposed treatment of each of the creditor and equity
interests is as follows:
The 20% Mortgage noteholders have an allowed secured claim equal to the
$3,000,000 principal amount of the notes plus accrued interest thereon
at 20% through the date on which the confirmation order was entered by
the Bankruptcy Court. On the effective date of the Plan, each
noteholder will receive its prorata share of restated mortgage notes
(the "Restated Mortgage Notes"), due four years from the confirmation
date, in exchange for its allowed claim.
Interest on the Restated Mortgage Notes will accrue at an annual rate of
11.5% or other appropriate interest rate approved by the Bankruptcy
Court and will be payable quarterly. These noteholders will retain their
lien interests as collateral for repayment of the restated mortgage
notes.
The 12.5% First Mortgage noteholders have an allowed claim equal
approximately $61,000,000. Under the Plan, this claim is reduced to
$30,000,000. On the effective date of the Plan, each noteholder will
receive, in exchange for its allowed claim, (i) its prorata share of
$30,000,000 face amount of restated first mortgage notes (the "Restated
First Mortgage Notes") which will accrue interest at an annual rate of
13.5% per annum payable semi-annually and will be due five years from
the confirmation date, and (ii) New Common Stock (see above).
The 7.5% convertible subordinated noteholders have an allowed claim
equal to approximately $1,500,000. On the effective date of the Plan,
each convertible subordinated noteholder will receive its prorata share
of New Common Stock (see above) in exchange for its allowed claim.
The company's larger unsecured creditors, other than the 7.5%
convertible subordinated noteholders, will receive payments from a fund
of approximately $1,400,000 over a three-year period and their prorata
share, if any, of New Common Stock (see above).
The Internal Revenue Service ("IRS"), which has both secured and
unsecured claims aggregating approximately $3,000,000 will receive full
payment of its secured claim with interest at 8% per annum over four
years and will receive, with respect to its unsecured claim,
proportionately the same type of recovery which is provided for the
Company's larger unsecured creditors. In addition, the IRS will receive
its prorata share of the New Common Stock (see above).
Management Agreements
The Plan also calls for a change in the management of the reorganized
Elsinore. Effective at noon on August 12, 1996, Elsinore entered into an
Interim Management Agreement with Riviera Gaming Management Corp -
Elsinore, Inc. to manage the business operations of the Company subject
to the direction of the existing boards of directors of Elsinore and its
subsidiaries. When the Plan is fully effective, the existing board of
directors will be reconstituted with new directors, four of whom will be
chosen by the Bondholders Committee, and one of whom will be chosen by
the Equity Committee appointed in the bankruptcy case (with input from
other creditor constituencies in the case). Under the stipulation
between the Company and the Bondholders Committe, senior management
(Thomas E. Martin, President and Chief Executive Officer, and Frank l.
Burrell, Jr., Chairman of the Board) ceased to be compensated employees
of the Company on Monday, August 12, 1996, although they will continue
to serve as directors and authorized officers until replaced.
Item 7. Financial Statements, Pro Forma Financial Information and
Exhibits.
Exhibit No. Description
2.1 First Amended Plan of Reorganization
2.2 Order Confirming First Amended Plan of
Reorganization
99 Press Release of the Company dated
August 12, 1996.
SIGNATURE:
Pursuant to the requirements of the Securities Exchange Act of
1934, the registrant has duly caused this Current Report on Form 8-K to
be signed on its behalf by the undersigned hereunto duly authorized.
Dated: August 21, 1996
ELSINORE CORPORATION
By:/s/ Thomas E. Martin
THOMAS E. MARTIN, President
and Chief Executive Officer
3
John J. Dawson, Esq. (Bar No. 4099)
John R. Clemency, Esq.
STREICH LANG, P.A.
3800 Howard Hughes Parkway, Suite 1500
Las Vegas, Nevada 89109
(702) 792-2727
and
Renaissance One
Two North Central Avenue
Phoenix, Arizona 85004-2391
(602) 229-5200
Attorneys for Debtors
Gerald M. Gordon, Esq. (Bar No. 0229)
GORDON & SILVER, LTD.
3800 Howard Hughes Parkway
Fourteenth Floor
Las Vegas, Nevada 89109
and
Edward S. Weisfelner, Esq.
BERLACK, ISRAELS & LIBERMAN LLP
120 West 45th Street
New York, New York 10036
Attorneys for Unofficial Committee of Bondholders
IN THE UNITED STATES BANKRUPTCY COURT
FOR THE DISTRICT OF NEVADA
In re:
ELSINORE CORPORATION, a Nevada
corporation,
Debtor.
FOUR QUEENS, INC., a Nevada
corporation,
Debtor.
FOUR QUEENS EXPERIENCE
CORPORATION, a Nevada
corporation,
Debtor.
PALM SPRINGS EAST LIMITED
PARTNERSHIP, a Nevada limited
partnership,
Debtor.
ELSUB MANAGEMENT CORPORATION, a
Nevada corporation,
Debtor.
OLYMPIA GAMING CORPORATION, a
Nevada corporation,
Debtor.
In Proceedings Under Chapter 11
Case No. 95-24685 RCJ
(Jointly Administered)
(This pleading relates to
all cases)
Case No. 95-24686 RCJ
Case No. 95-24687 RCJ
Case No. 95-24688 RCJ
Case No. 95-24689 RCJ
Case No. 95-24839 RCJ
Date of Hearing: 07/16/96
Time of Hearing: 1:30 p.m
FIRST AMENDED PLAN OF REORGANIZATION PROPOSED JOINTLY BY
THE DEBTORS AND THE UNOFFICIAL BONDHOLDERS COMMITTEE
DATED: May 22, 1996<PAGE>
TABLE OF CONTENTS
PAGE
ARTICLE I INTRODUCTION. . . . . . . . . . . . . . 1
ARTICLE II DEFINITIONS. . . . . . . . . . . . . . . . . 2
2.1 Administrative Claim. . . . . . . . . . . . . . . 2
2.2 Allowed Claim . . . . . . . . . . . . . . . . . . 3
2.3 Amended 1993 Bonds Trust Indenture. . . . . . . . 4
2.4 Amended Note Purchase Agreement . . . . . . . . . 4
2.5 Ballot. . . . . . . . . . . . . . . . . . . . . . 4
2.6 Bankruptcy Code . . . . . . . . . . . . . . . . . 4
2.7 Bankruptcy Court. . . . . . . . . . . . . . . . . 5
2.8 Bankruptcy Rules. . . . . . . . . . . . . . . . . 5
2.9 Bondholders Committee . . . . . . . . . . . . . . 5
2.10 Business Day. . . . . . . . . . . . . . . . . . . 5
2.11 Cash. . . . . . . . . . . . . . . . . . . . . . . 5
2.12 Chapter 11 Professionals. . . . . . . . . . . . . 5
2.13 Claim . . . . . . . . . . . . . . . . . . . . . . 6
2.14 Class . . . . . . . . . . . . . . . . . . . . . . 6
2.15 Class 8 New Stock . . . . . . . . . . . . . . . . 6
2.16 Class 10 Fund . . . . . . . . . . . . . . . . . . 6
2.17 Class 11 New Stock. . . . . . . . . . . . . . . . 6
2.18 Class 13 New Stock. . . . . . . . . . . . . . . . 7
2.19 Confirmation Date . . . . . . . . . . . . . . . . 7
2.20 Confirmation Hearing. . . . . . . . . . . . . . . 7
2.21 Confirmation Order. . . . . . . . . . . . . . . . 7
2.22 Convertible Note Purchase
Agreements. . . . . . . . . . . . . . . . . . 7
2.23 Convertible Noteholders . . . . . . . . . . . . . 7
2.24 Convertible Notes . . . . . . . . . . . . . . . . 7
2.25 Court . . . . . . . . . . . . . . . . . . . . . . 8
2.26 Creditor. . . . . . . . . . . . . . . . . . . . . 8
2.27 Creditors Committee . . . . . . . . . . . . . . . 8
2.28 Debtors . . . . . . . . . . . . . . . . . . . . . 8
2.29 Debtors' Professionals. . . . . . . . . . . . . . 8
2.30 Disclosure Statement. . . . . . . . . . . . . . . 9
2.31 Disputed Claim. . . . . . . . . . . . . . . . . . 9
2.32 Effective Date. . . . . . . . . . . . . . . . . . 9
2.33 Effective Date Cash . . . . . . . . . . . . . . . 10
2.34 Elsinore. . . . . . . . . . . . . . . . . . . . . 10
2.35 Elsinore Equity Holders . . . . . . . . . . . . . 10
2.36 Elsinore Equity Interests . . . . . . . . . . . . 10
2.37 Elsub . . . . . . . . . . . . . . . . . . . . . . 10
2.38 Elsub Common Stock. . . . . . . . . . . . . . . . 10
2.39 Equity Holders Committee. . . . . . . . . . . . . 10
2.40 Equity Interests. . . . . . . . . . . . . . . . . 11
2.41 Estates . . . . . . . . . . . . . . . . . . . . . 11
2.42 Executory Contract. . . . . . . . . . . . . . . . 11
2.43 Four Queens . . . . . . . . . . . . . . . . . . . 11
2.44 FQEC. . . . . . . . . . . . . . . . . . . . . . . 11
2.45 FQEC Common Stock . . . . . . . . . . . . . . . . 11
2.46 FQI . . . . . . . . . . . . . . . . . . . . . . . 11
2.47 FQI Common Stock. . . . . . . . . . . . . . . . . 11
2.48 Gaming Authorities. . . . . . . . . . . . . . . . 12
2.49 Gaming Board. . . . . . . . . . . . . . . . . . . 12
2.50 Gaming Commission . . . . . . . . . . . . . . . . 12
2.51 General Unsecured Claim . . . . . . . . . . . . . 12
2.52 Interim Operating Agreement . . . . . . . . . . . 12
2.53 IRS . . . . . . . . . . . . . . . . . . . . . . . 12
2.54 IRS Secured Claim . . . . . . . . . . . . . . . . 12
2.55 IRS Unsecured Claim . . . . . . . . . . . . . . . 13
2.56 IRS Unsecured Claim Payment Amount. . . . . . . . 13
2.57 Management Agreement. . . . . . . . . . . . . . . 13
2.58 New Elsinore Common Stock . . . . . . . . . . . . 14
2.59 Old Elsinore Common Stock . . . . . . . . . . . . 14
2.60 Olympia . . . . . . . . . . . . . . . . . . . . . 14
2.61 Olympia Common Stock. . . . . . . . . . . . . . . 14
2.62 Other Equity Interests. . . . . . . . . . . . . . 14
2.63 Person. . . . . . . . . . . . . . . . . . . . . . 14
2.64 Petition Date . . . . . . . . . . . . . . . . . . 15
2.65 Plan. . . . . . . . . . . . . . . . . . . . . . . 15
2.66 Plan Supplement . . . . . . . . . . . . . . . . . 15
2.67 Priority Tax Claim. . . . . . . . . . . . . . . . 15
2.68 Priority Unsecured Claim. . . . . . . . . . . . . 15
2.69 Professional Charges. . . . . . . . . . . . . . . 15
2.70 Property Tax Administrative Claim . . . . . . . . 15
2.71 Pro Rata Share. . . . . . . . . . . . . . . . . . 16
2.72 PSELP . . . . . . . . . . . . . . . . . . . . . . 16
2.73 PSELP Partnership Interests . . . . . . . . . . . 16
2.74 PSELP Settlement. . . . . . . . . . . . . . . . . 16
2.75 Record Date . . . . . . . . . . . . . . . . . . . 16
2.76 Registration Agreement. . . . . . . . . . . . . . 16
2.77 Reorganization Cases. . . . . . . . . . . . . . . 17
2.78 Reorganized Debtors . . . . . . . . . . . . . . . 17
2.79 Reorganized Elsinore. . . . . . . . . . . . . . . 17
2.80 Reorganized Elsinore Articles . . . . . . . . . . 17
2.81 Reorganized Elsinore Bylaws . . . . . . . . . . . 17
2.82 Reorganized Elsub . . . . . . . . . . . . . . . . 18
2.83 Reorganized FQEC. . . . . . . . . . . . . . . . . 18
2.84 Reorganized FQI . . . . . . . . . . . . . . . . . 18
2.85 Reorganized FQI Articles. . . . . . . . . . . . . 18
2.86 Reorganized FQI Bylaws. . . . . . . . . . . . . . 18
2.87 Reorganized Olympia . . . . . . . . . . . . . . . 18
2.88 Reorganized PSELP . . . . . . . . . . . . . . . . 18
2.89 Restated 1993 Mortgage Notes. . . . . . . . . . . 18
2.90 Restated 1993 Mortgage Notes
Security Documents. . . . . . . . . . . . . . 19
2.91 Restated 1994 Mortgage Notes. . . . . . . . . . . 19
2.92 Restated 1994 Mortgage Notes
Security Documents. . . . . . . . . . . . . . 20
2.93 Rights. . . . . . . . . . . . . . . . . . . . . . 21
2.94 Rights Agreement. . . . . . . . . . . . . . . . . 21
2.95 Secured Claim . . . . . . . . . . . . . . . . . . 21
2.96 Secured Creditor. . . . . . . . . . . . . . . . . 21
2.97 Secured Tax Claims. . . . . . . . . . . . . . . . 21
2.98 Stipulation . . . . . . . . . . . . . . . . . . . 22
2.99 Trust Indenture Act . . . . . . . . . . . . . . . 22
2.100 Unsecured Claim. . . . . . . . . . . . . . . . . 22
2.101 Unsecured Creditor . . . . . . . . . . . . . . . 22
2.102 1993 Bondholders . . . . . . . . . . . . . . . . 22
2.103 1993 Bondholders' Claims . . . . . . . . . . . . 22
2.104 1993 Bonds . . . . . . . . . . . . . . . . . . . 23
2.105 1993 Bonds Indenture Trustee . . . . . . . . . . 23
2.106 1994 Bondholders . . . . . . . . . . . . . . . . 23
2.107 1994 Bonds . . . . . . . . . . . . . . . . . . . 23
ARTICLE III CLASSIFICATION OF CLAIMS AND EQUITY INTERESTS 23
3.1 Class 1: Administrative Claims . . . . . . . . . 23
3.2 Class 2: Priority Unsecured Claims . . . . . . . 24
3.3 Class 3: Priority Tax Claims . . . . . . . . . . 24
3.4 Class 4: Secured Tax Claims. . . . . . . . . . . 24
3.5 Class 5: 1994 Bondholders' Secured
Claims. . . . . . . . . . . . . . . . . . . . 24
3.6 Class 6: IRS Secured Claim . . . . . . . . . . . 24
3.7 Class 7: Other Secured Claims. . . . . . . . . . 24
3.8 Class 8: 1993 Bondholders' Claims. . . . . . . . 24
3.9 Class 9: Administrative
Convenience Unsecured Claims. . . . . . . . . 24
3.10 Class 10: General Unsecured Claims . . . . . . . 25
3.11 Class 11: Unsecured Convertible
Note Claims . . . . . . . . . . . . . . . . . 25
3.12 Class 12: IRS Unsecured Claim. . . . . . . . . . 25
3.13 Class 13: Elsinore Equity
Interests . . . . . . . . . . . . . . . . . . 25
3.14 Class 14: Other Equity Interests . . . . . . . . 25
ARTICLE IV TREATMENT OF CLASSES OF CLAIMS WHICH ARE NOT
IMPAIRED UNDER THE PLAN. . . . . . . . . 26
4.1 Treatment of Class 1
(Administrative Claims) . . . . . . . . . . . 26
4.2 Treatment of Class 2 (Priority
Unsecured Claims) . . . . . . . . . . . . . . 26
4.3 Treatment of Class 3 (Priority Tax
Claims) . . . . . . . . . . . . . . . . . . . 27
4.4 Treatment of Class 4 (Secured Tax
Claims) . . . . . . . . . . . . . . . . . . . 27
4.5 Treatment of Class 7 (Other Secured
Claims) . . . . . . . . . . . . . . . . . . . 28
4.6 Treatment of Class 14 (Other Equity
Interests). . . . . . . . . . . . . . . . . . 28
ARTICLE V TREATMENT OF CLASS 5 CLAIMS (1994 Bondholders'
Secured Claims) . . . . . . . . . . 29
5.1 Distribution. . . . . . . . . . . . . . . . . . . 29
5.2 Retention of Liens. . . . . . . . . . . . . . . . 29
5.3 Impairment. . . . . . . . . . . . . . . . . . . . 30
ARTICLE VI TREATMENT OF CLASS 6 CLAIMS (IRS Secured Claim) 30
6.1 Distribution. . . . . . . . . . . . . . . . . . . 30
6.2 Retention of Liens. . . . . . . . . . . . . . . . 30
6.3 Impairment. . . . . . . . . . . . . . . . . . . . 30
ARTICLE VII TREATMENT OF CLASS 8 CLAIMS (1993 Bondholders'
Claims). . . . . . . . . . . . . . . . . 31
7.1 Distribution. . . . . . . . . . . . . . . . . . . 31
7.2 Retention of Liens. . . . . . . . . . . . . . . . 31
7.3 Distribution Agent. . . . . . . . . . . . . . . . 31
7.4 Certification of 1993 Bondholders'
Claims. . . . . . . . . . . . . . . . . . . . 32
7.5 Surrender and Cancellation of 1993
Bonds . . . . . . . . . . . . . . . . . . . . 32
7.6 Impairment. . . . . . . . . . . . . . . . . . . . 33
ARTICLE VIII TREATMENT OF CLASS 9 CLAIMS (Administrative
Convenience Unsecured Claims). . . . . . 34
8.1 Distributions . . . . . . . . . . . . . . . . . . 34
8.2 Impairment. . . . . . . . . . . . . . . . . . . . 34
ARTICLE IX TREATMENT OF CLASS 10 CLAIMS (General Unsecured
Claims). . . . . . . . . . . . . . . . . 34
9.1 Distributions . . . . . . . . . . . . . . . . . . 34
9.2 Administration of Class 10 Fund . . . . . . . . . 35
9.3 Claims Objections . . . . . . . . . . . . . . . . 35
9.4 Impairment. . . . . . . . . . . . . . . . . . . . 35
ARTICLE X TREATMENT OF CLASS 11 CLAIMS (Unsecured
Convertible Note Claims). . . . . . 35
10.1 Distributions . . . . . . . . . . . . . . . . . . 35
10.2 Impairment. . . . . . . . . . . . . . . . . . . . 36
ARTICLE XI TREATMENT OF CLASS 12 CLAIMS (IRS Unsecured Claim) 36
11.1 Distributions . . . . . . . . . . . . . . . . . . 36
11.2 Impairment. . . . . . . . . . . . . . . . . . . . 36
ARTICLE XII TREATMENT OF CLASS 13 EQUITY INTERESTS (Elsinore
Equity Interests). . . . . . . . . . . . 36
12.1 Distributions . . . . . . . . . . . . . . . . . . 36
12.2 Impairment. . . . . . . . . . . . . . . . . . . . 37
ARTICLE XIII MEANS FOR IMPLEMENTATION OF PLAN . . . . . . 37
13.1 Structure Of Reorganized Debtors. . . . . . . . . 37
(a) Reorganized Elsinore . . . . . . . . . . . . 37
(c) Other Reorganized Debtors. . . . . . . . . . 38
13.2 Post-Confirmation Management. . . . . . . . . . . 38
(a) Interim Operating Agreement. . . . . . . . . 38
(b) Management Agreement . . . . . . . . . . . . 38
13.3 Directors . . . . . . . . . . . . . . . . . . . . 39
13.4 Funding of the Plan . . . . . . . . . . . . . . . 40
13.5 Issuance of New Securities. . . . . . . . . . . . 41
13.6 Rights Subscription . . . . . . . . . . . . . . . 42
13.7 Registration of New Elsinore Common
Stock . . . . . . . . . . . . . . . . . . . . 45
13.8 Retention of Key Employees. . . . . . . . . . . . 46
13.9 Effective Date Events . . . . . . . . . . . . . . 47
13.10 Stipulation Superseded . . . . . . . . . . . . . 47
<PAGE>
ARTICLE XIV OBJECTIONS TO CLAIMS. . . . . . . . . . . . . . . 48
14.1 Objections. . . . . . . . . . . . . . . . . . . . 48
14.2 Distributions . . . . . . . . . . . . . . . . . . 48
ARTICLE XV TREATMENT OF EXECUTORY CONTRACTS . . . . . . 48
15.1 Assumption of Certain Executory
Contracts . . . . . . . . . . . . . . . . . . 48
15.2 Rejection of Other Executory
Contracts . . . . . . . . . . . . . . . . . . 49
15.3 Rejection Claims Bar Date . . . . . . . . . . . . 49
15.4 Vesting . . . . . . . . . . . . . . . . . . . . . 49
ARTICLE XVI DISCHARGE. . . . . . . . . . . . . . . . . . 49
ARTICLE XVII CONDITIONS PRECEDENT TO EFFECTIVE DATE . . . 50
17.1 Conditions Precedent to Effective
Date. . . . . . . . . . . . . . . . . . . . . 50
17.2 Waiver of Effective Date Conditions . . . . . . . 51
ARTICLE XVIII MODIFICATIONS OF THE PLAN. . . . . . . . . . 51
ARTICLE XIX OFFICIAL COMMITTEES. . . . . . . . . . . . . 51
ARTICLE XX RETENTION OF JURISDICTION. . . . . . . . . . 51
20.1 In General. . . . . . . . . . . . . . . . . . . . 52
20.2 Plan Disputes and Enforcement . . . . . . . . . . 52
20.3 Further Orders. . . . . . . . . . . . . . . . . . 52
20.4 Other Claims. . . . . . . . . . . . . . . . . . . 53
20.5 Final Decree. . . . . . . . . . . . . . . . . . . 53
20.6 Appeals . . . . . . . . . . . . . . . . . . . . . 53
20.7 Executory Contracts . . . . . . . . . . . . . . . 53
20.8 Other Debtors' Reorganizations. . . . . . . . . . 54
ARTICLE XXI GENERAL PROVISIONS . . . . . . . . . . . . . 54
21.1 Additional Assurances . . . . . . . . . . . . . . 54
21.2 Extension of Payment Dates. . . . . . . . . . . . 54
21.3 Confirmation by Non-Acceptance
Method. . . . . . . . . . . . . . . . . . . . 54
21.4 Vesting . . . . . . . . . . . . . . . . . . . . . 55
21.5 Retention of Claims and Causes of
Action. . . . . . . . . . . . . . . . . . . . 55
21.6 Interest on Claims. . . . . . . . . . . . . . . . 56
21.7 Joint and Several Claims. . . . . . . . . . . . . 56
21.8 No Admission of Joint Liability . . . . . . . . . 56
21.9 Exculpation and Limitation of
Liability . . . . . . . . . . . . . . . . . . 56
21.10 Captions. . . . . . . . . . . . . . . . . . . . 57
21.11 Prohibition Against Prepayment
Penalties . . . . . . . . . . . . . . . . . . 58
21.12 Payment of Statutory Fees . . . . . . . . . . . 58
21.13 Successors and Assigns. . . . . . . . . . . . . 58
21.14 Disclosure Statement . . . . . . . . . . . . . . 58
21.15 Confirmation Order . . . . . . . . . . . . . . . 58
21.16 Revocation . . . . . . . . . . . . . . . . . . . 58
21.17 Reservation of Rights. . . . . . . . . . . . . . 59
21.18 Fractional Dollars or Shares . . . . . . . . . . 59
21.19 Unclaimed Property . . . . . . . . . . . . . . . 59
21.20 Payment Option . . . . . . . . . . . . . . . . . 60
<PAGE>
EXHIBITS IN PLAN SUPPLEMENT
Exhibit "1" Interim Operating Agreement
Exhibit "2" Amended and Restated Articles of Incorporation of
Elsinore Corporation
Exhibit "3" Amended and Restated Bylaws of Elsinore Corporation
Exhibit "4" Amended and Restated Articles of Incorporation of
Four Queens, Inc.
Exhibit "5" Amended and Restated Bylaws of Four Queens, Inc.
Exhibit "6" Form of Restated 1993 Mortgage Note
Exhibit "7" Form of Restated 1994 Mortgage Note
Exhibit "8" Rights Subscription Agreement
Exhibit "9" Assumed Executory Contracts
Exhibit "10" Management Agreement
Exhibit "11" Amended 1993 Bonds Trust Indenture
Exhibit "12" Amended Note Purchase Agreement
Exhibit "13" Registration Agreement
<PAGE>
ARTICLE I
INTRODUCTION
This Plan of Reorganization is proposed jointly by:
(i) each of the Debtors and Debtors-In-Possession in the above-captioned,
jointly administered Chapter 11 cases, specifically,
ELSINORE CORPORATION, a Nevada corporation ("Elsinore"), FOUR
QUEENS, INC., a Nevada corporation ("FQI"), ELSUB MANAGEMENT
CORPORATION, a Nevada corporation ("Elsub"), FOUR QUEENS EXPERIENCE
CORPORATION, a Nevada corporation ("FQEC"), PALM SPRINGS EAST
LIMITED PARTNERSHIP, a Nevada limited partnership ("PSELP"), and
OLYMPIA GAMING CORPORATION, a Nevada corporation ("Olympia")
(collectively, the "Debtors"); and (ii) an unofficial committee
(the "Bondholders Committee") of a majority of the holders of the
12.5% First Mortgage Notes issued in October of 1993 (the "1993
Bondholders"). The Debtors and the Bondholders Committee propose
this Plan of Reorganization for the Debtors in accordance with
their "Stipulation Re: Consensual Plan Of Reorganization" dated
February 22, 1996.
All Creditors and other parties-in-interest are
encouraged to consult the Disclosure Statement prepared by the
Debtors (with cooperation from the Bondholders Committee), as
approved by the Bankruptcy Court, before voting to accept or reject
this Plan of Reorganization. NO SOLICITATION MATERIALS, OTHER THAN
THE DISCLOSURE STATEMENT AND RELATED MATERIALS TRANSMITTED
THEREWITH AND APPROVED BY THE BANKRUPTCY COURT, HAVE BEEN
AUTHORIZED BY THE BANKRUPTCY COURT FOR USE IN SOLICITING
ACCEPTANCES OR REJECTIONS OF THIS PLAN OF REORGANIZATION.
ARTICLE II
DEFINITIONS
For purposes of this Plan, and except as expressly
provided otherwise herein or unless the context otherwise requires,
all of the defined terms stated in Article II will have the
meanings stated below. For purposes of this Plan and such defined
terms, the singular and plural uses of such defined terms and the
conjunctive and disjunctive uses thereof will be fungible and
interchangeable (unless the context otherwise requires); and the
defined terms will include masculine, feminine, and neuter genders.
The defined terms stated in Article II also are substantive terms
of the Plan; and Article II will be deemed incorporated throughout
the rest of the Plan to apply the substantive provisions included
in the defined terms. Accordingly, the defined terms are as
follows:
2.1 Administrative Claim. This term will refer to
and mean every cost or expense of administration of the
Reorganization Cases allowed under Bankruptcy Code 503(b) and
referred to in Bankruptcy Code 507(a)(1) arising prior to the
Effective Date, including, without limitation: (a) every cost or
expense of administration of the Reorganization Cases, including,
without limitation, all actual and necessary post-petition expenses
of maintaining and preserving the Estates and all expenses
necessary or appropriate to carry out the Interim Operating
Agreement; (b) all actual and necessary post-petition expenses of
operating the Four Queens; (c) all Professional Charges approved by
the Bankruptcy Court pursuant to interim and final allowances in
accordance with Bankruptcy Code 330, 331, and 503(b); (d) every
Property Tax Administrative Claim; (e) all fees and charges
assessed against the Estates under Chapter 123 of Title 28, United
States Code; (f) any costs and expenses of preparing and filing
registration statements with the Securities and Exchange Commission
as required to effectuate this Plan; (g) any title insurance
premiums required in conjunction with this Plan; (h) all fees and
costs associated with the gaming applications, investigations and
waivers necessary to effectuate the Plan, including those related
to the persons designated as officers, directors and key employees;
and (i) all fees and costs incurred by the Bondholders Committee in
conjunction with obtaining from Gaming Authorities the necessary
licensing waivers and approvals to effectuate the Plan.
2.2 Allowed Claim. This term will refer to and mean
every Claim against any of the Debtors: (a)(i) as to which a proof
of such Claim has been filed within the time fixed by the
Bankruptcy Court or, if such Claim arises from the Debtors'
rejection of an Executory Contract, no later than the first
Business Day which is thirty (30) days after the Confirmation Date,
or (ii) which the Debtors have scheduled in their respective
schedules of assets and liabilities (including any amendments
thereto) filed with the Court as liquidated in amount and
undisputed; and in either event: (b)(i) as to which no objection
to the allowance of such Claim has been filed within any applicable
time period fixed by the Bankruptcy Court, or (ii) as to which the
order allowing such Claim has become final and non-appealable
without any appeal, review, or other challenge of any kind to that
order having been taken or being still timely. The term Allowed
Claim may be used throughout the Plan with each of the various
Creditors' Claims or Classes of those Claims (e.g., "Allowed
Administrative Claims" or "Allowed Class 1 Claims") to signify that
such Claims are, will be, or must be Allowed Claims to qualify for
certain treatment under the Plan.
2.3 Amended 1993 Bonds Trust Indenture. This term
will refer to and mean the amended trust indenture governing the
Restated 1993 Mortgage Notes, which will be substantially in the
form of Exhibit "11" to the Plan Supplement. On the Effective
Date, the 1993 Bonds Indenture Trustee shall be fully authorized to
execute the Amended 1993 Bonds Trust Indenture without the need for
any additional opinions, certificates, consents, confirmations,
waivers, or authorizations of any entity, notwithstanding any
language in the existing Trust Indenture to the contrary. Any and
all such requirements shall be deemed satisfied by confirmation of
this Plan.
2.4 Amended Note Purchase Agreement. This term will
refer to and mean the Amended Note Purchase Agreement governing the
Restated 1994 Mortgage Notes, which will be substantially in the
form of Exhibit "12" to the Plan Supplement.
2.5 Ballot. This term will refer to and mean the
ballots for accepting or rejecting the Plan which will be
distributed to the Creditors and Elsinore Equity Holders holding
Claims and Elsinore Equity Interests in the Classes which are
solicited to vote on the Plan.
2.6 Bankruptcy Code. This term will refer to and
mean Title 11 of the United States Code, 11 U.S.C. Section 101, et
seq., as it may be amended from time to time during the
Reorganization Cases.
2.7 Bankruptcy Court. This term will refer to and
mean the United States Bankruptcy Court for the District of Nevada,
or such other court which exercises jurisdiction over part or all
of the Reorganization Cases, including the United States District
Court for the District of Nevada if and to the extent that the
reference of part or all of the Reorganization Cases is withdrawn.
2.8 Bankruptcy Rules. This term will refer to and
mean the Federal Rules of Bankruptcy Procedure, promulgated
pursuant to 28 U.S.C. Section 2075 and the Local Rules of Practice
of the United States District Court, District of Nevada, adopted
April 17, 1995, as applicable from time to time during the
Reorganization Cases.
2.9 Bondholders Committee. This term will refer to
and mean the unofficial committee of the majority of the holders of
the 1993 Bonds. The Bondholders Committee is one of the proponents
of this Plan.
2.10 Business Day. This term will refer to and mean
every day except Saturdays, Sundays, federal holidays observed by
the Bankruptcy Court, and Nevada state holidays observed by the
Bankruptcy Court.
2.11 Cash. This term will refer to and mean cash,
cash equivalents, bank deposits, and negotiable instruments payable
on demand and supported by collected funds.
2.12 Chapter 11 Professionals. This term will refer
to and mean the Debtors' Professionals and other professionals
which are or may be employed with the Bankruptcy Court's approval
at the expense of the Estates, or any of them, pursuant to
Bankruptcy Code Section 327(a), 327(e), or 1103(a), wherever such
professionals are referred to collectively in the Plan.
2.13 Claim. This term will refer to and mean "claim"
as defined in Bankruptcy Code Section 101(5).
2.14 Class. This term will refer to and mean each of
the classifications of the Creditors' Claims and Equity Interests,
which are described in Article III of the Plan. Each subclass of
a Class provided in this Plan will be treated as a separate class
of the Plan for voting purposes.
2.15 Class 8 New Stock. This term will refer to and
mean the New Elsinore Common Stock to be distributed under this
Plan to the holders of the 1993 Bondholders' Claims, which shall be
87.5% of the New Elsinore Common Stock to be issued under the Plan
other than the New Elsinore Common Stock distributed pursuant to
the Rights Agreement.
2.16 Class 10 Fund. This term will refer to and mean
the funds to be deposited by the Reorganized Debtors in a
segregated account(s) for the exclusive benefit of Class 10
Creditors in the total amount equal to $1,500,000 less the total
amount of payments due under this Plan with respect to Claims in
Class 9 (Administrative Convenience Unsecured Claims). These funds
will be held for distribution in accordance with the treatment of
Class 10 General Unsecured Claims. The Reorganized Debtors will
fund the Class 10 Fund through six (6) equal semi-annual
installments commencing on the date six (6) months after the
Effective Date.
2.17 Class 11 New Stock. This term will refer to and
mean the New Elsinore Common Stock to be distributed under this
Plan to the holders of the Convertible Notes, which shall be 2.5%
of the New Elsinore Common Stock to be issued under the Plan other
than the New Elsinore Common Stock distributed pursuant to the
Rights Agreement. The amount of the Class 11 New Stock to be
issued under the Plan is subject to dilution in certain events as
described in Section 13.6 of this Plan.
2.18 Class 13 New Stock. This term will refer to and
mean the New Elsinore Common Stock to be distributed under this
Plan to the holders of the Old Elsinore Common Stock, which shall
be 10% of the New Elsinore Common Stock to be issued under the Plan
other than the New Elsinore Common Stock distributed pursuant to
the Rights Agreement. The amount of the Class 13 New Stock to be
issued under the Plan is subject to dilution in certain events as
described in Section 13.6 of the Plan.
2.19 Confirmation Date. This term will refer to and
mean the date which is eleven (11) days after the date on which the
Bankruptcy Court enters the Confirmation Order.
2.20 Confirmation Hearing. This term will refer to
and mean the hearing regarding confirmation of the Plan conducted
by the Bankruptcy Court pursuant to Bankruptcy Code Section 1128,
as adjourned or continued from time to time.
2.21 Confirmation Order. This term will refer to and
mean the written order entered by the Bankruptcy Court which
confirms the Plan pursuant to Bankruptcy Code Section 1129.
2.22 Convertible Note Purchase Agreements. This term
will refer to and mean the various Note Purchase Agreements dated
as of March 30, 1995 related to the Convertible Notes.
2.23 Convertible Noteholders. This term will refer
to and mean the holders of the outstanding Convertible Notes.
2.24 Convertible Notes. This term will refer to and
mean the 7.5% Convertible Subordinated Notes due December 31, 1996
issued by Elsinore in March, 1995, and all warrants, options or
other rights attendant thereto.
2.25 Court. This term is completely synonymous and
interchangeable with Bankruptcy Court, which is defined in a
preceding Section of this Article II.
2.26 Creditor. This term will refer to and mean
"creditor" as defined in Bankruptcy Code Section 101(10).
2.27 Creditors Committee. This term will refer to
and mean the Official Unsecured Creditors Committee appointed in
the Reorganization Cases by the United States Trustee pursuant to
Bankruptcy Code Section 1102.
2.28 Debtors. This term will collectively refer to
the Debtors and Debtors-In-Possession in the Reorganization Cases,
specifically, Elsinore Corporation, a Nevada corporation; Four
Queens, Inc., a Nevada corporation; Elsub Management Corporation,
a Nevada corporation; Four Queens Experience Corporation, a Nevada
corporation; Palm Springs East Limited Partnership, a Nevada
limited partnership; and Olympia Gaming Corporation, a Nevada
corporation.
2.29 Debtors' Professionals. This term will refer to
and mean: (i) the law firm of Streich Lang, P.A., the Debtors'
bankruptcy counsel; (ii) all accounting, valuation, or other
consulting or expert professionals employed by the Debtors; and
(iii) any and all other similar professionals which the Debtors
have employed or may employ to assist in the conduct of the
Reorganization Cases or to provide professional services for a
specified purpose, all in accordance with Bankruptcy Code Section
327(a) and 327(e).
2.30 Disclosure Statement. This term will refer to
and mean the Disclosure Statement prepared and presented by the
Debtors, with input from the Bondholders Committee, with respect to
this Plan, in its present form or as it may be altered, amended, or
modified, as approved by the Bankruptcy Court.
2.31 Disputed Claim. This term will refer to and
mean every Claim which is not an Allowed Claim.
2.32 Effective Date. This term will refer to and
mean the first Business Day after the last of the following dates
and events has occurred, unless and to the extent that any of such
conditions is waived by the Debtors and the Bondholders Committee
in writing: (a) the date on which the Confirmation Order has
become final and non-appealable without any appeal, review, or
other challenge of any kind to that order having been taken or
being still timely for which a stay on appeal has been issued; and
(b) satisfaction of all conditions precedent to effectiveness set
forth in Article XVII of this Plan. Except where performance
earlier than the Effective Date is expressly required by the Plan
or where it is lawful and expressly permitted by the Plan to
perform after the Effective Date, performance under the Plan will
be due on the Effective Date. In the event that the Effective Date
does not occur on or before December 31, 1996 for any reason, it
may be extended only by an order of the Bankruptcy Court entered
with the consent of both the Bondholders Committee and the Debtors
after notice and a hearing. The Debtors and Reorganized Debtors
will have the right to render any or all of the performance under
this Plan prior to what otherwise would be the Effective Date if
the Debtors or Reorganized Debtors, with the consent of the
Bondholders Committee, deem it appropriate to do so, including, but
not limited to, the right to render performance under any
circumstances which would moot any appeal, review, or other
challenge of any kind to the Confirmation Order if the Confirmation
Order is not stayed pending such appeal, review, or other
challenge.
2.33 Effective Date Cash. This term will refer to
and mean all Cash held by the Reorganized Debtors (less customer
deposits held by FQI and the minimum bankroll requirements for FQI
as established by the Gaming Authorities and maintained by FQI
throughout its Reorganization Case) on the Effective Date prior to
the distribution or reservation of any amounts as of the Effective
Date under the Plan.
2.34 Elsinore. This term will refer to and mean
Elsinore Corporation, a Nevada corporation, one of the Debtors.
2.35 Elsinore Equity Holders. This term will refer
to and mean the holders of the Old Elsinore Common Stock.
2.36 Elsinore Equity Interests. This term will refer
to and mean the interests of the holders of the Old Elsinore Common
Stock.
2.37 Elsub. This term will refer to and mean Elsub
Management Corporation, a Nevada corporation, one of the Debtors.
2.38 Elsub Common Stock. This term will refer to and
mean the issued and outstanding shares of common stock in Elsub,
which are held by Elsinore.
2.39 Equity Holders Committee. This term will refer
to and mean the Official Equity Holders Committee appointed in
Elsinore's Reorganization Case by the United States Trustee
pursuant to Bankruptcy Code Section 1102.
2.40 Equity Interests. This term will refer to and
mean the Elsinore Equity Interests and the Other Equity Interests.
2.41 Estates. This term will refer to and mean the
bankruptcy estates of the Debtors created in the Reorganization
Cases under Bankruptcy Code Section 541.
2.42 Executory Contract. This term will refer to and
mean every unexpired lease or other executory contract which is
subject to being assumed or rejected by any of the Debtors under
Bankruptcy Code Section 365.
2.43 Four Queens. This term will refer to and mean
the real property, improvements, and personal property which
comprise the hotel, casino and related facilities located in
downtown Las Vegas, Nevada, commonly known as the Four Queens Hotel
and Casino. The Four Queens is owned and operated by FQI, a wholly
owned subsidiary of Elsinore.
2.44 FQEC. This term will refer to and mean Four
Queens Experience Corporation, a Nevada corporation, one of the
Debtors.
2.45 FQEC Common Stock. This term will refer to and
mean the issued and outstanding shares of common stock in FQEC,
which are held by Elsinore.
2.46 FQI. This term will refer to and mean Four
Queens, Inc., a Nevada corporation, one of the Debtors.
2.47 FQI Common Stock. This term will refer to and
mean the issued and outstanding shares of common stock in FQI,
which are held by Elsinore.
2.48 Gaming Authorities. This term will refer to and
mean the Gaming Board, the Gaming Commission and any other body
that has gaming regulatory authority over the various Debtors.
2.49 Gaming Board. This term will refer to and mean
the State of Nevada Gaming Control Board established pursuant to
Nev. Rev. Stat. Section 463.010, et seq., as amended.
2.50 Gaming Commission. This term will refer to and
mean the State of Nevada Gaming Commission.
2.51 General Unsecured Claim. This term will refer
to and mean every Unsecured Claim against the Debtors, or any of
them, which is not a Class 1 Administrative Claim or Property Tax
Administrative Claim, a Class 2 Priority Unsecured Claim, a Class 3
Priority Tax Claim, a Class 8 1993 Bondholders' Claim, a Class 9
Administrative Convenience Unsecured Claim, a Class 11 Convertible
Note Unsecured Claim, or a Class 12 IRS Unsecured Claim.
2.52 Interim Operating Agreement. This term will
refer to and mean the agreement to be executed as of the
Confirmation Date between various of the Debtors and the Person(s)
designated by the Bondholders Committee to manage various of the
Debtors and their business from the Confirmation Date through the
Effective Date. The Interim Operating Agreement will be
substantially in the form of Exhibit "1" to the Plan Supplement.
2.53 IRS. This term will refer to and mean the
Internal Revenue Service, an agency of the United States
government.
2.54 IRS Secured Claim. This term will refer to and
mean all Claims held by the IRS which are Secured Claims.
2.55 IRS Unsecured Claim. This term will refer to
and mean all Claims held by the IRS which are Unsecured Claims and
which are not Priority Tax Claims.
2.56 IRS Unsecured Claim Payment Amount. This term
will refer to and mean the total amount of the payments to be paid
with respect to the IRS Unsecured Claim, if and when it is an
Allowed Claim, pursuant to Article XI of this Plan. (If the IRS
Unsecured Claim does not become an Allowed Claim, no payments will
be due with respect to that Disputed Claim.) The IRS Unsecured
Claim Payment Amount shall be the amount equal to the allowed
amount of the IRS Unsecured Claim multiplied by the Payment
Percentage described below, less the amount of the IRS' liability
for any preferential transfers received from the Debtors prior to
the Petition Dates (as determined by the Bankruptcy Court). The
Payment Percentage shall be the lesser of 100%, or the amount equal
to the total amount to be deposited into the Class 10 Fund divided
by the total amount of Allowed Claims that are General Unsecured
Claims. (This is the same payment percentage which the Plan
provides will be paid to the holders of Allowed General Unsecured
Claims in Class 10.)
2.57 Management Agreement. This term will refer to
and mean the agreement by and between Reorganized Elsinore and
Reorganized FQI and the management group designated by the
Bondholders Committee related to the management of Reorganized
Elsinore and Reorganized FQI and their business for the period from
and after the Effective Date. The Management Agreement will be
substantially in the form of Exhibit "10" to the Plan Supplement.
Any changes to the form of the Management Agreement prior to the
Confirmation Date must be mutually agreeable to the Debtors and the
Bondholders Committee.
2.58 New Elsinore Common Stock. This term will refer
to and mean the 5,000,000 shares of common stock of Reorganized
Elsinore authorized, issued, and reserved for issuance pursuant to
this Plan.
2.59 Old Elsinore Common Stock. This term will refer
to and mean the issued and outstanding shares of common stock in
Elsinore, together with the rights of any Person to purchase
Elsinore common stock pursuant to any warrants, options or other
agreements other than any such rights with respect to the
Convertible Notes.
2.60 Olympia. This term will refer to and mean
Olympia Gaming Corporation, a Nevada corporation, one of the
Debtors.
2.61 Olympia Common Stock. This term will refer to
and mean the issued and outstanding shares of common stock in
Olympia, which are held by Elsinore.
2.62 Other Equity Interests. This term will refer to
and mean the equity interests held by the holders of the FQI Common
Stock, the FQEC Common Stock, the Elsub Common Stock, the Olympia
Common Stock, and the PSELP Partnership Interests. Elsinore is the
holder of all outstanding FQI Common Stock, FQEC Common Stock,
Elsub Common Stock, and Olympia Common Stock. The PSELP
Partnership Interests consist of a 90% general partnership interest
held by Elsub, and a 10% limited partnership interest held by
Native American Casino Corporation.
2.63 Person. This term will refer to and mean
"person" as defined in Bankruptcy Code 101(41).
2.64 Petition Dates. This term will refer to and
mean the filing dates of the Debtors' respective voluntary Chapter
11 petitions commencing the Reorganization Cases. With respect to
all of the Debtors except for Olympia, the Petition Date is October
31, 1995. With respect to Olympia, the Petition Date is November
11, 1995.
2.65 Plan. This term will refer to and mean this
"First Amended Plan Of Reorganization Proposed Jointly By Debtors
And The Unofficial Bondholders Committee" and every modification
thereof, if any, filed by the Debtors and the Bondholders
Committee.
2.66 Plan Supplement. This term will refer to and
mean the supplement accompanying this Plan which contains all of
the Exhibits to this Plan. By this reference, the Plan Supplement
is incorporated into, and is a part of, this Plan.
2.67 Priority Tax Claim. This term will refer to and
mean every Claim entitled to priority under Bankruptcy Code
507(a)(8), including without limitation any such Claim held by the
IRS.
2.68 Priority Unsecured Claim. This term will refer
to and mean every Unsecured Claim or portion thereof which is not
an Administrative Claim, a Property Tax Administrative Claim, or a
Priority Tax Claim, and which is entitled to priority under the
applicable provisions of Bankruptcy Code 507.
2.69 Professional Charges. This term will refer to
and mean the allowed interim and final professional fees and
expenses charged by the Chapter 11 Professionals.
2.70 Property Tax Administrative Claim. This term
will refer to and mean every Claim of any state or local
governmental unit which is an Administrative Claim for unpaid real
property taxes, unpaid personal property taxes, unpaid gaming
taxes, or unpaid sales taxes, and every prorated portion thereof
arising on and after the Petition Date until the Effective Date.
Property Tax Administrative Claims will be classified and paid
under the Plan as the Plan provides for Class 1 Claims.
2.71 Pro Rata Share. This term will refer to and
mean the proportion that an Allowed Claim or Equity Interest in a
particular Class bears to the aggregate amount of all Allowed
Claims or Equity Interests in such Class.
2.72 PSELP. This term will refer to and mean Palm
Springs East Limited Partnership, a Nevada limited partnership, one
of the Debtors.
2.73 PSELP Partnership Interests. This term will
refer to and mean the outstanding partnership interests in PSELP.
2.74 PSELP Settlement. This term will refer to and
mean the Settlement Agreement dated as of March 29, 1996 between
PSELP and the 29 Palms Band of Mission Indians.
2.75 Record Date. For purposes of voting on this
Plan, this term will refer to and mean the date the Bankruptcy
Court enters the Order approving the Disclosure Statement, or such
other date established by the Bankruptcy Court relative to
determining the holders of stocks, bonds, notes and other
securities entitled to vote on the Plan. For purposes of
distributions under this Plan, the record date will correspond to
the Confirmation Date, or such other date established by the
Bankruptcy Court.
2.76 Registration Agreement. This term will refer to
and mean the Registration Agreement covering the stock in
Reorganized Elsinore that will be duly executed on or before the
Effective Date. A copy of the Registration Agreement is attached
to the Plan Supplement as Exhibit "13".
2.77 Reorganization Cases. This term will refer to
and mean the Debtors' cases under Chapter 11 of the Bankruptcy Code
which were commenced by the Debtors' filing of their respective
voluntary Chapter 11 petitions on the Petition Dates.
2.78 Reorganized Debtors. This term will refer to
and mean the Debtors, or any of them, if and as reorganized from
and after the Effective Date. Unless otherwise expressly stated or
the context otherwise requires, alternative references to the
Debtors or Reorganized Debtors, or any of them, throughout various
provisions of the Plan are intended to anticipate whether an event
may occur before or after the Effective Date. The collective
reference to Reorganized Debtors in the Plan shall not be construed
or interpreted as substantively consolidating any individual Debtor
or Reorganized Debtor with another Debtor or Reorganized Debtor, or
establishing one or more Debtor or Reorganized Debtor as liable for
any Claim owing by another Debtor or Reorganized Debtor.
2.79 Reorganized Elsinore. This term will refer to
Elsinore as reorganized from and after the Effective Date, one of
the Reorganized Debtors.
2.80 Reorganized Elsinore Articles. This term will
refer to and mean the Amended and Restated Articles of
Incorporation of Elsinore Corporation, substantially in the form of
Exhibit "2" to the Plan Supplement.
2.81 Reorganized Elsinore Bylaws. This term will
refer to and mean the Amended and Restated Bylaws of Elsinore
Corporation, substantially in the form of Exhibit "3" to the Plan
Supplement.
2.82 Reorganized Elsub. This term will refer to
Elsub from and after the Effective Date, and in the event it is
reorganized pursuant to this Plan, one of the Reorganized Debtors.
2.83 Reorganized FQEC. This term will refer to FQEC,
from and after the Effective Date, and in the event that it is
reorganized pursuant to this Plan, one of the Reorganized Debtors.
2.84 Reorganized FQI. This term will refer to FQI as
reorganized from and after the Effective Date, one of the
Reorganized Debtors.
2.85 Reorganized FQI Articles. This term will refer
to and mean the Amended and Restated Articles of Incorporation of
Four Queens, Inc., substantially in the form of Exhibit "4" to the
Plan Supplement.
2.86 Reorganized FQI Bylaws. This term will refer to
and mean the Amended and Restated Bylaws of Four Queens, Inc.,
substantially in the form of Exhibit "5" to the Plan Supplement.
2.87 Reorganized Olympia. This term will refer to
Olympia, from and after the Effective Date, and in the event that
it is reorganized under this Plan, one of the Reorganized Debtors.
2.88 Reorganized PSELP. This term will refer to
PSELP from and after the Effective Date, and in the event it is
reorganized under this Plan, one of the Reorganized Debtors.
2.89 Restated 1993 Mortgage Notes. This term will
refer to and mean the Restated 1993 Mortgage Notes which will be
issued by Reorganized Elsinore in accordance with Article VII of
this Plan and governed by the terms of the existing Trust Indenture
related to the 1993 Bonds, as amended in accordance with this Plan.
The aggregate principal amount of the Restated 1993 Mortgage Notes
to be issued and distributed in accordance with the Plan is
$30,000,000. Interest on the outstanding principal amount of the
Restated 1993 Mortgage Notes will accrue from and after the
Confirmation Date at the rate of 13.5% per annum. The Restated
1993 Mortgage Notes will provide for the payment of interest semi-annually
commencing on the last day of the sixth month following
the Confirmation Date, with all unpaid principal and interest owing
under the Restated 1993 Mortgage Notes due and payable in full on
the date five (5) years following the Confirmation Date. Prior to
the Effective Date, the Bondholders Committee may, in its sole and
absolute discretion, make an election to reduce the interest rate
from 13.5% per annum to 11.5% per annum, and extend the maturity
date from five (5) years to seven (7) years following the
Confirmation Date. The amounts owing under the Restated 1993
Mortgage Notes may be prepaid without penalty. Each Restated 1993
Mortgage Note will be substantially in the form attached as Exhibit
"6" to the Plan Supplement.
2.90 Restated 1993 Mortgage Notes Security Documents.
This term will refer to and mean the existing security documents
related to the 1993 Bonds, as amended if necessary in accordance
with this Plan, which will continue to collateralize the Restated
1993 Mortgage Notes.
2.91 Restated 1994 Mortgage Notes. This term will
refer to and mean the Restated 1994 Mortgage Notes which will be
issued by Reorganized Elsinore in accordance with Article V of this
Plan, and governed by the terms of the Amended Note Purchase
Agreement. The aggregate principal amount of the Restated 1994
Mortgage Notes to be issued and distributed in accordance with the
Plan is the amount equal to $3,000,000, plus accrued interest at
the nondefault contract rate of 20% per annum owing with respect to
the 1994 Bonds through the date on which the Confirmation Order is
entered by the Bankruptcy Court, together with any recoverable
costs and expenses as provided in the 1994 Bonds. Interest on the
outstanding principal amount of the Restated 1994 Mortgage Notes
will accrue from and after the date on which the Confirmation Order
is entered by the Bankruptcy Court at the rate of 10% per annum, or
such other rate stated in the Confirmation Order that the
Bankruptcy Court determines is a market rate of interest for the
Secured Claims held by the 1994 Bondholders with respect to the
1994 Bonds. The Restated 1994 Mortgage Notes will provide for the
payment of interest quarterly commencing on the first day of the
fourth month following the Confirmation Date, with all unpaid
principal and interest owing under the Restated 1994 Mortgage Notes
due and payable in full on the date four (4) years following the
Confirmation Date. The amounts owing under the Restated 1994
Mortgage Notes may be prepaid without penalty. Each Restated 1994
Mortgage Note will be substantially in the form attached as
Exhibit "7" to the Plan Supplement.
2.92 Restated 1994 Mortgage Notes Security Documents.
This term will refer to and mean the existing security documents
related to the 1994 Bonds, as amended if necessary in accordance
with this Plan, which will continue to collateralize the Restated
1994 Mortgage Notes.
2.93 Rights. This term will refer to and mean the
rights subscription by which parties will be able to subscribe to
a portion of the New Elsinore Common Stock in Reorganized Elsinore
issued pursuant to the Plan. The Rights are governed by the Rights
Agreement.
2.94 Rights Agreement. This term will refer to and
mean the rights subscription agreement substantially in the form of
Exhibit "8" to the Plan Supplement.
2.95 Secured Claim. This term will refer to and mean
every Claim or portion thereof which is asserted by the Creditor
holding such Claim to be secured by a lien, security interest, or
assignment encumbering property (including all types of real
property, personal property, and alleged cash collateral) in which
the Debtors have an interest, to the extent of the validity,
perfection, and enforceability of the claimed lien, security
interest, or assignment and the value of the interest of the
Creditor holding the Secured Claim against the property.
2.96 Secured Creditor. This term will refer to and
mean every Creditor which holds a Secured Claim in the
Reorganization Cases.
2.97 Secured Tax Claims. This term will refer to and
mean every Claim of any state or local governmental unit which is
secured by property of the Estates by operation of applicable non-bankruptcy
laws, including, but not limited to, every such Claim
for unpaid real property taxes, unpaid personal property taxes, or
unpaid sales taxes. The Secured Tax Claims do not include any
Secured Claim held by the IRS.
2.98 Stipulation. This term will refer to and mean
the "Stipulation Re: Consensual Plan Of Reorganization" dated
February 22, 1996, executed by the Debtors and the Bondholders
Committee, which the Debtors and Bondholders Committee acknowledge
is binding upon them. Among other things, the Stipulation sets
forth agreed minimum recoveries to the various holders of Claims
and Equity Interests for the purposes of this Plan. To the extent
there are any inconsistencies between the provisions of the
Stipulation and this Plan, the provisions of this Plan shall
control.
2.99 Trust Indenture Act. This term will refer to
and mean the Trust Indenture Act of 1939, as amended.
2.100 Unsecured Claim. This term will refer to and
mean every Claim against any of the Debtors, or portion thereof,
regardless of the priority of such Claim, which is not a Secured
Claim as defined in a preceding Section of this Article II.
2.101 Unsecured Creditor. This term will refer to
and mean every Creditor which holds an Unsecured Claim in the
Reorganization Cases.
2.102 1993 Bondholders. This term will refer to and
mean the holders of the outstanding 1993 Bonds.
2.103 1993 Bondholders' Claims. This term will refer
to and mean all of the Claims of the 1993 Bondholders with respect
to the 1993 Bonds. For purposes of the Plan, the 1993 Bondholders'
Claims, in the aggregate, shall be an Allowed Claim in the amount
of $57,000,000, plus the amount of reasonable costs and expenses
(including attorneys' fees) incurred by the 1993 Bonds Indenture
Trustee with respect to the 1993 Bonds.
2.104 1993 Bonds. This term will refer to and mean
the outstanding 12.5% First Mortgage Notes due 2000 issued by
Elsinore in October of 1993.
2.105 1993 Bonds Indenture Trustee. This term will
refer to and mean First Trust National Association, or such other
indenture trustee named by the Bondholders Committee prior to the
Confirmation Date, or its successor, as indenture trustee under the
Trust Indenture related to the 1993 Bonds and the Restated 1993
Mortgage Notes.
2.106 1994 Bondholders. This term will refer to and
mean the holders of the outstanding 1994 Bonds.
2.107 1994 Bonds. This term will refer to and mean
the outstanding 20% Mortgage Notes issued by Elsinore in October of
1994.
ARTICLE III
CLASSIFICATION OF CLAIMS AND EQUITY INTERESTS
All Claims and the Equity Interests are classified
under the Plan as hereafter stated in Article III. As of the
Confirmation Hearing, any Class of Claims which does not contain
any unpaid Creditor's Claim will be deemed deleted automatically
from the Plan; and any Class of Claims which does not contain an
Allowed Claim (or a Claim temporarily or provisionally allowed by
the Bankruptcy Court for voting purposes) will not be entitled to
vote on confirmation of the Plan.
3.1 Class 1: Administrative Claims. The Class 1
Claims will be all Claims which are Administrative Claims,
including, without limitation, the Property Tax Administrative
Claims.
3.2 Class 2: Priority Unsecured Claims. The Class
2 Claims will be all Claims which are Priority Unsecured Claims.
3.3 Class 3: Priority Tax Claims. The Class 3
Claims will be all Claims which are Priority Tax Claims.
3.4 Class 4: Secured Tax Claims. The Class 4
Claims will be all Claims which are Secured Tax Claims. Each
Secured Tax Claim shall be deemed a separate subclass of Class 4
for all purposes under this Plan.
3.5 Class 5: 1994 Bondholders' Secured Claims. The
Class 5 Claims will be all Secured Claims of the 1994 Bondholders
with respect to the 1994 Bonds.
3.6 Class 6: IRS Secured Claim. The Class 6 Claims
will be all Claims which comprise the IRS Secured Claim.
3.7 Class 7: Other Secured Claims. The Class 7
Claims will be all Claims which are Secured Claims, if any, other
than Secured Claims in Class 4, Class 5, Class 6 and Class 8. Each
Other Secured Claim, if any, shall be deemed a separate subclass of
Class 7 for all purposes under this Plan.
3.8 Class 8: 1993 Bondholders' Claims. The Class
8 Claims will be all of the 1993 Bondholders' Claims.
3.9 Class 9: Administrative Convenience Unsecured
Claims. The Class 9 Claims consist of all Unsecured Claims against
the Debtors that are, in the aggregate for each Creditor, $500 or
less, or that are in the aggregate greater than $500, but are
voluntarily reduced by the Creditor holding that Unsecured Claim(s)
to $500. The option to reduce an Unsecured Claim(s) to the
aggregate sum of $500 and have such an Unsecured Claim(s) treated
as a Class 9 Claim must be made in the manner prescribed in the
Ballot. The Class 9 Claims owed by each of the Debtors will be
deemed a separate subclass of Class 9 for all purposes under this
Plan. (E.g., all of the Class 9 Claims owed by FQI will be treated
as a separate subclass of Class 9.)
3.10 Class 10: General Unsecured Claims. The Class
10 Claims consist of all Claims which are General Unsecured Claims.
The Class 10 Claims owed by each of the Debtors will be deemed a
separate subclass of Class 10 for all purposes under this Plan.
(E.g., all of the Class 10 Claims owed by FQI will be treated as a
separate subclass of Class 10.)
3.11 Class 11: Unsecured Convertible Note Claims.
The Class 11 Claims will be all Unsecured Claims of the Convertible
Noteholders with respect to the Convertible Notes.
3.12 Class 12: IRS Unsecured Claim. The Class 12
Claims will be all Claims which comprise the IRS Unsecured Claim.
3.13 Class 13: Elsinore Equity Interests. Class 13
consists of all of the Elsinore Equity Interests held by the
holders of the Old Elsinore Common Stock.
3.14 Class 14: Other Equity Interests. Class 14
consists of all of the Other Equity Interests, and the Other Equity
Interests outstanding with respect to each of the Debtors other
than Elsinore will be treated as a separate subclass of Class 14
for all purposes under this Plan.
ARTICLE IV
TREATMENT OF CLASSES OF CLAIMS
WHICH ARE NOT IMPAIRED UNDER THE PLAN
4.1 Treatment of Class 1 (Administrative Claims).
Every Creditor holding a Class 1 Administrative Claim will be paid
by the Reorganized Debtor obligated on that Claim: (a) fully and
in Cash on the Effective Date if the Claim is then an Allowed
Claim; (b) fully and in Cash (including any interest allowed by the
Bankruptcy Court) when and if the Claim becomes an Allowed Claim
after the Effective Date; or (c) as otherwise agreed in writing by
the Creditor holding the Allowed Claim or ordered by the Bankruptcy
Court. Every Allowed Class 1 Administrative Claim for a post-petition
operating expense incurred in the ordinary course of the
Debtors' operations will be paid fully and in Cash by the
Reorganized Debtor obligated on that Claim in the ordinary course
of business (including any payment terms applicable to any such
expense). Each Reorganized Debtor will remain solely obligated on
the Allowed Administrative Claims owed by the corresponding Debtor
(e.g., Reorganized FQI will remain solely obligated on Allowed
Administrative Claims owed by FQI).
4.2 Treatment of Class 2 (Priority Unsecured
Claims). Every Creditor holding a Class 2 Priority Unsecured Claim
will be paid by the Reorganized Debtor obligated on that Claim:
(a) fully and in Cash on the Effective Date if the Claim is then an
Allowed Claim; (b) fully and in Cash (including any interest
allowed by the Bankruptcy Court) when and if the Claim becomes an
Allowed Claim after the Effective Date; or (c) as otherwise agreed
in writing by the Creditor holding the Allowed Claim or ordered by
the Bankruptcy Court. Each Reorganized Debtor will remain solely
obligated on the Allowed Priority Unsecured Claims owed by the
corresponding Debtor (e.g., Reorganized FQI will remain solely
obligated on Allowed Priority Unsecured Claims owed by FQI).
4.3 Treatment of Class 3 (Priority Tax Claims).
Every Creditor holding a Class 3 Priority Tax Claim, as and when it
is an Allowed Claim, will be paid by the Reorganized Debtor
obligated on that Claim (i) in full and in Cash on the later of the
Effective Date or the date upon which such Claim becomes an Allowed
Claim or, at the election of the Reorganized Debtor obligated on
that Claim, (ii) in equal quarterly installments of principal and
interest over a period commencing at the end of the first calendar
quarter after the Effective Date, and continuing at the end of each
calendar quarter thereafter until the date that is six years after
the assessment date with respect to such Claim, with interest fixed
at a rate per annum equal to the rate defined in Internal Revenue
Code Section 6621 as in effect on the Effective Date. Each
Reorganized Debtor will remain solely obligated on the Allowed
Priority Tax Claims owed by the corresponding Debtor (e.g.,
Reorganized FQI will remain solely obligated on Allowed Priority
Tax Claims owed by FQI).
4.4 Treatment of Class 4 (Secured Tax Claims). With
respect to each subclass of Class 4, each Creditor holding a
Class 4 Secured Tax Claim, as and when it is an Allowed Secured
Claim, will be paid by the Reorganized Debtor obligated on such
Claim: (i) in full and in Cash on the later of the Effective Date
or the date upon which such Claim becomes an Allowed Claim or, at
the election of the Reorganized Debtor obligated on that Claim;
(ii) in full in the ordinary course of business and in accordance
with the customary procedures for the payment of such Claim, with
the Creditor retaining its existing liens and security interests on
its collateral as security for its Allowed Secured Tax Claim. Each
Reorganized Debtor will remain solely obligated on the Allowed
Secured Tax Claims owed by the corresponding Debtor (e.g.,
Reorganized FQI will remain solely obligated on Allowed Secured Tax
Claims owed by FQI). Class 4 Claims are unimpaired pursuant to the
Plan and Bankruptcy Code Section 1124.
4.5 Treatment of Class 7 (Other Secured Claims).
The holder of every Allowed Secured Claim in Class 7 (or any
subclass thereof) will receive on the later of the Effective Date
or the date upon which such Claim becomes an Allowed Secured Claim,
one of the following, at the option of the Reorganized Debtor
obligated on that Secured Claim: (i) Cash in the full amount of
such Allowed Secured Claim; or (ii) reinstatement of the underlying
obligation or instrument or other treatment in accordance with
Bankruptcy Code Section 1124, with the holder retaining its
existing liens and security interests on its collateral as security
for its Allowed Secured Claim; or (iii) abandonment to such
Creditor of all of the property of the Debtors upon which the
holder of the Allowed Secured Claim has a valid, perfected, and
enforceable lien or security interest. Each Reorganized Debtor
will remain solely obligated on the Allowed Class 7 Other Secured
Claims owed by the corresponding Debtor (e.g., Reorganized FQI will
remain solely obligated on Allowed Class 7 Other Secured Claims
owed by FQI). Class 7 Claims are unimpaired pursuant to the Plan
and Bankruptcy Code Section 1124.
4.6 Treatment of Class 14 (Other Equity Interests).
With respect to each subclass of Class 14, the holders of the Other
Equity Interests will retain their existing Other Equity Interests,
which will be continued following the Effective Date. The Other
Equity Interests in each subclass of Class 14 are unimpaired
pursuant to the Plan and Bankruptcy Code Section 1124.
ARTICLE V
TREATMENT OF CLASS 5 CLAIMS
(1994 Bondholders' Secured Claims)
5.1 Distribution. The Secured Claims of the 1994
Bondholders shall be an Allowed Secured Claim in the aggregate
amount of $3,000,000, plus accrued interest at the nondefault
contract rate of 20% per annum through the date on which the
Confirmation Order is entered by the Bankruptcy Court, together
with recoverable costs and expenses as provided under the 1994
Bonds. On the Effective Date, or as soon thereafter as
practicable, each holder of the 1994 Bonds as of the Record Date
for distribution shall receive its Pro Rata Share of the Restated
1994 Mortgage Notes, in full satisfaction, settlement, release and
discharge of, and in exchange for, its Class 5 Allowed Secured
Claim pursuant to its 1994 Bonds. If the date on which the first
payment is due under the Restated 1994 Mortgage Notes occurs prior
to the Effective Date, Elsinore and FQI will make the first payment
to the 1994 Bondholders as provided under the terms of the Restated
1994 Mortgage Notes.
5.2 Retention of Liens. Pursuant to the Restated
1994 Mortgage Notes Security Documents, the Restated 1994 Mortgage
Notes will be secured by all liens and security interests (with
existing priority) in the Reorganized Debtors' assets that secure
the 1994 Bonds.
5.3 Impairment. The 1994 Bondholders' Secured
Claims which comprise the Class 5 Claims are impaired pursuant to
the Plan.
ARTICLE VI
TREATMENT OF CLASS 6 CLAIMS
(IRS Secured Claim)
6.1 Distribution. The holder of the IRS Secured
Claim, as and when it is an Allowed Secured Claim, shall receive
payments equal to the allowed amount of the IRS Secured Claim, with
interest at the rate of 8% per annum, amortized over the period
from the Effective Date through the date that is four (4) years
following the Effective Date. Payments on the Allowed IRS Secured
Claim will be made in equal amounts due semi-annually, commencing
on the last day of the sixth month following the Effective Date.
All unpaid principal and interest owing in respect to the IRS
Secured Claim will be due and payable in full on the date that is
four (4) years following the Effective Date. The IRS Secured Claim
can be prepaid without penalty.
6.2 Retention of Liens. The holder of an Allowed
IRS Secured Claim will retain its existing lien(s), if any, (with
existing validity and priority) in the Reorganized Debtors'
respective assets, to the extent of the allowed amount of the IRS
Secured Claim.
6.3 Impairment. The IRS Secured Claim which
comprises the Class 6 Claims is impaired pursuant to the Plan.
<PAGE>
ARTICLE VII
TREATMENT OF CLASS 8 CLAIMS
(1993 Bondholders' Claims)
7.1 Distribution. The 1993 Bondholders' Claims
shall be an Allowed Claim in the aggregate amount of $57,000,000,
plus the amount of reasonable costs and expenses (including
attorneys' fees) incurred by the 1993 Bonds Indenture Trustee with
respect to the 1993 Bonds (the "Fees of the 1993 Bond Indenture
Trustee"). On the Effective Date, the 1993 Bondholders will be
deemed to have waived all unpaid interest on the 1993 Bonds which
accrued as of the Confirmation Date. On the Effective Date, or as
soon thereafter as practicable, each holder of the 1993 Bonds as of
the Record Date for distribution shall receive, in full
satisfaction, settlement, release and discharge of, and in exchange
for, its Allowed 1993 Bondholders' Claim pursuant to its 1993
Bonds: (i) its Pro Rata Share of the Restated 1993 Mortgage Notes;
(ii) its Pro Rata Share of the Class 8 New Stock; and (iii) its Pro
Rata Share of the Rights. In addition, the Fees of the 1993 Bonds
Indenture Trustee to date will be paid on the Effective Date from
Effective Date Cash.
7.2 Retention of Liens. Pursuant to the Restated
1993 Mortgage Notes Security Documents, the Restated 1993 Mortgage
Notes will be secured by all liens and security interests (with
existing priority) in the Reorganized Debtors' assets that secure
the 1993 Bonds.
7.3 Distribution Agent. The 1993 Bonds Indenture
Trustee shall act as the distribution agent for the purpose of
exchanging the 1993 Bonds for the New Elsinore Common Stock and for
the Restated 1993 Mortgage Notes distributed to the 1993
Bondholders under the Plan. Reorganized Elsinore shall pay all
reasonable fees and expenses of the 1993 Bonds Indenture Trustee in
acting as distribution agent as and when such fees and expenses are
due without further order of the Court.
7.4 Certification of 1993 Bondholders' Claims. The
1993 Bonds Indenture Trustee shall certify to Elsinore a list of
the registered 1993 Bondholders as of each Record Date for each of
the 1993 Bonds designating the name, address, taxpayer
identification number (if known), certificate number, and the
amount of unpaid principal of the 1993 Bonds for each holder. The
unpaid principal designated shall be the amount outstanding as of
the Record Date. All distributions on account of 1993 Bondholders'
Claims shall be made to the registered 1993 Bondholders of the
second Record Date as set forth on the list certified to Elsinore
by the 1993 Bonds Indenture Trustee.
7.5 Surrender and Cancellation of 1993 Bonds. As a
condition to receiving its Pro Rata Share of the Restated 1993
Mortgage Notes, the Class 8 New Stock and the Rights distributable
under this Plan, each 1993 Bondholder shall surrender its 1993
Bonds instruments to the 1993 Bonds Indenture Trustee for
cancellation. Distributions will not be made to a 1993 Bondholder
unless and until its 1993 Bonds instruments have been surrendered.
When a 1993 Bondholder surrenders its 1993 Bonds instruments to the
1993 Bonds Indenture Trustee, the 1993 Bonds Indenture Trustee
shall hold such instruments in "book entry only" until such
instruments are canceled.
Any 1993 Bondholder whose 1993 Bonds instruments have
been lost, stolen, mutilated or destroyed, shall, in lieu of
surrendering such instruments, deliver to the 1993 Bonds Indenture
Trustee: (a) evidence satisfactory to the 1993 Bonds Indenture
Trustee of the loss, theft, mutilation, or destruction of the
instruments, and (b) the security or indemnity that may be
reasonably required by the 1993 Bonds Indenture Trustee to hold the
1993 Bonds Indenture Trustee harmless with respect to any such
representation of the 1993 Bondholder. Upon compliance with the
preceding sentence, a 1993 Bondholder shall, for all purposes under
this Plan, be deemed to have surrendered its 1993 Bonds
instruments.
Any 1993 Bondholder which shall not have surrendered
or have been deemed to surrender its 1993 Bonds instruments within
two (2) years after the Effective Date, shall have its Claim
pursuant to its 1993 Bonds automatically disallowed in full, shall
receive no distribution on account of that Claim, and shall be
forever barred from asserting any claim against the Reorganized
Debtors on account of that Claim. Any New Elsinore Common Stock
issued and held for distribution on account of that disallowed
Claim shall be returned to Reorganized Elsinore and treated as
treasury shares, and any Restated 1993 Mortgage Notes issued and
held for distribution on account of that disallowed Claim shall be
canceled.
7.6 Impairment. The 1993 Bondholders' Claims which
comprise the Class 8 Claims are impaired pursuant to the Plan.
ARTICLE VIII
TREATMENT OF CLASS 9 CLAIMS
(Administrative Convenience Unsecured Claims)
8.1 Distributions. The Class 9 Administrative
Convenience Unsecured Claims owed by each of the Debtors will be a
separate subclass of Class 9. With respect to each subclass of
Class 9, the holder of every Class 9 Unsecured Claim that is an
Allowed Claim shall receive, in full satisfaction, settlement,
release and discharge of, and in exchange for, its Allowed Claim(s)
a payment from the Reorganized Debtor obligated on that Claim(s) in
the aggregate amount equal to the lesser of: (a) $500; or (b) the
amount of such holder's Allowed Claim(s). Payments to holders of
Allowed Class 9 Claims will be due on the first Business Day thirty
days after the Effective Date. No interest will be paid on Class 9
Claims.
8.2 Impairment. The Unsecured Claims which comprise
the Class 9 Claims and each subclass thereof are impaired pursuant
to the Plan.
ARTICLE IX
TREATMENT OF CLASS 10 CLAIMS
(General Unsecured Claims)
9.1 Distributions. The Class 10 General Unsecured
Claims owed by each of the Debtors will be a separate subclass of
Class 10. With respect to each subclass of Class 10, the holder of
every Class 10 Unsecured Claim that is an Allowed Claim shall
receive, in full satisfaction, settlement, release and discharge
of, and in exchange for, its Allowed Unsecured Claim, payments in
the total amount equal to its Pro Rata Share (based on the Allowed
Claims in all subclasses of Class 10) of the amounts in the
Class 10 Fund. Payments to holders of Allowed Class 10 Claims will
be made in six (6) equal semi-annual installments. The first
installment is due on the date six (6) months after the Effective
Date, and each subsequent installment is due on the date every six
(6) months thereafter, with the last installment due on the date
three (3) years after the Effective Date. No interest will be paid
on Class 10 Claims.
9.2 Administration of Class 10 Fund. Distributions
from the Class 10 Fund will be made by the Reorganized Debtors only
pursuant to the terms of this Plan or upon order of the Bankruptcy
Court after notice and a hearing.
9.3 Claims Objections. Objections to the allowance
of any Class 10 Claim will be conducted by the Reorganized Debtors.
Nothing herein will be deemed to preclude any other party in
interest, at its own expense, from objecting to the allowance of
any Class 10 Claim.
9.4 Impairment. The General Unsecured Claims which
comprise the Class 10 Claims, and each subclass thereof, are
impaired pursuant to the Plan.
ARTICLE X
TREATMENT OF CLASS 11 CLAIMS
(Unsecured Convertible Note Claims)
10.1 Distributions. On the Effective Date, or as
soon thereafter as practicable, each holder of the Convertible
Notes as of the Record Date for distribution shall receive its Pro
Rata Share of the Class 11 New Stock and its Pro Rata Share of the
Rights in full satisfaction, settlement, release and discharge of,
and in exchange for, its Convertible Notes.
10.2 Impairment. The Unsecured Claims which comprise
the Class 11 Claims are impaired pursuant to the Plan.
ARTICLE XI
TREATMENT OF CLASS 12 CLAIMS
(IRS Unsecured Claim)
11.1 Distributions. The holder of the IRS Unsecured
Claim, as and when it is an Allowed Claim, shall receive, in full
satisfaction, settlement, release and discharge of, and in exchange
for, its Allowed IRS Unsecured Claim, payments equal to the IRS
Unsecured Claim Payment Amount, which will be paid in six (6) equal
semi-annual installments. The first installment is due on the date
six (6) months after the Effective Date, and each subsequent
installment is due on the date every six (6) months thereafter,
with the last installment due on the date three (3) years after the
Effective Date. No interest will be paid on the Class 12 IRS
Unsecured Claim.
11.2 Impairment. The IRS Unsecured Claim which
comprises the Class 12 Claims are impaired pursuant to the Plan.
ARTICLE XII
TREATMENT OF CLASS 13 EQUITY INTERESTS
(Elsinore Equity Interests)
12.1 Distributions. On the Effective Date, or as
soon thereafter as practicable, each holder of Old Elsinore Common
Stock as of the Record Date for distribution shall receive in
exchange for its Old Elsinore Common Stock its Pro Rata Share of
the Class 13 New Stock and its Pro Rata Share of the Rights.
Following such exchange, the Old Elsinore Common Stock shall be
canceled.
12.2 Impairment. The Elsinore Equity Interests in
Class 13 are impaired pursuant to the Plan.
ARTICLE XIII
MEANS FOR IMPLEMENTATION OF PLAN
13.1 Structure Of Reorganized Debtors. Following the
Effective Date, each Reorganized Debtor will exist as a separate
entity.
(a) Reorganized Elsinore.
Reorganized Elsinore will be a Nevada
corporation, and will continue to be a
public company, with its stock listing on
the American Stock Exchange expected to
continue. The New Elsinore Common Stock
in Reorganized Elsinore will be issued as
described below. The Old Elsinore Common
Stock will be exchanged for certain
shares of the New Elsinore Common Stock,
and the Old Elsinore Common Stock will
then be canceled. From and after the
Effective Date, the articles of
incorporation and bylaws of Reorganized
Elsinore will be the Reorganized Elsinore
Articles and the Reorganized Elsinore
Bylaws.
(b) Reorganized FQI.
Reorganized FQI will continue as a Nevada
corporation, and will be wholly owned by
Reorganized Elsinore. From and after the
Effective Date, the articles of
incorporation and bylaws of Reorganized
FQI will be the Reorganized FQI Articles
and the Reorganized FQI Bylaws. The
existing FQI Common Stock is continued
under the Plan.
(c) Other Reorganized Debtors.
With respect to the Reorganized Debtors
other than Reorganized Elsinore and
Reorganized FQI, those entities shall
continue to exist after the Effective
Date as separate entities, in accordance
with Nevada law. The existing articles
of incorporation and bylaws or
partnership agreement will continue in
effect following the Effective Date,
except to the extent such articles of
incorporation and bylaws or partnership
agreement are amended by this Plan or by
proper corporate actions implemented
after the Effective Date. The existing
FQEC Common Stock, Elsub Common Stock,
Olympia Common Stock, and PSELP
Partnership Interests are continued under
this Plan.
13.2 Post-Confirmation Management.
(a) Interim Operating
Agreement. From and after the
Confirmation Date, the Debtors will be
managed by the Person(s) designated by
the Bondholders Committee (in accordance
with the corporate framework of the
Debtors). On the Confirmation Date, the
Debtors and the Person(s) designated by
the Bondholders will execute the Interim
Operating Agreement. From the
Confirmation Date to the Effective Date,
the Debtors and their businesses will be
operated and managed in accordance with
the Interim Operating Agreement.
(b) Management Agreement.
From and after the Effective Date, the
Debtors will be managed by the management
group designated by the Bondholders
Committee. On the Effective Date,
Reorganized Elsinore and Reorganized FQI
and the selected management group will
execute the Management Agreement, and
thereafter the Debtors and their
businesses will be operated and managed
in accordance with the Management
Agreement.
13.3 Directors. After the Confirmation Date, and
upon approval by the appropriate Gaming Authorities, the members of
the Board of Directors of Elsinore will be changed in accordance
with the following: (a) the new Board of Directors for Reorganized
Elsinore shall be comprised of five (5) or fewer members (as
determined by the Bondholders Committee); (b) one (1) member of the
new Board (the "Equity Nominee") will be nominated by the existing
Elsinore Equity Holders by the Confirmation Date; (c) the other
members of the new Board will be nominated by the Bondholders
Committee by the Confirmation Date; (d) the Equity Nominee will
serve as a member of the new Board at least for the two (2) year
period following the Confirmation Date; and (d) the new Board will
be empowered to act on behalf of Reorganized Elsinore during such
time that is required for the Equity Nominee to obtain licensing
from the appropriate Gaming Authorities. The existing directors of
Elsinore and FQI, should they choose to do so, will continue to
serve as directors of Elsinore and FQI from and after the
Confirmation Date until the Effective Date, at which time they will
each be deemed to have resigned and will be replaced by the new
directors designated in accordance with the Plan. During that
period, but in no event beyond the Effective Date, all of the
existing directors of Elsinore and FQI will be compensated at the
current compensation level for outside directors as it existed on
the Petition Date for Elsinore and FQI so long as they continue to
serve as directors of Elsinore and FQI.
13.4 Funding of the Plan. Payments under the Plan
which are due from Reorganized Elsinore and from Reorganized FQI on
the Effective Date will be funded from the Effective Date Cash.
Payments under the Plan which are due from the Reorganized Debtors
other than Reorganized Elsinore or Reorganized FQI on the Effective
Date will be funded from cash on hand of the obligated Reorganized
Debtor. The funds necessary to ensure continuing performance under
the Plan after the Effective Date will come from excess Effective
Date Cash, and from revenues of the Reorganized Debtors' operations
including the operation of the Four Queens. In addition,
$5,000,000 of new equity will be raised through the Rights
subscription described below, and will be available to fund
Reorganized FQI's ongoing operations (including capital
improvements), and in the sole discretion of Reorganized Elsinore,
other Reorganized Debtors' ongoing operations. In the sole
discretion of Reorganized Elsinore, the Reorganized Debtors shall
be entitled to transfer funds among themselves as necessary to
enable the Reorganized Debtors to conduct their business operations
after the Confirmation Date and to satisfy their obligations under
the Plan; provided, however, that each transfer shall be properly
documented and recorded, and the authority to effect such a
transfer or any such actual transfer shall not be construed or
interpreted as a substantive consolidation of the Reorganized
Debtors, or any of them, or an admission of liability of one Debtor
for the debts of another Debtor.
13.5 Issuance of New Securities. Pursuant to this
Plan, the following securities will be issued by Reorganized
Elsinore on the Effective Date:
(a) Approximately
$3,575,000 ($3,000,000, plus
accrued interest on the
outstanding 1994 Bonds at the
nondefault contract rate of
20% per annum through the date
on which the Confirmation
Order is entered by the
Bankruptcy Court) in aggregate
principal amount of the
Restated 1994 Mortgage Notes,
which will be issued to the
1994 Bondholders pursuant to
Article V of this Plan;
(b) $30,000,000 in
aggregate principal amount of
the Restated 1993 Mortgage
Notes, which will be issued to
the 1993 Bondholders pursuant
to Article VII of this Plan;
(c) 5,000,000 shares of
New Elsinore Common Stock,
eighty percent (80%) of which
will be issued on the
Effective Date to the 1993
Bondholders, the Convertible
Noteholders and the Elsinore
Equity Holders pursuant to
Article VII, Article X, and
Article XII of this Plan, and
twenty percent (20%) of which
will be issued pursuant to the
Rights subscription to the
1993 Bondholders, the
Convertible Noteholders and
the Elsinore Equity Holders.
The Restated 1994 Mortgage Notes, the Restated 1993 Mortgage Notes,
the New Elsinore Common Stock and the Rights to be issued under the
Plan will be issued pursuant to the exemption from securities
registration set forth in Bankruptcy Code 1145. Reorganized
Elsinore shall not be required under this Plan to issue to any 1993
Bondholder, 1994 Bondholder, Convertible Noteholder or Elsinore
Equity Holder any fraction of a share of New Elsinore Common Stock.
The number of shares of New Elsinore Common Stock to be issued to
each 1993 Bondholder, 1994 Bondholder, Convertible Noteholder or
Elsinore Equity Holder shall be rounded down to the closest whole
number, and no distribution will be made with respect to any
fractional share interest.
13.6 Rights Subscription. The operations (including
capital expenditures) of Reorganized Elsinore and Reorganized FQI
following the Effective Date will be funded in part through the
sale of new equity through a stock subscription (the "Rights")
issued pursuant to this Plan. Twenty percent (20%) of the New
Elsinore Common Stock will be issued to the parties that subscribe
to the Rights, for a total price of $5,000,000. Initially, ten
percent (10%) of the Rights will be allocated to the Elsinore
Equity Holders (Class 13), two and one-half percent (2.5%) of the
Rights will be allocated to the Convertible Noteholders (Class 11),
and eighty-seven and one-half percent (87.5%) of the Rights will be
allocated to the 1993 Bondholders (Class 8). Within each of these
classes, the Rights will be allocated to each holder in the same
proportion as such holder's Allowed Claim or Elsinore Equity
Interest bears to the total Allowed Claims or Elsinore Equity
Interests in the class.
The Rights will be governed by the Rights Agreement.
Following the Confirmation Date, each holder of the 1993 Bonds, the
Convertible Notes and the Elsinore Equity Interests will be
required to elect (a) whether that holder intends to exercise the
Rights which are initially allocated to that holder, and (b)
whether, and to the extent, the holder intends to purchase
additional New Elsinore Common Stock if one or more of the holders
in its class (Class 8, Class 11 or Class 13, as the case may be) do
not elect to exercise its allocated Rights. A holder electing to
exercise its Rights will be required to deliver the exercise price
in cash to Reorganized Elsinore, or its designated agent, with its
election on or before a date to be set following the Confirmation
Date, and prior to the Effective Date.
The Rights of non-exercising holders of each Class
will be automatically reallocated among the holders of that Class
electing to purchase additional New Elsinore Common Stock in a
manner that Reorganized Elsinore shall reasonably determine.
If, and to the extent that the holders in any of
Class 8, Class 11 or Class 13 do not elect to exercise all of the
Rights allocated to that Class, the unexercised Rights will be
automatically distributed to the members of the Bondholders
Committee, in such proportions as they shall determine. The
members of the Bondholders Committee hereby guarantee to exercise
any and all Rights (and purchase the New Elsinore Common Stock
related thereto) which are not exercised by the members of Class 8,
Class 11 and Class 13.
The Bondholders Committee will underwrite and
guarantee a 100% subscription to the Rights. The Bondholders
Committee will receive a premium in the amount of an additional
five percent (5%) of the New Elsinore Common Stock in the event
that the members of the Bondholders Committee are required to
exercise between 97.51% and 100% of the Rights. The Bondholders
Committee will receive a premium in the amount of an additional
four percent (4%) of the New Elsinore Common Stock in the event
that the members of the Bondholders Committee are required to
exercise between 95.01% and 97.50% of the Rights. The Bondholders
Committee will receive a premium in the amount of an additional
three percent (3%) of the New Elsinore Common Stock in the event
that the members of the Bondholders Committee are required to
exercise between 92.51% and 95.00% of the Rights. The Bondholders
Committee will receive a premium in the amount of an additional two
percent (2%) of the New Elsinore Common Stock in the event that the
members of the Bondholders Committee are required to exercise
between 90.01% and 92.50% of the Rights. The Bondholders Committee
will receive a premium in the amount of an additional one percent
(1%) of the New Elsinore Common Stock in the event that the members
of the Bondholders Committee are required to exercise between
87.51% and 90.00% of the Rights. Any premium of the New Elsinore
Common Stock to which the Bondholders Committee is entitled due to
exercising more than 87.5% of the Rights will come from a reduction
in the Class 13 New Stock if the Convertible Noteholders have fully
subscribed to the Rights, a reduction in the Class 11 New Stock if
the Elsinore Equity Holders have fully subscribed to the Rights, or
a pro rata reduction (based on the respective amounts of non-exercised
Rights for each of the two classes) in the Class 11 New
Stock and the Class 13 New Stock if the Convertible Noteholders and
the Elsinore Equity Holders both have not fully subscribed to the
Rights.
On or before the Confirmation Date, the Rights
Agreement, which governs the Rights and their exercise, will be
executed and delivered.
13.7 Registration of New Elsinore Common Stock.
Following the Effective Date, shares of the New Elsinore Common
Stock may be traded in accordance with the exemptions provided in
11 U.S.C. 1145 or in accordance with any registration statement
which may be filed by Elsinore pursuant to Section 12(g) of the
Securities and Exchange Act of 1934, as amended. In conjunction
with the Plan, Reorganized Elsinore will execute the Rights
Agreement. As soon as reasonably practicable after the Effective
Date, Reorganized Elsinore will use its best efforts to have the
listing on the American Stock Exchange continued with respect to
the New Elsinore Common Stock.
In the event the Plan is not approved by the class
vote of holders of Class 10 Claims, Class 11 Claims or the IRS
Unsecured Claims, but the Plan is nevertheless confirmed with the
Elsinore Equity Holders to receive shares of New Elsinore Common
Stock in a manner that does not qualify for the exemption from
federal and state securities law registration set forth in
Bankruptcy Code 1145, then the Elsinore Equity Holders shall
receive such shares of New Elsinore Common Stock pursuant to (i) a
registration of those shares under the Securities Act of 1933, as
amended ("Securities Act"), and under applicable state securities
laws (collectively, a "Registration") or (ii) an exemption from
Registration mutually acceptable to Elsinore and to the party from
whom the Elsinore Equity Holders will receive those shares (the
"Counterparty"), if any such mutually acceptable exemption is
available. If the Plan is confirmed as described above in this
paragraph and the Bankruptcy Court does not make a determination
that the Bankruptcy Code 1145 exemption from Registration applies
to the transaction in which Elsinore Equity Holders will receive
New Elsinore Common Stock, then the Counterparty or Elsinore may,
as soon as reasonably practicable after the Confirmation Order,
request a "no action" letter from the Securities and Exchange
Commission ("SEC") on the issue of whether registration under the
Securities Act is required. If the SEC declines to issue such a
"no action" letter or if neither the Counterparty nor Elsinore
elect to request a "no action" letter under those circumstances,
then Elsinore or Reorganized Elsinore shall, as soon as reasonably
practicable, effect a Registration of the shares of New Elsinore
Common Stock that are to be transferred to the Elsinore Equity
Holders.
13.8 Retention of Key Employees. On or before the
Confirmation Date, the employment of certain members of the
Debtors' senior management will be terminated as provided in the
Stipulation between the Debtors and the Bondholders Committee. The
senior executives terminated (with the exception of Mr. Gary Acord,
who has voluntarily resigned) will receive the severance payments
provided for in the applicable modified severance agreements
between Elsinore and those executives, as previously agreed to be
assumed by Elsinore in accordance with the Stipulation. Certain
other members of the Debtors' management identified in the
Stipulation will be retained as key employees to help ensure a
continuity of management for the Debtors following the Confirmation
Date as provided in the Stipulation.
13.9 Effective Date Events. The following events
shall occur on or before the Effective Date:
(a) The Reorganized
Elsinore Articles and
Reorganized FQI Articles will
be filed with the Nevada
Secretary of State's office
which, among other things,
will designate the new
directors of Reorganized
Elsinore and Reorganized FQI
then approved by the Gaming
Authorities.
(b) The Reorganized
Elsinore Bylaws and
Reorganized FQI Bylaws will be
executed;
(c) Additional necessary
and appropriate security
documents (if any) for
Restated 1993 Mortgage Notes
or Restated 1994 Mortgage
Notes will be filed, and any
necessary or appropriate title
insurance policies will be
obtained;
(d) The Management
Agreement will be executed;
and
(e) The Registration
Agreement will be executed.
13.10 Stipulation Superseded. Except with
respect to the provisions of the Stipulation relating to management
issues (Stipulation, Section 2.2(a)(VIII), pp. 12-16) and to the
retention of key employees of FQI (Stipulation, Section 2.2(a)(IX),
pp. 16-17), which are by this reference incorporated into this
Plan, as of the Effective Date, the Stipulation shall be deemed
superseded in its entirety by the Plan as confirmed.
ARTICLE XIV
OBJECTIONS TO CLAIMS
14.1 Objections. Any objections to Claims by the
Debtors or Reorganized Debtors or by any other Person properly
entitled to do so under the Bankruptcy Code and Bankruptcy Rules
must be filed with the Bankruptcy Court and served no later than 60
days following the Effective Date. Any objection to a Claim must
be served upon the holder of the Claim to which the objection has
been made, and upon the Debtors or Reorganized Debtors as
appropriate.
14.2 Distributions. Except as may otherwise be
agreed by the Reorganized Debtors, no payment or distribution will
be made with respect to all or a portion of any Disputed Claim
until such Claim is an Allowed Claim. Payments and distributions
to each holder of a Disputed Claim (to the extent that it
ultimately becomes an Allowed Claim) will be made in accordance
with the Plan once such Claim becomes an Allowed Claim. In order
to permit undelayed pro rata distributions to the holders of
Allowed General Unsecured Claims in Class 10, the Reorganized
Debtors may create appropriate reserves with respect to Disputed
Claims in that Class.
ARTICLE XV
TREATMENT OF EXECUTORY CONTRACTS
15.1 Assumption of Certain Executory Contracts.
Pursuant to this Plan, the Executory Contracts of each of the
Debtors listed in Exhibit "9" to the Plan Supplement shall be
assumed upon the Confirmation Date of the Plan pursuant to
Bankruptcy Code 365.
15.2 Rejection of Other Executory Contracts. Any and
all Executory Contracts of each of the Debtors that are not
expressly assumed pursuant to this Plan or which have not been
otherwise assumed by the Debtors in the Reorganization Cases will
be deemed rejected as of the Confirmation Date pursuant to
Bankruptcy Code 365.
15.3 Rejection Claims Bar Date. Every Claim asserted
by a Creditor arising from the rejection of an Executory Contract
must be filed with the Bankruptcy Court no later than the first
Business Day which is thirty (30) days after the Confirmation Date.
Every such Claim which is timely filed, as and when it becomes an
Allowed Claim, will be treated under the appropriate Class of the
Plan. Every such Claim which is not timely filed by the deadline
stated above will be barred and discharged and the Creditor holding
the Claim will not receive or be entitled to any distribution under
the Plan on account of such Claim.
15.4 Vesting. All Executory Contracts which are
assumed will be vested in the appropriate Reorganized Debtor as of
the Effective Date.
ARTICLE XVI
DISCHARGE
Except as otherwise provided in the Confirmation
Order or the Plan, entry of the Confirmation Order discharges any
and all Claims against the Debtors, and any of them, including, but
not limited to, any Claim which arose at any time before the entry
of the Confirmation Order and any Claim of a kind described in
Bankruptcy Code 502(g), (h) and (i). On and after the
Confirmation Date, and as to every discharged Claim, every holder
of a Claim will be precluded from asserting against the Debtors
and/or Reorganized Debtors, and any assets of the Debtors and/or
Reorganized Debtors, any such discharged Claim and any rights,
remedies, demands, damages, or liabilities of any kind arising from
or related to any such discharged Claim.
ARTICLE XVII
CONDITIONS PRECEDENT TO EFFECTIVE DATE
17.1 Conditions Precedent to Effective Date. The
following are conditions to the occurrence of the Effective Date of
this Plan:
(a) All regulatory and
other approvals required by
the State of Nevada or Clark
County (including all
necessary approvals of the
Gaming Authorities) of the
transactions contemplated by
this Plan have been obtained
except for gaming approval of
the Equity Nominee designated
by the existing Elsinore
Equity Holders, and including,
without limitation, approval
of at least two (2) of the
four (4) directors of
Reorganized Elsinore nominated
by the Bondholders Committee;
(b) The Rights have been
fully subscribed to and
funded.
(c) The Plan has been
confirmed pursuant to the
Confirmation Order and the
Confirmation Order remains in
full force and effect without
material modification thereof;
and
(d) There is not in
effect any stay, injunction or
restraining order or any other
order of any kind which has
been issued by a court of
competent jurisdiction or
governmental entity staying or
prohibiting the effectuation
of the Plan.
17.2 Waiver of Effective Date Conditions. With the
approval of the Bondholders Committee, the Debtors may waive any of
the conditions set forth in Sections 17.1(b)-(d) at any time,
without notice, without leave of or order of the Bankruptcy Court,
and without any formal action other than proceeding to consummate
this Plan.
ARTICLE XVIII
MODIFICATIONS OF THE PLAN
The Plan may be modified jointly by the Debtors or
the Reorganized Debtors (as applicable) and the Bondholders
Committee, subject to and in accordance with the provisions and
requirements of Bankruptcy Code 1127.
ARTICLE XIX
OFFICIAL COMMITTEES
As of the Effective Date, the duties of all statutory
committees, and specifically the Creditors Committee and the Equity
Holders Committee, shall terminate, except with respect to
applications for approval of professional fees and expenses, unless
otherwise ordered by the Court.
ARTICLE XX
RETENTION OF JURISDICTION
Notwithstanding confirmation of the Plan, the
Bankruptcy Court will retain jurisdiction for the following
purposes:
20.1 In General. The Bankruptcy Court will retain
jurisdiction to determine the allowance and payment of any Claim(s)
upon any objection(s) thereto (or other appropriate proceedings) by
the Debtors, the Reorganized Debtors or any other party in interest
entitled to proceed in that manner. As part of such retained
jurisdiction, the Bankruptcy Court will continue to determine the
allowance of Administrative Claims and any request(s) for
payment(s) thereof, including Administrative Claims for
Professional Charges. Additionally, the Bankruptcy Court will
retain jurisdiction to determine the allowance, legality and
payment of all Claims asserted by the IRS, pursuant to Bankruptcy
Code 505 or otherwise.
20.2 Plan Disputes and Enforcement. The Bankruptcy
Court will retain jurisdiction to determine any dispute(s) which
may arise regarding the interpretation of any provision(s) of the
Plan. The Bankruptcy Court also will retain jurisdiction to
enforce any provisions of the Plan and any and all documents
relating to the Plan.
20.3 Further Orders. The Bankruptcy Court will
retain jurisdiction to facilitate the performance of the Plan by
entering any further necessary or appropriate order(s) regarding
enforcement of the Plan and any provision(s) thereof. In addition,
the Bankruptcy Court will retain jurisdiction to facilitate or
implement the discharge of any Claim, or any portion thereof,
pursuant to the Plan.
20.4 Other Claims. The Bankruptcy Court will retain
jurisdiction to adjudicate any cause(s) of action or other
proceeding(s) presently pending or otherwise referenced here or
elsewhere in the Plan, including, but not limited to, the
adjudication of any and all "core proceedings" under 28 U.S.C.
157(b) which may be pertinent to the Reorganization Cases, and
which the Debtors or Reorganized Debtors may deem appropriate to
initiate and prosecute before the Court in aid of the
reorganization of the Debtors. This provision will not restrict
the rights of the Debtors or Reorganized Debtors to proceed in any
other court of competent jurisdiction; and it will not be construed
to require the Debtors or Reorganized Debtors to proceed in any
other such court if the Bankruptcy Court also has proper
jurisdiction.
20.5 Final Decree. The Bankruptcy Court will retain
jurisdiction to enter an appropriate final decree in the
Reorganization Cases.
20.6 Appeals. In the event of an appeal of the
Confirmation Order or any other kind of review or challenge to the
Confirmation Order, and provided that no stay of the effectiveness
of the Confirmation Order has been entered, the Bankruptcy Court
will retain jurisdiction to implement and enforce the Confirmation
Order and the Plan according to their terms, including, but not
limited to, jurisdiction to enter such orders regarding the Plan or
the performance thereof as may be necessary or appropriate to
effectuate the reorganization of the Debtors.
20.7 Executory Contracts. The Bankruptcy Court will
retain jurisdiction to determine any and all matters regarding
Executory Contracts, including, but not limited to, assumptions or
rejections thereof, and any and all Claims arising from such
Executory Contracts, including, but not limited to, rejection
damages Claims.
20.8 Other Debtors' Reorganizations. Up to the date
of the Confirmation Hearing, the Bondholders Committee (with input
from the Debtors) reserves the right to amend this Plan to withdraw
from consideration for reorganization FQEC or Olympia. Whether
this Plan is confirmed or becomes effective as to Elsub, FQEC,
Olympia or PSELP shall not in any way affect confirmation of this
Plan or the Effective Date as it relates to Elsinore and FQI, or
the remaining Debtors. Likewise, the conversion of the
Reorganization Case(s) relating to Elsub, FQEC, Olympia or PSELP to
Chapter 7 of the Bankruptcy Code will not affect the Confirmation
Order or this Plan, or the Effective Date, as it relates to
Elsinore and FQI, or the remaining Debtors.
ARTICLE XXI
GENERAL PROVISIONS
21.1 Additional Assurances. The Debtors, Reorganized
Debtors, the Bondholders Committee and the Creditors holding Claims
herein will execute such other and further documents as are
necessary to implement any of the provisions of the Plan.
21.2 Extension of Payment Dates. If any payment date
falls due on any day which is not a Business Day, then such payment
date will be extended to the next Business Day.
21.3 Confirmation by Non-Acceptance Method. The
Debtors and the Bondholders Committee hereby request, if necessary,
confirmation of the Plan pursuant to Bankruptcy Code 1129(b), with
respect to any impaired Class of Claims or Equity Interests which
does not vote to accept the Plan. The Debtors and the Bondholders
Committee will pursue confirmation of the Plan pursuant to
Bankruptcy Code 1129(b) in an effort to obtain for the Unsecured
Creditors, the IRS, the Convertible Noteholders, and the holders of
the Old Elsinore Common Stock the recoveries provided in the Plan.
The Debtors and the Bondholders believe that the Plan as proposed
meets the cramdown requirements of Bankruptcy Code 1129(b). If
the Court determines that the Plan cannot be confirmed as proposed,
then, pursuant to Bankruptcy Code 1127 and Local Rule 3019, the
Bondholders Committee reserves the right to propose an immediate
modification to the Plan which provides for a lesser recovery or
zero recovery for junior classes of claims and interests in these
cases, including lesser recoveries or zero recoveries (and the loss
of other rights attendant thereto) for the Convertible Noteholders
and for the holders of the Old Elsinore Common Stock.
21.4 Vesting. As of the Effective Date, the
Reorganized Debtors will be vested with all property of their
respective Estates at that time, free and clear of all Claims,
liens, security interests, assignments, encumbrances, charges, and
other interests of Creditors except as otherwise provided in this
Plan.
21.5 Retention of Claims and Causes of Action.
Pursuant to Bankruptcy Code 1123(b)(3), and except as otherwise
provided in this Plan, the Reorganized Debtors will retain and may
enforce any and all claims and causes of action of the Debtors,
including, but not limited to, any claims to recover preferences or
fraudulent conveyances pursuant to Bankruptcy Code 547 and 548.
21.6 Interest on Claims. Unless otherwise
specifically provided for in the Plan or the Confirmation Order, or
required by applicable bankruptcy law, post-petition interest shall
not accrue or be paid on Claims, and no holder of a Claim shall be
entitled to interest accruing on or after the Petition Dates on any
Claim. Without limiting the foregoing, interest shall not accrue
or be paid upon any Disputed Claim in respect of the period from
the Petition Date to the date a final distribution is made thereon
if such Disputed Claim thereafter becomes an Allowed Claim.
21.7 Joint and Several Claims. On the Confirmation
Date, joint and several Claims against more than one Debtor, and
all guarantees of Claims against one Debtor for an obligation
incurred by another Debtor shall be deemed to be one obligation;
any Claim which is joint and several as to the Debtors or any two
of them or any Claims based on such guarantees shall be deemed to
be one Claim.
21.8 No Admission of Joint Liability. Except as
provided specifically in the Plan, the consolidation of the
Reorganization Cases for administrative purposes and the treatment
of Claims against and Equity Interests in the Debtors in this Plan
shall not constitute or be construed as an admission or finding by
the Court of joint liability or responsibility by any Debtor or
Reorganized Debtor for the liabilities of any other of the Debtors
or Reorganized Debtors.
21.9 Exculpation and Limitation of Liability.
Neither the Debtors, the Reorganized Debtors, nor the Bondholders
Committee, nor any statutory committees, nor any of their
respective present or former members, officers, directors,
employees, advisors, attorneys, or agents, shall have or incur any
liability to any holder of a Claim or an Equity Interest, or any
other party-in-interest, or any of their respective agents,
employees, representatives, financial advisors, attorneys, or
affiliates, or any of their successors or assigns, for any act or
omission in connection with, relating to, or arising out of, the
Reorganization Cases, the pursuit of confirmation of the Plan, the
consummation of the Plan, or the administration of the Plan or the
property to be distributed under the Plan, except for their wilful
misconduct, and in all respects shall be entitled to reasonably
rely upon the advice of counsel with respect to their duties and
responsibilities under the Plan.
Notwithstanding any other provisions of this Plan, no
holder of a Claim or Equity Interest, no other party-in-interest,
none of their respective agents, employees, representatives,
financial advisors, attorneys, or affiliates, and no successors or
assigns of the foregoing, shall have any right of action against
the Debtors, the Reorganized Debtors, or the Bondholders Committee,
or any statutory committee, or any of their respective present or
former members, officers, directors, employees, advisors,
attorneys, or agents, for any act or omission in connection with,
relating to, or arising out of, the Reorganization Cases, the
pursuit of confirmation of the Plan, the consummation of the Plan,
or the administration of the Plan or the property to be distributed
under the Plan, except for their wilful misconduct.
21.10 Captions. Section captions used in the Plan
are for convenience only, and will not affect the construction of
the Plan.
21.11 Prohibition Against Prepayment Penalties. If
the Reorganized Debtors choose, in their sole and absolute
discretion, to prepay any obligation on which deferred payments are
provided under the Plan, the Reorganized Debtors will not be liable
or subject to the assessment of any prepayment penalty thereon
unless otherwise ordered by the Bankruptcy Court. The Reorganized
Debtors will not be obligated to pay any such prepayment of any
deferred obligation.
21.12 Payment of Statutory Fees. All fees payable
pursuant to Section 1930 of Title 28 of the United States Code, as
determined by the Bankruptcy Court at or in conjunction with the
Confirmation Hearing, will be paid on or before the Confirmation
Date.
21.13 Successors and Assigns. The rights and
obligations of any Creditor or the holders of the Equity Interests
referred to in the Plan will be binding upon, and will inure to the
benefit of, the successors, assigns, heirs, devisees, executors,
and personal representatives of such Creditor or such holder of an
Equity Interest.
21.14 Disclosure Statement. Creditors, the holders
of the Equity Interests, and other interested parties are referred
to the Disclosure Statement, which accompanies the Plan in
conjunction with the solicitation of acceptances of the Plan.
21.15 Confirmation Order. The Plan shall have no
force or effect unless the Bankruptcy Court enters the Confirmation
Order.
21.16 Revocation. If the Plan is revoked or
withdrawn prior to confirmation, then the Plan shall be deemed null
and void, and, in such event, nothing contained herein shall be
deemed to constitute a waiver or release of any Claims by or
against the Debtors or any other Person or to prejudice in any
manner the rights of the Debtors or any Person.
21.17 Reservation of Rights. Neither the filing of
the Plan, nor any statement or provision contained herein, nor the
taking of any action by the Debtors with respect to the Plan shall
be or shall be deemed to be an admission or waiver of any rights
prior to the Effective Date, except as specifically set forth in
the Plan with respect to the period prior to the Effective Date.
21.18 Fractional Dollars or Shares. Notwithstanding
any other provision of the Plan, no payments or distributions under
the Plan of or on account of fractions of dollars or fractions of
shares of stock will be made. When any payment or distribution of
or on account of a fraction of a dollar or a fraction of a share of
stock to any holder of an Allowed Claim or Equity Interest would
otherwise be required, the actual payment or distribution made will
reflect a rounding of such fraction to the nearest whole number (up
or down). The Reorganized Debtors shall not be required to make
any distribution or issue any check that would be in an amount less
than Two Dollars ($2.00) on account of any Claim.
21.19 Unclaimed Property. Except as otherwise
provided in this Plan, any property held for distribution in
accordance with the Plan by the Reorganized Debtors which is
unclaimed or undistributed on the third anniversary of the
Effective Date shall revest in the Reorganized Debtors and be
distributed to the Reorganized Debtors.
21.20 Payment Option. At the option of each of the
Reorganized Debtors, except as otherwise required or provided in
the Plan or by any applicable agreement, any cash payment to be
made pursuant to the Plan may be made by check on a United States
bank mailed by first class mail or by wire transfer.
RESPECTFULLY SUBMITTED this 22 day of May, 1996.
ELSINORE CORPORATION, a Nevada
corporation
By /s/ Thomas E. Martin
Thomas E. Martin
Its President and CEO
FOUR QUEENS, INC., a Nevada
corporation
By /s/ Thomas E. Martin
Thomas E. Martin
Its President and CEO
FOUR QUEENS EXPERIENCE
CORPORATION,
a Nevada corporation
By /s/ Thomas E. Martin
Thomas E. Martin
Its President
PALM SPRINGS EAST LIMITED
PARTNERSHIP, a Nevada limited
partnership
BY: ELSUB MANAGEMENT
CORPORATION, General Partner
By /s/ Thomas E. Martin
Thomas E. Martin
Its President
ELSUB MANAGEMENT CORPORATION, a
Nevada corporation,
By /s/ Thomas E. Martin
Thomas E. Martin
Its President
OLYMPIA GAMING CORPORATION, a
Nevada
corporation
By /s/ Thomas E. Martin
Thomas E. Martin
Its President
<PAGE>
UNOFFICIAL COMMITTEE OF BONDHOLDERS
By /s/ Bruce Waterfall
Its Chairperson
PREPARED BY:
STREICH LANG, P.A.
3800 Howard Hughes Parkway
Suite 1500
Las Vegas, Nevada 89109
and
Renaissance One
Two North Central Avenue
Phoenix, Arizona 85004-2391
By /s/ Robert J. Miller
John J. Dawson
John R. Clemency
Robert P. Harris
Robert J. Miller
Attorneys for the Elsinore Debtors
Edward S. Weisfelner, Esq.
BERLACK, ISRAELS & LIBERMAN LLP
120 West 45th Street
New York, New York 10036
and
GORDON & SILVER, LTD.
3800 Howard Hughes Parkway
Fourteenth Floor
Las Vegas, Nevada 89109
By /s/ Gerald M. Gordon
Gerald M. Gordon
Attorneys for Unofficial Committee of
Bondholders
John J. Dawson, Esq. (Bar No. 4099)
John R. Clemency, Esq.
STREICH LANG, P.A.
3800 Howard Hughes Parkway
Suite 1500
Las Vegas, Nevada 89109
(702) 792-2727
and
Renaissance One
Two North Central Avenue
Phoenix, Arizona 85004-2391
(602) 229-5200
Attorneys for Debtors
IN THE UNITED STATES BANKRUPTCY COURT
FOR THE DISTRICT OF NEVADA
In re:
ELSINORE CORPORATION,a Nevada
corporation,
Debtor.
FOUR QUEENS, INC., a Nevada
corporation,
Debtor.
FOUR QUEENS EXPERIENCE
CORPORATION, a Nevada
corporation,
Debtor.
PALM SPRINGS EAST LIMITED
PARTNERSHIP, a Nevada limited
partnership,
Debtor.
ELSUB MANAGEMENT CORPORATION, a
Nevada corporation,
Debtor.
OLYMPIA GAMING CORPORATION, a
Nevada corporation,
Debtor.
In Proceedings Under Chapter 11
Case No. 95-24685 RCJ
(Jointly Administered)
(This pleading relates to
all cases)
Case No. 95-24686 RCJ
Case No. 95-24687 RCJ
Case No. 95-24688 RCJ
Case No. 95-24689 RCJ
Case No. 95-24839 RCJ
Date of Hearing: 7/16/96
7/18/96
8/5/96
Time of Hearing: 1:30 p.m.
ORDER CONFIRMING FIRST AMENDED PLAN OF REORGANIZATION
PROPOSED JOINTLY BY THE DEBTORS AND THE UNOFFICIAL
BONDHOLDERS COMMITTEE (AS MODIFIED)
<PAGE>
This matter came before the Court on July 16, 1996 for a
confirmation hearing on the "First Amended Plan Of Reorganization
Proposed Jointly By The Debtors And The Unofficial Bondholders
Committee" dated May 22, 1996 (the "Plan"). The Plan was filed by:
(i) the Debtors and Debtors-In-Possession in the above-captioned,
jointly administered Chapter 11 cases (collectively, the
"Debtors"); and (ii) the unofficial committee (the "Bondholders
Committee") of a majority of the holders of the 12.5% First
Mortgage Notes issued in October of 1993 (the "1993 Bondholders").
With respect to the Plan, the Court finds and concludes as
follows:
1. By an Order dated June 5, 1996 (the "Solicitation
Procedures Order"), the Court approved the "Disclosure
Statement Accompanying First Amended Plan Of Reorganization
Proposed Jointly By The Debtors And The Unofficial Bondholders
Committee" dated May 22, 1996 (the "Disclosure Statement")
related to the Plan, and fixed certain procedures related to
the solicitation of votes on the Plan. Following the Court's
entry of the Solicitation Procedures Order, plan solicitation
packages (in the form approved by the Court), including the
Disclosure Statement, were timely transmitted to the creditors
and shareholders of record from whom votes were solicited, in
accordance with Bankruptcy Rule 3017(d) and the Solicitation
Procedures Order.
2. The voting on the Plan is summarized in the "Debtors'
Certification of Acceptance and Rejection of Chapter 11 Plan
(Ballot Report)" (the "Ballot Report") filed by the Debtors.
3. Objections to the Plan (collectively, the "Objections)
have been filed by: (i) the Official Unsecured Creditors'
Committee (the "Creditors Committee"); (ii) the Official
Equity Security Holders Committee (the "Equity Committee");
(iii) the Internal Revenue Service ("IRS"); (iv) various
Putnam Funds, holders of the outstanding 1994 Bonds (the "1994
Bondholders"); (v) Magnolia Partners, L.P. ("Magnolia"), one
of the Convertible Noteholders; and (vi) the State of Nevada
Gaming Control Board (the "Gaming Control Board").
4. Prior to the confirmation hearings described below, the
Debtors and the Bondholders Committee gave notice of the
following modifications to the Plan:
(a) The Debtors and the Bondholders Committee
withdrew as Plan proponents FQEC and Olympia. The Debtors and the
Bondholders Committee reserved the right to propose a joint plan or
separate plans of reorganization for FQEC and Olympia in the
future.
(b) The Debtors and the Bondholders Committee
modified the Plan (including, without limitation, sections 2.91 and
5.1) to provide for the consensual treatment of the Class 5 Claims
held by the 1994 Bondholders. Under the Plan as modified, the
Class 5 Claims held by the 1994 Bondholders will be allowed and
treated in accordance with the specifications of the "Elsinore
Corporation Term Sheet For Amended And Restated 1994 Notes" which
is attached hereto as Exhibit "1".
(c) The Debtors and the Bondholders Committee
modified the Plan (including, without limitation, section 4.3) to
provide for the consensual treatment of the Class 3 Priority Claim
of the State of Nevada, Department of Taxation (the "Department").
Under the Plan, the Department's Priority Claims will be treated as
follows:
(i) With respect to the Departments' Priority
Claim against Elsinore in the amount of $128,998.94, the amount of
$111,046.18 will be paid in equal quarterly installments of
principal and interest over a period of one year commencing at the
end of the first calendar quarter after the Effective Date of the
Plan.
(ii) The remaining portion of the Department's
Priority Claim against Elsinore in the amount of $17,952.76, and
the Department's Priority Claim against FQI in the amount of
$28,239.00 will be paid in accordance with the current treatment of
Class 3 under the Plan, except as provided in subparagraph iii.
below.
(iii) Interest on all of the Department's
Priority Claims will accrue at the rate of 9% per annum from and
after the Effective Date of the Plan.
(iv) The Department's Priority Claims can be
prepaid at any time without penalty.
(d) Subject to statements made on the record at the July
16, 1996 confirmation hearing, the Debtors and the Bondholders
Committee obtained approval from the Gaming Authorities for the
form of the Interim Management Agreement which is attached hereto
as Exhibit "2." Accordingly, the Debtors and the Bondholders
Committee are authorized to execute and implement the terms of the
Interim Management Agreement in accordance with, inter alia,
section 13.2 of the Plan.
5. On July 16, 1996, the Court conducted a hearing regarding
the confirmation of the Plan, at which time the Court
considered: (i) the various Objections, including the legal
memoranda related thereto; (ii) the legal memoranda in support
of the Plan filed by the Debtors and the Bondholders
Committee; (iii) the declarations submitted by the parties,
particularly the declaration of Thomas Martin, the president
and chief executive officer of Elsinore; the declaration of
Kathleen Nylen, a valuation expert retained by the Debtors;
the declaration of Bradley J. Holtz, a valuation expert
retained by the Bondholders Committee; the declaration of
Jeffrey R. Truitt, a financial consultant retained by the
Bondholders Committee; and the declarations of various members
of the replacement management team identified in the Plan,
including the declaration of William Westerman, the President
of Riviera Gaming Management-Elsinore; and (iv) oral argument
by counsel. The Court also considered the prior testimony and
evidence which has been presented in these cases, and the
entire record before the Court.
6. At the conclusion of the July 16, 1996 confirmation
hearing, the Court ruled on the record that the Plan meets all
of the confirmation requirements of the Bankruptcy Code, other
than the requirement that the Plan complies with the absolute
priority rule which is codified in 11 U.S.C. section 1129(b)
to the extent that it provides for a recovery to equity
holders without providing payment in full to intermediate
creditors, including the unsecured claims of the IRS, the
general unsecured creditors represented by the Creditors
Committee, and the Convertible Noteholders. At the end of the
July 16, 1996 hearing on the Plan, the Court reserved ruling
on the absolute priority objection raised by the IRS, the
Creditors Committee, and the Convertible Noteholders.
7. On July 18, 1996, the Court conducted further proceedings
with respect to the Plan. At the July 18 hearing, the Court
concluded that the recovery proposed for the Elsinore Equity
Holders (10% of the New Elsinore Common Stock, the "10%
Interest" and participation in the Rights) under the Plan did
not comport with the absolute priority rule under the
Bankruptcy Code in light of the objections filed by the
Creditors Committee, the IRS, and the Convertible Noteholders.
Pursuant to section 21.3 of the Plan, the Bondholders
Committee moved for modification of the Plan to eliminate
recovery for Elsinore Equity Holders.
8. Following the July 18 confirmation hearing, but before
the entry of an Order incorporating the Court's ruling on the
Plan, the Creditors Committee, the Convertible Noteholders,
the IRS, and the Equity Committee filed with the Court a
"Joint Motion For Reconsideration Based Upon The Withdrawal Of
Creditor Objections" (the "Reconsideration Motion"). Through
the Reconsideration Motion, the Creditors Committee, the
Convertible Noteholders, and the IRS withdrew their Objections
to the Plan in return for a reallocation of the 10% Interest
(and the corresponding interest in the Rights) which
originally was earmarked for Elsinore Equity Holders under the
Plan.
9. On August 5, 1996, the Court conducted a hearing on the
Reconsideration Motion. Based on the record, the arguments of
the parties at the August 5, 1996 hearing, and the agreement
of the Creditors' Committee, the Equity Committee, the IRS,
and the Convertible Noteholders to withdraw their opposition
to the Plan, the Court determined that the relief sought in
the Reconsideration Motion should be granted. The Court also
determined that the Confirmation Date should be moved up so
that, among other things, the management transition provided
under the Plan is not delayed any further. Accordingly, the
Plan is modified to provide the following:
(a) In addition to the recovery provided in the
Plan, the Class 10 Unsecured Creditors of FQI will receive a
pro rata interest in 2.5% of the New Elsinore Common Stock and
a 2.5% pro rata participation interest in the Rights;
(b) In addition to the recovery provided in the
Plan, the Class 10 Unsecured Creditors of Elsinore will
receive a pro rata interest in 1% of the New Elsinore Common
Stock;
(c) In addition to the recovery provided in the
Plan, the IRS will receive 1.9% of the New Elsinore Common
Stock;
(d) In addition to the recovery provided under the
Plan, the Convertible Noteholders will receive a pro rata
interest in 1% of the New Elsinore Common Stock and 1% pro
rata participation interest in the Rights;
(e) In place of the recovery provided under the
Plan, the Elsinore Equity Holders will receive a pro rata
interest in 3.6% of the New Elsinore Common Stock and a 6.5%
pro rata participation interest in the Rights;
(f) If permitted under applicable nonbankruptcy law,
the Elsinore Equity Holders may transfer their right under the
Plan to nominate a member of the Board of Directors for
Reorganized Elsinore in accordance with section 13.3 of the
Plan; and
(g) The Confirmation Date will mean 12:00 noon
(Nevada time) on August 12, 1996.
10. The modifications to the Plan set forth in this Order do
not materially or adversely change the treatment of any
creditor or party-in-interest (other than the creditors which
agreed to the modifications) who has previously cast a ballot
to either accept or reject the Plan. Accordingly, no further
disclosure of information, solicitation of creditors and
parties-in-interest, or voting is required with respect to the
Plan modifications.
11. Confirmation of the Plan is a core proceeding under 28
U.S.C. Section 157(b)(2). Pursuant to 28 U.S.C. Section
157(b) and 1334, this Court has the jurisdiction to enter a
final order confirming the Plan.
12. After hearings on due and proper notice, the Court has
determined that the Plan, as modified hereby, satisfies the
requirements for confirmation set forth in Bankruptcy Code
Section 1129(a) and (b).
Based on the foregoing findings and conclusions, and the
entire record before the Court; and good cause appearing,
IT IS HEREBY ORDERED as follows:
A. The Plan, as modified hereby, shall be, and hereby
is, confirmed pursuant to Bankruptcy Code Section 1129. The terms
of the Plan and the exhibits thereto contained in the Plan
Supplement (including the Interim Management Agreement that was
modified and approved by the Gaming Authorities in Open Court at
the July 16 hearing), are approved in substance and are by
reference incorporated into this Order confirming the Plan. The
modifications to the Plan set forth above shall be, and hereby are,
approved.
B. All Objections to confirmation of the Plan that have
not been withdrawn, waived, or settled, shall be, and hereby are,
overruled on the merits.
C. In accordance with the Plan, the assumption by
Elsinore, FQI, Elsub and PSELP of their respective Executory
Contracts listed in Exhibit "9" to the Plan Supplement shall be,
and hereby is, approved, effective as of the Confirmation Date.
All Executory Contracts of Elsinore, FQI, Elsub and PSELP not
listed in Exhibit "9" to the Plan Supplement and not otherwise
assumed by those Debtors in the Reorganization Cases shall be, and
hereby are, deemed rejected as of the Confirmation Date, and the
rejection of those contracts shall be, and hereby is, approved.
Parties asserting claims arising out of the rejection of an
executory contract under the Plan shall have 30 days to assert the
claims in these cases. The Executory Contracts of FQEC and
Olympia shall not be assumed or rejected pursuant to the Plan.
FQEC and Olympia reserve all of their rights to assume or reject
their respective Executory Contracts at a later time.
D. The Debtors, the Reorganized Debtors, and all other
necessary parties are authorized and empowered, without further
Court order, to execute and deliver any instrument, security,
agreement or document, and to perform any act, that is necessary,
desirable, or required for the consummation of the Plan, including,
without limitation: (i) issuing or causing the issuance of the
securities and other instruments contemplated by the Plan,
including the Restated 1994 Mortgage Notes, the Restated 1993
Mortgage Notes, the New Elsinore Common Stock and the Rights; (ii)
executing and filing the Reorganized Elsinore Articles and the
Reorganized FQI Articles with the Nevada Secretary of State's
office, and executing the Reorganized Elsinore Bylaws and the
Reorganized FQI Bylaws; (iii) executing any appropriate security
documents related to the Restated 1993 Mortgage Notes or Restated
1994 Mortgage Notes; and (iv) obtaining all regulatory and other
approvals required by the State of Nevada or Clark County
(including all necessary approvals of the Gaming Authorities) of
the transactions contemplated by the Plan.
E. Pursuant to Bankruptcy Code Section 1145, except
with respect to an entity that is an underwriter as defined in
Section 1145(b), section 5 of the Securities Act of 1933 and any
State or local law requiring registration for offer or sale of a
security or registration or licensing of an issuer of, underwriter
of, or broker or dealer in, a security do not apply to the offer or
sale, in accordance with the Plan, of the Restated 1994 Mortgage
Notes, the Restated 1993 Mortgage Notes, the New Elsinore Common
Stock, the Rights or the exercise of the Rights.
F. Pursuant to Bankruptcy Code Section 1141, and except
as otherwise proved in the Plan or this Order, entry of the
Confirmation Order discharges any and all Claims against Elsinore,
FQI, Elsub and PSELP, and any of them, including, but not limited
to, any Claim which arose at any time before the entry of the
Confirmation Order and any Claim of a kind described in Bankruptcy
Code Section 502(g), (h) and (i). On and after the Confirmation
Date, and as to every discharged Claim, every holder of a Claim
will be precluded from asserting against Elsinore, FQI, Elsub,
PSELP, or any of the Reorganized Debtors, and any assets of
Elsinore, FQI, Elsub, PSELP, or any of the Reorganized Debtors, any
such discharged Claim and any rights, remedies, demands, damages,
or liabilities of any kind arising from or related to any such
discharged Claim.
G. This Court shall retain jurisdiction in accordance
with the terms of Article XX of the Plan.
H. Until the entry of the final decree, the Debtors
shall file with the clerk, not later than four (4) months after the
entry of this Order, and every six (6) months thereafter, a report
of the action taken by the Reorganized Debtors and the progress
made toward consummation of the confirmed Plan. Said report shall
include, at a minimum, the following information:
(1) A schedule of any personal property costing more than
$5,000 and any real property acquired since confirmation of the
Plan and the price paid for each;
(2) A schedule listing each debt, the total amount required
to be paid under the Plan, the amount required to be paid to date,
the amount actually paid to date, and the amount unpaid;
(3) A schedule of executory contracts entered into after Plan
confirmation;
(4) A statement listing each postpetition tax (i.e., income,
payroll, property, sales), and payee and the amount actually paid;
and
(5) The progress toward completion of the confirmed Plan and
a list and status of any pending adversary proceedings or motion
and resolution expected.
Pursuant to LR 3022, and unless there are any pending
adversary proceedings or contested matters, a final decree may be
entered 6 months following the entry of this Confirmation Order.
DATED this ____ day of July, 1996.
/s/ Robert C. Jones
UNITED STATES BANKRUPTCY JUDGE
PREPARED AND SUBMITTED BY
THE PLAN PROPONENTS:
STREICH LANG
A Professional Association
3800 Howard Hughes Parkway
Suite 1500
Las Vegas, Nevada 89109
and
Renaissance One
Two North Central Avenue
Phoenix, Arizona 85004-2391
By /s/ Ira S. Levine for
John R. Clemency
Robert P. Harris
Attorneys for the Debtors
and
Edward S. Weisfelner, Esq.
BERLACK, ISRAELS & LIEBERMAN LLP
120 West 45th Street
New York, New York 10036
and
GORDON & SILVER, LTD.
3800 Howard Hughes Parkway
Fourteenth Floor
Las Vegas, Nevada 89109
By /s/ Gerald M. Gordon
Gerald M. Gordon
Thomas H. Fell
Attorneys for Bondholders Committee
OFFICE OF U.S. TRUSTEE APPROVED/DISAPPROVED
600 Las Vegas Blvd. South, #430
Las Vegas, Nevada 89101
By /s/ Barry Jenkins
Barry Jenkins
JONES, JONES, CLOSE & BROWN APPROVED/DISAPPROVED
290 South Arlington Avenue, #200
Reno, Nevada 89501
By /s/ Janet L. Chubb
Janet Chubb
Attorneys for Creditors Committee
McDONALD, CARANO, WILSON, McCUNE, APPROVED/DISAPPROVED
BERGIN, FRANKOVICH & HICKS
2300 West Sahara, Suite 1000
Las Vegas, NV 89102
By /s/ Bryan Clark for
David Huston
Attorneys for Equity Committee
INTERNAL REVENUE SERVICE APPROVED/DISAPPROVED
4750 West Oakey
Las Vegas, Nevada 89102
By /s/ Rollin G. Thorley
Rollin G. Thorley
Don S. DeAmicis, Esq. APPROVED/DISAPPROVED
ROPES & GRAY REVIEWED
One International Plaza
Boston, Massachusetts 02110
and
William McGimsey, Esq.
601 East Charleston
Las Vegas, Nevada 89104
By /s/ William M. McGimsey
William McGimsey
Attorneys for 1994 Bondholders
Richard C. Josephson, Esq. APPROVED/DISAPPROVED
STOEL RIVES LLP
900 SW Fifth Avenue, Suite 2300
Portland, Oregon 97204
and
WOODBURN & WEDGE
300 South Fourth Street, Suite 620
Las Vegas, Nevada 89101
By /s/ Richard C. Josephson
Richard F. Holley
Attorneys for Magnolia Partners
Exhibit 99
FOR IMMEDIATE RELEASE
Tuesday, August 13, 1996
BANKRUPTCY COURT ORDERS CONFIRMATION OF
PLAN OF REORGANIZATION FOR ELSINORE
LAS VEGAS, Nevada, August 13, 1996...Elsinore Corporation
(ASE/PSE:ELS) today announced that on August 8, 1996, in the
Chapter 11 proceedings of Elsinore and a number of subsidiaries
pending in the United States Bankruptcy Court for the District of
Nevada, the Bankruptcy Court entered an order (the "Confirmation
Order") confirming a modified plan of reorganization for Elsinore
and certain of the other debtors. The plan was proposed jointly
by the Elsinore Debtors and by an unofficial committee of the 1993
noteholders in the cases (the "Bondholders Committee"). The plan
that was confirmed on August 8, 1996, differs in certain respects
from the prior versions of the plan that were the subject of
previous releases. The modified plan, which the Bankruptcy Court
confirmed, results from an agreement among various junior parties
which had objected to plan confirmation.
The confirmed plan contemplates the ongoing operation of
Elsinore and at least three of its subsidiaries, Four Queens, Inc.
("FQI"), Elsub Management Corporation ("Elsub") and Palm Springs
East Limited Partnership (PSELP"). The plan calls for a
restructuring of the debts of the Elsinore entities, and it calls
for a redistribution of equity interests in the companies.
Creditors and former shareholders of Elsinore, FQI, Elsub and
PSELP will receive the distributions provided under the plan as
modified by the Confirmation Order that was entered by the
Bankruptcy Court on August 8, 1996. Distributions will be made
out of cash flow generated by the ongoing operations of the
businesses, supplemented by a $5 million rights offering and the
issuance of stock in the reorganized Debtors. Effective at noon
on August 12, 1996, Elsinore has entered into an Interim
Management Agreement with Riviera Gaming Management Corp.-Elsinore, Inc.
To manage the business operations of the Debtors
subject to direction of the existing board of directors for the
companies. When the plan eventually becomes fully effective
(which is expected to occur before the end of the year), the
existing board of directors will be reconstituted with new
directors, four of whom will be chosen by the Bondholders
Committee and one of whom will be chosen by the Equity Committee
appointed in the case (with input from other creditor
constituencies in the cases.)
In summary, the plan provides for the following: Elsinore's
1994 noteholders will retain their lien interests as collateral
for repayment of approximately $3.8 million in outstanding
principal, accrued interest, costs and fees, which will be paid
over four years with interest at a rate of 11.5% per annum.
Elsinore's 1993 noteholders (represented largely by the
Bondholders Committee) will receive at least 87.5% of the new
common stock (and a corresponding percentage of the rights
offering) in reorganized Elsinore in exchange for a reduction in
their secured claims from approximately $61 million to $30
million. The $30 million secured claim of the 1993 noteholders
will be paid over five years with interest at a
-more-
Elsinore Corporation
Add 1
rate of 13.5 % per annum. Unsecured creditors who hold claims of
$500 or less will receive payment in full on the effective date of
the plan which is expected to occur before the end of the year.
Larger general unsecured creditors will receive pro rata
recoveries from a fund of approximately $1.4 million which will be
paid out over three years following the effective date of the
plan. In addition, general unsecured creditors of Elsinore will
receive on a pro rata basis 1% of the new common stock in
reorganized Elsinore, and general unsecured creditors of FQI will
receive on a pro rata basis 2.5% of the new common stock and a
2.5% participation in the rights offering for reorganized
Elsinore. The IRS will receive full payment of its secured claim
with interest at 8% over 4 years, and the IRS will receive in
respect of its unsecured claim proportionately the same type of
recovery which is provided for larger general unsecured creditors
in the case. In addition, the IRS will receive 1.9% of the new
common stock to be issued in reorganized Elsinore. Elsinore's
convertible subordinated noteholders, who hold claims of
approximately $1.5 million, will receive on a pro rata basis up to
3.5% of the new common stock plus a 3.5% participation interest in
the rights offering for reorganized Elsinore. Finally, the old
shareholders of Elsinore will receive on a pro rata basis 3.6% of
the new common stock and a 6.5% participation interest in the
rights offering. Under the plan, the Bondholders Committee has
guaranteed a 100% subscription for the $5 million rights offering.
If, pursuant to its guaranty, the Bondholders Committee is
required to subscribe to more than 87.5% of the rights offering,
then the Bondholders will receive a higher percentage of the new
common stock issued in reorganized Elsinore, and the stock
recoveries of the general unsecured creditors, the IRS, the
convertible noteholders and the old shareholders will be diluted
in a corresponding amount.
While Elsinore's senior management, Thomas E. Martin,
President and Chief Executive Officer, and Frank L. Burrell, Jr.,
Chairman of the Board, will cease to be employees of the
corporation, the balance of jobs for the 1,000 or so employees of
Elsinore and its subsidiaries (including FQI) will be unaffected
by confirmation of the modified plan.
Trading in the company's common stock continues to be halted
by the American Stock Exchange and by the Pacific stock Exchange.
As previously reported, Elsinore intends to pursue a reactivation
of its listings with the American Stock Exchange and the Pacific
Stock Exchange so that the new common stock in reorganized
Elsinore can be traded publicly following the effective date of
the plan. There can be no assurance that the listing on the
American Stock Exchange and the Pacific Stock Exchange will be
continued.
Elsinore, through a subsidiary, owns and operates the Four
Queens Hotel and Casino, a downtown Las Vegas hotel and casino
offering 690 rooms, meeting facilities, four restaurants, 1,050
slot machines and numerous blackjack, craps and other table games.
For information on Elsinore Corporation via facsimile at no
cost, simply call 1-800-PRO-INFO and dial company code 177.
###
