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) February 28, 1996
Consumat Systems, Inc.
(Exact name of registrant as specified in its charter)
Virginia
(State or other jurisdiction of incorporation)
0-9253 54-0720128
(Commission file number) (IRS Employer Identification No.)
8407 Erle Road, Mechanicsville, Virginia 23111
and
Post Office Box 9379, Richmond, Virginia 23227
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (804) 746-4120
Not applicable
(Former name or former address, if changed since last report)
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Item 3. Bankruptcy or Receivership
On February 28, 1996, the United States Bankruptcy Court for the Eastern
District of Virginia, Richmond Division("the Court"), confirmed the Second
Amended Plan of Reorganization filed by Consumat Systems, Inc. on January 26,
1996, as modified by the Modification to Second Amended Plan of
Reorganization filed by Consumat Systems, Inc. on February 27, 1996("the
Plan"). All capitalized terms used herein shall have the meanings set forth
in the Plan, a copy of which is attached hereto.
In accordance with the Plan, the Company will change it's corporate name
to Reorganized Consumat Systems, Inc. Under the Plan, all administrative and
priority claims are to be paid in full on the Effective Date (March 12, 1996)
or as soon as is practicable thereafter. All secured claims are to be paid in
full on the Effective Date except for Lighthouse Investments, LLC, which is
to receive a promissory note in the amount of $192,306.29. Under the Plan,
each Trade Claimant with an Allowed Unsecured Claim will be paid fifty
percent(50%) of their Allowed Claim on the Effective Date. Each Miscellaneous
Unsecured Claimant with an Allowed Unsecured Claim will receive twenty-five
percent(25%) of their claim in cash plus a pro-rata share of 150,000 shares
of common stock in the reorganized company. In addition, all Holders of
Allowed Equity Interests will receive a pro-rata share of 500,000 shares of
common stock in the reorganized company.
Also under the Plan, management of the Company, consisting of Robert L.
Massey, Robert S. Lee, Mark E. Hills, William O. Wiley and James K. Fishback,
are to receive, in the aggregate, 100,000 shares of the common stock of the
reorganized company. On the Effective Date, and in accordance with the Plan,
Sirrom Capital Corporation("SCC"), its affiliates, and/or their assigns will
purchase 260,000 shares of the common stock of the reorganized company.
Financing for the Plan is to be provided to Reorganized Consumat Systems,
Inc. by SCC. The total indebtedness of Reorganized Consumat to SCC as the
result of this financing, both during and subsequent to the bankruptcy, will
be $1,500,000. In connection with such financing and in accordance with the
Plan, Reorganized Consumat will grant a stock purchase warrant to SCC which
entitles SCC to purchase up to 475,000 shares of the reorganized company at
$0.01 per share.
On the Effective Date of the Plan, Reorganized Consumat Systems, Inc.
will have authorized 5,000,000 shares of common stock and 1,000,000 shares of
preferred stock. Of this amount, 1,010,000 shares of the common stock will be
issued under this Plan. In addition, 475,000 shares of the common stock will
be reserved for the SCC warrant as described above. The common stock of the
reorganized company will continue to be approved for quotation on the NASDAQ
system under the symbol "CSMT".
Unaudited financial information concerning the assets and liabilities of
Consumat Systems, Inc. on the confirmation date (February 28, 1996) is as
follows:
Total Current Assets $1,565,735
Net Property, Plant &
Equipment 616,725
Other Assets 94,709
Total Assets $2,111,982
Total Postpetition Liabilities $1,574,335
Total Prepetition Liabilities 1,275,632
Total Liabilities $2,849,967
A copy of the Second Amended Plan of Reorganization of Consumat Systems,
Inc. as confirmed by the Court on February 28, 1996 is attached as Exhibit
2(a) to this Form 8-K. A copy of the Modification to Second Amended Plan of
Reorganization, as approved by the Court on February 28, 1996, is attached as
Exhibit 2(b) to this Form 8-K.
Item 5. Other Events
On February 28, 1996, Consumat Systems, Inc. issued a press release, a
copy of which is attached as Exhibit 99 to this Form
8-K.
Item 7. Financial Statements and Exhibits
(c.) Exhibits
Exhibit Number Description
2(a) Second Amended Plan of Reorganization of
Consumat Systems, Inc. as confirmed on
February 28, 1996
2(b) Modification to Second Amended Plan of
Reorganization as approved on February 28,
1996
99 Press Release dated February 28, 1996
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
CONSUMAT SYSTEMS, INC.
Date: February 28, 1996 /s/ Robert L. Massey
Robert L. Massey
Chief Executive Officer
Date: February 28, 1996 /s/ Mark E. Hills
Mark E. Hills
Chief Accounting Officer
UNITED STATES BANKRUPTCY COURT
FOR THE EASTERN DISTRICT OF VIRGINIA
Richmond Division
In re: : Chapter 11
:
CONSUMAT SYSTEMS, INC., : Case No. 95-34253-S
:
Debtor. :
SECOND AMENDED
PLAN OF REORGANIZATION
January 26, 1996
Augustus C. Epps, Jr. (Va. Bar No. 13254)
Andrew J. Dolson (Va. Bar No. 28682)
Christian, Barton, Epps, Brent
& Chappell
909 East Main Street, Suite 1200
Richmond, Virginia 23219
(804) 697-4100
Counsel for Consumat Systems, Inc.
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TABLE OF CONTENTS
Page
DEFINITIONS..........................................................1
GENERAL TERMS AND CONDITIONS.........................................8
TREATMENT OF UNCLASSIFIED CLAIMS.....................................9
CLASSIFICATION OF CLAIMS AND INTERESTS..............................10
TREATMENT OF CLASSES................................................10
PROVISIONS REGARDING VOTING AND DISTRIBUTIONS UNDER THE PLAN........14
EXECUTION AND IMPLEMENTATION OF PLAN................................17
EXECUTORY CONTRACTS AND UNEXPIRED LEASES............................20
EFFECT OF CONFIRMATION OF PLAN......................................24
EFFECTIVENESS OF THE PLAN...........................................26
RETENTION OF JURISDICTION...........................................27
MISCELLANEOUS PROVISIONS............................................28
ACCEPTANCE OF PLAN AND REQUEST FOR CONFIRMATION.....................33
SCHEDULES AND EXHIBITS
SCHEDULE 8.01(a) Assumed Executory Contracts
EXHIBIT A Loan and Security Agreement
EXHIBIT B Form of Lighthouse Promissory Note
<PAGE>
UNITED STATES BANKRUPTCY COURT
FOR THE EASTERN DISTRICT OF VIRGINIA
Richmond Division
In re: : Chapter 11
:
CONSUMAT SYSTEMS, INC., : Case No. 95-34253-S
:
Debtor. :
SECOND AMENDED
PLAN OF REORGANIZATION
Consumat Systems, Inc., debtor-in-possession, files this Second Plan of
Reorganization pursuant to Title 11 of the United States Code and requests
confirmation hereof.
ARTICLE I
DEFINITIONS
Unless the context otherwise requires, the following terms shall have
the following meanings when hereinafter used in this Second Amended Plan of
Reorganization, which meanings shall be equally applicable to both the singular
and plural forms of such terms:
1.01. Administrative Expense Claim means a Claim for costs, expenses,
compensation, and/or reimbursement under ss. 503(b) of the Bankruptcy Code or a
Claim for any fees or charges assessed against the Estate under Chapter 123 of
Title 28 of the United States Code, which Claim is entitled to priority under
ss. 507(a)(1) of the Bankruptcy Code.
1.02. AFCO means AFCO Credit Corporation, its successors or assigns, a
Claimant with a Secured Claim on account of the Premium Finance Agreement.
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1.03. Allowed means, with respect to a Claim or Equity Interest, any
Claim or Equity Interest to the extent that (a) a Proof of Claim or Proof of
Equity Interest was timely filed with the Bankruptcy Court, or, with leave of
the Bankruptcy Court or without objection by the Debtor, filed late, and (i) as
to which a party in interest, including the Debtor, does not file an objection
on or before the Objection Date or (ii) the Proof of Claim or Proof of Equity
Interest is allowed by a Final Order; or (b) such Claim or Equity Interest is
deemed filed pursuant to ss. 1111(a) of the Bankruptcy Code, and (i) as to which
the Debtor has not amended its Bankruptcy Schedules to delete such Claim or
Equity Interest or to list such Claim or Equity Interest as disputed,
contingent, or unliquidated or (ii) the Claim or Equity Interest is allowed by a
Final Order.
1.04. APCP means Air Pollution Control Products, Inc., a Claimant with
Secured Claims as described in the orders entered by the Bankruptcy Court on
October 11, 1995, and October 26, 1995.
1.05. Bankruptcy Code means the United States Bankruptcy Code, being
Title 11 of the United States Code, as enacted in 1978 and thereafter amended.
1.06. Bankruptcy Court or Court means the United States Bankruptcy
Court for the Eastern District of Virginia, Richmond Division, or such other
Court as has jurisdiction of this Chapter 11 case or of some matter affecting
this case.
1.07. Bankruptcy Rules means the Federal Rules of Bankruptcy Procedure
and the Local Rules of the Bankruptcy Court, as amended from time to time.
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1.08. Bankruptcy Schedules means the Schedules of Assets and
Liabilities, Statement of Financial Affairs, and List of Equity Security Holders
filed by the Debtor on October 6 and 20, 1995, with the Clerk of the Bankruptcy
Court.
1.09. Bar Date means December 13, 1995, the final date established by
the Court for filing a Proof of Claim or Proof of Equity Interest in the
Debtor's Chapter 11 case or, with respect to a Claim arising from the rejection
of an executory contract or unexpired lease, means the date set forth in Section
8.01(e) of the Plan.
1.10. Business Day means any day other than a Saturday, Sunday or any
other day on which commercial banks in Richmond, Virginia, are required or
authorized by law to close.
1.11. Carroll Hughes means Carroll T. Hughes, Jr., his successors or
assigns, a Miscellaneous Claimant with an Unsecured Claim under the Consulting
Agreement.
1.12. Claim means any right to payment from the Debtor or any right to
an equitable remedy against the Debtor for breach of performance, as "claim" is
defined in Section 101(5) of the Bankruptcy Code.
1.13. Claimant means the holder of a Claim.
1.14. Confirmation or Confirmation of the Plan means the entry by the
Bankruptcy Court of a Confirmation Order confirming the Plan at or after a
hearing pursuant to ss. 1129 of the Bankruptcy Code, which shall have the effect
prescribed in ss. 1141 of the Bankruptcy Code, and Confirmation Date means the
date that the Confirmation Order is entered.
1.15. Confirmation Order means the Order entered by the Bankruptcy
Court confirming the Plan.
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1.16. Consulting Agreement means the Consulting Agreement between the
Debtor and Carroll Hughes, dated July 17, 1992, pursuant to which Carroll Hughes
agreed to provide consulting services to the Debtor.
1.17. Contingent Unsecured Claim means the disputed and contingent
Unsecured Claim of the Trustees and ENSCO as evidenced by the amended proof(s)
of claim filed by Thomas A. Pearson, Trustee, and by ENSCO.
1.18. Debtor means Consumat Systems, Inc., debtor and
debtor-in-possession.
1.19. Disclosure Statement means the Disclosure Statement to which
this Plan is an exhibit.
1.20. Disputed means, with respect to a Claim or Equity Interest, any
such Claim or Equity Interest Proof of which was timely and properly filed and
which has been or hereafter is listed on the Bankruptcy Schedules as
unliquidated, disputed or contingent, and, in either case, or in the case of an
Administrative Expense Claim, any such Claim or Equity Interest as to which the
Debtor has interposed a timely objection or request for estimation in accordance
with the Bankruptcy Code and the Bankruptcy Rules, which objection or request
for estimation has not been withdrawn or determined by Final Order.
1.21. Effective Date means a Business Day that is no less than eleven
(11) days after the Confirmation Date but not more than thirty days after the
Confirmation Date.
1.22. ENSCO means Environmental Systems Company, its successors or
assigns, a Miscellaneous Claimant with an Unsecured Claim evidenced by a
promissory note dated July 13, 1994, in the original principal amount of
$110,000.00, and the Holder of an Equity Interest.
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1.23. Equity Interest means any equity interest in the Debtor, and any
option, warrant or other agreement requiring the issuance of any such equity
interest.
1.24. Estate means the estate created in this Chapter 11 case pursuant
to ss. 541 of the Bankruptcy Code.
1.25. Final Order means an Order of the Bankruptcy Court or any other
Court that may have jurisdiction over this Chapter 11 case as to which any
appeal that has been or may be taken has been resolved or as to which the time
for appeal has expired.
1.26. Holder means the holder of an Equity Interest.
1.27. Lighthouse means Lighthouse Investments, L.L.C., its successors
or assigns, a Claimant with a Secured Claim evidenced by a promissory note dated
December 1, 1993, in the original principal amount of $174,047.94.
1.28. Loan Agreement means the Loan and Security Agreement by and
between the Debtor and Sirrom, pursuant to which Sirrom shall make a
post-Confirmation Date loan to Reorganized Consumat. A copy of the Loan
Agreement is attached hereto as Exhibit A.
1.29. Mechanicsville Facility means the facility located at 8407 Erle
Road, Mechanicsville, Hanover County, Virginia, the site of the Debtor's
business operations.
1.30. Mechanicsville Lease means the Lease Agreement dated July 1,
1992, by and between Ellen Properties, as lessor, and the Debtor, as lessee,
concerning the Mechanicsville Facility.
1.31. Miscellaneous Claimant means any one of the following Claimants:
NEWS, ENSCO, McGuire, Woods, Battle & Boothe, Robert L. Massey, Robert S. Lee,
Carroll Hughes, William O. Wiley, and the Trustees.
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1.32. NEWS means New England Waste Services, Inc., its successors or
assigns, a Miscellaneous Claimant with an Unsecured Claim under the Sanco Sale
Agreement.
1.33. Notes means the promissory notes in the original principal
amounts of $600,000 and $1,700,000 made by NEWS and naming the Debtor as payee
in connection with the Sanco Sale Agreement, which promissory notes subsequently
were transferred without recourse and without warranties to the Trustees and
ENSCO.
1.34. Objection Date means the same date as the Effective Date.
1.35. Other Priority Claim means a Claim entitled to priority under ss.
507(a)(2), (3), (4), (5), (6) or (7) of the Bankruptcy Code.
1.36. Petition Date means October 6, 1995, which is the date the Debtor
commenced its Chapter 11 case.
1.37. Plan means this Second Amended Plan of Reorganization and any
subsequent amendments or modifications thereto.
1.38. Premium Finance Agreement means the Premium Finance Agreement
dated July 7, 1995, by and between the Debtor and AFCO and pursuant to which
AFCO financed the Debtor's various insurance premium obligations.
1.39. Priority Tax Claim means a Claim of a governmental unit for
taxes, which Claim is entitled to priority under ss. 507(a)(8) of the Bankruptcy
Code.
1.40. Proof means, with respect to a Claim or Equity Interest, a
written statement setting forth a Claim or Equity Interest and filed with the
Court in accordance with the Bankruptcy Rules.
1.41. Reorganized Consumat means the Debtor on and after the Effective
Date.
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1.42. Sanco Sale Agreement means the Agreement for Purchase and Sale of
Stock dated September 13, 1993, by and among the Debtor, NEWS and others.
1.43. Secured Claim means a Claim secured by property of the Estate.
1.44. Sirrom means Sirrom Capital Corporation, its successors or
assigns.
1.45. Trade Claimant means a Claimant (not a Miscellaneous Claimant)
with an Unsecured Claim arising from supplies or services (other than
professional services) provided to the Debtor by such Claimant before the
Petition Date.
1.46. Trustees means Thomas A. Pearson and T. Jackson Lawson, the
trustees under the Trust Agreement dated June, 1995, by and among BHA Group,
Inc., C. Arthur Weaver Company, Inc., Chatham Steel Corporation, Electrical
Equipment Company, McNeil, Inc., R.L. Kunz, Inc., Susquehanna Concrete Products,
Inc., and other former unsecured creditors of Consumat Systems, Inc. and Thomas
A. Pearson and T. Jackson Lawson, Trustees.
1.47. Unsecured Claim means any Claim, including unliquidated and
contingent Claims (but excluding all Claims for attorneys' fees incurred by the
Claimant and for interest on the Claim from and after the Petition Date), other
than Secured Claims, Administrative Expense Claims, Priority Tax Claims, and
Other Priority Claims.
Any term in this Plan that is not defined herein but that is used in
the Bankruptcy Code shall have the meaning ascribed to such term in the
Bankruptcy Code.
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<PAGE>
ARTICLE II
GENERAL TERMS AND CONDITIONS
The following terms and conditions apply to this Plan:
2.01. Claims and Equity Interests. Various types of Claims and Equity
Interests are defined in this Plan. This Plan is intended to address all Claims
against and Equity Interests in the Debtor whether such Claims and Equity
Interests are Disputed or Allowed.
2.02. Time for Filing Proofs of Claim or Equity Interests and
Objections Thereto; Time for Filing or Making Other Claims and Objections
Thereto. All Claimants and Holders, other than Claimants having executory
contract or unexpired lease rejection Claims, whose Claims or Equity Interests
were not scheduled correctly by the Debtor, or whose Claims or Equity Interests
are scheduled as Disputed, contingent or unliquidated, must have filed Proofs of
Claim or Proofs of Equity Interests on or before the Bar Date. Objections to
Proofs of Claims and to Proofs of Equity Interests must be filed on or before
the Objection Date.
Proofs of Claim relating to executory contract or unexpired lease
rejection Claims and any objections thereto must be filed on or before the
Rejection Bar Date set forth in Section 8.01(e) of the Plan. Administrative
Expense Claims made pursuant to ss. 507(a)(1) of the Bankruptcy Code must be
filed on or before the Effective Date or within such shorter period as may be
ordered by the Court. Objections, if any, to such Administrative Expense Claims
must be filed in accordance with the Bankruptcy Rules.
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<PAGE>
ARTICLE III
TREATMENT OF UNCLASSIFIED CLAIMS
3.01. Allowed Administrative Expense Claims. Except to the extent a
Claimant agrees to a different treatment, each Claimant with an Administrative
Expense Claim allowed under ss. 503(b) of the Bankruptcy Code and any fees and
charges assessed against the Estate under Chapter 123 of Title 28 of the United
States Code shall be paid, by Reorganized Consumat, in cash in an amount equal
to such Allowed Administrative Expense Claim on the later of the Effective Date
and the date such Administrative Expense Claim becomes an Allowed Administrative
Expense Claim, or as soon thereafter as practicable; provided, however, that
Claimants with Allowed Administrative Expense Claims representing obligations
incurred in the ordinary course of business of the Debtor, or incurred by the
Debtor with the approval of the Bankruptcy Court1, shall be paid in full and
performed by Reorganized Consumat in accordance with the terms and conditions of
the particular transactions and agreements relating thereto.
3.02. Allowed Priority Tax Claims. Except to the extent a Claimant
agrees to a different treatment, each Claimant with an Allowed Priority Tax
Claims shall be paid, by and at the option of Reorganized Consumat, (a) in cash
in an amount equal to such Allowed Priority Tax Claim on the later of the
Effective Date and the date such Priority Tax Claim becomes an Allowed Priority
Tax Claim, or as soon thereafter as is practicable, or (b) in equal annual
payments in an aggregate amount equal to such Allowed Priority Tax Claim,
- --------
1 Including, specifically, but without limitation, APCP.
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together with interest at a fixed annual rate equal to nine percent (9%), over a
period through the sixth anniversary of the date of assessment of such Allowed
Priority Tax Claim, or upon such other terms determined by the Bankruptcy Court
to provide the Claimant with such Allowed Priority Tax Claim deferred cash
payments having a value, as of the Effective Date, equal to such Allowed
Priority Tax Claim.
ARTICLE IV
CLASSIFICATION OF CLAIMS AND INTERESTS
4.01. Class 1. Class 1 shall consist of the Other Priority Claims.
4.02. Class 2. Class 2 shall consist of the Secured Claim of AFCO.
4.03. Class 3. Class 3 shall consist of the Secured Claims of APCP.
4.04. Class 4. Class 4 shall consist of the Secured Claim of
Lighthouse.
4.05. Class 5. Class 5 shall consist of the Unsecured Claims of
Trade Claimants.
4.06. Class 6. Class 6 shall consist of the Unsecured Claims of
Miscellaneous Claimants.
4.07. Class 7. Class 7 shall consist of the Equity Interests.
ARTICLE V
TREATMENT OF CLASSES
5.01. Class 1. Except to the extent a Claimant agrees to a different
treatment, each Claimant with an Allowed Other Priority Claim shall be paid cash
in an amount equal to such Allowed Other Priority Claim on the later of the
Effective Date or the date such Other Priority Claim becomes an Allowed Other
Priority Claim, or as soon thereafter as possible.
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Class 1 is an unimpaired class. Class 1 and each Claimant with an Allowed Other
Priority Claim are conclusively presumed to have accepted the Plan.
5.02. Class 2. The Allowed Secured Claim of AFCO under the Premium
Finance Agreement shall be unaltered and, therefore, is unimpaired in accordance
with ss. 1124 of the Bankruptcy Code.
Class 2 is an unimpaired class. Class 2 and AFCO are conclusively
presumed to have accepted the Plan.
5.03. Class 3. The Allowed Secured Claims of APCP, shall be unaltered
except as set forth in the orders entered by the Bankruptcy Court on October 11,
1995, and October 26, 1995,
Class 3 is an impaired class and APCP is entitled to vote to accepted
or reject the Plan.
5.04. Class 4. Lighthouse, on account of its Allowed Secured Claim
(which shall include accrued but unpaid interest through the Effective Date),
shall receive on the Effective Date a promissory note in such principal amount
made by Reorganized Consumat, which shall be payable in twelve (12) equal
quarter-annual payments of principal and interest at ten percent (10%) per annum
beginning on March 31, 1996, and continuing on the last day of each successive
calendar quarter thereafter through December 31, 1998, when such promissory note
shall be paid in full. Reorganized Consumat, in its sole discretion, shall be
entitled to accelerate and to prepay without penalty under the promissory note.
The promissory note shall be substantially in the form of Exhibit B attached
hereto. Lighthouse shall retain the liens securing its Allowed Secured Claim as
of the Effective Date to the
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extent of the obligations of Reorganized Consumat under such promissory note;
provided, however, such liens shall be subject to and subordinate to the liens
and security interests of Sirrom against and in all of the assets of Reorganized
Consumat as set forth in Section 7.03 of the Plan.
Class 4 is an impaired class, and Lighthouse is entitled to vote to
accept or reject the Plan.
5.05. Class 5. On the later of the Effective Date or the date which is
ten (10) Business Days after the date on which the last order of the Bankruptcy
Court concerning a Disputed Claim becomes a Final Order, each Trade Claimant
with an Allowed Unsecured Claim shall receive cash in an amount equal to fifty
percent (50%) of its Allowed Unsecured Claim.
Class 5 is an impaired class, and each Trade Claimant with an Allowed
Unsecured Claim is entitled to vote to accept or reject the Plan.
5.06. Class 6. On the later of the Effective Date or the date which is
ten (10) Business Days after the date in which the last order of the Bankruptcy
Court concerning a Disputed Claim becomes a Final Order, each Miscellaneous
Claimant with an Allowed Unsecured Claim shall receive (a) the lesser of (i)
cash in an amount equal to twenty-five percent (25%) of its Allowed Unsecured
Claim or (ii) $60,000, plus (b) its pro rata share of 150,000 shares of the
common stock of Reorganized Consumat. No fractional shares shall be issued
pursuant to this Section 5.06.
For purposes of this Plan, the Unsecured Claim of NEWS shall be deemed
allowed and fixed at $614,977, which is the amount of the Amended Proof of Claim
filed by NEWS,
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and shall be paid in accordance with this Section 5.06 of the Plan. The Debtor
takes no position on the effect of the allowance of NEWS' Unsecured Claim in
this Chapter 11 case on any obligations of NEWS under the Notes and on any
defenses and rights of offset or recoupment NEWS may have to the Notes.
Notwithstanding Section 9.02 of the Plan, NEWS shall be entitled to take such
actions as it deems appropriate to liquidate its Unsecured Claim and to seek
satisfaction of its Unsecured Claim by way of offset or recoupment against its
obligations under the Notes. The Debtor releases and discharges any claims of
any nature whatsoever against NEWS.
Class 6 is an impaired class, and each Claimant with an Allowed
Unsecured Claim is entitled to vote to accept or reject the Plan.
5.07. Class 7. All Class 7 Equity Interests in or with respect to the
Debtor that consists of options, warrants or other agreements requiring the
issuance of Equity Interests of the Debtor, shall be disallowed and canceled.
All Class 7 Equity Interests consisting of issued and outstanding shares of
capital stock of the Debtor also shall be disallowed and canceled unless all
impaired classes of Claims accept the Plan, in which case Holders of Allowed
Equity Interests consisting of issued and outstanding shares of capital stock of
the Debtor shall receive as of the Effective Date a pro rata distribution of
500,000 shares of common stock of Reorganized Consumat. No fractional shares
shall be issued pursuant to this Section 5.07.
Class 7 is an impaired class. Each Holder of an Equity Interest in
Class 7 is entitled to vote to accept or reject the Plan.
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ARTICLE VI
PROVISIONS REGARDING VOTING AND DISTRIBUTIONS UNDER THE PLAN
6.01 Voting. Each Claimant with an Allowed Claim in an impaired
class of Claims and each Holder with an Allowed Equity Interest in the impaired
class of Equity Interests, shall be entitled to vote separately to accept or
reject the Plan as provided in the order entered by the Bankruptcy Court
governing the voting and balloting procedures applicable to the Plan. For
purposes of calculating the number of Allowed Claims or Allowed Equity
Interests in a class of Claims or Equity Interests held by Claimants or
Holders with Allowed Claims or Allowed Equity Interests in a class that have
voted to accept or reject the Plan under ss. 1126(c) of the Bankruptcy Code,
all Allowed Claims or Allowed Equity Interests in such class held by one
entity, including any entity that acquired record ownership of such Allowed
Claims or Allowed Equity Interests after the Petition Date, shall be
aggregated and treated as one Allowed Claim or one Allowed Equity Interest in
such class.
6.02. Method of Distributions Under the Plan.
(a) In General. All distributions under the Plan shall be made
by Reorganized Consumat. All Allowed Claims in a class held by one Claimant
shall be aggregated and treated as one Allowed Claim in such class for purposes
of making a distribution to such Claimant under the Plan.
(b) Distributions of Cash. Any payment of cash made by
Reorganized Consumat pursuant to the Plan shall be made by check drawn on a
domestic bank.
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(c) Timing of Distributions. Any payment or distribution
required to be made under the Plan on a date other than a Business Day shall be
due on the next succeeding Business Day.
(d) Minimum Distributions. No payment of cash less than
ten dollars ($10.00) shall be made by Reorganized Consumat to any Claimant
unless a request therefor is made in writing to Reorganized Consumat.
(e) Unclaimed Distributions. Any cash or other distributions
pursuant to the Plan, including dividends or other amounts earned thereon, that
are unclaimed for a period of one year after distribution thereof shall be
revested in Reorganized Consumat.
6.03. Distributions Relating to Disputed Claims. Cash shall be
distributed by Reorganized Consumat to a Claimant with a Disputed Administrative
Expense Claim or other Disputed Claim when, and to the extent that, such
Disputed Administrative Expense Claim or other Disputed Claims becomes an
Allowed Administrative Expense Claim or other Allowed Claim pursuant to a Final
Order. Such distribution shall be made in accordance with the Plan to the
Claimant with such Claim based upon the amount in which such Disputed
Administrative Expense Claim or other Disputed Claim becomes an Allowed
Administrative Expense Claim or other Allowed Claim, as the case may be.
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6.04. Cancellation and Surrender of Existing Notes, Instruments,
Certificates, etc.
(a) On the Effective Date, any promissory notes or other
instruments evidencing any Claim, any certificates evidencing any Equity
Interest in the Debtor and any options, warrants or other agreements requiring
the issuance of Equity Interests in the Debtor, shall be deemed canceled
without further act or action under any applicable agreement, law, regulation,
order, or rule and the obligations of the Debtor shall be discharged.
(b) Each Claimant holding a promissory note or other
instrument evidencing a Claim shall surrender to Reorganized Consumat such
promissory note or instrument, and each Holder of an Equity Interest shall
surrender to Reorganized Consumat any certificate evidencing such Equity
Interest.
(c) Notwithstanding any other provision of this Plan, no
distribution of property hereunder shall be made to or on behalf of any Claimant
unless and until such promissory note or instrument is received by Reorganized
Consumat or the unavailability or such note or instrument is established to the
reasonable satisfaction of Reorganized Consumat. Reorganized Consumat may
require any entity delivering an affidavit of loss and indemnity to furnish a
bond in form and substance (including, without limitation, with respect to
amount) reasonably satisfactory to Reorganized Consumat. Any Claimant who fails
within sixty days after demand by Reorganized Consumat for surrender of a
promissory note or instrument (i) to surrender or cause to be surrendered such
promissory note or instrument or (ii) to execute and deliver an affidavit of
loss and indemnity reasonably satisfactory to Reorganized Consumat, and if
requested, to furnish a bond reasonably
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satisfactory to Reorganized Consumat, shall be deemed to have forfeited all
rights, claims, and interests and shall not participate in any distribution
hereunder.
ARTICLE VII
EXECUTION AND IMPLEMENTATION OF PLAN
7.01. Payments. The funds necessary to pay Allowed Claims shall be paid
from (a) the proceeds of the post-Confirmation Date loan from Sirrom under the
Loan Agreement, (b) the proceeds arising from the issuance of the common stock
of Reorganized Consumat and/or (c) cash flow from Reorganized Consumat's
post-Confirmation Date operations.
7.02. Post-Confirmation Loan. In order to consummate the Plan,
Reorganized Consumat will borrow $1,000,000 from Sirrom under the Loan
Agreement, as modified from time to time2. It is anticipated that the loan
proceeds will meet the capital requirements of Reorganized Consumat and enable
Reorganized Consumat to satisfy its obligations under the Plan.
7.03. Assumption of Debtor-In-Possession Financing and
Collateralization. Confirmation of this Plan shall evidence and effect
Reorganized Consumat's assumption of the indebtedness of the Debtor arising from
the debtor-in-possession financing provided by Sirrom. Sirrom shall have liens
against and security interests in all of the assets of Reorganized Consumat as
security both for the debtor-in-possession indebtedness assumed by
- --------
2 This amount is in addition to the first $500,000 loaned the Debtor by Sirrom
during the pendency of this Chapter 11 case but shall be reduced dollar for
dollar by any additional funds loaned the Debtor by Sirrom during the pendency
of this Chapter 11 case. Such loans from Sirrom shall be assumed by Reorganized
Consumat and paid pursuant to the terms of the Loan Agreement.
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<PAGE>
Reorganized Consumat and for the indebtedness and other obligations of
Reorganized Consumat under the Loan Agreement.
7.04. Mechanicsville Facility. Consumat shall conduct its production
activities and otherwise operate its business at the Mechanicsville Facility.
7.05. Corporate Governance.
(a) General. On the Effective Date, the management, control,
and operation of Reorganized Consumat shall become the general responsibility of
the Board of Directors of Reorganized Consumat, which shall thereafter have the
responsibility for the management, control, and operation of Reorganized
Consumat.
(b) Meeting of Stockholders. The first annual meeting of the
stockholders of Reorganized Consumat shall be held on a date in June, 1996,
selected by the Board of Directors of Reorganized Consumat in accordance with
the articles of incorporation and bylaws of Reorganized Consumat, and subsequent
meetings of the stockholders of Reorganized Consumat shall be held at least once
annually thereafter in accordance with the articles of incorporation and bylaws
of Reorganized Consumat.
(c) Directors and Officers of Reorganized Consumat.
(1) Board of Directors. The initial Board of
Directors of Reorganized Consumat shall consist of three (3) persons. Each of
the members of such initial Board of Directors shall serve until the first
annual meeting of stockholders of Reorganized Consumat or their earlier
resignation or removal in accordance with the articles of incorporation or
bylaws of Reorganized Consumat. Robert L. Massey, Alexander Y. Hoff, and Peter
T. Socha shall constitute the initial Board of Directors.
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(2) Officers. The officers of Reorganized
Consumat immediately prior to the Effective Date shall serve as the initial
officers of Reorganized Consumat on and after the Effective Date in
accordance with any employment agreement with Reorganized Consumat and
applicable nonbankruptcy law.
(d) Articles of Incorporation and Bylaws. The articles of
incorporation and bylaws of Reorganized Consumat shall be amended and restated
as of the Effective Date to the extent necessary (a) to prohibit the issuance of
nonvoting equity securities as required by ss. 1123(a)(6) of the Bankruptcy
Code, subject to further amendment of such articles of incorporation as
permitted by applicable law, (b) to change the name of Reorganized Consumat to
"Reorganized Consumat Systems, Inc.", and (c) to effectuate the provisions of
the Plan, in each case without any further action by the stockholders or
directors of the Debtor or Reorganized Consumat.
7.06 Management; Issuance of Options, etc. Management of
Reorganized Consumat shall receive on the Effective Date a total of 100,000
shares of the common stock of Reorganized Consumat, which shares shall be
distributed equally among Robert L. Massey, Robert S. Lee, Mark E. Hills,
William O. Wiley, and James K. Fishback. At the discretion of the Board of
Directors of Reorganized Consumat, Reorganized Consumat may issue options,
warrants or other agreements requiring the issuance of up to 300,000 additional
shares of the common stock of Reorganized Consumat.
7.07 Accounting Treatment. Reorganized Consumat shall account for
its reorganization using the fresh-start reporting provisions, as described in
the American
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Institute of Certified Public Accountants' Statement of Position 90-7, to the
extent allowed by the statement.
7.08 Purchase of Additional Common Stock. On the Effective Date,
Sirrom, its affiliates, and/or their respective assigns shall purchase 260,000
shares of the common stock of Reorganized Consumat at a price of $.15 per share
for a total purchase price of $39,000, which amount shall be paid to Reorganized
Consumat on the Effective Date.
7.09 Capitalization. On the Effective Date, Reorganized Consumat shall
be capitalized with 5,000,000 shares of common stock and 1,000,000 shares of
preferred stock; there shall be a total of 1,010,000 shares3 of common stock of
Reorganized Consumat issued and outstanding. Fractional shares shall not be
issued, and any Miscellaneous Claimant with an Allowed Unsecured Claim and any
Holder of an Allowed Equity Interest who would otherwise be entitled to receive
a portion of a share of common stock of Reorganized Consumat shall receive the
next lower number of whole shares.
ARTICLE VIII
EXECUTORY CONTRACTS AND UNEXPIRED LEASES
8.01. Assumption or Rejection of Executory Contracts and Unexpired
Leases.
(a) Executory Contracts. All executory contracts, other
than unexpired leases of real property and customer warranty agreements, to
which the Debtor is a party are hereby rejected, except for any executory
contract (i) which has been assumed pursuant to an order of the Bankruptcy
Court entered prior to the Confirmation Date, (ii) which has been
- --------
3 510,000 shares in the event that no shares are distributed to Holders of
Allowed Equity Interests pursuant to Section 5.07 of this Plan.
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<PAGE>
entered into by the Debtor after the Petition Date in the ordinary course of
business or pursuant to an order of the Bankruptcy Court, (iii) as to which a
motion for approval of the assumption of such contract has been filed prior to
the Confirmation Date, (iv) which is assumed pursuant to the provisions set
forth in this Article VIII of the Plan, or (v) which is set forth on Schedule
8.01(a) attached hereto. The insurance policies set forth on Schedule 8.01(a)
attached hereto and any agreements, documents or instruments relating thereto,
including, without limitation, any retrospective premium rating plans relating
to such policies, are treated as executory contracts under the Plan and are
hereby assumed pursuant to ss. 365(a) of the Bankruptcy Code. Nothing contained
in this Section 8.01(a) shall constitute a waiver of any claim, right or cause
of action that the Debtor may hold against the insurer under any policy of
insurance.
(b) Unexpired Leases. All unexpired leases of real property
that exist between the Debtor and any person are hereby rejected except for the
Mechanicsville Lease, which shall be deemed assumed as of the Effective Date.
The rejection of any unexpired lease of real property that was rejected pursuant
to an order of the Bankruptcy Court entered prior to the Confirmation Date shall
be effective as of the date of such order, and the rejection of any unexpired
lease of real property pursuant to this Section 8.01(b) shall be effective as of
the earlier of the Confirmation of the Plan or the date upon which Reorganized
Consumat notifies the lessor under such lease of the effectiveness of the
rejection of such lease.
(c) Approval of Assumption or Rejection of Leases and
Contracts. Entry of the Confirmation Order shall constitute (i) the approval,
pursuant to ss. 365(a) of the
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Bankruptcy Code, of the assumption of the executory contracts and unexpired
leases of real property assumed pursuant to Section 8.01(a) and (b) hereof, (ii)
the extension of time pursuant to ss. 365(d)(4) of the Bankruptcy Code within
which Reorganized Consumat may assume or reject any of its unexpired leases of
real property not previously rejected through the date of entry of an order
approving the assumption or rejection of such leases, and (iii) the approval,
pursuant to ss. 365(a) of the Bankruptcy Code, of the rejection of the executory
contracts and unexpired leases of real property rejected pursuant to Section
8.01(a) and (b) hereof.
(d) Cure of Defaults. On the Effective Date or as soon
thereafter as is practicable, Reorganized Consumat shall cure any and all
defaults under any executory contract or unexpired lease of real property
assumed pursuant to the Plan in accordance with ss. 365(b)(1) of the Bankruptcy
Code.
(e) Time for Filing Proofs of Claim Relating to Rejected
Executory Contracts or Unexpired Leases and Objections Thereto. Proofs of Claim
relating to the rejection of executory contracts or unexpired leases of real
property pursuant to this Section 8.01 must be filed with the Bankruptcy Court
no later than thirty days after the later of (i) notice of entry of an order
approving the rejection of such contracts or leases and (ii) notice of entry of
the Confirmation Order (the "Rejection Bar Date"). Any Claims for which Proof
was not filed by such Rejection Bar Date shall be forever barred from assertion
against the Debtor and its Estate, and Reorganized Consumat and its property.
Except as otherwise provided in this Plan or ordered by the Bankruptcy Court, or
unless the Claimant agrees to a different treatment, all Claims arising from the
rejection of executory contracts or
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unexpired leases of real property shall be treated in Class 6 under the Plan.
Objections, if any, to Proofs of Claim relating to the rejection pursuant to
Section 8.01(a) or (b) of the Plan of executory contracts or unexpired leases of
real property shall be filed no later than thirty days after filing of such
Proofs of Claim and service thereof on the Debtor or Reorganized Consumat and
its counsel.
8.02. Indemnification Obligations. For purposes of the Plan, the
obligations of the Debtor to indemnify, reimburse or limit the liability of its
present and any former directors, officers or employees that were directors,
officers or employees, respectively, on or after the Petition Date against any
obligations pursuant to the articles of incorporation, the bylaws, applicable
state law or specific agreement, or any combination of the foregoing, shall
survive Confirmation of the Plan, remain unaffected thereby, and not be
discharged irrespective of whether indemnification, reimbursement or limitation
is owed in connection with an event occurring before, on, or after the Petition
Date.
8.03. Compensation and Benefit Programs. All employment and severance
practices and policies, and all compensation and benefit plans, policies, and
programs of the Debtor applicable to its directors, officers or employees,
including, without limitation, all savings plans, retirement plans, health care
plans, severance benefit plans, incentive plans, and life, disability and other
insurance plans are treated as executory contracts under the Plan and are hereby
assumed pursuant to ss. 365(a) of the Bankruptcy Code.
8.04. Retiree Benefits. Payments, if any, due to any person for the
purpose of providing or reimbursing payments for retired employees and their
spouses and dependents for medical, surgical, or hospital care benefits, or
benefits in the event of sickness, accident,
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disability, or death under any plan, fund, or program (through the purchase of
insurance or otherwise) maintained or established in whole or in part by the
Debtor prior to the Petition Date shall be continued for the duration of the
period the Debtor has obligated itself to provide such benefits.
ARTICLE IX
EFFECT OF CONFIRMATION OF PLAN
9.01. Vesting of Assets.
(a) The property of the Estate of the Debtor shall vest
in Reorganized Consumat on the Effective Date.
(b) From and after the Effective Date, Reorganized Consumat
may operate its business, and may use, acquire, and dispose of its property free
of any restrictions of the Bankruptcy Code.
(c) As of the Effective Date, all property of Reorganized
Consumat shall be free and clear of all Claims and Equity Interests, except for
the liens and security interests in favor of Sirrom and Lighthouse as provided
in the Plan. In addition, APCP and AFCO shall retain their respective liens and
security interests against the same property and with the same priority as set
forth in the Final Order Authorizing Post-Petition Financing entered by the
Bankruptcy Court on October 26, 1995, and any further order entered by the
Bankruptcy Court concerning any additional loans by Sirrom to the Debtor.
(d) Any rights or causes of action accruing to the Debtor
shall remain assets of Reorganized Consumat, except as set forth in Section 9.03
of the Plan.
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<PAGE>
9.02. Discharge of Debtor. The rights afforded herein and the treatment
of all Claims and Equity Interests herein shall be in exchange for and in
complete satisfaction, discharge and release of Claims and Equity Interests of
any nature whatsoever against the Debtor or any of its assets or properties;
provided, however, that the discharge of the Debtor shall not affect any defense
or right of recoupment or offset that NEWS may be entitled to assert against any
obligations formerly owed by NEWS to the Debtor, including, but not limited to,
the Notes. Except as otherwise provided in the Plan (a) on the Effective Date,
all such Claims against, and Equity Interests in, the Debtor shall be satisfied,
discharged and released in full, and (b) all persons shall be precluded from
asserting against Reorganized Consumat, its successors, or its assets or
properties, any other or further Claims or Equity Interests based upon any act
or omission, transaction or other activity of any kind of nature that occurred
prior to the Confirmation Date.
9.03. Extinguishment of Causes of Action Under the Avoiding Power
Provisions. On the Effective Date, all rights, claims, causes of action,
avoiding powers, suits, and proceedings arising under ss.ss. 544, 545, 547, 548,
549, and 553 of the Bankruptcy Code shall be extinguished whether or not then
pending.
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ARTICLE X
EFFECTIVENESS OF THE PLAN
10.01. Condition Precedent. The Plan shall not become effective unless
and until Reorganized Consumat shall have sufficient cash on hand as of the
Effective Date after giving effect to the distributions of cash required to be
made under the Plan, as determined by Reorganized Consumat.
10.02. Effect of Failure of Condition. In the event that the condition
specified in Section 10.01 of the Plan has not occurred on or before thirty days
after the Confirmation Date, and upon notification submitted by Reorganized
Consumat to the Bankruptcy Court (a) the Confirmation Order shall be vacated,
(b) no distributions under the Plan shall be made, (c) Reorganized Consumat,
Sirrom and all Claimants and Holders shall be restored to the status quo ante as
of the day immediately preceding the Confirmation Date as though the
Confirmation Date never occurred, and (d) all the Debtor's obligations with
respect to Sirrom and to the Claims and Equity Interests shall remain unchanged
and nothing contained herein shall be deemed to constitute a waiver or release
of any Claims by or against the Debtor or any other person or to prejudice in
any manner the rights of the Debtor or any person in any further proceedings
involving the Debtor.
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ARTICLE XI
RETENTION OF JURISDICTION
Notwithstanding Confirmation of this Plan or the Effective Date having
occurred, the Bankruptcy Court shall retain jurisdiction of this case for
purposes of ss.ss. 105(a), 362, 1127, and 1142 of the Bankruptcy Code and for,
among other things, the following purposes:
(a) To enforce and interpret the Plan, to resolve any disputes arising
under or in connection with the Plan, to effectuate payments under the Plan, and
to compel performance of any person in accordance with the provisions of the
Plan.
(b) To determine all matters with respect to the subordination,
allowance or disallowance of Claims or Equity Interests or any portion thereof.
(c) To determine all matters with respect to Reorganized Consumat or to
property vested in Reorganized Consumat in accordance with the Plan.
(d) To determine all matters with respect to the assumption or
rejection of executory contracts or unexpired leases, to determine the amount of
damages, if any, suffered by the nondebtor party to any rejected executory
contract or unexpired lease, and to determine all matters with respect to the
allowance or disallowance of any Claim resulting from the rejection of any
executory contract or unexpired lease.
(e) To determine all applications, motions, adversary proceedings or
contested matters initiated or commenced by the Debtor or any party in interest,
whether such applications, motions, adversary proceedings or contested matters
are pending on the Confirmation Date or thereafter commenced.
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<PAGE>
(f) To determine such other matters and for such other purposes as may
be provided for in the Confirmation Order or otherwise deemed appropriate to
accomplish its purposes.
(g) To correct any defect, or cure any omission or to reconcile any
inconsistency in the Plan or in the Confirmation Order, all as may be necessary
or appropriate to carry out the intents and purposes of the Plan.
(h) To make such orders as are necessary or appropriate to carry
out the provisions of this Plan.
(i) To determine any other matter not inconsistent with the
Bankruptcy Code.
(j) To enter a Final Order closing this case.
ARTICLE XII
MISCELLANEOUS PROVISIONS
12.01. Effectuating Documents and Further Transactions. The President
of either of the Debtor or Reorganized Consumat is authorized in accordance with
the authority under the resolutions of the respective Boards of Directors of the
Debtor or Reorganized Consumat, as the case may be, to execute, deliver, file or
record such contracts, instruments, releases, indentures and other agreements or
documents and take such actions as may be necessary or appropriate to effectuate
and further evidence the terms and conditions of the Plan and any notes,
securities or other instruments issued pursuant to the Plan, including but not
limited to any documents which Sirrom may require Reorganized Consumat to
execute, deliver, file or record in connection with the Loan Agreement.
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<PAGE>
12.02. Exemptions. (a) Pursuant to ss. 1146(c) of the Bankruptcy Code,
the issuance, transfer or exchange of notes or equity securities under the Plan,
the creation and perfection of any mortgage, deed of trust or other security
interest, the making or assignment of any lease or sublease or modifications
thereto, or the making or delivery of any deed or other instrument of transfer
under, in furtherance of, or in connection with the Plan, including any deeds,
bills of sale or assignments executed in connection with any of the transactions
contemplated under the Plan, shall not be subject to any stamp, real estate
transfer, mortgage recording or other similar tax.
(b) By operation of ss. 1145 of the Bankruptcy Code, the distribution
of the common stock of Reorganized Consumat to be issued under Sections 5.06 and
5.07 shall be exempt from registration under Section 5 of the Securities Act of
1933, as amended, and any state or local law requiring registration for offer or
sale of a security or registration or licensing of an issuer of, or broker or
dealer in, a security. All such securities so issued shall be freely
transferrable by the initial recipients thereof (i) except for any such
securities received by an "underwriter" within the meaning of ss. 1145(b) of the
Bankruptcy Code, and (ii) subject to any restriction contained in the terms of
such securities themselves, in this Plan or any documents relating to the Plan.
12.03. Recordation. A copy of this Plan and the Confirmation Order
shall be recorded in the appropriate land records of the County of Hanover,
Virginia, on or before the Effective Date.
12.04. Exculpation. Neither Reorganized Consumat and the Debtor nor
any of their respective members, officers, directors, employees, advisors or
agents shall have or incur
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any liability to any Claimant or Holder for any act or omission in connection
with, or arising out of, the pursuit of Confirmation of the Plan, the
consummation of the Plan or the administration of the Plan or the property to be
distributed under the Plan, except for willful misconduct or gross negligence,
and, in all respects, Reorganized Consumat, the Debtor, and each of their
respective members, officers, directors, employees, advisors and agents shall be
entitled to rely upon the advice of counsel with respect to their duties and
responsibilities under the Plan.
12.05. Intentionally Omitted.
12.06. Modifications to Plan. This Plan may be modified pursuant to ss.
1127 of the Bankruptcy Code and as herein provided. The Plan may be modified,
before or after Confirmation, without notice or hearing, or on such notice and
hearing as the Bankruptcy Court deems appropriate, if the Bankruptcy Court finds
that the proposed modification does not materially and adversely affect the
rights of any parties in interest that have not had notice and an opportunity to
be heard with regard to the proposed modification. Without limiting the
foregoing, the Plan otherwise may be modified after notice and a hearing. In the
event of any modification on or before Confirmation, any votes in favor of the
Plan shall be deemed to be votes in favor of the Plan as modified, unless the
Bankruptcy Court finds that the proposed modification materially and adversely
affects the rights of the parties in interest that cast such votes.
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12.07. Revocation or Withdrawal of the Plan.
(a) The Debtor reserves the right to revoke or withdraw the Plan
prior to the Confirmation Date.
(b) If the Debtor revokes or withdraws the Plan prior to the
Confirmation Date, then the Plan shall be deemed null and void. In such event,
nothing contained herein shall be deemed to constitute a waiver or release of
any claims by or against the Debtor or any other person or to prejudice in any
manner the rights of the Debtor or any person in any further proceedings
involving the Debtor.
12.08. Binding Effect. Upon confirmation, the Plan shall be binding
upon and inure to the benefit of the Debtor, Claimants, Holders, and their
respective successors and assigns.
12.09. Notices. Any notice required or permitted to be provided under
the Plan shall be in writing and served by either (a) certified mail, return
receipt requested, postage prepaid, (b) hand delivery, or (c) reputable
overnight delivery service, freight prepaid, to be addressed as follows:
REORGANIZED CONSUMAT SYSTEMS, INC.
P.O. Box 9379
Richmond, Virginia 23227
or
8407 Erle Road
Mechanicsville, Virginia 23111
Attn: Robert L. Massey, President and Chief
Executive Officer
with a copy to: CHRISTIAN, BARTON, EPPS, BRENT
& CHAPPELL
909 East Main Street, Suite 1200
Richmond, Virginia 23219
Attn: Augustus C. Epps, Jr., Esquire
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SIRROM CAPITAL CORPORATION
500 Church Street, Suite 200
Nashville, Tennessee 37219
Attn: Peter T. Socha, Vice President and Chief
Credit Officer
with a copy to: LeCLAIR RYAN, A Professional Corporation
707 East Main Street, 11th Floor
Richmond, Virginia 23219
Attn: William A. Broscious, Esquire
12.10. Governing Law. Except to the extent the Bankruptcy Code or
Bankruptcy Rules are applicable, the rights and obligations arising under this
Plan shall be governed by, and construed and enforced in accordance with, the
laws of the Commonwealth of Virginia, without giving effect to the principles of
conflicts of law thereof.
12.11. Withholding and Reporting Requirements. In connection with the
Plan and all instruments issued in connection therewith and distributions
thereon, the Debtor or Reorganized Consumat, as the case may be, shall comply
with all withholding and reporting requirements imposed by any federal, state,
local or foreign taxing authority and all distributions hereunder shall be
subject to any such withholding and reporting requirements.
12.12. Intentionally Omitted.
12.13. Headings. Headings are used in the Plan for convenience and
reference only, and shall not constitute a part of the Plan for any other
purpose.
12.14. Schedules. All Exhibits and Schedules to the Plan are
incorporated into and are a part of the Plan as if set forth in full herein.
12.15. Filing of Additional Documents. On or before substantial
consummation of the Plan, Reorganized Consumat shall file with the Bankruptcy
Court such agreements and
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other documents as may be necessary or appropriate to effectuate and further
evidence the terms and conditions of the Plan.
ARTICLE XIII
ACCEPTANCE OF PLAN AND REQUEST FOR CONFIRMATION
Claimants with Allowed Claims in impaired classes and Holders of
Allowed Equity Interests in the impaired class shall be requested to accept or
reject the Plan. If any class fails to accept the Plan by the requisite
majorities in number and amount required under ss. 1126 of the Bankruptcy Code,
the Debtor will request that the Bankruptcy Court confirm the Plan pursuant to
ss. 1129(b) of the Bankruptcy Code.
Date: January 26, 1996 CONSUMAT SYSTEMS, INC.
By:
Robert L. Massey, President
Augustus C. Epps, Jr. (Va. Bar No. 13452)
Andrew J. Dolson (Va. Bar No. 28682)
Christian, Barton, Epps, Brent
& Chappell
909 East Main Street, Suite 1200
Richmond, Virginia 23219
(804) 697-4100
Of Counsel
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SCHEDULE 8.01(a)
ASSUMED EXECUTORY CONTRACTS
Ellen Properties
Attn: S. James Ellen, Jr.
c/o Capital Masonry
2305 LaCrosse Street
Richmond, VA 23223
Trigon Blue Cross Blue Shield
of Virginia
P.O. Box 26807
Richmond, VA 23261-6807
Healthkeepers
P.O. Box 26623
Richmond, VA 23261-6623
Atlantic Mailing Equipment
Services
P.O. Box 11874
Charlotte, NC 28220
J.B. Edwards Leasing Co.
P.O. Box 6798
Wyomissing, PA 19610
Pitney Bowes
P.O. Box 41067
Norfolk, VA 23541-1067
Mellon Securities Trust Company
85 Challenger Road
Overpeck Centre
Ridgefield Park, NJ 07660
Lease on manufacturing facility used by the debtor. Lease dated July 1, 1992.
Debtor is the lessee.
Health insurance contract on part of debtors employees.
Health insurance contract on part of debtors employees.
Operating lease on mailing machine.
Operating lease on copier.
Operating lease on postage meter.
Contract to handle stock transfer transactions.
Fortis Benefits
P.O. Box 27-644-1
Kansas City, MO 64180-0644
Hilb, Rogal and Hamilton
Company of Richmond
4235 Innslake Drive
P.O. Box 1488
Glen Allen, VA 23060
As Agent For:
Travelers Insurance Company
Workers Comp - VA
Policy #KUB652K4516IND95
Automobile
Policy #650652K45040IND95
Commercial Package
Policy #630114X4933TIA95
Boiler & Machinery
Policy #UM5J660542K31ATIL95
Cigna Insurance Company
Foreign Liability
Policy #PHF045221
Hartford Insurance Company
Workers Comp - AK
Policy #14WBBX6322
Great American Insurance Co.
Umbrella Liability
Policy #UMB8279995
Commercial Underwriters Inc.
Company
General Liability
Policy #EWC1000194
Robert L. Massey
216 Fulham Circle
Richmond, VA 23227
Life and disability insurance contract on all of debtors employees.
Agent handling all general business insurance as noted.
Employment Contract
Robert S. Lee
6015 Arbor View Terrace
Chester, VA 23831
Mark E. Hills
4805 Fort McHenry Parkway
Glen Allen, VA 23060
Air Pollution Control Products, Inc.
P.O. Box 6113
Ashland, VA 23005
Crochet Equipment Company, Inc.
P.O. Box 15338
Baton Rouge, LA 70895
McCain Engineering Company, Inc.
P.O. Box 817
Pelham, AL 35124
Interel Environmental Technologies, Inc.
11234 E. Caley Avenue, Unit B
Englewood, CO 80111
Shinduk Industry
Myung Bldg. 396-36
Seokyo-Dong
Mapo-KU, Seoul, Korea
Daelim Engineering
Daelim Engineering Bldg.
#17-5, Yoido-dong
Yongdungpo-ku, Seoul, 150-010, Korea
Intacorp
1424, N.W. 82nd Avenue
Miami, FL 33126
Employment Contract
Employment Contract
APC P.O. #008367
APC P.O. #9251
Crochet P.O. #1203
McCain P.O. #5518
McCain P.O. #7211
Interel P.O. #6807
Shinduk P.O. #SI-9512
Daelim P.O. #PO-11473-001
Intacorp P.O. #M-1778-95-5
EXHIBIT A
Loan and Security Agreement
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EXHIBIT B
Form of Lighthouse Promissory Note
163812.2
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UNITED STATES BANKRUPTCY COURT
FOR THE EASTERN DISTRICT OF VIRGINIA
Richmond Division
___________________________________
)
In re: ) Chapter 11
)
CONSUMAT SYSTEMS, INC., ) Case No. 95-34253-S
)
Debtor. )
___________________________________)
MODIFICATION TO SECOND AMENDED PLAN OF REORGANIZATION
Consumat Systems, Inc., debtor and debtor-in-possession (the "Debtor"),
pursuant to 11 U.S.C. Section 1127(a) and Rule 3019 of the Federal Rules of
Bankruptcy Procedure, and in accordance with Section 12.06 of the Second
Amended Plan of Reorganization (the "Plan"), submits this modification to the
Plan:
1. Sections 1.17, 1.21, 1.31 and 1.45 of Article I of the Plan are
modified as follows:
1.17. Contingent Unsecured Claim means the contingent Unsecured
Claim of the Trustees and ENSCO as evidenced by the amended proof of
claim filed by the Trustees and ENSCO.
1.21. Effective Date means a Business Day after the
Confirmation Date but not more than thirty-five days after the
Confirmation Date.
1.31. Miscellaneous Claimant means any one of the following
Claimants: NEWS, ENSCO, the Trustees, Robert L. Massey, Robert S. Lee,
Carroll T. Hughes, Jr. and William O. Wiley.
- --------------
Augustus C. Epps, Jr. VSB 13254
Andrew J. Dolson VSB 28682
Christian, Barton, Epps, Brent
& Chappell
909 East Main Street, Suite 1200
Richmond, Virginia 23219-3095
(804) 697-4100
Counsel for Consumat Systems, Inc.
<PAGE>
1.45. Trade Claimant means a Claimant (not a Miscellaneous
Claimant) with an Unsecured Claim arising from supplies or services
provided to the Debtor by such Claimant before the Petition Date.
2. Section 5.04 of Article V of the Plan is modified by adding a new
second paragraph as follows:
Sirrom, its affiliates, and/or their respective assigns shall have
a ten percent (10%) interest in the net principal actually paid on the
promissory note described above in this Section 5.04 and a ten percent
(10%) interest in the net interest actually paid on such note. The
promissory note shall be delivered by Reorganized Consumat to Lighthouse
and Lighthouse shall have the sole right to commence any collection or
enforcement action with respect thereto. Alternatively, and upon
agreement of Lighthouse, Sirrom, and Reorganized Consumat, the
obligations of Reorganized Consumat hereunder may be evidenced by two
promissory notes which together have the same economic terms of the
promissory note referred to in this Section 5.04 above.
3. Section 5.05 of Article V of the Plan is modified by adding a new
second paragraph as follows:
For purposes of this Plan, the Unsecured Claim of McGuire, Woods,
Battle & Boothe, L.L.P. shall be deemed allowed and fixed at $22,000.
The Debtor releases and discharges all claims of any nature whatsoever
against McGuire, Woods, Battle & Boothe, L.L.P.
4. Section 5.06 of Article V of the Plan is modified by deleting the
second paragraph and inserting the following in the place thereof:
For purposes of this Plan only, the Unsecured Claim of NEWS shall
be deemed allowed and fixed at $494,977 and the Contingent Unsecured
Claim of ENSCO and the Trustees shall be deemed allowed and fixed at
$120,000. The Unsecured Claim of ENSCO shall be deemed allowed and
fixed at $120,849.35. The Debtor releases and discharges all claims of
any nature whatsoever against NEWS, ENSCO, and the Trustees.
CONSUMAT SYSTEMS, INC.
By:
Robert L. Massey, President
- --------------
Augustus C. Epps, Jr. VSB 13254
Andrew J. Dolson VSB 28682
Christian, Barton, Epps, Brent
& Chappell
909 East Main Street, Suite 1200
Richmond, Virginia 23219-3095
(804) 697-4100
Counsel for Consumat Systems, Inc.
CERTIFICATE
I hereby certify that on this ____ day of February, 1996, a true copy
of the foregoing Modification to Second Amended Plan of Reorganization was
telecopied and delivered by hand to:
Gregg R. Nivala, Esquire
Assistant United States Trustee
The Shockoe Center Building
11 S. 12th Street, Suite 224
Richmond, Virginia 23217-2246
Augustus C. Epps, Jr.
FOR IMMEDIATE RELEASE. . . . . . . . . . . . . . February 28, 1996
Richmond, Virginia. . . . . . . . . . . . Contacts:Robert L.Massey
Mark E. Hills
804/746-4120
Consumat Systems, Inc. (NASDAQ Bulletin Board:CSMT), the Richmond,
Virginia based incineration and pollution control equipment manufacturer,
announced today that its Second Amended Plan of Reorganization has been
confirmed by the United States Bankruptcy Court for the Eastern District of
Virginia in Richmond. Robert L. Massey, President and Chief Executive
Officer of Consumat stated that "the votes from both our creditors and our
stockholders were overwhelmingly in favor of the Plan".
As previously reported, the Company filed for protection under Chapter
11 of the United States Bankruptcy Code on October 6, 1995. The filing was
precipitated by several pieces of protracted litigation and difficulty in
raising capital due to the litigation. Sirrom Capital Corporation (Sirrom),
a small business investment company based in Nashville, Tennessee, has
provided $1 million in capital to the Company during the bankruptcy case.
Sirrom has agreed to provide an additional $500,000 to the Company to fund
the Plan of Reorganization and to fund the future growth of the business.
The Company also announced preliminary unaudited results for the year
ended December 31, 1995, which indicate net income of $89,126 on revenues of
$4,399,309. Audited results for this period should be released prior to the
end of March. Mr. Massey stated that "we are very pleased with these results
since they were achieved despite significant professional fees associated
with litigation and the bankruptcy". He further stated that "the quarter
ended December 31, 1995 was the sixth consecutive quarter of profitable
operations and backlog has continued to improve with the infusion of new
capital".
