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: April 19, 1996
Commission Registrant, State of Incorporation, I.R.S. Employer
File Number Address and Telephone Number Identification No.
1-11299 ENTERGY CORPORATION 13-5550175
(a Delaware corporation)
639 Loyola Avenue
New Orleans, Louisiana 70113
Telephone (504)529-5262
1-2703 GULF STATES UTILITIES COMPANY 74-0662730
(a Texas Corporation)
350 Pine Street
Beaumont, Texas 77701
Telephone (409)838-6631
<PAGE>
Item 5. Other Events
Entergy Corporation and Gulf States Utilities
Company
Gulf States Utilities Company, Southwestern
Electric Power Company, and members of the Cajun Electric
Power Cooperative, Inc. issued the following press release
on April 19, 1996:
MEMBERS COMMITTEE, SWEPCO, GSU
FILE REORGANIZATION PLAN FOR CAJUN
The Cajun Electric Members Committee, Southwestern
Electric Power Company (SWEPCO) and Gulf States Utilities
Company (GSU) today filed a reorganization plan for Cajun
Electric Power Cooperative, Inc. in the U.S. Bankruptcy
Court for the Middle District of Louisiana (Case No. 94-
114740).
Under the plan, wholesale rates to the member
distribution cooperatives that buy power from Cajun would be
reduced from 4.88 cents per kilowatt-hour to a proposed 3.74
cents per kilowatt-hour. That, in turn, would allow the
cooperatives to reduce retail rates to residential customers
by 20 to 25 percent. The Louisiana cooperatives serve a
population of more than 1 million people.
Also under the plan, Cajun's creditors would receive a
total value in excess of $1.2 billion, that includes $405
million in cash from SWEPCO to purchase the Big Cajun II
coal-fired power plant, Big Cajun I gas-fired power plant
and related non-nuclear assets. It also includes $497
million to $567 million in net present value from future
payments the member cooperatives would make to the federal
government's Rural Utilities Service (RUS), Cajun's largest
creditor, using a portion of the cooperatives' future income
from their retail customers. The remaining value comes from
existing liquid assets and a ratepayer trust fund that was
established as part of the bankruptcy procedure.
Finally, the plan resolves the complex legal an
financial issues resulting from Cajun's investment in the
River Bend nuclear power generating plant. It gives the RUS
a choice of auctioning Cajun's 30 percent ownership interest
in River Bend to the highest bidder, acquiring the ownership
interest itself, or conveying the ownership at no cost to
GSU, which owns the other 70 percent of the plant. In each
case, the plan provides for full funding of decommissioning
costs.
"The key to this plan is that it provides competitive
wholesale rates to the Cajun member cooperatives, which
serve more than 1 million Louisiana residents, while
maximizing value to the Cajun estate," said David Kleiman,
attorney for the Members Committee, which consists of 10 of
the 12 distribution cooperatives served by Cajun. "It's
important to provide the creditors with fair compensation,
and this plan certainly does that. But from the Members'
standpoint, it also means that for the first time in 15
years, the cooperatives in Louisiana will have rates that
are competitive, and they will be able to see the kind of
growth and development the rural areas of the state
deserve."
Noting the bankruptcy of one cooperative, the sale of
another, the pending sale of still another and the financial
difficulties of all cooperatives in the state, Kleiman said
other proposals may provide more value to the estate, but
that means higher, uncompetitive rates for the cooperative
and their customers. "That is not acceptable to the Members
Committee. The joint proposal of the Members, SWEPCO and
GSU provides a permanent solution to these long-standing
problems," he said.
The court appointed trustee for Cajun has indicated he
will submit a plan based on a competing proposal.
SWEPCO President and Chief Executive Officer Richard H.
Bremer said the comprehensive nature of the
Members/SWEPCO/GSU plan makes it a winner. "We also feel it
can be supported by the Louisiana Public Service Commission.
The Commission has been a strong proponent of competitive
rates for the cooperatives, and we appreciate the
encouragement from the Commission for the direction we've
taken with this joint proposal. We are committed to
providing competitive wholesale rates, and we look forward
to providing the information the Commission needs from us to
evaluate the Cajun proposals and conduct its regulatory
approval process," Bremer said.
GSU President Frank Gallaher said, "This plan provides
for resolution of various legal and regulatory matters
involving GSU and Cajun. The resolution of these cases
would be a major step forward and a positive feature of the
plan."
SWEPCO is a wholly owned electric subsidiary of Central
and South West Corporation (NYSE:CSR). GSU is a wholly
owned electric subsidiary of Entergy Corporation (NYSE:ETR).
Item 7 Financial Statements and Exhibits
(a) Exhibits
(2) Plan of Reorganization for Cajun
Electric Power Cooperative, Inc.,
submitted jointly by the Members
Committee, Southwestern Electric Power
Company and Gulf States Utilities
Company In Re: Cajun Elecric Power
Cooperative, Inc. (Case No. 94-11474)
in the United States Bankruptcy Court
for the Middle District of Louisiana
<PAGE>
SIGNATURE
Pursuant to the requirements of the Securities Exchange
Act 1934, the registrant has duly caused this report to be
signed on its behalf by the undersigned hereunto duly
authorized.
Entergy Corporation
By: /s/ Louis E. Buck, Jr.
Louis E. Buck, Jr.
Vice President and
Chief Accounting Officer
Gulf States Utilities Corporation
By: /s/ Louis E. Buck, Jr.
Louis E. Buck, Jr.
Vice President, Chief Accounting
Officer and Assistant Secretary
Dated: April 22, 1996
Exhibit 2
UNITED STATES BANKRUPTCY COURT
MIDDLE DISTRICT OF LOUISIANA
IN RE: )
) CASE NO. 94-11474
CAJUN ELECTRIC POWER )
COOPERATIVE, INC., ) Chapter 11
)
DEBTOR. ) USDC NO. 94-CV-2763
PLAN OF REORGANIZATION FOR
CAJUN ELECTRIC POWER COOPERATIVE, INC.
SUBMITTED JOINTLY BY THE MEMBERS
COMMITTEE, SWEPCO AND GSU
The Cajun Electric Members Committee ("Members Committee"),
Southwestern Electric Power Company ("SWEPCO") and Gulf States
Utilities Company ("GSU") (collectively the "Proponents") hereby
propose the following plan of reorganization ("Plan") for Cajun
Electric Power Cooperative, Inc., the debtor herein ("Debtor" or
"Cajun"):
INTRODUCTION TO THE PLAN
This Plan produces a total value for creditors estimated to
be between $1.177 billion and $1.247 billion, which is
substantially more than the $804 million established by the LPSC
as the maximum value of Cajun's assets in 1994. Equally
significant, this Plan ends the GSU litigation by incorporating
the terms of a global settlement negotiated by the Proponents. <FN1>
This Plan is feasible and confirmable because: (i) it is not
contingent on financing; (ii) it is the only plan that has the
support of the Members, which is required of any plan; (iii) it
is the only plan that avoids litigation over the Members'
contract rights; and (iv) it is the only plan that reduces rates
to a competitive level and is therefore supportable by the LPSC,
which must approve any plan.
This Plan does not contain any "break-up" fee or other
pecuniary imposition on the Cajun estate.
The distinguishing attribute of this Plan is that it will
produce competitive wholesale rates to cooperatives serving over
one million Louisiana residents and maximize the value of the
Cajun estate. The cooperatives cannot and will not remain viable
at non-competitive rates, as evidenced by the bankruptcy of
Washington St. Tammany, the insolvency and acquisition of BREMCO,
the agreement of the Teche Board to sell to CLECO, and other
cooperatives that are experiencing financial difficulties.
Cajun's current rates to the Members exceed SWEPCO's wholesale
rates by over 45 percent. This Plan would reduce the Members'
wholesale rates to an above-market, but reasonably competitive,
level of approximately 37.5 mills, which would immediately
provide significant rate relief to Louisiana ratepayers while
also maximizing the value of the estate. Any plan that proposes
higher, non-competitive rates in an effort to extract excessive
value from Louisiana ratepayers would not provide a permanent
solution to the substantial rate disparity between cooperatives
on the one hand, and investor-owned and municipal utilities on
the other hand, and additional cooperative insolvencies would
result. This Plan recognizes the fact that competition is
forthcoming in the utility industry and, very significantly, it
allows creditors to share in the benefit of rate reductions
through a secure dedicated payment stream that will escalate as
the revitalized cooperatives experience load growth.
The ultimate cost of the River Bend project in which Cajun
invested caused problems for all involved. The Rural Utility
Services ("RUS") has made direct and guaranteed loans that, with
interest, exceed $4.2 billion, a significant portion of which
relates to River Bend. The Members have had rates imposed that
make them non-competitive and jeopardize their continued
existence. GSU has been subjected to numerous, lengthy and
expensive lawsuits resulting from River Bend and its contractual
relations with Cajun. Finally, employees, suppliers, trade
creditors and others who have dealt with Cajun have faced
uncertainties resulting from the pending bankruptcy.
The Proponents submit this Plan to resolve the many
difficulties that have plagued Cajun over the past 16 years,
starting with the decision to invest in a nuclear power plant.
To put an end to Cajun's Chapter 11 case, a plan must
satisfy the following four (4) criteria:
1. It must provide a mechanism to resolve the
pervasive litigation in which Cajun and GSU are
involved.
2. It must provide a payment to creditors consistent
with the mandates of the Louisiana Public Service
Commission ("LPSC").
3. It must provide Cajun's 12 Members with a long
term, reliable, competitively priced source of power.
4. It must maximize the value of Cajun's assets,
consistent with the foregoing criteria.
This Plan meets these criteria. Further, this Plan meets
the dictates of, and should be acceptable to the LPSC because it
pays the fair value of the used and useful assets of Cajun while
maintaining a competitive rate level.
SUMMARY OF THE PLAN
The Plan provides for an enterprise (hereinafter "SWECO") to
be formed by SWEPCO as a wholly owned subsidiary or affiliate to
acquire Cajun's non-nuclear assets (hereinafter the "Generation
and Transmission Assets"), except the liquid assets. The total
consideration to creditors made available under this Plan will
be: $405 million in cash from SWECO for the Generation and
Transmission Assets; cash and liquid assets in the estate
estimated to be $125 million (as of December, 1996); Deferred
Payments from the Members with a net present value of $497
million to $567 million, payment of which will be assured by a
subordination of SWECO's right to payments from the Members; and
the segregated funds claimed by the Members (the "Ratepayers'
Trust Fund") estimated to provide an additional $150 million.
This provides a net present value to the estate of approximately
$1.2 billion.
The Members and SWECO shall enter into new power supply
agreements, with a 20 year term, whereby SWECO shall be obligated
to supply and the Members shall be obligated to purchase all of
their power requirements up to the capacity of the Generation and
Transmission Assets. The terms and conditions of the new power
supply agreements shall be mutually agreeable to SWECO on the one
hand and the Members on the other. The parties shall also enter
into agreements whereby the Members will dedicate 5.875 mills to
the RUS for every kilowatt hour of electricity purchased from
SWECO up to the capacity of the Generation and Transmission
Assets. The obligation to purchase power, along with a dedicated
payment stream, will result in gross payments to the RUS over 20
years of a sum exceeding $1 billion, which stream has a net
present value estimated between $497 million and $567 million.
Cajun's involvement in River Bend and prior business
dealings with GSU, as well as the resulting bankruptcy, have
spawned much litigation with more threatened. The filed and
threatened litigation includes:
1. River Bend Contract and Fraud Suit. In 1989,
Cajun sued GSU for fraud and breach of contract arising out
of Cajun's River Bend investment. Cajun seeks rescission of
the River Bend JOA and return of all funds invested in River
Bend. The litigation is pending in the United States
District Court for the Middle District of Louisiana, Cause
No. 89-474-B. On October 25, 1995, the District Court
denied Cajun's fraud claim, and the suit remains pending.
2. River Bend Nullity Suit. Certain Members and
Cajun have filed suit against GSU alleging that the River
Bend JOA is an absolute nullity because the contract was
never approved by the LPSC. The nullity suit has been
stayed until resolution of the fraud portion of the River
Bend litigation.
3. Prudency/Used and Useful Order. On June 17, 1994,
in Order No. U-17735-C, the LPSC ruled that Cajun's
investment in River Bend was imprudent and that the River
Bend capacity is not used or useful. This order is on
appeal to the 19th Judicial District Court.
4. Rate Order. On December 16, 1994, in Order No.
U-17735-E, the LPSC ordered Cajun to reduce its annual
revenues by $30.2 million, which lowered rates to
approximately 48.8 mills. Cajun filed an appeal in
opposition to the rate decrease, and certain Members filed
appeals contending that rates should be further decreased.
The appeals are pending at the 19th Judicial District Court.
5. Preemption Litigation. Following entry of the
LPSC's Rate Order, the RUS sent a letter advising Cajun that
the Rate Order was implicitly preempted. On December 21,
1994, Cajun filed a complaint for declaratory judgment as to
whether its rates were regulated by the RUS or the LPSC. On
July 20, 1995, the District Court entered a judgment that
the LPSC retained jurisdiction to regulate Cajun. RUS has
appealed to the Fifth Circuit (95-30941).
6. River Bend JOA/Big Cajun II, Unit 3, JOA. Cajun
and GSU are involved in litigation both in the U.S. District
Court, Middle District of Louisiana (No. 91-1091) and in the
bankruptcy case regarding their respective rights and
obligations under the River Bend JOA and the Big Cajun II,
Unit 3, JOA. Cajun has ceased paying any O&M expenses
relating to River Bend, and has moved to reject the River
Bend JOA pursuant to 11 U.S.C. 365. GSU contends that the
River Bend JOA is not an executory contract subject to
rejection. GSU has obtained injunctive relief mandating
Cajun to deliver 42% of the power from Big Cajun II, Unit 3,
to GSU, and allowing GSU to deposit its share of O&M
expenses relating to Big Cajun II, Unit 3, into the registry
of the court. GSU claims ownership of the deposited funds.
7. GSU Subordination Action Against RUS. GSU filed
an adversary proceeding against RUS in the bankruptcy court
(now pending in District Court under Civil Action No.
95-00080-B-M-2), contending that the claims and liens of RUS
against Cajun are subordinated under bankruptcy and state
law.
8. Challenges to Liens and Claims of RUS and CoBank
Preserved by Creditors Committee, Members Committee and
Cajun. Pursuant to the bankruptcy court's cash collateral
order, on May 10, 1995, the Creditors Committee asserted and
preserved numerous challenges to the claims and liens of RUS
and CoBank. Most significantly, the Creditors Committee
asserts that all obligations of Cajun to the RUS or CoBank,
and any security therefor, are an absolute nullity to the
extent that such obligations were incurred without the
required prior approval of the LPSC. The Creditors
Committee has also reserved a subordination action against
RUS. On May 9, 1995, the Members Committee and Debtor
raised similar objections to the claims and liens of RUS and
CoBank.
9. Challenges to the Supply Contracts. Southwest
Louisiana Electric Membership Corporation ("SLEMCO")
contends that its Supply Contract is a nullity because the
Supply Contract was never approved by the LPSC. SLEMCO
first entered into its Supply Contract with Cajun in 1976,
at a time when the LPSC had jurisdiction over SLEMCO, but
the LPSC never approved the contract as required by law. In
addition, the other Members executed new, superseding Supply
Contracts in 1976 that may also be a nullity under state
law. Besides the nullity issue, the Members Committee
contends that the Supply Contracts are not assignable
without the consent of the Members. See Matter of Wabash
Valley Power Ass'n, Inc., 72 F.3d 1305 (7th Cir. 1995), pet.
reh'g den'd (April 2, 1996).
10. Claims for River Bend Decommissioning Costs.
There are serious issues involving Cajun's liability for
River Bend decommissioning costs, the computation of any
such liability, and whether any such liability would be
treated as a post-petition administrative claim.
11. Transmission and Other Regulatory Litigation.
There is substantial litigation between Cajun and GSU
pending before the Federal Energy Regulatory Commission
relating to transmission issues and matters involving the
GSU/Entergy merger pending before FERC, the SEC and the NRC.
The Plan includes settlements that eliminate the need for
the court to hear and determine the filed and threatened
litigation. A key element in the settlement is GSU's agreement
to assume responsibility for Cajun's 30% interest in River Bend
(at the option of the RUS), and resolution of all other claims
between Cajun and GSU.
Another key feature of the Plan is resolution of the
objections raised by the Creditors Committee to the claims and
liens of RUS and CoBank. The Plan resolves the Creditors
Committee's objections by paying the general unsecured trade
creditors a minimum of seventy-five (75%) of the allowed amount
of their claims (up to a maximum of $6 million).
The Plan would also render moot the nullity contentions of
SLEMCO and the other Members regarding their Supply Contracts, in
addition to the other contract issues identified in the Wabash
Valley case.
Also rendered moot by the Plan is the Debtor's efforts to
reject the River Bend JOA, the preemption litigation pending at
the 5th Circuit Court of Appeals and the various appeals of the
LPSC's Rate Order.
TERMS OF THE PLAN
Article I: Definitions.
I.1 "Allowed Claim" means any Claim against the Debtor, (i)
the proof of which was filed on or before the Bar Date; or (ii)
that was scheduled by the Debtor as liquidated in amount and not
disputed or contingent; and (iii) in either case, a Claim to
which no objection is timely filed or that is allowed by a Final
Order of the Court.
I.2 "Allowed Secured Claim" means any Allowed Claim to the
extent it is secured by (i) a lien on the Debtor's assets, or
(ii) a right of set-off under Code Section 553.
I.3 "Allowed Unsecured Claim" means any Allowed Claim to
the extent it is not secured either by a lien on the Debtor's
assets or a right of set-off under Code Section 553.
I.4 "Bar Date" means October 1, 1995, the date designated
by the Court in its Order dated August 21, 1995 as the last day
for filing a proof of Claim.
I.5 "Cash Payment" means the $405 million to be paid on the
Effective Date by SWECO for the Generation and Transmission
Assets.
I.6 "Claim" means a claim as defined in Code Section 101(5)
against Cajun.
I.7 "CoBank" means National Bank for Cooperatives.
I.8 "Code Section" means a section of the United States
Bankruptcy Code, 11 U.S.C. 101 et seq., as in effect with
respect to the Reorganization Case.
I.9 "Confirmation Order" means the order of the Court
confirming this Plan.
I.10 "Court" means the United States District Court for the
Middle District of Louisiana, exercising its original bankruptcy
jurisdiction pursuant to 28 U.S.C. 1334.
I.11 "Creditors Committee" means the official committee of
unsecured creditors approved by the Court.
I.12 "Decommissioning Trust Fund" means a segregated trust
fund to be established to satisfy its obligations for
Decommissioning Costs (as defined in Section 6.1 below).
I.13 "Deferred Payments" means the 20 year payment stream
having a present value estimated between $497 million and $567
million, which will be paid directly by the Members to the RUS in
consideration of the release of the lien of RUS on the Supply
Contracts.
I.14 "Disbursement Fund" means that certain interest bearing
escrow account to be established under the supervision of the
Trustee, into which cash proceeds are deposited and from which
Plan disbursements shall be made.
I.15 "Effective Date" means a date selected by the
Proponents for this Plan to become effective, and for documents
to be executed to implement the provisions of the Plan, which
date shall be not later than 90 days after the Confirmation Order
becomes a Final Order and the required approvals set forth in
Article XI are obtained. The Proponents may waive, in writing,
the requirement that the Confirmation Order become a Final Order
prior to the Plan becoming effective, in which case the Effective
Date shall be a date selected by the Proponents.
I.16 "FFB" means the Federal Financing Bank of the United
States Department of the Treasury.
I.17 "FIBA" means First Interstate Bank of Arizona, N.A., as
trustee.
I.18 "Final Order" means an order or judgment (a) as to
which the time has expired within which a proceeding for review
(whether by way of rehearing, appeal, certiorari (or otherwise)
may be commenced, without any such proceeding having been
commenced, or (b) which, if such a review proceeding was timely
commenced, has been affirmed by the highest tribunal in which
review was sought or remains in effect without modification
following termination of such proceeding for review, and the time
has expired within which any further proceeding for review may be
commenced.
I.19 "Generation and Transmission Assets" means all of the
assets owned by the Debtor on the Effective Date, except the
following: (i) River Bend, which is being transferred to GSU, RUS
or a third party; (ii) the River Bend Litigation and all other
claims against GSU, which are being settled; (iii) the Liquid
Assets; and (iv) any assets identified in writing by SWECO prior
to confirmation as an asset not to be acquired. In addition, the
Decommissioning Trust Fund, Ratepayer Trust Fund and Registry
Trust Fund do not constitute Generation and Transmission Assets.
I.20 "GSU" means Gulf States Utilities Company.
I.21 "GSU Subordination Action" means the adversary
proceeding filed by GSU requesting subordination of RUS' claims,
Civil Action No. 95-00080-B-M-2.
I.22 "Initial Distribution Date" shall mean a date no later
than 30 days after the Effective Date when the initial payments
to Allowed Claims, as set forth in this Plan, shall be made.
I.23 "Liquid Assets" means all of Debtor's cash, investment
accounts, and other liquid assets categorized as current assets
on Debtor's balance sheet, but does not include the
Decommissioning Trust Fund, Ratepayer Trust Fund, Registry Trust
Fund or Debtor's fuel, material and supply inventory.
I.24 "LPSC" means the Louisiana Public Service Commission.
I.25 "Members" means Beauregard Electric Cooperative, Inc.,
Claiborne Electric Cooperative, Inc., Concordia Electric
Cooperative, Inc., Dixie Electric Membership Corporation,
Jefferson Davis Electric Cooperative, Inc., Northeast Louisiana
Power Cooperative, Inc., Pointe Coupee Electric Membership
Corporation, South Louisiana Electric Cooperative Association,
Southwest Louisiana Electric Membership Corporation, Teche
Electric Cooperative, Inc., Valley Electric Membership
Corporation and Washington-St. Tammany Electric Cooperative, Inc.
I.26 "Members Committee" means an unofficial committee
comprised of the following 10 Members: Beauregard Electric
Cooperative, Inc., Concordia Electric Cooperative, Inc., Dixie
Electric Membership Corporation, Jefferson Davis Electric
Cooperative, Inc., Northeast Louisiana Power Cooperative, Inc.,
Pointe Coupee Electric Membership Corporation, South Louisiana
Electric Cooperative Association, Southwest Louisiana Electric
Membership Corporation, Valley Electric Membership Corporation
and Washington-St. Tammany Electric Cooperative, Inc.
I.27 "NRC" means the Nuclear Regulatory Commission.
I.28 "Petition Date" means December 21, 1994.
I.29 "Proponents" means the Members Committee, SWEPCO and
GSU.
I.30 "RUS" means the United States of America, acting
through the Rural Utilities Service (formerly the Rural
Electrification Administration), an agency within the United
States Department of Agriculture.
I.31 "Ratepayer Trust Fund" means the excess funds collected
by Cajun that are accumulating in a segregated fund pursuant to
the Order Concerning Use Of Cash Collateral And Adequate
Protection approved by the bankruptcy court on February 13, 1995,
and all interest thereon.
I.32 "Registry Trust Fund" means the fund established by the
Court whereby GSU deposits its share of operating and maintenance
expense for Big Cajun II, Unit 3, with the registry of the Court.
I.33 "Reorganization Case" means this Chapter 11 case of
Cajun (Case No. 94-11474; USDC No. 94-CV-2763).
I.34 "River Bend" or the "Cajun River Bend Interest" means
Cajun's 30% interest in the River Bend nuclear generating
facility constructed by GSU, including all related fuel,
accessories, spare parts and appurtenances.
I.35 "River Bend JOA" means the River Bend Joint Operating
Agreement between GSU and Cajun.
I.36 "River Bend Litigation" means the contract, fraud and
nullity litigation between the Debtor and GSU pending in the
United States District Court for the Middle District of
Louisiana, under cause numbers 89-474-B, 91-1091 and 93-395.
I.37 "Subsequent Distribution Dates" shall mean periodic
dates selected by the Trustee for payments to Allowed Claims
after the Initial Distribution Date.
I.38 "Supply Contracts" means the long term all-requirements
contracts between the Debtor and each of its Members.
I.39 "SWECO" means Southwestern Wholesale Electric Company,
a new entity formed as a wholly owned subsidiary or affiliate by
SWEPCO to acquire the Generation and Transmission Assets.
I.40 "SWEPCO" means Southwestern Electric Power Company, a
Louisiana based investor owned utility.
I.41 "Trustee" means the Chapter 11 trustee appointed herein
by the Court, or any successor Trustee that may be subsequently
appointed by the Court.
Article II: Treatment of Unclassified Claims.
II.1 Treatment of Administrative Claims. The Trustee shall
pay in cash on the Initial Distribution Date or, if later, the
date payable in the ordinary course of business, the full amount
of each Allowed Unsecured Claim entitled to priority under Code
Section 507(a)(1) that is outstanding on the Effective Date;
provided, however, that in the case of any Claim by a
professional for compensation or reimbursement of expenses,
payment of such Claim shall be subject to Court approval.
II.2 Treatment of Pre-Petition, Priority Tax Claims. The
Trustee shall pay in cash on the Initial Distribution Date the
full amount of each Allowed Unsecured Claim entitled to priority
under Code Section 507(a)(8).
Article III: Classification of Claims and Interests.
Claims required to be classified under Code Section
1123(a)(1) and Member Interests are classified as follows:
III.1 Class 1. All Other Priority Claims. All Allowed
Unsecured Claims entitled to priority under Code Section 507(a)
(other than 507(a)(1), (8)) shall be dealt with in Class 1.
III.2 Class 2. Allowed Secured Claim of RUS, including
Guaranties of FFB, CoBank and FIBA. RUS' Allowed Secured Claim
shall be dealt with in Class 2. The total RUS Claim is scheduled
at approximately $4.2 billion, and is comprised of the following
elements: (a) direct loans; (b) guarantied CoBank loan of
approximately $500 million; (c) guarantied FIBA loan of
approximately $1 billion; and (d) guarantied FFB loans. RUS
asserts a first priority lien on substantially all of the
Debtor's assets; however, a number of parties, including GSU, the
Members Committee, the Creditors Committee and the Debtor have
raised certain issues, defenses and claims that may effect the
amount and priority of the RUS Claim. Under any scenario, the
RUS Claim is undersecured and must be bifurcated pursuant to Code
Section 506(a).
III.3 Class 3. Allowed Claims of Members for Post-
Petition Overpayments. The Members' Allowed Claims for post-
petition overpayments shall be dealt with in Class 3. Subsequent
to the Petition Date, the Members have overpaid Cajun for power,
and said overpayments have accumulated in the Ratepayer Trust
Fund pursuant to a Court order. It is estimated that the
Ratepayer Trust Fund will have $150 million as of December, 1996.
The Members Committee asserts, alternatively, that (a) the
Ratepayer Trust Fund is held in trust for the benefit of the
Members (and ultimately the ratepayers), and is not property of
the Cajun estate; (b) the Class 3 Claims are secured by the
Ratepayer Trust Fund; and/or (c) the Class 3 Claims are
administrative claims.
III.4 Class 4. Allowed Secured Claim of CoBank.
CoBank's Allowed Secured Claim shall be dealt with in Class 4.
CoBank has a secured Claim arising out of two letters of credit
issued in favor of Clorox and Kodak, respectively. Said Claim is
secured by (a) Debtor's pledge of CoBank Class E Stock and (b) a
mortgage shared with the RUS that purports to encumber
substantially all of Debtor's assets.
III.5 Class 5. Allowed Secured Claim of Hibernia Bank.
Hibernia Bank's Allowed Secured Claim shall be dealt with in
Class 5. Hibernia Bank is scheduled as having a secured Claim
arising out of the issuance of Industrial Development Bonds to
finance construction of Debtor's headquarters building. Said
Claim is secured by the headquarters building.
III.6 Class 6. All Claims of GSU. GSU asserts Claims
exceeding $171 million, including FERC judgments of approximately
$55 million and pre-petition and post-petition defaults by Cajun
on River Bend and transmission facility obligations. All of
GSU's Claims shall be dealt with in Class 6 including, without
limitation, any Claim for damages arising out of the rejection of
the River Bend JOA.
III.7 Class 7. Allowed Unsecured Claims of Trade
Creditors. The Allowed Unsecured Claims for goods or services
provided prior to the Petition Date shall be dealt with in Class
7. Class 7 does not include any Claims arising under Code
Sections 365(g) and 502(g).
III.8 Class 8. Allowed Unsecured Claims of Members.
All Allowed Unsecured Claims of the Members shall be dealt with
in Class 8. The Members on the Members Committee filed proof of
claims exceeding $1 billion that include the following types of
Claims, in the aggregate:
(a) capital credits: $31,993,761.00;
(b) pre-petition overpayments: $132,982,606.00;
(c) 1994 incentives and rebates: $193,115,00
(d) substation obligations: $1,329,904.04;
(e) miscellaneous: $37,412.76; and
(f) contingent third party claims relating
to LPSC Docket No. U-19943: $1,165,569,000.00.
III.9 Class 9. All Other Allowed Unsecured Claims not
otherwise Classified. The Allowed Unsecured Claims of all other
creditors not otherwise classified shall be dealt with in Class
9.
III.10 Class 10. Interests of Members. The interests of
the Members in the Debtor shall be dealt with in Class 10.
Article IV: Classes Impaired by the Plan.
Class 1 is not impaired by the Plan. All other Classes are
impaired by the Plan, pursuant to Code Section 1124.
Article V: Treatment of Classes.
V.1 Class 1. All Other Priority Claims. The Trustee shall
pay in cash on the Initial Distribution Date the full amount of
each Allowed Unsecured Claim in Class 1.
V.2 Class 2. Allowed Secured Claim of RUS. The Class 2
Allowed Secured Claim shall be treated as provided in paragraphs
A and B below:
A. (i) On the Initial Distribution Date, SWECO shall
make a Cash Payment of $405 million to the Trustee, who
shall deposit the same in the Disbursement Fund. On the
Initial Distribution Date, the Trustee shall pay to the RUS
$405 million less the following amounts: (a) those sums
necessary to pay Allowed Claims in Sections 2.1, 2.2, 5.1
and 5.7, (b) the amount necessary to bring the balance in
the Decommissioning Trust Fund to $125 million as provided
in Section 6.1 to pay the Decommissioning Costs and (c)
reserves for disputed Claims and reorganization expenses;
and
(ii) On the Initial Distribution Date, and on the
Subsequent Distribution Dates, as applicable, the Trustee
shall pay to the RUS the cash portion of the Liquid Assets
(total Liquid Assets estimated to be $125 million); and
(iii) RUS will receive the Deferred Payments estimated
to have a net present value of between $497 million and $567
million. The Deferred Payments shall be generated and paid
to RUS as described in Section 7.3 below; and
(iv) RUS may make the election described in Section 6.2
below with respect to the disposition of River Bend.
B. Additional Payment or Collateral. It is estimated that
the balance of the Ratepayer Trust Fund will be approximately
$175 million in December, 1996. If the RUS accepts this Plan, on
the Initial Distribution Date the RUS shall also receive as an
additional payment all but $25 million of the funds in the
Ratepayer Trust Fund. If the RUS does not accept this Plan, all
but $25 million of the funds in the Ratepayer Trust Fund shall be
held by an entity, designated by the Members Committee and
approved by the Court, in a security fund as collateral to assure
that the Deferred Payments under this Plan received by the RUS
aggregate to a net present value of $497 million. At such time
as RUS receives Deferred Payments having a net present value of
$497 million, the Ratepayer Trust Fund shall be released as
security and disposed of as provided in Section 5.3 below. If at
anytime during which the Ratepayer Trust Fund serves as security
as provided herein, a Member defaults in making its portion of
the Deferred Payments to the RUS, or if the RUS fails to receive
total Deferred Payments over the 20-year period having a net
present value of at least $497 million, the Ratepayer Trust Fund
shall be available to cure such default.
V.3 Class 3. Allowed Claims of Members for Post-Petition
Overpayments. Each Member has an Allowed Class 3 Claim equal to
its percentage of the funds in the Ratepayer Trust Fund
(estimated to contain $175 million by December, 1996). If RUS
accepts this Plan, the Members agree to release all of their
interest in the Ratepayer Trust Fund except for $25 million. If
RUS does not accept this Plan and the Ratepayer Trust Fund
ultimately is released as security for the Deferred Payments,
then at such time a docket shall be opened at the LPSC to
determine the most appropriate procedures for allocating and
refunding the funds in the Ratepayer Trust Fund to the Members,
for ultimate distribution of said refunds back to the retail
consumers. Notwithstanding anything in the Plan to the contrary,
$25 million of the funds in the Ratepayer Trust Fund will be used
for the benefit of the Members to (1) reimburse them for expenses
and to pay expenses incurred in conjunction with this bankruptcy
proceeding, and (ii) for the purpose of advancing and developing
the Members' marketing and rural economic development efforts.
V.4 Class 4. Allowed Secured Claim of CoBank. SWECO will
acquire the Debtor's undivided interest in Big Cajun 2, Unit 3,
and the Debtor's ownership of equity in CoBank, subject to the
Tax Benefit Transfer Agreements with Kodak and Clorox. On the
Effective Date, SWECO will enter into a Letter of Credit and
Reimbursement Agreement, Pledge Agreement (for any CoBank stock,
cash dividends, revolvements etc.) and other related documents in
a form mutually acceptable to SWECO and CoBank. On the Effective
Date, CoBank shall issue new letters of credit to Kodak and
Clorox with declining maximum draw amounts as required by the Tax
Benefit Transfer Agreements. SWECO's reimbursement obligations
shall be secured by SWECO's ownership of equity in CoBank
acquired from Cajun (including but not limited to Class E stock,
replacement stock, uncertified equities, retirements,
revolvements, patronage refunds and cash collateral). All other
liens held by CoBank shall be deemed released, cancelled and
discharged on the Effective Date. SWECO and CoBank may execute
such other documents as are necessary and appropriate to avoid a
disqualifying event under the Tax Benefit Transfer Agreements
from occurring, and to otherwise implement the provisions of this
section.
V.5 Class 5. Allowed Secured Claim of Hibernia Bank. The
Allowed Secured Claim of Hibernia Bank representing the
Industrial Development Bonds, secured by the Debtor's current
headquarters building and land, shall be paid in full in
accordance with the payment schedule required by such Industrial
Development Bonds. Any payment defaults, and any reasonable
fees, costs or charges payable under Code Section 506(b), shall
be cured on the Effective Date, as an administrative Claim in
Section 2.1. SWECO shall cause the future payments on the
Industrial Development Bonds to be made to Hibernia Bank, but
shall have no personal liability or recourse for such payments.
Hibernia Bank shall retain its lien on the headquarters building
and land, and may enforce such lien in the event of any default
after the Effective Date. On the Effective Date, the Debtor
shall convey title to the headquarters and land to SWECO, subject
to the lien of Hibernia Bank, but free and clear of any and all
other liens, claims, and encumbrances including, but not limited
to, the liens of the RUS.
V.6 Class 6. All Claims of GSU. GSU's Class 6 Claims
shall be satisfied pursuant to a settlement between GSU and Cajun
of all outstanding litigation and claims between the parties,
which settlement is more particularly described in Article VI
below.
V.7 Class 7. Allowed Unsecured Claims of Trade Creditors.
The Class 7 Allowed Unsecured Claims shall be paid by the Trustee
from the Disbursement Fund an amount equal to 100% of the allowed
amount of such Claims, which payment shall be made within 15 days
after the later of the date the Confirmation Order is entered or
the date the Claim is allowed; provided, however, that if the RUS
objects to the foregoing treatment of Class 7 creditors in this
and any competing plan, the above designated percentage shall be
reduced from 100% to 75%, which represents a fair compromise of
the objections asserted by the Creditors Committee. The
Creditors Committee shall be deemed to have waived all challenges
to the claims and liens of the RUS and CoBank, including, without
limitation, objections based on nullity and subordination
theories. Notwithstanding anything herein to the contrary: (i)
the maximum aggregate amount paid to Class 7 Allowed Unsecured
Claims shall not exceed $6 million (and if Class 7 Allowed
Unsecured Claims to be paid hereunder exceed $6 million such
claims must share pro-rata in the sum of $6 million), and (ii) no
Class 7 Claims shall receive any post-petition or post
confirmation interest.
V.8 Allowed Unsecured Claims of Members. The Class 8
Allowed Unsecured Claims shall be paid by the Trustee on the
Subsequent Distribution Dates pro-rata with the Class 9 Allowed
Unsecured Claims from unencumbered monies, if any, deposited in
the Disbursement Fund after payment of Claims in Sections 2.1,
2.2, 5.1, 5.2 and 5.7.
V.9 Class 9. All Other Allowed Unsecured Claims Not
Otherwise Classified. The Class 9 Allowed Unsecured Claims shall
be paid by the Trustee on Subsequent Distribution Dates pro-rata
with the Class 8 Allowed Unsecured Claims from unencumbered
monies, if any, deposited in the Disbursement Fund after payment
of Claims in Sections 2.1, 2.2, 5.1, 5.2 and 5.7.
V.10 Interests of Members. The interests of the Members
shall be canceled on the Effective Date.
Article VI: Settlement of Litigation and Claims
Among Cajun, GSU and the Members
The Proponents agree that the following settlement
provisions contained in Article VI are in the best interest of
the estate and are submitted for approval as an integral part of
this Plan to occur on the Effective Date:
6.1 Funding of Decommissioning Costs.
(a) The Trustee will set aside in a decommissioning
trust fund or other appropriate vehicle the sum of
$125,000,000 (in 1995 dollars). This Decommissioning
Trust Fund will be made up of Cajun's new contribution,
and the amount in Cajun's existing decommissioning
trust fund. The establishment of the Decommissioning
Trust Fund will absolve Cajun (but not others who
succeed to Cajun's River Bend Interest) of all
responsibility for River Bend Decommissioning Costs as
defined below. SWEPCO, SWECO and the Members shall
have no responsibility or liability for Decommissioning
Costs or for any other costs or obligations of any type
or nature related to River Bend.
"Decommissioning" means all actions taken to
render the River Bend nuclear power plant permanently
inactive, inoperable and free of radioactive materials.
The term decommissioning is intended to be
comprehensive and include, without limitation, the
entombment, decontamination, dismantlement, removal and
disposal of structures, systems and components of the
River Bend nuclear power plant in order to permanently
cease the nuclear generation of electric energy,
including all actions necessary to bring the plant site
to "greenfield" status and any other item included in a
study accepted and approved by regulatory authorities
of competent jurisdiction as a basis for the
termination of operations under the license to own or
operate River Bend. The term also includes preparation
for decommissioning, such as engineering and other
planning activities, and all associated activities to
be performed after the actual dismantlement occurs,
such as physical security and radiation monitoring.
The term also includes activities associated with spent
fuel storage, disposal, transfer, transportation and
removal and low level radioactive waste storage,
disposal, transfer, transportation and removal, as well
as Cajun's future obligations with respect to
decontamination and decommissioning of DOE's uranium
enrichment facilities. Also included is the
preparation of studies and supporting documentation
required by regulatory authorities.
"Decommissioning Costs" means the funds expended
to perform the Decommissioning as well as necessary
fees and expenses for: (i) administrative and other
expenses of the Trust Fund; (ii) terminating and
transferring licenses to own and operate all or a
portion of River Bend; (iii) demolishing equipment and
structures which are not radioactive; (iv) removing and
disposing of equipment and structures which are or may
be radioactive; and (v) the handling and disposal of
any and all salvage. The term includes expenditures
whether they are treated as capital items or expense
items for regulatory, financial, or tax accounting
purposes.
The foregoing listings are not intended to form a
basis for excluding any action or cost legitimately
part of decommissioning and returning the site to
"greenfield" status because of the failure to
separately identify or to fall within a category
specifically identified.
The definitions stated herein shall be included in
the document creating the Decommissioning Trust Fund.
(b) If, upon the completion of Decommissioning of the
River Bend, the Decommissioning Trust Fund, and such
additional amounts as have been added to it as a result
of the investment and management of funds included
therein, is not exhausted by the prudent expenditure of
funds necessary to complete the Decommissioning
attendant to the Cajun River Bend interest, the
remainder will be remitted to RUS.
(c) Upon the transfer of Cajun's River Bend Interest,
the Trustee shall deliver title free and clear of all
liens and encumbrances except those agreed to by the
purchaser. In the event the River Bend is transferred
to RUS, its liens and encumbrances shall be merged with
the title which it obtains. In the event the River
Bend is transferred to any other person, RUS will
release all of its liens and encumbrances on the River
Bend.
6.2 Disposition of River Bend and River Bend JOA.
(a) In the sole discretion of RUS, River Bend will be
transferred under one of the two options set forth
below. The RUS must timely exercise one of the two
options prior to approval of a disclosure statement for
this Plan, by filing a written notice of its election
with the Court and concurrently serving said notice on
each of the Proponents. The RUS is entitled to make
this election regardless of whether the RUS accepts
this Plan or any other plan. If the RUS fails to
timely elect either option below, River Bend shall be
transferred to GSU as provided herein.
In connection with such transfers, GSU will make
available to all prospective bidders records, personnel
and facilities such that prospective bidders can
conduct an appropriate due diligence evaluation before
making their bid. GSU may subject the examination of
personnel, records and facilities to reasonable
confidentiality and business requirements.
RUS shall have substantial flexibility in
exercising its discretion to arrange for the transfer
of the River Bend. In furtherance of that end, RUS's
flexibility shall include, but shall not be limited to,
being permitted to establish a reserve price which must
be met before consummating a sale at auction, not being
required to accept the highest bid received at an
auction and taking title to the River Bend itself for
subsequent reconveyance.
(b) Option 1
River Bend and Cajun's interest in River Bend fuel
and spare parts will be auctioned off to the highest
bidder, with net proceeds remitted to RUS. The highest
bidder will become obligated to fully comply with the
Cajun NRC license requirements, all other applicable
laws and regulations and the provisions of the River
Bend JOA, commencing with the date of the transfer of
River Bend. The highest bidder also will be, required
to fully reimburse GSU for such fuel, regardless of its
stage of fabrication, as GSU purchased for Cajun's
account which is necessary for the continued operations
of the plant, which has not been paid for by Cajun on
or before the passage of title and which has neither
been consumed nor spent for the production of
electrical power and which is available for future use.
All of Cajun's interest and obligations under the River
Bend JOA, the NRC license and any recorded documents of
transfer between GSU and Cajun relating to River Bend
will be canceled and terminated as to Cajun and,
subject to the provisions in this paragraph, will be
assumed by the purchaser, who shall have financial
resources adequate to give reasonable assurance of its
ability to perform all assumed obligations. In
addition, the highest bidder will accept and succeed to
all such responsibilities as Cajun may have for its
ratable share of River Bend Decommissioning Costs in
excess of the Decommissioning Trust Fund. As used
herein, the non-fuel obligations under the JOA for
which a successor shall be obligated shall be limited
to obligations for operations commencing with the
closing of this settlement and shall not include
unfulfilled or unpaid obligations which Cajun incurred
while it was still the owner. GSU may elect to become
a bidder.
(c) Option 2
River Bend and Cajun's interest in River Bend fuel
and spare parts will be assigned to RUS which will
become obligated to fully comply with the Cajun NRC
license requirements, all other applicable laws and
regulations and the provisions of the River Bend JOA,
commencing with the date of its succession to River
Bend. RUS also will be required to fully reimburse GSU
for all such fuel, regardless of its stage of
fabrication, as GSU purchased for Cajun's account which
is necessary for the continued operations of the plant,
which has not been paid for by Cajun on or before the
passage of title and which has neither been consumed
nor spent for the production of electrical power and
which is available for future use. All of Cajun's
interest and obligations under the River Bend JOA, the
NRC license and any recorded documents of transfer
between GSU and Cajun relating to River Bend will be
canceled and terminated as to Cajun and will be assumed
by RUS. In addition, RUS will accept and succeed to
all such responsibilities as Cajun may have for its
ratable share of River Bend Decommissioning Costs in
excess of the Decommissioning Trust Fund. As used
herein, the non-fuel obligations under the JOA for
which a successor shall be obligated shall be limited
to obligations for operations commencing with the
closing of this settlement and shall not include
unfulfilled or unpaid obligations which Cajun incurred
while it was still the owner.
(d) RUS will receive from GSU and Cajun, Cajun's share
of all net cash payments resulting from the litigation
presently being conducted against General Electric in
connection with claims alleging River Bend design
defects. Cajun's share of all payments in kind and
other non-cash consideration received or promised as a
result of the litigation will be payable to the owner
of River Bend at the time such payments in kind or
other non-cash consideration become due.
The same allocation shall be made between RUS and
a transferee of River Bend of refunds or other benefit
related to the payment by Cajun to the U.S. Government
to fund the decontaminating and decommissioning of
DOE's uranium enrichment facilities.
(e) In the event that no bidder submits a
bid accepted by RUS under Option 1 above and in
the further event that RUS elects not to acquire
Cajun's interest in River Bend under Option 2
above, the Trustee shall convey and GSU will
accept title to River Bend at no cost to GSU,
subject to Cajun having fulfilled all of its
obligations under this settlement.
6.3 Transmission and Certain Other Issues
(a) Pursuant to existing FERC decisions, the claim due
GSU for past transmission services under the CTOC
credits and QTF Dockets amounts to $55,000,000 (the
"Liquidated Transmission Debt"). The Liquidated
Transmission Debt consists of $32,000,000 due under the
QTF Docket and $23,000,000 due under the CTOC Credits
Docket. As partial consideration for the settlement of
all claims, GSU waives its right to collect the
Liquidated Transmission Debt from Cajun.
(b) Post-petition transmission underpayments in the
liquidated amount of $58,000 per month will be paid by
the Trustee to GSU as an administrative Claim under
Section 2.1 in the Plan from the Petition Date until
the Effective Date.
(c) Upon the Effective Date of this Plan and upon the
closing of this settlement, transmission services under
Entergy's Network Service Tariff and Entergy's
Transmission Service Tariff will be in place for Cajun
or SWECO. Neither GSU nor Entergy will oppose the
entitlement of SWECO or the Members' group, as
transferees of Cajun's assets, to transmission service
thereunder or its effectiveness at such date.
(d) All previous transmission agreements existing
between Cajun and Entergy, GSU, LP&L or MP&L will be
terminated upon the commencement of services described
in paragraph (c) hereinabove.
6.4 Transfer of Transmission Assets to GSU and other
Transmission Issues. Cajun presently owns certain transmission
assets having a depreciated book value of approximately $26
million. On the Effective Date after the conveyance of the
transmission assets by the Trustee to SWECO, SWECO shall cause
said transmission assets to be transferred to GSU, or at SWECO's
direction, the Trustee shall convey the transmission assets
directly to GSU free and clear of all liens and interests;
provided, however, the transfer of the transmission assets shall
not effect the eligibility of SWECO for transmission service
available under tariffs of GSU and Entergy on file with FERC.
6.5 Settlement of all Claims and Disputes
(a) Any and all claims of any nature or kind, whether
or not now pending in Court, whether known or unknown,
whether founded in law, equity or otherwise, whether or
not already asserted for any and all acts or omissions
between Cajun and GSU or Entergy, except the unsecured
non-priority claim of LP&L for pre-petition
transmission service, and between RUS and GSU or
Entergy, will be dismissed with prejudice and released
and satisfied in full, including, but not limited to,
all claims for the River Bend Litigation, the
Liquidated Transmission Debt, the fraud and breach of
contract case, the antitrust case, the nullity case,
the service water litigation, any claims of equitable
subordination of RUS's rights, all pending cases before
any regulatory agency or on appeal from any regulatory
agency (such as the transmission cases before FERC, the
merger appeals before FERC, the SEC and NRC and any and
all other matters pending before any regulatory agency)
and any and all other claims or disputes between Cajun
and GSU or Entergy, and between RUS and GSU or Entergy
of any nature whatsoever, whether or not in litigation.
(The foregoing does not include resolution of claims of
RUS against Cajun that are not specifically identified
as resolved in this paragraph.) Judgment will be
rendered in favor of RUS in GSU's adversary proceeding
asserting claims of equitable subordination of RUS's
rights. Any and all claims Cajun may have against RUS
for equitable subordination, whether known or unknown,
will be released. Cajun will use its best efforts to
obtain waiver of all claims held by its members against
GSU or Entergy under the nullity case and antitrust
case.
(b) The preliminary injunction issued by the U.S.
District Court in the service water litigation between
GSU and Cajun will continue in full force and effect
until the closing of this settlement and upon such
date, all funds paid and to be paid into the Registry
of the Court pursuant to said injunction shall be paid
over to GSU, together with all interest earned thereon.
6.6 All required regulatory approvals will be sought and
obtained promptly. The settlement may be modified structurally
to account for regulatory or tax concerns provided the
modification does not adversely affect another party to this
settlement.
Article VII: Means for Implementing Plan.
VII.1 Sale of Generation and Transmission Assets to
SWECO. On the Effective Date, SWECO shall purchase the
Generation and Transmission Assets and make the $405 million Cash
Payment to the Trustee for deposit in the Disbursement Fund. On
the Effective Date, the Generation and Transmission Assets shall
be transferred by the Trustee to SWECO free and clear of all
liens, claims and interests, except as provided in Sections 5.4
(CoBank) and 5.5 (Hibernia Bank). The purchase by SWECO shall be
subject to the terms and conditions of a definitive asset
purchase agreement acceptable to SWECO, which shall include the
terms for such purchase set forth in this Plan and normal and
customary provisions for a commercial transaction of this size
and nature. The asset purchase agreement shall be filed with the
Court prior to the confirmation hearing, and the Trustee shall be
deemed to have entered into such purchase agreement as of the
date of the Confirmation Order.
VII.2 Disbursement Fund. The Disbursement Fund shall be
established under the supervision of the Trustee. The Cash
Payment from SWECO, the Liquid Assets, and all other proceeds (if
any) from the liquidation, sale or collection of assets shall be
deposited in the Disbursement Fund. Unless otherwise provided in
the Plan, all Plan distributions shall be made from the
Disbursement Fund.
Payments under the Plan will be made from the Disbursement
Fund in the following order:
(1) payments required under Sections 2.1
(Administrative Claims) and 2.2 (Priority Tax Claims);
(2) payment of the Class 1 Allowed Priority Claims;
(3) payment of the Class 7 Allowed Unsecured Claims;
(4) payment of the amount necessary to bring the
balance in the Decommissioning Trust Fund to $125
million to satisfy the Decommissioning Costs as
specified in Section 6.1;
(5) payment of the Class 2 Allowed Secured Claim of
the RUS as provided in Section 5.2; and
(6) payment of remaining unencumbered proceeds (if
any) to Class 8 (Members) and 9 (Other Unsecured
Claims) Claims on a pro-rata basis.
VII.3 Deferred Payments; New Power Supply Contracts with
SWECO.
(a) On the Effective Date, SWECO and the Members shall
enter into new, 20 year power supply contracts whereby the
Members would purchase power from SWECO upon terms and conditions
mutually acceptable to SWECO and the Members. The new supply
contracts shall supersede and replace the existing Supply
Contracts by and between the Members and the Debtor.
(b) The new supply contracts shall provide that the Members
will make a direct periodic payment to the RUS of 5.875 mills for
every kilowatt hour of electricity purchased from SWECO up to the
capacity of the Generation and Transmission Assets. This will
result in Deferred Payments to RUS over 20 years having a net
present value estimated between $497 million and $567 million.
The new supply contracts shall further provide that SWECO's right
to payment for power shall be subordinate to the RUS's right to
the Deferred Payments from the Members, in the following
circumstances. In the event that (i) the RUS does not receive
its direct payment from a Member(s) for any payment period and
(ii) SWECO has actually received payment from such defaulting
Member(s) for power purchased in the corresponding time period,
then SWECO, upon demand from the RUS, shall turn over sufficient
funds to make such direct payment to the RUS. Failure of any
Member to make its direct periodic payments to the RUS shall
constitute a default under the new supply contracts. A default
covered by the aforementioned subordination shall include but not
be limited to one that is voluntary, involuntary or that results
from the action of any regulatory authority. Upon payment of any
direct periodic payments by SWECO to the RUS as set forth herein,
SWECO shall be subrogated to the rights of the RUS with respect
to the entitlement to such payment.
VII.4 Implementation. Pursuant to Code Section 1142(b)
and Bankruptcy Rule 7070, the Court confirming this Plan may
direct the Trustee to execute or deliver any and all documents or
instruments, or to perform any other act necessary to implement
or consummate this Plan. If the Trustee refuses to comply with
such direction, the Court may direct the U.S. Trustee to appoint
a new trustee to implement and consummate this Plan.
Article VIII: Executory Contracts.
VIII.1 Supply Contracts. Pursuant to Section 7.3 above,
on the Effective Date, SWECO and the Members shall execute new
all-requirements contracts to replace and supersede the Supply
Contracts with the Debtor. This effectively moots the legal
challenges to the Supply Contracts and preserves the market for
the benefit of creditors.
VIII.2 River Bend JOA. Disposition of the River Bend JOA
depends on which option RUS elects under Section 6.2 above. If a
transferee (other than GSU) or RUS acquires River Bend, the River
Bend JOA will be assumed by Cajun and assigned to such transferee
or RUS, as the case may be. If GSU is the transferee of River
Bend, Cajun shall be deemed to have rejected the River Bend JOA.
VIII.3 All Other Executory Contracts. On the Effective
Date, the Trustee shall be deemed to have assumed and assigned to
SWECO all other executory contracts of the Debtor, except for
executory contracts identified on a list of executory contracts
to be rejected which shall be filed by SWEPCO on or before twenty
days prior to the date of the hearing on confirmation of this
Plan. The contracts so identified shall be deemed rejected on
the Effective Date. All payments necessary to cure any defaults
on contracts to be assumed and assigned to SWECO, shall be paid
as administrative Claims under Section 2.1 on the Initial
Distribution Date.
Article IX: Miscellaneous Provisions.
IX.1 Voting. Pursuant to Code Section 1126, all of the
classes (except Class 1) are eligible to vote on the Plan.
IX.2 Cramdown. In the event any class of creditors that is
impaired does not accept the Plan as provided in Code Section
1129(a)(8)(A), the Proponents request that the Court confirm the
Plan pursuant to Code Section 1129(b).
IX.3 Modifications of the Plan. The Proponents may jointly
modify the Plan in accordance with Code Section 1127.
IX.4 Charter Amendment. Pursuant to Code Section
1123(a)(6), Debtor's Articles of Incorporation shall be deemed
amended as of the Effective Date and for so long as any
obligation of Cajun under the Plan remains unperformed, to
prohibit (a) the issuance of non-voting equity securities, (b)
the creation of a class of equity securities having a preference
over any other class of equity securities with respect to
dividends unless adequate provision is made for the election of
directors representing the preferred class in the event of a
default in the payment of its dividends, and (c) the creation of
any other class of equity securities unless an appropriate
distribution of voting power is made among all such classes.
IX.5 U.S. Trustee Fees. All fees payable by the Debtor
pursuant to 28 U.S.C. 1930 have been paid or shall be paid as of
the Effective Date.
Article X: Reservation of Rights and Property; Discharge.
X.1 Causes of Action. Except for claims expressly settled
in this Plan, and claims set forth in the following sentence, the
Trustee shall retain all causes of action it may have under state
or federal law including the United States Bankruptcy Code, and
the Debtor shall be authorized to prosecute such actions as fully
and completely as if the same were being prosecuted by a Trustee
in bankruptcy. All claims and causes of actions of any nature or
kind, known or unknown, asserted or unasserted which arise from
or relate to the assets purchased by and conveyed to SWECO, shall
on the Effective Date be deemed assigned and conveyed to SWECO.
X.2 Claims Adjudication. Each Claim as to which a proof of
claim has been filed prior to the Bar Date or that is listed as
undisputed, liquidated and non-contingent in the Schedules filed
by the Debtor shall be allowed without order of the Court unless
an objection thereto is filed in accordance with Bankruptcy Rule
3007 no later than 9 days after the Effective Date.
Notwithstanding any term contained in the Plan requiring payment
or issuance of any instrument on account of any particular Claim
on any particular date, such payment or issuance shall not take
place except to the extent that (a) in the case of a Claim by a
professional person for compensation and reimbursement of
expenses, such Claim has been allowed by order of the court, or
(b) in the case of any other Claim, such Claim has been allowed
by Final Order of the Court or by operation of the preceding
sentence.
X.3 Vesting of Property in Cajun and SWECO. Upon entry of
the Confirmation Order, all of the property of the estate that is
not sold to SWECO, if any, or otherwise liquidated shall be
vested in Cajun, free and clear of all Claims and interests of
creditors except as provided for in the Plan, and Cajun shall be
entitled to manage its affairs without further order of the Court
pursuant to Code Section 1141(b). All assets conveyed to SWECO
(i.e. the Generation and Transmission Assets) shall be conveyed
free and clear of all liens, claims, interests and encumbrances,
whether lien claims or otherwise, unless specifically authorized
by this Plan. The conveyance to SWECO shall further be free and
clear of any claims of successorship liability, and SWECO shall
have no successor liability as a result of its purchase of the
Generation and Transmission Assets, or as a result of any
provisions of this Plan.
X.4 Discharge. On the Effective Date, the Debtor shall be
discharged of all its debts and obligations except as provided in
this Plan.
Article XI. Required Regulatory Approval.
The effectiveness of the Plan and the obligations of the
Proponents hereunder are subject to regulatory approvals by Final
Order, including FERC, the Securities and Exchange Commission,
the LPSC, the NRC, and possibly other state regulatory
commissions. The Boards of Directors of the Proponents have
authorized the filing of the Plan, but reserve the right to
approve all final closing documents.
Article XII. Retention of Jurisdiction.
XII.1 Retention of Jurisdiction. After confirmation of
the Plan, the Court shall retain jurisdiction for the following
purposes:
(1) For the classification of Claims and for the re-
examination of any Claims that have been allowed for
purposes of voting, and the determination of such
objections as may be filed to Claims. The failure to
object to or to examine any Claim for the purpose of
voting shall not be deemed to be a waiver of the right
to object to, or re-examine the Claim in whole or in
part;
(2) For determination of all questions and disputes
regarding title to the assets of the estate,
determination of all causes of action, controversies,
disputes, or conflicts, whether or not subject to
action pending as of the date the Confirmation Order is
entered, between the Debtor and any other party,
including but not limited to, any rights of the Debtor
to recover assets pursuant to the provisions of the
Bankruptcy Code;
(3) For the correction of any defect, the curing of
any omission, or the reconciliation of any
inconsistency in this Plan or the Confirmation Order as
may be necessary to carry out the purposes and intent
of this Plan;
(4) To consider any matters brought before the Court
by an interested party necessary to carry out the
terms, conditions and intent of this Plan;
(5) For the modification of this Plan after
confirmation pursuant to the Bankruptcy Rules and the
Bankruptcy Code;
(6) To enforce and interpret the terms and conditions
of this Plan;
(7) To enter any order, including injunctions,
necessary to enforce the title, rights and powers of
the Debtor and to impose such limitations,
restrictions, terms and conditions of such title,
rights, and powers as this Court may deem necessary;
(8) To determine whether a default has occurred under
the Plan, and make such orders as the Court deems
necessary to enforce the provisions of the Plan; and
(9) To enter an order concluding and terminating this case.
Respectfully submitted on this 19th day of April, 1996.
CAJUN ELECTRIC MEMBERS COMMITTEE
By:
David H. Kleiman, One of its
Counsel
By:
James P. Moloy, One of its
Counsel
David H. Kleiman (Indiana Bar No. 5244-49)
James P. Moloy (Indiana Bar No. 10301-49)
DANN PECAR NEWMAN & KLEIMAN, Professional Corporation
One American Square, Suite 2300
Indianapolis, Indiana 46282
(317) 632-3232
By:
John M. Sharp, Local Counsel
John M. Sharp (Bar No. 19149)
A Professional Law Corporation
14481 Old Hammond Highway, Suite 2
Baton Rouge, LA 70816
504-273-8510
SOUTHWESTERN ELECTRIC POWER
COOPERATIVE, INC.
By:
Bobby S. Gilliam, One of its
Counsel
Bobby S. Gilliam (Bar No. 6227)
Wilkinson, Carmody & Gilliam
1700 Beck Building
Shreveport, La 71166
318-221-4196
Myron M. Sheinfeld
Henry J. Kaim
Sheinfeld Maley & Kay
1001 Fannin, Suite 3700
Houston, TX 77002
713-658-8881
GULF STATES UTILITIES COMPANY
By:
Tom F. Phillips, One of its
Counsel
Tom F. Phillips (Bar No. 7532)
Taylor, Porter, Brooks & Phillips, L.L.P.
P. O. Box 2471
Baton Rouge, LA 70821
504-387-3221
_______________________________
<FN1> After arduous negotiations the Proponents reached a settlement
of the GSU litigation. Despite the complexity of the issues,
the settlement is fair and will facilitate the confirmation
of a plan. The Proponents urge the Trustee to support the
settlement and this Plan.
