<PAGE> 1
UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
(Mark One)
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 or 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended June 30, 1995
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 or 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the transition period from __________________ to __________________
Commission Registrant, State of Incorporation I.R.S. Employer
File Number Address and Telephone Number Identification No.
_______________________________________________________________________
0-7862 AMERCO 88-0106815
(A Nevada Corporation)
1325 Airmotive Way, Ste. 100
Reno, Nevada 89502-3239
Telephone (702) 688-6300
2-38498 U-Haul International, Inc. 86-0663060
(A Nevada Corporation)
2727 N. Central Avenue Phoenix, Arizona 85004
Telephone (602) 263-6645
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to
such filing requirements for the past 90 days.
Yes [X] No [ ].
32,856,568 shares of AMERCO Common Stock, $0.25 par value and 5,762,495 shares
of AMERCO Series A common stock, $0.25 par value were outstanding at August
11, 1995.
5,385 shares of U-Haul International, Inc. Common Stock, $0.01 par value, were
outstanding at August 11, 1995. U-Haul International, Inc. meets the
conditions set forth in General Instruction H(1)(a) and (b) of Form 10-Q and
is therefore filing this form with the reduced disclosure format.
<PAGE> 2
TABLE OF CONTENTS
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements.
a) Consolidated Balance Sheets as of June 30, 1995,
March 31, 1995 and June 30, 1994............... 4
b) Consolidated Statements of Earnings for the
Quarters ended June 30, 1995 and 1994............ 6
c) Consolidated Statements of Changes in Stockholders'
Equity for the Quarters ended June 30, 1995
and 1994........................................... 7
d) Consolidated Statements of Cash Flows for the
Quarters ended June 30, 1995 and 1994............ 9
f) Notes to Consolidated Financial Statements -
June 30, 1995, March 31, 1995 and
June 30, 1994.................................. 10
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations.................... 17
PART II. OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K....................... 26
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INTENTIONALLY BLANK
<PAGE> 4
PART I. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS.
<TABLE>
AMERCO AND CONSOLIDATED SUBSIDIARIES
Consolidated Balance Sheets
<CAPTION>
June 30, March 31, June 30,
ASSETS 1995 1995 1994
---------- --------- ------------------
(unaudited) (audited) (unaudited)
(in thousands)
<S> <C> <C> <C>
Cash and cash equivalents $ 29,604 35,286 19,617
Receivables 322,859 300,238 208,833
Inventories 52,422 50,337 41,920
Prepaid expenses 24,455 25,933 24,307
Investments, fixed maturities 761,115 705,428 718,438
Investments, other 146,618 135,220 94,392
Deferred policy acquisition costs 52,622 49,244 48,917
Other assets 29,684 30,057 30,283
--------- --------- ---------
Property, plant and equipment, at
cost:
Land 217,611 214,033 200,720
Buildings and improvements 734,061 735,624 693,041
Furniture and equipment 182,158 179,016 166,268
Rental trailers and other rental
equipment 256,730 245,892 218,445
Rental trucks 925,671 913,641 863,982
General rental items 51,058 51,890 55,186
--------- --------- ---------
2,367,289 2,340,096 2,197,642
Less accumulated depreciation 1,098,666 1,065,850 972,968
--------- --------- ---------
Total property, plant and
equipment 1,268,623 1,274,246 1,224,674
--------- --------- ---------
$ 2,688,002 2,605,989 2,411,381
========= ========= =========
<FN>
The accompanying notes are an integral part of these
consolidated financial statements.
</TABLE>
<PAGE> 5
<TABLE>
<CAPTION>
June 30, March 31, June 30,
LIABILITIES AND STOCKHOLDERS' EQUITY 1995 1995 1994
--------- --------- --------
(unaudited) (audited) (unaudited)
(in thousands)
<S> <C> <C> <C>
Liabilities:
Accounts payable and accrued
liabilities $ 145,011 127,613 158,920
Notes and loans 866,132 881,222 725,565
Policy benefits and losses, claims 474,277 475,187 449,986
and loss expenses payable
Liabilities from premium deposits 347,718 304,979 308,408
Cash overdraft 23,291 31,363 14,569
Other policyholders' funds and
liabilities 34,320 20,378 6,617
Deferred income 9,521 7,426 8,714
Deferred income taxes 81,097 71,037 64,799
--------- --------- ---------
Stockholders' equity:
Serial preferred stock, with or
without par value, 50,000,000
shares authorized; 6,100,000
issued without par value and
outstanding as of June 30, 1995
March 31, 1995 and June 30, 1994 - - -
Serial common stock, with or with-
out par value, 150,000,000 shares
authorized - - -
Series A common stock of $.25 par
value, authorized 10,000,000 shares,
issued 5,762,495 shares as of
June 30, 1995 and March 31, 1995,
and 5,754,334 shares as of
June 30, 1994 1,441 1,441 1,438
Common stock of $.25 par value,
authorized 150,000,000 shares,
issued 34,237,505 shares as of
June 30, 1995 and March 31, 1995 and
34,245,666 shares as of June 30, 1994 8,559 8,559 8,562
Additional paid-in capital 165,675 165,675 165,651
Foreign currency translation (11,736) (12,435) (11,461)
Unrealized gain(loss) on investments (1,569) (6,483) (368)
Retained earnings 579,210 561,589 540,693
--------- --------- ---------
741,580 718,346 704,515
Less:
Cost of common shares in treasury,
(1,380,937 shares as of June 30,
1995 and 1,335,937 shares as of
March 31, 1995 and June 30, 1994) 11,457 10,461 10,461
Unearned employee stock
ownership plan shares 23,488 21,101 20,251
--------- --------- ---------
Total stockholders' equity 706,635 686,784 673,803
--------- --------- ---------
Contingent liabilities and commitments
--------- --------- ---------
$ 2,688,002 2,605,989 2,411,381
========= ========= =========
</TABLE>
<PAGE> 6
<TABLE>
AMERCO AND CONSOLIDATED SUBSIDIARIES
Consolidated Statements of Earnings
Quarters ended June 30,
(Unaudited)
<CAPTION>
1995 1994
----------- ----------
(in thousands except
per share data)
<S> <C> <C>
Revenues
Rental and other revenue $ 235,311 228,962
Net sales 53,116 51,302
Premiums 30,702 31,559
Net investment income 11,380 10,510
---------- ----------
Total revenues 330,509 322,333
Costs and expenses
Operating expense 182,044 165,541
Cost of sales 28,959 27,550
Benefits and losses 27,241 26,412
Amortization of deferred acquisition
costs 2,928 3,084
Depreciation 37,693 37,282
Interest expense 18,832 16,638
---------- ----------
Total costs and expenses 297,697 276,507
Pretax earnings from operations 32,812 45,826
Income tax expense (11,950) (16,413)
---------- ----------
Net earnings $ 20,862 29,413
========== ==========
Earnings per common share:
Net earnings $ 0.46 0.71
========== ==========
Weighted average common shares outstanding 37,958,426 37,107,536
========== ==========
<FN>
The accompanying notes are an integral part of these
consolidated financial statements.
</TABLE>
<PAGE>7
<TABLE>
AMERCO AND CONSOLIDATED SUBSIDIARIES
Consolidated Statements of Changes in Stockholders' Equity
Quarters ended June 30,
(Unaudited)
<CAPTION>
1995 1994
--------- -------
(in thousands)
<S> <C> <C>
Series A common stock of $.25 par
value: Authorized 10,000,000 shares,
issued 5,762,495 as of June 30, 1995
and 5,762,495 as of March 31, 1995 and
5,754,334 as of June 30, 1994
Beginning and end of period $ 1,441 1,438
------- -------
Common stock of $.25 par value:
Authorized 150,000,000 shares, issued
34,237,505 as of June 30, 1995, and
as of March 31, 1995 and 34,245,666
as of June 30, 1994
Beginning and end of period 8,559 8,562
------- -------
Additional paid-in capital:
Beginning and end of period 165,675 165,651
------- -------
Foreign currency translation:
Beginning of period (12,435) (11,152)
Change during period 699 (309)
------- -------
End of period (11,736) (11,461)
------- -------
Unrealized gain (loss) on investments:
Beginning of period (6,483) 679
Change during period 4,914 (1,047)
------- -------
End of period (1,569) (368)
------- -------
Retained earnings:
Beginning of period 561,589 514,521
Net earnings 20,862 29,413
Dividends paid to stockholders:
Preferred stock: ($.53 per share
for 1995 and 1994, respectively) (3,241) (3,241)
------- -------
End of period 579,210 540,693
------- -------
<FN>
The accompanying notes are an integral part of these
consolidated financial statements.
</TABLE>
<PAGE> 8
<TABLE>
AMERCO AND CONSOLIDATED SUBSIDIARIES
Consolidated Statements of Changes in Stockholders' Equity
Quarters ended June 30,
(Unaudited)
<CAPTION>
1995 1994
-------- -------
(in thousands)
<S> <C> <C>
Treasury stock:
Beginning of period 10,461 10,461
Net increase (45,000 shares in 1995) 996 -
------- -------
End of period 11,457 10,461
------- -------
Unearned employee stock ownership
plan shares:
Beginning of period 21,101 14,953
Increase in loan 2,523 4,335
Proceeds from loan (136) (1,837)
------- -------
End of period 23,488 20,251
------- -------
Total stockholders' equity $ 706,635 673,803
======= =======
<FN>
The accompanying notes are an integral part of these
consolidated financial statements.
</TABLE>
<PAGE> 9
<TABLE>
AMERCO AND CONSOLIDATED SUBSIDIARIES
Consolidated Statements of Cash Flows
Quarters ended June 30,
(Unaudited)
<CAPTION>
1995 1994
-------- --------
(in thousands)
<S> <C> <C>
Cash flows from operating activities:
Net earnings $ 20,862 29,413
Depreciation and amortization 40,565 41,489
Provision for losses on accounts
receivable 1,568 736
Net gain on sale of real and personal
property (16) (131)
Gain on sale of investments (337) 30
Changes in policy liabilities and
accruals (4,960) 11,766
Additions to deferred policy
acquisition costs (7,109) (4,155)
Net change in other operating assets
and liabilities 18,641 43,182
-------- ---------
Net cash provided by operating activities 69,214 122,330
-------- ---------
Cash flows from investing activities:
Purchases of investments:
Property, plant and equipment (70,149) (144,794)
Fixed maturities (86,329) (31,098)
Real estate (653) (8)
Mortgage loans (4,662) (5,504)
Proceeds from sale of investments:
Property, plant and equipment 38,015 58,868
Fixed maturities 37,863 30,756
Real estate 691 220
Mortgage loans 6,177 1,442
Changes in other investments (8,802) (10,507)
-------- --------
Net cash used by investing activities (87,849) (100,625)
-------- --------
Cash flows from financing activities:
Net change in short-term borrowings 2,000 46,250
Loan to leveraged employee stock
ownership plan (2,523) (2,919)
Proceeds from leveraged employee stock
ownership plan 136 119
Principal payments on notes (17,090) (44,449)
Net change in cash overdraft (8,072) (11,990)
Dividends paid (3,241) (3,241)
Purchase of treasury shares (996) -
Investment contract deposits 60,383 6,966
Investment contract withdrawals (17,644) (11,266)
-------- ---------
Net cash provided (used) by
financing activities 12,953 (20,530)
-------- ---------
increase in cash and cash equivalents (5,682) 1,175
Cash and cash equivalents at
beginning of period 35,286 18,442
-------- ---------
Cash and cash equivalents at
end of period $ 29,604 19,617
======== =========
<FN>
The accompanying notes are an integral part of these
consolidated financial statements.
</TABLE>
<PAGE> 10
AMERCO AND CONSOLIDATED SUBSIDIARIES
Notes to Consolidated Financial Statements
June 30, 1995, March 31, 1995 and June 30, 1994
(Unaudited)
1. PRINCIPLES OF CONSOLIDATION
The consolidated financial statements include the accounts of the parent
corporation, AMERCO, and its subsidiaries, all of which are wholly-owned.
All material intercompany accounts and transactions of AMERCO and its
subsidiaries (herein called the "Company" or the "consolidated group")
have been eliminated. The consolidated balance sheets as of June 30,
1995 and 1994, and the related consolidated statements of earnings,
changes in stockholders' equity and cash flows for the quarters ended
June 30, 1995 and 1994 are unaudited; in the opinion of management,
all adjustments necessary for a fair presentation of such financial
statements have been included. Such adjustments consisted only of
normal recurring items. Interim results are not necessarily indicative
of results for a full year.
The operating results and financial position of AMERCO's consolidated
insurance operations are determined on a quarter lag. There were no
effects related to intervening events which would significantly affect
consolidated position or results of operations for the financial
statements presented herein.
The financial statements and notes are presented as permitted by Form 10-Q
and do not contain certain information included in the Company's annual
financial statements and notes.
Earnings per share are computed based on the weighted average number of
shares outstanding, excluding shares of the employee stock ownership
plan that have not been committed to be released. Net income is
reduced for preferred dividends.
Certain reclassifications have been made to the financial statements
for the quarter ended June 30, 1994 to conform with the current year's
presentation.
<PAGE> 11
AMERCO AND CONSOLIDATED SUBSIDIARIES
Notes to Consolidated Financial Statements, Continued
(Unaudited)
2. INVESTMENTS
<TABLE>
A comparison of amortized cost to market for fixed maturities is
as follows (in thousands, except for par value):
<CAPTION>
March 31, 1995
-------------- Par Value Gross Gross Estimated
Consolidated or number Amortized unrealized unrealized market
Held-to-Maturity of shares cost gains losses value
--------- --------- ---------- ---------- ---------
<S> <C> <C> <C> <C> <C>
U.S. treasury
securities
and government
obligations $ 20,400 $ 20,284 918 (23) 21,179
U.S. government
agency mortgage
backed securities $ 65,381 64,797 321 (5,354) 59,764
Obligations of
states and
political
subdivisions $ 30,105 29,804 1,932 (425) 31,311
Corporate
securities $ 191,263 196,517 1,465 (5,671) 192,311
Mortgage-backed
securities $ 128,413 126,685 903 (8,042) 119,546
Redeemable preferred
stocks 33 1,966 303 (11) 2,258
------- ----- -------- -------
440,053 5,842 (19,526) 426,369
------- ----- -------- -------
<CAPTION>
March 31, 1995
-------------- Gross Gross Estimated
Consolidated Amortized unrealized unrealized market
Available-for-Sale Par Value cost gains losses value
<S> <C> <C> <C> <C> <C>
U.S. treasury
securities and
government
obligations $ 9,685 9,797 714 - 10,512
U.S. government
agency mortgage
backed securities $ 3,410 3,232 68 (206) 3,094
States,
municipalities
and political
subdivisions $ 5,825 6,098 109 (12) 6,195
Corporate
securities $ 262,874 262,628 4,157 (4,967) 261,818
Mortgage-backed
securities $ 41,699 41,431 358 (2,345) 39,443
------- ------ -------- -------
323,186 5,406 (7,530) 321,062
------- ------ -------- -------
Total $ 763,239 11,248 (27,056) 747,431
======= ====== ======== =======
</TABLE>
<PAGE> 12
AMERCO AND CONSOLIDATED SUBSIDIARIES
Notes to Consolidated Financial Statements, Continued
(Unaudited)
3. SUMMARIZED CONSOLIDATED FINANCIAL INFORMATION OF PONDEROSA
HOLDINGS, INC. AND ITS SUBSIDIARIES
A summary consolidated balance sheet (unaudited) for Ponderosa
Holdings, Inc. and its subsidiaries is presented below:
June 30,
1995 1994
--------- ---------
(in thousands)
Investments - fixed maturities $ 761,115 718,438
Other investments 126,747 94,392
Receivables 142,643 132,944
Deferred policy acquisition costs 52,622 48,917
Due from affiliate 12,999 9,125
Deferred federal income taxes 8,720 8,195
Other assets 15,518 14,892
--------- ---------
Total assets $ 1,120,364 1,026,903
========= =========
Policy liabilities and accruals $ 407,632 385,539
Unearned premiums 66,645 64,292
Premium deposits 347,718 308,408
Other policyholders' funds and
liabilities 33,891 11,543
--------- ---------
Total liabilities 855,886 769,782
Stockholder's equity 264,478 257,121
--------- ---------
Total liabilities and
stockholder's equity $ 1,120,364 1,026,903
========= =========
<PAGE> 13
AMERCO AND CONSOLIDATED SUBSIDIARIES
Notes to Consolidated Financial Statements, Continued
(Unaudited)
3. SUMMARIZED CONSOLIDATED FINANCIAL INFORMATION OF PONDEROSA
HOLDINGS, INC. AND ITS SUBSIDIARIES, continued
A summarized consolidated income statement (unaudited)
for Ponderosa Holdings, Inc. and its subsidiaries is
presented below:
Quarters ended June 30,
1995 1994
------ ------
(in thousands)
Premiums $ 30,097 34,352
Net investment income 11,531 10,554
Other income 1,601 1,267
------ ------
Total revenue 43,229 46,173
Benefits and losses 27,241 26,412
Amortization of deferred policy
acquisition costs 2,928 3,084
Other expenses 5,313 7,801
------ ------
Income from operations 7,747 8,876
Federal income tax expense (1,890) (2,742)
------ ------
Net income $ 5,857 6,134
======= ======
4. CONTINGENT LIABILITIES AND COMMITMENTS
During the three months ended June 30, 1995, U-Haul Leasing & Sales Co.,
a wholly-owned subsidiary of U-Haul International, Inc., entered into
one transaction, whereby they sold rental trucks and subsequently
leased them back. AMERCO has guaranteed $991,000 of residual values
at June 30, 1995 on these assets at the end of the lease term.
Following are the lease commitments for the lease executed during the
three months ended June 30, 1995, which have a term of more than one year
(in thousands):
Year ended Lease
March 31, Commitments
----------- -----------
1996 $ 1,164
1997 1,553
1998 1,553
1999 1,553
2000 1,553
Thereafter 3,493
-------
$ 10,869
=======
See discussion related to Stockholder Litigation under Item 2.
Management's Discussion and Analysis of Financial Condition
and Results of Operations - Liquidity and Capital Resources.
<PAGE> 14
AMERCO AND CONSOLIDATED SUBSIDIARIES
Notes to Consolidated Financial Statements, Continued
(Unaudited)
4. CONTINGENT LIABILITIES AND COMMITMENTS, continued
The Company is a defendant in a number of suits and claims incident to
the type of business conducted and several administrative
proceedings arising from state and local provisions that regulate
the removal and/or clean-up of underground fuel storage tanks. The
Company owns property within two state hazardous waste sites in the State
of Washington. At this time, the remedial clean-up cost or range of
costs for such sites cannot be estimated. Management's opinion is that
none of these suits or claims involving AMERCO and/or its subsidiaries is
expected to result in any material loss.
5. SUPPLEMENTAL CASH FLOWS INFORMATION
The (increase) decrease in receivables, inventories and accounts
payable and accrued liabilities net of other operating
and investing activities follows:
Quarters ended June 30,
1995 1994
---- ----
(in thousands)
Receivables $ (23,625) (14,042)
======== ========
Inventories $ (2,085) 7,092
======== ========
Accounts payable and
accrued liabilities $ 20,933 39,141
======= ========
Income taxes paid in cash amounted to none and $224,000 for 1995
and 1994, respectively.
Interest paid in cash amounted to $20,906,000 and $20,569,000 for
1995 and 1994, respectively.
6. RELATED PARTIES
Subsequent to March 31, 1995, a subsidiary of the Company continued
to loan TWO SAC Self-Storage Corporation (TWO SAC) funds for the
purchase of an additional 18 self-storage properties. As of June 30,
1995, $28,597,000 in principal was due from TWO SAC, while interest of
$797,000 has been accrued. No payment of principal or interest will be
made until the notes are finalized. Mark V. Shoen, a major
stockholder, director and officer of the Company owns all of the
issued and outstanding voting common stock of TWO SAC. The TWO SAC notes
will be secured by senior and junior mortgages and are expected to
mature in 2004 or 2005, or on demand. TWO SAC anticipates acquiring
approximately 28 properties from the Company that had been acquired
by the Company or its subsidiaries since June 1993.
On May 31, 1995, the Company purchased 45,000 shares of the Company's
Common Stock from Paul F. Shoen, a major stockholder of the Company, for
$996,000 or $22.125 per share. The transaction was effected on Nasdaq.
<PAGE> 15
AMERCO AND CONSOLIDATED SUBSIDIARIES
Notes to Consolidated Financial Statements, Continued
(Unaudited)
7. NEW ACCOUNTING STANDARDS
Statement of Financial Accounting Standards No. 114 - Accounting by Creditors
for Impairment of a Loan. Effective for years beginning after December
15, 1994, the standard requires that an impaired loan's fair value be
measured and compared to the recorded investment in the loan. If the fair
value of the loan is less than the recorded investment in the loan,
a valuation allowance is established. The Company adopted this statement
during the first quarter of fiscal 1996, with no material impact on
its financial condition or results of operations.
Statement of Financial Accounting Standards No. 121 - Accounting for
the Impairment of Long-Lived Assets and for Long-Lived Assets to be
Disposed of. Effective for fiscal years beginning after December 15,
1995, the standard establishes accounting standards for the impairment
of long-lived assets, certain identifiable intangibles, and goodwill
related to those assets to be held and used and for long-lived assets and
certain identifiable intangibles to be disposed of. This Statement
requires that long-lived assets and certain identifiable intangibles to
be held and used by an entity be reviewed for impairment whenever events
or changes in circumstances indicate that the carrying amount of an
asset may not be recoverable. In performing the review for
recoverability, the entity should estimate the future cash flows
expected to result from the use of the asset and its eventual
disposition. If the sum of the expected future cash flows (undiscounted
and without interest charges) is less than the carrying amount of the
asset, an impairment loss is recognized. Otherwise, an impairment
loss is not recognized. Measurement of an impairment loss for
long-lived assets and identifiable intangibles that an entity expects to
hold and use should be based on the fair value of the asset. The
Company has not completed an evaluation of the effect of this standard.
<PAGE> 16
AMERCO AND CONSOLIDATED SUBSIDIARIES
Notes to Consolidated Financial Statements, Continued
(Unaudited)
7. NEW ACCOUNTING STANDARDS, continued
Statement of Position 93-7, Reporting on Advertising Costs - as
issued by the Accounting Standards Executive Committee in
December 1993. This statement of position provides guidance
on financial reporting on advertising costs in annual
financial statements. The statement of position requires
reporting advertising costs as expenses when incurred or when
the advertising takes place, reporting the costs of direct
response advertising, and amortizing the amount of direct
response advertising reported as assets. The Company's direct
response advertising consists primarily of yellow page
directories. The amortization period is the length of the
directory, the majority of which is one year. The Company
logs data which substantiates that truck and trailer rental
reservations are placed during the customer's telephone call.
At June 30, 1995, $9,072,000 of yellow page directory costs
were reported as assets, with relating amortization expense of
$5,700,000 for the quarter ended June 30, 1995.
Other pronouncements issued by the Financial Standards Board with
future effective dates are either not applicable or not
material to the consolidated financial statements of the
Company.
<PAGE> 17
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS.
RESULTS OF OPERATIONS
The following table shows industry segment data from the Company's three
industry segments, rental operations, life insurance, and property and
casualty insurance, for the quarters ended June 30, 1995 and 1994. Rental
operations is composed of the operations of U-Haul and Amerco Real Estate
Company. Life insurance is composed of the operations of Oxford Life
Insurance Company. Property and casualty insurance is composed of the
operations of Republic Western Insurance Company (RWIC). The Company's
results of operations have historically fluctuated from quarter to
quarter. In particular, the Company's U-Haul rental operations are seasonal
and a majority of the Company's revenues and substantially all of its
earnings from its U-Haul rental operations are generated in the first and
second quarters each fiscal year (April through September).
<TABLE>
<CAPTION>
Property/ Adjustments
Rental Life Casualty And
Operations Insurance Insurance Eliminations Consolidated
---------- --------- --------- ------------ -----------
(in thousands)
<S> <C> <C> <C> <C> <C>
Quarter ended June 30, 1995
Revenues:
Outside $ 286,835 10,238 33,436 - 330,509
Intersegment - 367 (793) 426 -
--------- ------- ------- -------- ---------
Total revenues 286,835 10,605 32,643 426 330,509
========= ======= ======= ======== =========
Operating profit 43,897 2,622 5,125 - 51,644
========= ======= ======= ========
Interest expense 18,832
---------
Pretax earnings
from operations 32,812
=========
Identifiable assets 1,854,491 530,918 589,446 (286,853) 2,688,002
at June 30 ========= ======= ======= ======== =========
Quarter ended June 30, 1994
Revenues:
Outside $ 279,144 8,112 35,077 - 322,333
Intersegment - 372 2,627 (2,999) -
--------- ------- ------- -------- ---------
Total revenues 279,144 8,484 37,704 (2,999) 322,333
========= ======= ======= ======== =========
Operating profit 53,588 1,875 7,001 - 62,464
========= ======= ======= ========
Interest expense 16,638
---------
Pretax earnings
from operations 45,826
=========
Identifiable assets 1,659,617 461,407 565,496 (275,139) 2,411,381
at June 30 ========= ======= ======= ======== =========
</TABLE>
<PAGE> 18
QUARTER ENDED JUNE 30, 1995 VERSUS QUARTER ENDED JUNE 30, 1994
U-Haul
U-Haul revenues consist of (i) total rental and other
revenue and (ii) net sales. Total rental and other revenue
increased by $6.1 million, approximately 2.7%, to $233.9 million in
the first quarter of fiscal 1996. The increase reflects higher net
revenues from the rental of moving related equipment and
self-storage facilities which increased in the aggregate by $6.0
million due to growth (volume) in truck rental transactions,
additional rentable square footage, and improved self-storage
pricing.
Net sales revenues were $53.1 million in the first
quarter of fiscal 1996, which represents an increase of
approximately 3.5% from the first quarter of fiscal 1995 net sales
of $51.3 million. Revenue growth from the sale of moving support
items (i.e. boxes, etc.), hitches, and propane resulted in a $2.2
million increase during the quarter, which was offset by a $0.3
million decrease in gasoline sales consistent with the Company's
ongoing efforts to remove underground storage tanks and gradually
discontinue gasoline sales.
Cost of sales was $29.0 million in the first quarter of
fiscal 1996, which represents an increase of approximately 5.1%
from $27.6 million for the same period in fiscal 1995. This
increase in cost of sales primarily reflects higher material costs
from the sale of moving support items and propane which can
be primarily attributed to higher sales levels.
Operating expenses increased to $176.3 million in
the first quarter of fiscal 1996 from $160.7 million in the
first quarter of fiscal 1995, an increase of $15.6 million
(approximately 9.7%). The change from the prior year primarily
reflects higher rental equipment maintenance costs due to an
increase in fleet size and transaction levels ($6.0 million), an
increase in lease expense due to new leases originated during
the last twelve months ($2.2 million), and increased personnel
expense due to higher levels of business activity ($4.0
million). All other operating expense categories increased in
the aggregate by $3.4 million compared to the prior year.
Depreciation expense for the quarter was $37.7
million, as compared to $37.3 million during the same period of
the prior year, reflecting storage acquisitions and construction
in the past twelve months.
Oxford - Life Insurance
Premiums from Oxford's reinsurance lines
before intercompany eliminations were $4.1 million for the
quarter ended March 31, 1995, an increase of $0.3 million,
approximately 7.9% over 1994 and accounted for 66.9% of Oxford's
premiums for the period. Reinsurance premiums are primarily from
term life insurance, matured deferred annuity contracts, and credit
insurance business. This increase in premiums is primarily
attributable to the recent (fourth quarter 1994) reinsurance
agreement of credit insurance business.
<PAGE> 19
Premiums from Oxford's direct lines before
intercompany eliminations were $2.0 million for the quarter
ended March 31, 1995, an increase of $1.6 million from 1994.
This increase in direct premium is primarily attributable to
the credit insurance business ($1.5 million in premiums).
Oxford's direct business related to group life and disability
coverage issued to employees of the Company for the quarter
ended March 31, 1995 accounted for approximately 8.1% of
premiums. Other direct lines, including the credit insurance
business, accounted for approximately 25.0% of Oxford's
premiums for the quarter ended March 31, 1995.
Net investment income before intercompany
eliminations was $3.9 million and $3.6 million for the quarters
ended March 31, 1995 and 1994, respectively. This increase is
primarily due to increasing margins on the interest sensitive
business. Gains on the disposition of fixed maturity
investments were $0.2 million for both 1995 and 1994. Oxford
had $0.5 million of other income for both of the quarters ended
March 31, 1995 and 1994.
Benefits and expenses incurred were $8.0 million for
the quarter ended March 31, 1995, an increase of 21.2% over
1994. Comparable benefits and expenses incurred for 1994
were $6.6 million. This increase is primarily due to death
benefits incurred and Oxford's recent entrance into the credit
insurance business, partially offset by a decrease in the
amortization of deferred acquisition costs.
Operating profit before intercompany
eliminations increased by $0.7 million, or approximately 36.8%,
in 1995 to $2.6 million, primarily due to increased margins
on the interest sensitive business.
RWIC - Property and Casualty
RWIC gross premium writings for the quarter ended
March 31, 1995 were $36.2 million as compared to $47.7 million
in the first quarter of 1994. The rental industry market
accounts for a significant share of total premiums,
approximately 18.3% and 19.7% in the first quarters of 1995
and 1994, respectively. These writings include U-Haul customers,
fleetowners and U-Haul as well as other rental industry insureds
with similar characteristics. RWIC continues underwriting professional
reinsurance via broker markets. Premiums in this area decreased during
the first quarter of 1995 to $20.2 million, or 55.8% of total gross
premiums, from comparable 1994 figures of $29.1 million, or 61.0%
of total premiums. This decrease can be primarily attributed to
RWIC electing not to renew several treaties because of inadequate
pricing and market conditions. Premium writings in selected general
agency lines are expected to remain consistent with prior years as evidenced
by 17.4% share of written premiums in 1995 as compared to 14.9% share in
1994. RWIC expanded its direct business in 1995 to include multiple
peril coverage for a variety of commercial properties and businesses.
These premiums accounted for 6.4% of the total gross written premium during
first quarter 1995.
Net earned premiums decreased $6.1 million, or 20.3%,
to $24.0 million for the quarter ended March 31, 1995, compared
with premiums of $30.1 million for the quarter ended March 31,
1994. The premium decrease was primarily due to one time
changes in premium earning methodology and timing differences
related to runoff and start up programs.
<PAGE> 20
Underwriting expenses incurred were $27.5 million for
the quarter ended March 31, 1995, a decrease of $3.2 million, or
10.4% over1994. Comparable underwriting expenses incurred for
the first quarter of 1994 were $30.7 million. The decrease is due
to a reduction in acquisition expenses, which decreased
proportionately with written premiums.
Net investment income was $7.6 million for the
quarter ended March 31, 1995, an increase of 10.1% over 1994 net
investment income of $6.9 million. The marginal increase is the
result of the shift in types of securities held in the portfolio.
RWIC completed the first quarter of 1995 with
income before tax expense of $5.1 million as compared to $7.0
million for the comparable period ended March 31, 1994. This
represents a decrease of $1.9 million, or 27.1% over 1994.
Worse than expected underwriting results in the Company's
assumed reinsurance and rental industry liability lines were
offset by improved results in its general agency lines.
Interest Expense
Interest expense increased by $2.2 million to
$18.8 million for the quarter ended June 30, 1995, as compared
to $16.6 million for the quarter ended June 30, 1994. Higher
average debt levels outstanding caused the increase.
Consolidated Group
As a result of the foregoing, pretax earnings of
$32.8 million were realized in the quarter ended June 30,
1995, as compared to $45.8 million for the same period in
1994. After providing for income taxes, net earnings for the
quarter ended June 30, 1995 were $20.9 million, as compared to
$29.4 million for the same period of the prior year.
<PAGE> 21
QUARTERLY RESULTS
The following table presents unaudited quarterly
results for the nine quarters in the period beginning April 1,
1993 and ending June 30, 1995. The Company believes that
all necessary adjustments have been included in the amounts
stated below to present fairly, and when read in conjunction
with the consolidated financial statements incorporated
herein by accordance with generally accepted accounting principles,
the selected quarterly information. The Company's results of operations
have historically fluctuated from period to period, including on a
quarterly basis. In particular, the Company's U-Haul business
is seasonal and a majority of the Company's revenues and
substantially all of its net earnings from its U-Haul business
are generated in the first and second quarters of each fiscal
year (April through September). The operating results for the
periods presented are not necessarily indicative of results for
any future period.
Quarter Ended
-----------------------------------------------
Jun 30, Sep 30, Dec 31, Mar 31, Jun 30,
1994 1994 1994 1995 1995
-----------------------------------------------
(in thousands, except per share data)
Total revenues $322,333 361,115 295,888 260,282 330,509
Net earnings (loss) 29,413 40,071 1,907 (11,359) 20,862
Net earnings (loss)
per common share .71 1.00 (.04) (.44) .46
(1), (2)
Quarter Ended
-------------------------------------
Jun 30, Sep 30, Dec 31, Mar 31,
1993 1993 1993 1994
-------------------------------------
(in thousands, except per share data)
Total revenues $291,348 324,968 267,448 251,091
Net earnings (loss) 17,359 30,601 1,799 (9,575)
Net earnings (loss)
per common share .45 .79 (.02) (.33)
(1)
________________
(1)For the quarters ended December 31, 1993, March 31, June
30, September 30, December 31, 1994 , March 31, 1995, and
June 30, 1995, net earnings (loss) per common share
amounts were computed after giving effect to the dividend
on the Company's Series A 8 1/2% Preferred Stock.
(2)Reflects the adoption of Statement of Position 93-
6,
"Employers' Accounting for Employee Stock Ownership Plan."
<PAGE> 22
LIQUIDITY AND CAPITAL RESOURCES
U-Haul
To meet the needs of its customers, U-Haul must
maintain a large inventory of fixed asset rental items. At June 30, 1995,
net property, plant and equipment represented approximately 68.4% of total
U-Haul assets and approximately 47.2% of consolidated assets. In the
first quarter of fiscal 1996, capital expenditures were $70.1 million, as
compared to $144.8 million in the first quarter of fiscal 1995,
reflecting new rental truck acquisitions, purchase of trucks previously
leased, and real property acquisitions. The decrease in capital
expenditures from the prior year is due to a decrease in new rental truck
acquisitions. These acquisitions were funded with internally
generated funds from operations, and debt financings.
Cash flows from operations were $61.9 million in
the first quarter of fiscal 1996, as compared to $113.2 million
in the first quarter of fiscal 1995. The decrease of $51.3
million is primarily due to a decrease in net change of
operating assets and liabilities, specifically an increase in
receivables, and decreases in accounts payable and accrued
liabilities and deferred income taxes.
Oxford - Life Insurance
Oxford's primary sources of cash are premiums,
receipts from interest-sensitive products and investment
income. The primary uses of cash are operating costs and
benefit payments to policyholders. Matching the investment
portfolio to the cash flow demands of the types of insurance
being written is an important consideration. Benefit and
claim statistics are continually monitored to provide
projections of future cash requirements.
Cash provided by operating activities were $3.7
million and $0.8 million for the quarters ended March 31, 1995
and 1994, respectively. Cash flows from new annuity reinsurance
agreements increase investment contract deposits as well as the purchase
of fixed maturities. Cash flows from financing activities of
new annuity reinsurance agreements were approximately $55.0
million for the quarter ended March 31, 1995. In addition to
cash flow from operating and financing activities, a
substantial amount of liquid funds is available through Oxford's
short-term portfolio. At March 31, 1995 and 1994, short-term
investments amounted to $10.8 million and $18.5 million,
respectively. Management believes that the overall sources of
liquidity will continue to meet foreseeable cash needs.
Stockholder's equity of Oxford, excluding investment
of RWIC (in prior years), increased to $90.4 million in 1995
from $88.2 million in 1994. Ponderosa now holds 100% of the
common stock of RWIC as a result of a property dividend made by
Oxford on June 30, 1994.
<PAGE> 23
Applicable laws and regulations of the State of
Arizona require the Company's insurance subsidiaries to
maintain minimum capital determined in accordance with statutory
accounting practices in the amount of $400,000. In addition, the amount
of dividends that can be paid to stockholders by insurance
companies domiciled in the State of Arizona is limited. Any
dividend in excess of the limit requires prior regulatory
approval. As a result of the dividend of RWIC stock on June
30, 1994, the state of Arizona must approve future dividends
made through June 30, 1995. These restrictions are not
expected to have a material adverse effect on the ability of
the Company to meet its cash obligations.
RWIC - Property and Casualty
Cash flows from operating activities were $3.4
million and $8.2 million for the quarters ended March 31, 1995
and March 31, 1994, respectively. The change is due to
decreased net income and increased reserves related to premium
writings, offset by a small change in accounts receivable as
compared to a large increase during the first quarter of 1994.
RWIC's short-term investment portfolio was $17.1
million at March 31, 1995. This level of liquid assets,
combined with budgeted cash flow, is adequate to meet
periodic needs. This balance also reflects funds in transition from
maturity proceeds to long-term investments. The structure of the long-term
portfolio is designed to match future cash needs. Capital and
operating budgets allow RWIC to accurately schedule cash needs.
RWIC maintains a diversified investment
portfolio, primarily in bonds at varying maturity levels.
Approximately 95.7% of the portfolio consists of investment grade
securities. The maturity distribution is designed to provide sufficient
liquidity to meet future cash needs. Current liquidity is
adequate, with current invested assets equal to 96.7% of total
liabilities.
Stockholder's equity increased 3.6% from $168.1
million at December 31, 1994 to $174.1 million at March 31,
1995. RWIC considers current stockholder's equity to be adequate to
support future growth and absorb unforeseen risk events. RWIC
does not use debt or equity issues to increase capital and
therefore has no exposure to capital market conditions. RWIC
paid no stockholder's dividends during the quarter ended March
31, 1995.
Consolidated Group
At June 30, 1995, total notes and loans
payable outstanding was $866.1 million as compared to $881.2
million at March 31, 1995, and $725.6 million at June 30, 1994.
The increase from 1994 reflects the expansion in the rental
fleet and self-storage operation.
During each of the fiscal years ending March 31,
1996, 1997, and 1998, U-Haul estimates gross capital
expenditures will average approximately $350 million as a result
of the expansion of the rental fleet and self-storage operation.
This level of capital expenditures, combined with an average
of approximately $100 million in annual long-term debt
maturities during this same period, are expected to create
annual average funding needs of approximately $450 million.
Management estimates that U-Haul will fund approximately 60%
of these requirements with internally generated funds,
including proceeds from the disposition of older trucks and
other asset sales. The remainder of the anticipated capital
expenditures are expected to be financed through existing credit
facilities, new debt placements, and equity offerings.
<PAGE> 24
Credit Agreements
The Company's operations are funded by various credit
and financing arrangements, including unsecured long-term
borrowings, unsecured medium-term notes, and revolving lines of
credit with domestic and foreign banks. Principally to finance
its fleet of trucks and trailers, the Company routinely
enters into sale and leaseback transactions. As of June 30,
1995, the Company had $866.1 million in total notes and
loans payable outstanding and unutilized committed credit of
approximately $252.0 million.
Certain of the Company's credit agreements
contain restrictive financial and other covenants, including,
among others, covenants with respect to incurring
additional indebtedness, maintaining certain financial
ratios, and placing certain additional liens on its
properties and assets. In addition, these credit agreements
contain provisions that could result in a required
prepayment upon a "change in control" of the Company.
The Company is further restricted in the type and
amount of dividends and distributions that it may issue or pay,
and in the issuance of certain types of preferred stock. The
Company is prohibited from issuing shares of preferred stock
that provide for any mandatory redemption, sinking fund
payment, or mandatory prepayment, or that allow the holders thereof
to require the Company or a subsidiary of the Company to repurchase such
preferred stock at the option of such holders or upon the
occurrence of any event or events without the consent of its
lenders.
Stockholder Litigation
As disclosed in the Company's Form 10-K for the
year ended March 31, 1995, a judgment has been entered in the
Shoen Litigation against five of the Company's current directors
and one former director. The Company has agreed to
indemnify the defendants to the fullest extent permitted by law or the
Company's Articles of Incorporation or By-Laws for all expenses
and damages, if any, incurred by the defendants in this
proceeding, subject to certain exceptions. The five director-
defendants have filed for protection under Chapter 11 of the
federal bankruptcy laws and have filed, in cooperation with
the Company, amended plans of reorganization (collectively, the Plan),
all of which propose the same funding and treatment of the plaintiffs'
claims resulting from the judgment in the Shoen Litigation.
Under the Plan, the Company will transfer to
the stockholder plaintiffs $124.1 million of Series B 8.25%
Preferred Stock issued by the Company in exchange for their
AMERCO stock and will transfer to a trust (the Trust), property
having a stipulated or adjudicated value in excess of $338.7
million for the benefit of the non-stockholder plaintiffs.
Each of the non-stockholder plaintiffs will receive a
trust certificate representing an undivided, fractional beneficial
interest in the Trust. The property transferred to the Trust is
expected to consist of (i) $170.1 million in Series D Floating Rate
Preferred Stock issued by the Company; (ii) a 1993 REMIC certificate held
by the Company with a value of approximately $12.5 million evidencing
a pool of 61 commercial mortgage loans which are secured by
mortgages or deeds of trust on 60 self-storage properties;
(iii) mortgage notes with an aggregate principal balance of
approximately $100.9 million on property held by the Company,
<PAGE> 25
one or more of its subsidiaries, or two corporations;
and (iv) real property held free and clear of approximately
$55.3 million. The Company will establish a Contingency Fund
consisting of Company Common Stock or the proceeds therefrom to pay
post-petition interest to the plaintiffs if the court requires the
payment of such interest.
The Company expects the court to consider the Plan
during 1995. However, there is no assurance that the Plan
will be confirmed by the federal bankruptcy court or that
the Plan as confirmed will operate as described above.
The Company's participation in the Plan is subject to the approval of
the Board of Directors. Because of the Plan's complexity
and the alternatives provided to the plaintiffs under the Plan, and
because the Plan has not yet been confirmed, the Company is
unable to determine the Plan's impact on the Company's
financial condition, results of operations, or capital
expenditure plans. However, as a result of funding the Plan,
the Company is likely to incur additional costs in the
future in the form of dividends on preferred stock and/or
interest on borrowed funds. For example, dividends payable on
the Series B 8.25% Preferred Stock and on the Series D
Floating Rate Preferred Stock would equal approximately $22.6
million per year at current interest rates. In addition, the Company's
outstanding Common Stock would be reduced by 18,254,596 shares. These
and other features of the Plan as ultimately confirmed could result in
material changes in reported earnings and stockholder's equity per share
of Common Stock.
<PAGE> 26
PART II. OTHER INFORMATION
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K.
a. Exhibits
2 Amended and Restated Debtor's Plan of Reorganization Proposed
by Edward J. Shoen and Summary of Plan Provisions
3.1 Restated Articles of Incorporation (1)
3.2 Restated By-Laws of AMERCO as of January 10, 1995
(2)
27 Financial Data Schedule
b. Reports on Form 8-K.
A current report on Form 8-K was filed on May 5,
1995 reporting the filing of plans of reorganization
under Chapter 11 of the federal bankruptcy laws by
five of the Company's directors and describing the
role of the Company in funding these plans.
_____________________________________
(1) Incorporated by reference to the Company's Quarterly Report
on Form 10-Q
for the quarter ended December 31, 1992, file no. 0-7862.
(2) Incorporated by reference to the Company's Quarterly Report
on Form 10-Q
for the quarter ended December 31, 1994, file no. 0-7862.
<PAGE> 27
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.
U-Haul International, Inc.
___________________________________
(Registrant)
Dated: August 11, 1995 By: /S/ DONALD W. MURNEY
___________________________________
Donald W. Murney,
Treasurer (Principal
Financial Officer)
<PAGE>
John J. Dawson, Esq. (Az Bar No. 002786)
Susan G. Boswell, Esq. (Az Bar No. 004791)
Ronald E. Reinsel, Esq. (Az Bar No. 011059)
STREICH LANG, P.A.
Renaissance One
Two North Central Avenue
Phoenix, Arizona 85004-2391
Attorneys for EDWARD J. SHOEN,
Debtor and Debtor-In-Possession
IN THE UNITED STATES BANKRUPTCY COURT
FOR THE DISTRICT OF ARIZONA
In re: ) In Proceedings Under Chapter 11
)
EDWARD J. SHOEN, et al. ) Jointly Administered
------
) Case No. 95-1430-PHX-JMM
)
Debtors. ) (Cases 95-1430-PHX-JMM
) through 95-1434-PHX-GBN,
_____________________________) Inclusive)
AMENDED AND RESTATED DEBTOR'S PLAN OF REORGANIZATION
----------------------------------------------------
PROPOSED BY EDWARD J. SHOEN
---------------------------
DATED: April 25, 1995
AMENDED AND
RESTATED: July 28, 1995
Phoenix, Arizona
<PAGE>
TABLE OF CONTENTS
-----------------
Page
----
ARTICLE I INTRODUCTION. . . . . . . . . . . . . . . . . . . . . . . . 1
ARTICLE II DEFINITIONS. . . . . . . . . . . . . . . . . . . . . . . . . 8
2.1 Accepting Creditor Settlement . . . . . . . . . . . . . . . . . 9
2.2 Accepting Creditor Settlement Fund. . . . . . . . . . . . . . . 10
2.3 Administrative Claim. . . . . . . . . . . . . . . . . . . . . . 10
2.4 Allowed Claim . . . . . . . . . . . . . . . . . . . . . . . . . 11
2.5 AMERCO. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
2.6 Arizona Litigation. . . . . . . . . . . . . . . . . . . . . . . 12
2.7 Bankruptcy Code . . . . . . . . . . . . . . . . . . . . . . . . 12
2.8 Bankruptcy Court. . . . . . . . . . . . . . . . . . . . . . . . 12
2.9 Business Day. . . . . . . . . . . . . . . . . . . . . . . . . . 12
2.10 Claim . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
2.11 Class . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
2.12 Confirmation Date . . . . . . . . . . . . . . . . . . . . . . . 13
2.13 Confirmation Hearing. . . . . . . . . . . . . . . . . . . . . . 13
2.14 Confirmation Order. . . . . . . . . . . . . . . . . . . . . . . 13
2.15 Contingency Fund. . . . . . . . . . . . . . . . . . . . . . . . 13
2.16 Court . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
2.17 Creditor. . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
2.18 Debtor. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
2.19 Debtor Professionals. . . . . . . . . . . . . . . . . . . . . . 14
2.20 Director Defendants . . . . . . . . . . . . . . . . . . . . . . 15
2.21 Disbursing Agent. . . . . . . . . . . . . . . . . . . . . . . . 15
2.22 Dischargeability Litigation . . . . . . . . . . . . . . . . . . 15
2.23 Disclosure Statement. . . . . . . . . . . . . . . . . . . . . . 16
2.24 Disputed Claim. . . . . . . . . . . . . . . . . . . . . . . . . 16
2.25 Distribution Account. . . . . . . . . . . . . . . . . . . . . . 16
2.26 Effective Date. . . . . . . . . . . . . . . . . . . . . . . . . 16
2.27 Estate. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
2.28 Executory Contract. . . . . . . . . . . . . . . . . . . . . . . 17
2.29 General Unsecured Claim . . . . . . . . . . . . . . . . . . . . 17
2.30 Impoundment Trust . . . . . . . . . . . . . . . . . . . . . . . 17
2.31 Insider . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
2.32 Petition Date . . . . . . . . . . . . . . . . . . . . . . . . . 20
2.33 Plan. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
2.34 Priority Unsecured Claim. . . . . . . . . . . . . . . . . . . . 20
2.35 Professional Charges. . . . . . . . . . . . . . . . . . . . . . 20
2.36 Punitive Damage Claim . . . . . . . . . . . . . . . . . . . . . 20
2.37 Reorganization Case . . . . . . . . . . . . . . . . . . . . . . 20
2.38 Reorganized Debtor. . . . . . . . . . . . . . . . . . . . . . . 21
2.39 Secured Claim . . . . . . . . . . . . . . . . . . . . . . . . . 21
2.40 Secured Creditor. . . . . . . . . . . . . . . . . . . . . . . . 21
2.41 Securities Litigation Claims. . . . . . . . . . . . . . . . . . 21
2.42 Settlement Trust. . . . . . . . . . . . . . . . . . . . . . . . 22
<PAGE>
2.43 Settlement Trust Property . . . . . . . . . . . . . . . . . . . 24
2.44 Share Case Claim. . . . . . . . . . . . . . . . . . . . . . . . 25
2.45 Share Case Judgment . . . . . . . . . . . . . . . . . . . . . . 26
2.46 Share Case Judgment Amount. . . . . . . . . . . . . . . . . . . 27
2.47 Share Case Judgment Codebtor Claim. . . . . . . . . . . . . . . 27
2.48 Shareholder Plaintiffs. . . . . . . . . . . . . . . . . . . . . 27
2.49 Shareholder Plaintiffs' Effective Date Payoff . . . . . . . . . 28
2.50 Stock Exchange Distributees . . . . . . . . . . . . . . . . . . 28
2.51 Stock Exchange Distribution . . . . . . . . . . . . . . . . . . 29
2.52 Unsecured Claim . . . . . . . . . . . . . . . . . . . . . . . . 29
2.53 Unsecured Committee . . . . . . . . . . . . . . . . . . . . . . 29
2.54 Unsecured Creditor. . . . . . . . . . . . . . . . . . . . . . . 30
ARTICLE III CLASSIFICATION OF CLAIMS AND THE DEBTOR'S EQUITY INTEREST . 30
3.1 Class 1: Administrative Claims . . . . . . . . . . . . . . . . 30
3.2 Class 2: Priority Unsecured Claims . . . . . . . . . . . . . . 30
3.3 Class 3A: Leonard S. Shoen And/Or LSS, Inc. Share Case
Claims. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
3.4 Class 3B: Samuel W. Shoen And/Or SAMWILL, Inc. Share Case
Claims. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
3.5 Class 3C: Michael L. Shoen And/Or MICKL, Inc. Share Case
Claims. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
3.6 Class 3D: Mary Anna (Shoen) Eaton And/Or MARAN, Inc. Share Case
Claims. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
3.7 Class 3E: Cecilia (Shoen) Hanlon And/Or CEMAR, Inc. Share Case
Claims. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
3.8 Class 3F: Theresa (Shoen) Romero And/Or THERMAR, Inc. Share
Case Claims . . . . . . . . . . . . . . . . . . . . . . . . . . 31
3.9 Class 3G: Katrina (Shoen) Carlson And/Or KATTYDID, Inc. Share
Case Claims . . . . . . . . . . . . . . . . . . . . . . . . . . 31
3.10 Class 4: General Unsecured Claims. . . . . . . . . . . . . . . 31
3.11 Class 5: Punitive Damage Claim . . . . . . . . . . . . . . . . 31
3.12 Class 6: Securities Litigation Claims. . . . . . . . . . . . . 31
3.13 Class 7: Share Case Judgment Codebtor Claims . . . . . . . . . 31
3.14 Class 8: Debtor's Equity Interest. . . . . . . . . . . . . . . 31
ARTICLE IV TREATMENT OF CLASSES INDISPUTABLY UNIMPAIRED UNDER
THE PLAN . . . . . . . . . . . . . . . . . . . . . . . . . 31
4.1 Treatment of Class 1 (Administrative Claims). . . . . . . . . . 31
4.2 Treatment of Class 2 (Priority Unsecured Claims). . . . . . . . 32
ARTICLE V TREATMENT OF CLASS 3A CLAIMS (Leonard S. Shoen
And/Or LSS, Inc. Share Case Claims). . . . . . . . . . . . 33
ARTICLE VI TREATMENT OF CLASS 3B CLAIMS (Samuel W. Shoen
And/Or SAMWILL, Inc. Share Case Claims). . . . . . . . . . 34
ARTICLE VII TREATMENT OF CLASS 3C CLAIMS (Michael L.
Shoen And/Or MICKL, Inc. Share Case Claims). . . . . . . . 36
<PAGE>
ARTICLE VIII TREATMENT OF CLASS 3D CLAIMS (Mary Anna
(Shoen) Eaton And/Or MARAN, Inc. Share Case
Claims). . . . . . . . . . . . . . . . . . . . . . . . . . 37
ARTICLE IX TREATMENT OF CLASS 3E CLAIMS (Cecilia (Shoen)
Hanlon And/Or CEMAR, Inc. Share Case Claims) . . . . . . . 39
ARTICLE X TREATMENT OF CLASS 3F CLAIMS (Theresa (Shoen)
Romero And/Or THERMAR, Inc. Share Case Claims) . . . . . . 40
ARTICLE XI TREATMENT OF CLASS 3G CLAIMS (Katrina (Shoen)
Carlson And/Or KATTYDID, Inc. Share Case Claims) . . . . . 41
ARTICLE XII TREATMENT OF CLASS 4 CLAIMS (General
Unsecured Claims). . . . . . . . . . . . . . . . . . . . . 43
ARTICLE XIII TREATMENT OF CLASS 5 CLAIMS (Punitive Damage
Claim) . . . . . . . . . . . . . . . . . . . . . . . . . . 45
ARTICLE XIV TREATMENT OF CLASS 6 CLAIMS (Securities
Litigation Claims) . . . . . . . . . . . . . . . . . . . . 47
ARTICLE XV TREATMENT OF CLASS 7 CLAIMS (Share Case Judgment
Codebtor Claims) . . . . . . . . . . . . . . . . . . . . . 49
ARTICLE XVI TREATMENT OF CLASS 8 DEBTOR'S EQUITY INTEREST. . . . . . . 51
ARTICLE XVII MEANS FOR EXECUTION OF THE PLAN. . . . . . . . . . . . . . 51
ARTICLE XVIII TREATMENT OF EXECUTORY CONTRACTS . . . . . . . . . . . . . 53
ARTICLE XIX DISCHARGE. . . . . . . . . . . . . . . . . . . . . . . . . 53
ARTICLE XX MODIFICATIONS OF THE PLAN. . . . . . . . . . . . . . . . . 54
ARTICLE XXI RETENTION OF JURISDICTION. . . . . . . . . . . . . . . . . 54
21.1 In General. . . . . . . . . . . . . . . . . . . . . . . . . . . 54
21.2 Plan Disputes . . . . . . . . . . . . . . . . . . . . . . . . . 55
21.3 Further Orders. . . . . . . . . . . . . . . . . . . . . . . . . 55
21.4 Other Claims. . . . . . . . . . . . . . . . . . . . . . . . . . 55
21.5 Final Decree. . . . . . . . . . . . . . . . . . . . . . . . . . 55
21.6 Appeals . . . . . . . . . . . . . . . . . . . . . . . . . . . . 56
21.7 Executory Contracts . . . . . . . . . . . . . . . . . . . . . . 56
21.8 Committees. . . . . . . . . . . . . . . . . . . . . . . . . . . 56
ARTICLE XXII GENERAL PROVISIONS . . . . . . . . . . . . . . . . . . . . 56
22.1 Extension of Payment Dates. . . . . . . . . . . . . . . . . . . 56
22.2 Confirmation by Non-Acceptance Method . . . . . . . . . . . . . 56
22.3 Vesting . . . . . . . . . . . . . . . . . . . . . . . . . . . . 56
<PAGE>
22.4 Captions. . . . . . . . . . . . . . . . . . . . . . . . . . . . 57
22.5 Successors and Assigns. . . . . . . . . . . . . . . . . . . . . 57
22.6 Disclosure Statement. . . . . . . . . . . . . . . . . . . . . . 58
<PAGE> 1
ARTICLE I
---------
INTRODUCTION
------------
This Plan of Reorganization (defined herein, including all
modifications, as the "Plan") is proposed by EDWARD J. SHOEN, who is the Debtor
and the Debtor-In-Possession in the above-captioned Chapter 11 case (defined
herein, in all capacities, as the "Debtor"). The Plan proposes the
reorganization of the Debtor.
The Debtor is a director of AMERCO, a Nevada corporation (defined
herein as "AMERCO").<F1> The largest Claims of Creditors in this case (as the
terms "Claim" and "Creditor" are defined herein) arise from a judgment entered
on February 21, 1995 (defined herein as the "Share Case Judgment") against the
Debtor and certain other directors of AMERCO (defined herein collectively as the
"Director Defendants")<F2> in litigation brought by various holders of AMERCO
common stock (defined herein collectively as the "Shareholder Plaintiffs") in
the Superior Court, Maricopa County, Arizona as Case No. CV 88-20139 (defined
herein as the "Arizona Litigation"). The Share Case Judgment includes
- -------------------------
<F1>
In a different context (i.e., funding the Plan), the defined term
----
"AMERCO" also includes any involved subsidiaries and affiliates of the above-
referenced Nevada corporation.
<F2>
The other Director Defendants are: (i) James P. Shoen;
(ii) Aubrey K. Johnson; (iii) John M. Dodds; and (iv) William E. Carty, all of
whom also filed individual petitions under Chapter 11 on February 21, 1995. The
Chapter 11 cases of the other Director Defendants are jointly administered with
the above-captioned Chapter 11 case of the Debtor, and are maintained as
Jointly Administered Case No. 95-1430-PHX-JMM. Paul F. Shoen is another
defendant in the Arizona Litigation against whom the Share Case Judgment was
entered. The Shareholder Plaintiffs (as defined herein) entered into an
agreement with Paul F. Shoen whereby (in the Debtor's opinion) that defendant
effectively capped and exonerated his liability to the Shareholder Plaintiffs
for a payment of $1,500,000 which is (or may be) refundable to him. The Debtor
is informed and believes that, as of the week of July 17, 1995, Paul F. Shoen
has not sought bankruptcy relief.
<PAGE> 2
provisions for a judicially ordered transfer of the Shareholder Plaintiffs'
AMERCO common stock. In this regard, the Share Case Judgment provides that the
Debtor and the other Director Defendants, jointly and severally, must pay the
monetary obligations owing to the respective Shareholder Plaintiffs under that
judgment (i.e., the total principal amount of $461,838,000, plus interest and
---- ----
taxable costs, as apportioned to each of the Shareholder Plaintiffs according
to the judgment (defined herein as the "Share Case Judgment Amount")). Upon the
Director Defendants' payment of the Share Case Judgment Amount to the
Shareholder Plaintiffs, the Share Case Judgment will be satisfied; and a
provision of the Share Case Judgment requires all of the Shareholder Plaintiffs
to transfer their AMERCO common stock to the Director Defendants or their
designee. AMERCO (or an entity designated in writing by AMERCO) is the Director
Defendants' designee.
The Claims (as defined herein) of the Shareholder Plaintiffs pursuant
to the Share Case Judgment are Disputed Claims (as defined herein) with respect
to the liability of the Debtor and the other Director Defendants for the Share
Case Judgment Amount. The Debtor and the other Director Defendants have, among
other remedies, unexpired rights to appeal the Share Case Judgment.
The Debtor and the other Director Defendants hold indemnification
claims against AMERCO which may apply to the Share Case Judgment; and they have
preserved and scheduled those indemnification claims in their respective
Chapter 11 cases. At the same time, the Debtor and the other Director
Defendants have not attempted to make demands upon and prosecute the
indemnification claims against AMERCO because: (i) they believe that the
enforcement of such indemnification claims may require protracted and expensive
litigation, including litigation involving other AMERCO stockholders who may
try to prevent AMERCO from performing its indemnification agreements with the
<PAGE> 3
Director Defendants; (ii) they believe that the eventual outcome of any such
litigation is uncertain; (iii) they believe that the ultimate collectibility of
any indemnification judgment (if and when such a judgment is obtained) is
uncertain; and (iv) the settlement of the Share Case Judgment as provided in
the Plan effectively moots any need for the Debtor and the other Director
Defendants to make demands upon and prosecute indemnification claims against
AMERCO.
Pursuant to AMERCO's corporate bylaws, AMERCO has certain rights of
first refusal with respect to sale(s) of the Shareholder Plaintiffs' AMERCO
common stock and any purchase of that stock by the Debtor and the other Director
Defendants. Moreover, the rights of the Director Defendants to acquire the
Shareholder Plaintiffs' AMERCO common stock pursuant to the Share Case Judgment
present (or may present) a corporate opportunity which AMERCO is entitled to
exercise.
In the context of the facts and circumstances described above, and
with the cooperation of AMERCO, the Plan filed by the Debtor<F3> proposes the
following funding and treatment of the Shareholder Plaintiffs' Disputed Claims
arising from the Share Case Judgment:
1. In full settlement and satisfaction of the Shareholder
Plaintiffs' Disputed Claims under the Share Case Judgment and on the Plan's
Effective Date (as defined herein), the Debtor and the other Director Defendants
will cause to be transferred to the Shareholder Plaintiffs (pursuant to the
Stock Exchange Distribution, the Settlement Trust and [if applicable] the
Contingency Fund, all as defined herein) property having either a stipulated or
- -------------------------
<F3> The plans of reorganization in the other four (4) Director
Defendants' Chapter 11 cases propose the same funding and treatment of the
Shareholder Plaintiffs' Disputed Claims arising form the Share Case Judgment.
<PAGE> 4
adjudicated value equal to the full amount which the Shareholder Plaintiffs
could recover as an Allowed Claim from the Estate (as defined herein) of the
Debtor and the estates of the other Director Defendants on account of the
Shareholder Plaintiffs' Disputed Claims for the Share Case Judgment Amount
(if and when those Disputed Claims were allowed). In this regard, and because
the Debtor believes that his Estate and the estates of the other Director
Defendants are insolvent, the Plan proposes that the stipulated or adjudicated
value of the property transferred will be at least equal to $461,838,000, plus
----
judgment interest thereon at the rate of ten percent (10%) per year from
February 14, 1995 to and including the Petition Date (as defined herein), plus
----
any taxable costs awarded against the Debtor and the other Director Defendants
in the Share Case Judgment (defined herein collectively as the "Shareholder
Plaintiffs' Effective Date Payoff"). Because of the insolvency of the Debtor's
Estate and the estates of the other Director Defendants, the Shareholder
Plaintiffs' Effective Date Payoff does not contemplate payment of interest under
the Share Case Judgment from and after the Petition Date. Nevertheless, if the
Bankruptcy Court (as defined herein) requires that interest under the Share Case
Judgment must be paid from and after the Petition Date, the Debtor and the other
Director Defendants, with the cooperation of AMERCO, will arrange with AMERCO
to establish a fund (defined herein as the "Contingency Fund") which will ensure
that any such interest payment can be made when due on or after the Effective
Date. The Contingency Fund will be funded by AMERCO common stock, which will be
apportioned among the Shareholder Plaintiffs in the same proportions as their
ownership of the AMERCO common stock described in paragraph 1 of the Share Case
Judgment. The amount of the AMERCO common stock funding the Contingency Fund
will be at least equal in value to the amount of interest under the Share Case
<PAGE> 5
Judgment from and after the Petition Date. If the Bankruptcy Court requires
such interest to be paid on the Effective Date, then the Shareholder Plaintiffs
will be paid (at AMERCO's option) either pro rata distributions of the AMERCO
--------
common stock funding the Contingency Fund or pro rata cash payments of such
--------
interest from AMERCO's purchase or sale of such AMERCO common stock. The
pro rata stock distributions or cash payments will be made according to the
- --------
proportions established in paragraph 1 of the Share Case Judgment. Otherwise,
the Contingency Fund will be maintained by AMERCO in AMERCO common stock and/or
cash until the interest payment issue has been finally adjudicated and
concluded in all litigation where it is pending, including the Shareholder
Plaintiffs' Dischargeability Litigation against the Debtor and the other
Director Defendants.
2. Alternatively, and in lieu of their respective proportionate
shares of the property comprising the Shareholder Plaintiffs' Effective Date
Payoff and any claims to the Contingency Fund, each of the Shareholder
Plaintiffs may elect to participate in the Accepting Creditor Settlement (as
defined herein) and receive discounted cash payments on the Effective Date in
full settlement and satisfaction of their respective Disputed Claims under the
Share Case Judgment. The total discounted cash payments available to the
Shareholder Plaintiffs under the Accepting Creditor Settlement will be
$350,000,000; and each of the Shareholder Plaintiffs choosing to participate in
the Accepting Creditor Settlement will receive shares of the $350,000,000 in
the same proportions as the otherwise applicable shares of the Shareholder
Plaintiffs' Effective Date Payoff
and the Contingency Fund. If any of the Shareholder Plaintiffs accepts
the discounted cash payoff on the Effective Date, the Shareholder Plaintiffs'
Effective Date Payoff and the Contingency Fund will be reduced by what otherwise
would be the proportionate share of each settling Shareholder Plaintiff in the
<PAGE> 6
Shareholder Plaintiffs' Effective Date Payoff and the Contingency Fund.
Acceptance of and participation in the Accepting Creditor Settlement by each of
the Shareholder Plaintiffs requires that both the Shareholder Plaintiff who is
an individual and the Shareholder Plaintiff which is that individual's closely
held corporation must accept the Accepting Creditor Settlement and must vote to
accept the Plan. [Example: For Leonard S. Shoen and/or LSS, Inc. to accept and
-------
participate in the Accepting Creditor Settlement, both Leonard S. Shoen,
individually, and LSS, Inc. must accept the Accepting Creditor Settlement and
must vote to accept the Plan.]
3. AMERCO<F4> will be the funding source of the property comprising
the Shareholder Plaintiffs' Effective Date Payoff and the alternatively
available discounted cash payments under the Accepting Creditor Settlement.
AMERCO also will be the funding source of the Contingency Fund.
4. As part of the closing which will occur to implement the Plan
on the Effective Date, the Shareholder Plaintiffs' AMERCO common stock will be
transferred to AMERCO (or its designee). If the Shareholder Plaintiffs do not
cooperate in the closing, their common stock will be transferred on AMERCO's
books and records by an appropriate officer of AMERCO.
5. Although determinations of tax attributes and consequences will
not be a condition of the Plan, AMERCO is attempting to structure the funding
and settlement of the Share Case Judgment in a manner which is intended to be
mutually beneficial to AMERCO, the Shareholder Plaintiffs, and the Debtor and
the other Director Defendants. In this regard, AMERCO is requiring the
structure contemplated in the Plan as part of its agreement to fund the Plan.
- ------------------------
<F4>
See note 1 above.
---
<PAGE> 7
Accordingly, acquisition of the Shareholder Plaintiffs' AMERCO common stock
pursuant to the Stock Exchange Distribution is intended by AMERCO to be a tax
free exchange of stock; and payment of the rest of the Share Case Judgment
Amount pursuant to the Settlement Trust and the Contingency Fund (if applicable)
is intended by AMERCO to be a settlement payment(s). As noted above and in the
Disclosure Statement (as defined herein), the Debtor's Plan is not conditioned
upon tax attributes, tax avoidance, or any determination of any tax
consequences; and all interested parties are referred to their respective tax
advisors. The Debtor and the other Director Defendants will agree with AMERCO
to structure the settlement of the Share Case Judgment and the transfer of the
Shareholder Plaintiffs' AMERCO common stock as provided in the Plan.
Exclusive of the Shareholder Plaintiffs and/or their Disputed Claims
under the Share Case Judgment, the Debtor has other Claims and Creditors to deal
with in the Plan. With respect to these other Claims and Creditors, the Debtor
proposes to implement the Plan by making payments from income earned after the
Petition Date and/or by selling or transferring other assets of the Debtor or
his Estate -- all as provided in the Plan. The Debtor's implementation of the
Plan will include, but is not limited to, obtaining final adjudications of any
other Claims which are Disputed Claims (whether by stipulations or after
litigation and the exhaustion of appellate rights and remedies).
The Debtor expects that the Plan will be effective by the first
Business Day (as defined herein) after January 1, 1996 (although nothing in the
Plan prohibits an earlier or later Effective Date as the circumstances of the
case may permit or require). In light of the provisions regarding the
Shareholder Plaintiffs' Effective Date Payoff and the Contingency Fund or the
<PAGE> 8
alternatively available discounted cash payments under the Accepting Creditor
Settlement, the Plan will be substantially consummated on the Effective Date.
ALL CREDITORS ARE ENCOURAGED TO CONSULT THE DISCLOSURE STATEMENT
PREPARED BY THE DEBTOR BEFORE VOTING TO ACCEPT OR REJECT THE PLAN. AMONG OTHER
INFORMATION, THE DISCLOSURE STATEMENT CONTAINS DISCUSSIONS OF THE DEBTOR, THE
HISTORICAL BACKGROUND OF THE CHAPTER 11 CASE AND THE PRE-PETITION PERIOD, AND
THE PROCEEDINGS IN THE ARIZONA LITIGATION RESULTING IN THE SHARE CASE
JUDGMENT.<F5> THE DISCLOSURE STATEMENT ALSO INCLUDES ANY FINANCIAL ANALYSIS
GERMANE TO THE PLAN, A DESCRIPTION OF THE PROPERTY WHICH WILL BE TRANSFERRED AS
THE SHAREHOLDER PLAINTIFFS' EFFECTIVE DATE PAYOFF, A DESCRIPTION OF THE
CONTINGENCY FUND (WHICH THE PLAN ALSO DESCRIBES), AND A SUMMARY AND ANALYSIS OF
THE PLAN.
ARTICLE II
----------
DEFINITIONS
-----------
For purposes of the Plan, and except as expressly provided otherwise
herein or unless the context otherwise requires, all of the defined terms stated
in Article II will have the meanings hereinafter stated. For purposes of the
Plan and such defined terms, the singular and plural uses of such defined terms
and the conjunctive and disjunctive uses thereof will be fungible and
interchangeable (unless the context otherwise requires); and the defined terms
will include masculine, feminine, and neuter genders. The defined terms stated
in Article II also are substantive terms of the Plan; and Article II will be
deemed incorporated throughout the rest of the Plan to convey substantive
- ------------------------
<F5> As discussed in the Disclosure Statement, the Arizona Litigation also
resulted in the entry of a separate judgment for punitive damages against one
of the Director Defendants, Edward J. Shoen (the Debtor herein). A notice of
appeal of the punitive damage judment already has been filed.
<PAGE> 9
provisions included in the defined terms. Accordingly, the defined terms are as
follows:
2.1 Accepting Creditor Settlement. This term will refer to and
-----------------------------
mean an election by each Creditor holding a Share Case Claim, which will be made
at the time such Creditor submits a ballot voting on the Plan, whereby the
Creditor will have the option to accept, in full settlement and satisfaction of
the Creditor's Share Case Claim, a pro rata cash distribution from the Accepting
--------
Creditor Settlement Fund. That pro rata cash distribution will be equal to a
--------
percentage of the Accepting Creditor Settlement Fund, which percentage will be
computed by dividing the number of each electing Creditor's shares of AMERCO
common stock as of the Petition Date by the total number of shares of AMERCO
common stock held by the Shareholder Plaintiffs as of the Petition Date in
accordance with paragraph 1 of the Share Case Judgment. Creditors electing to
participate in the Accepting Creditor Settlement will not participate in or be
entitled to any interest in the Stock Exchange Distribution, the Settlement
Trust, or the Contingency Fund. Furthermore, in order for each of the
Shareholder Plaintiffs to accept and participate in the Accepting Creditor
Settlement, both the Shareholder Plaintiff who is an individual and the
Shareholder Plaintiff which is that individual's closely held corporation must
accept the Accepting Creditor Settlement and must vote to accept the Plan.
[Example: For Leonard S. Shoen and/or LSS, Inc. to accept and participate in
-------
the Accepting Creditor Settlement, both Leonard S. Shoen, individually, and LSS,
Inc. must accept the Accepting Creditor Settlement and must vote to accept the
Plan.] After each electing Shareholder Plaintiff receives the cash distribution
pursuant to the Accepting Creditor Settlement, the electing Creditor's AMERCO
<PAGE> 10
common stock will be transferred to AMERCO (or its designee). The cash
distributions paid pursuant to the Accepting Creditor Settlement will be for the
following purposes:
(a) The dollar amount which is the product of $124,131,175.00
times the fraction which is $350,000,000 divided by the Shareholder Plaintiffs'
- -----
Effective Date Payoff times the AMERCO common stock ownership percentage which
-----
has been established for each electing Shareholder Plaintiff in the proportions
described in paragraph 1 of the Share Case Judgment will be paid to purchase the
electing Creditor's AMERCO common stock; and
(b) All other cash distributions paid pursuant to the
Accepting Creditor Settlement will be settlement payments to the electing
Shareholder Plaintiffs.
2.2 Accepting Creditor Settlement Fund. This term will refer to
----------------------------------
and mean a fund in the maximum amount of Three Hundred Fifty Million Dollars
($350,000,000) cash which will be funded by AMERCO on the Effective Date. The
proceeds of the Accepting Creditor Settlement Fund will be distributed on the
Effective Date to the Creditors holding Share Case Claims which elect to
participate in the Accepting Creditor Settlement in full settlement and
satisfaction of such Claims. If fewer than all of the Creditors holding Share
Case Claims elect to participate in the Accepting Creditor Settlement, the
Accepting Creditor Settlement Fund will be funded in an amount equal to the
total pro rata cash distributions which will be made to the electing Creditors
--------
from the Accepting Creditor Settlement Fund.
2.3 Administrative Claim. This term will refer to and mean: (a)
--------------------
every cost or expense of administration of the Reorganization Case, including
any actual and necessary post-petition expenses of preserving the Estate;
(b) any actual and necessary post-petition expenses of the Debtor; (c) all
Professional
<PAGE> 11
Charges approved by the Bankruptcy Court pursuant to interim and final
allowances in accordance with Bankruptcy Code (SECTION)(SECTION)330, 331, and
503(b), 11 U.S.C. (SECTION)(SECTION)330, 331, and 503(b); and (d) all fees and
charges assessed against the Estate under Chapter 123 of Title 28, United States
Code.
2.4 Allowed Claim. This term will refer to and mean every Claim
-------------
against the Debtor: (a)(i) as to which a proof of such Claim has been filed
within the time fixed by the Bankruptcy Court or, if such Claim arises from the
rejection of an Executory Contract, on or before the first Business Day which is
thirty (30) days after the entry of the order allowing the Debtor to reject the
Executory Contract (which may be, but is not limited to, the Confirmation
Order), or (ii) which the Debtor has scheduled as liquidated in amount and
undisputed; and in either event: (b)(i) as to which no objection to the
allowance of such Claim has been filed within any applicable time period fixed
by the Bankruptcy Court, or (ii) as to which the order allowing such Claim has
become final and non-appealable without any appeal, review, or other challenge
of any kind to that order having been taken or being still timely. If any Claim
or the Creditor holding such Claim is subject to any defense, setoff,
counterclaim, recoupment, or other adverse claim of any kind of the Debtor or
the Reorganized Debtor, including, but not limited to, any pending appeal or
unexpired right to appeal, that Claim will be deemed a Disputed Claim; and it
will not become an Allowed Claim unless and until all disputes are resolved or
adjudicated fully and finally, with all appellate rights and remedies having
been exhausted. Unless any earlier time is fixed by order of the
Bankruptcy Court, and subject to amendment rights and the relation back of
amendments to amendment rights and the relation back of amendments under
applicable federal or state procedural rules, any objection to the allowance
of any Claim and the assertion of any defense, setoff, counterclaim,
<PAGE> 12
recoupment, or other adverse claim of any kind of the Debtor or the Reorganized
Debtor must be filed on or before the first Business Day which is ninety (90)
days after the Confirmation Date.
2.5 AMERCO. This term will refer to and mean AMERCO, a Nevada
------
corporation, and will include, in the context of funding the Plan, all involved
affiliates, subsidiaries, or designees thereof.
2.6 Arizona Litigation. This term will refer to and mean the
------------------
litigation in the Superior Court, Maricopa County, Arizona entitled Samuel W.
---------
Shoen, M.D., et al. v. Edward W. Shoen, et al., Case No. CV 88-20139.
- ----------------------------------------------
2.7 Bankruptcy Code. This term will refer to and mean Title 11 of
---------------
the United States Code, 11 U.S.C. (SECTION)(SECTION)101, et seq., as it may be
-- ---
amended from time to time during the Reorganization Case.
2.8 Bankruptcy Court. This term will refer to and mean the United
----------------
States Bankruptcy Court for the District of Arizona, or such other court which
exercises jurisdiction over all or part of the Reorganization Case, including
the United States District Court for the District of Arizona to the extent that
the reference of all or part of the Reorganization Case is withdrawn.
2.9 Business Day. This term will refer to and mean every day
------------
except Saturdays, Sundays, and federal and Arizona state holidays observed by
the Bankruptcy Court.
2.10 Claim. This term will refer to and mean "claim" as defined in
-----
Bankruptcy Code (SECTION)101(5), 11 U.S.C. (SECTION)101(5).
2.11 Class. This term will refer to and mean each of the
-----
classifications of Claims and the Debtor's equity interest described in
Article III of the Plan.
<PAGE> 13
2.12 Confirmation Date. This term will refer to and mean the date
-----------------
on which the Bankruptcy Court enters the Confirmation Order.
2.13 Confirmation Hearing. This term will refer to and mean the
--------------------
hearing regarding confirmation of the Plan conducted pursuant to Bankruptcy Code
(SECTION)1128, 11 U.S.C. (SECTION)1128, including any adjournment or
continuation of that hearing from time to time.
2.14 Confirmation Order. This term will refer to and mean the order
------------------
confirming the Plan pursuant to Bankruptcy Code (SECTION)1129, 11 U.S.C.
(SECTION)1129.
2.15 Contingency Fund. This term will refer to and mean the fund
----------------
which will be established by AMERCO to ensure that interest under the Share Case
Judgment from and after the Petition Date can be paid if the Bankruptcy Court
requires the payment of such interest. Subject only to any adjustments which
are provided with respect to the Accepting Creditor Settlement if, and to the
extent that, the Shareholder Plaintiffs exercise that option:
(a) The Contingency Fund will be funded by AMERCO common
stock, provided, however, that AMERCO will have the option: (i) to replace all
-----------------------
or any part of the AMERCO common stock in the Contingency Fund with cash from
AMERCO's purchase or sale of that stock; and (ii) to distribute the Contingency
Fund (when and if any distribution is required) by distributing the AMERCO
common stock and/or by distributing cash from AMERCO's purchase or sale of part
or all of that stock;
(b) The Contingency Fund will be held by AMERCO, and will be
deemed a perfected pledge by AMERCO for the benefit of the Shareholder
Plaintiffs, until (if ever) payment of interest under the Share Case Judgment
after the Petition Date is finally adjudicated and ordered, or until the issue
<PAGE> 14
of such payment of interest has been finally adjudicated and concluded in all
litigation involving that issue;
(c) The Contingency Fund will be sufficient in value at all
times to pay the interest when and if such payment is required;
(d) If and when the Contingency Fund is distributed, it will
be distributed pro rata to the Shareholder Plaintiffs entitled to receive such
--------
distributions in accordance with the proportions established in paragraph 1 of
the Share Case Judgment; and
(e) If and when the Contingency Fund is distributed, it will
be distributed in settlement and payment of the damages included in the Share
Case Claims of the Shareholder Plaintiffs.
2.16 Court. This term will be completely synonymous and
-----
interchangeable with Bankruptcy Court, which is defined in a preceding section
of this Article II.
2.17 Creditor. This term will refer to and mean "creditor" as
--------
defined in Bankruptcy Code (SECTION)101(10), 11 U.S.C. (SECTION)101(10), and
will include every holder of a Claim, whether or not such Claim is an Allowed
Claim.
2.18 Debtor. This term will refer to and mean Edward J. Shoen, in
------
all capacities, including, but not limited to: (a) Edward J. Shoen,
individually; (b) the Estate of Edward J. Shoen; and (c) Edward J. Shoen, as the
representative of the Estate.
2.19 Debtor Professionals. This term will refer to and mean the law
--------------------
firm of Streich Lang, a Professional Association, and any and all other
professionals which the Debtor or the Reorganized Debtor retains to assist in
the conduct of the Reorganization Case or to provide professional services for a
<PAGE> 15
specified special purpose, all in accordance with Bankruptcy Code
(SECTION)(SECTION)327(a) and 327(e), 11 U.S.C. (SECTION)(SECTION)327(a) and
327(e).
2.20 Director Defendants. This term will refer to and mean
-------------------
Edward J. Shoen, James P. Shoen, John M. Dodds, Aubrey K. Johnson, and William
E. Carty, wherever they are referred to collectively in the Plan.
2.21 Disbursing Agent. This term will refer to and mean the
----------------
individual or entity selected by the Debtor and approved by the Bankruptcy Court
to act as the signatory on the Distribution Account. The Disbursing Agent,
which may be the Reorganized Debtor, will be identified by the Debtor and
approved by an order of the Court (which may be, but is not limited to, the
Confirmation Order).
2.22 Dischargeability Litigation. This term will refer to and mean
---------------------------
the adversary proceedings which the Shareholder Plaintiffs have filed against
the Debtor and the other Director Defendants alleging: (a) that the Share Case
Judgment Amount, including interest from and after the Petition Date, is a non-
dischargeable debt of the Debtor and the other Director Defendants under certain
provisions of Bankruptcy Code (SECTION)523(a), 11 U.S.C. (SECTION)523(a);
(b) that in the case of Edward J. Shoen, the Punitive Damages Claim, also
including interest from and after the Petition Date, is a non-dischargeable
debt of that particular Director Defendant under certain provisions of
Bankruptcy Code (SECTION)523(a), 11 U.S.C. (SECTION)523(a); and (c) that in the
cases of certain Director Defendants (i.e., Edward J. Shoen and James P. Shoen),
----
discharges should be denied based on certain provisions of Bankruptcy Code
(SECTION)727(a), 11 U.S.C. (SECTION)727(a). The Debtor and the other Director
Defendants dispute the Shareholder Plaintiffs' contentions in the
Dischargeability Litigation and deny that the Shareholder Plaintiffs are
entitled to any of the relief requested in that litigation.
<PAGE> 16
2.23 Disclosure Statement. This term will refer to and mean the
--------------------
Disclosure Statement (dated April 25, 1995 and amended and restated July 28,
1995) presented by the Debtor with respect to the Plan, in its present form or
as it may be altered, amended, or modified.
2.24 Disputed Claim. This term will refer to and mean every Claim
--------------
which is not an Allowed Claim.
2.25 Distribution Account. This term will refer to and mean a
--------------------
deposit account(s) in the name of the Reorganized Debtor: (a) which will be
established at a federally insured bank or other federally insured financial
institution which the Bankruptcy Court approves as a depository institution; (b)
on which the Disbursing Agent will be the authorized signatory for the
Reorganized Debtor; and (c) from which the Disbursing Agent will pay or tender
to Creditors entitled to cash distributions under the Plan the payments due from
the Reorganized Debtor under the Plan on the Effective Date and, at the option
of the Reorganized Debtor or pursuant to an order of the Bankruptcy Court, such
payments due under the Plan after the Effective Date.
2.26 Effective Date. This term will refer to and mean the first
--------------
Business Day after the last of the following dates and events has occurred,
unless and to the extent that such conditions have been waived, wholly or
partially, by the Debtor or the Reorganized Debtor in the exercise of his sole
and absolute discretion: (a) one hundred twenty (120) days after the date on
which the Confirmation Order has become final and non-appealable without any
appeal, review, or other challenge of any kind to that order having been taken
or being still timely; and (b) January 1, 1996, provided, however, that if the
-----------------------
condition described in the preceding subsection (a) has been satisfied or waived
earlier than January 1, 1996, the Debtor or the Reorganized Debtor will be
<PAGE> 17
entitled to establish the Effective Date earlier than January 1, 1996. Except
where performance earlier than the Effective Date is expressly required by the
Plan or where it is lawful and expressly permitted by the Plan to perform after
the Effective Date, performance under the Plan will be due on the Effective
Date. The Debtor and the Reorganized Debtor will have the right, but not the
obligation, to render any or all of the performance under the Plan prior to what
otherwise would be the Effective Date if the Debtor or the Reorganized Debtor
deems it appropriate to do so, including, but not limited to, the right to
perform under any circumstances which would moot any appeal, review, or other
challenge of any kind to the Confirmation Order if the Confirmation Order is not
stayed pending such appeal, review, or other challenge.
2.27 Estate. This term will refer to and mean the bankruptcy estate
------
of the Debtor created under Bankruptcy Code (SECTION)541, 11 U.S.C.
(SECTION)541.
2.28 Executory Contract. This term will refer to and mean every
------------------
unexpired lease and other contract which is subject to being assumed or rejected
under Bankruptcy Code (SECTION)365, 11 U.S.C. (SECTION)365.
2.29 General Unsecured Claim. This term will refer to and mean
-----------------------
every Unsecured Claim against the Debtor (including, but not limited to, every
such Claim arising from the rejection of an Executory Contract), which will be
classified and paid under the Plan as the Plan provides for Class 4 Claims, and
which is not an Administrative Claim, a Priority Unsecured Claim, a Share Case
Claim, a Punitive Damage Claim, a Securities Litigation Claim, or a Share Case
Judgment Codebtor Claim.
2.30 Impoundment Trust. This term will refer to and mean the trust
-----------------
which will be the receptacle for all payments made, and/or property deposited in
lieu of cash payments, on account of the Claims of the Creditors holding the
<PAGE> 18
Punitive Damage Claim. The Impoundment Trust will be established on the
Effective Date to receive and impound all distributions made on account of the
Punitive Damage Claim so long as it is a Disputed Claim and to disburse all
accumulated distributions with respect to the Punitive Damage Claim as and when,
and to the extent that, it becomes an Allowed Claim. The Impoundment Trust will
be governed by the following terms and procedures:
(a) The Impoundment Trust will be an entity separate and
independent from the Reorganized Debtor and AMERCO. The Creditors holding the
Punitive Damage Claim will be the beneficiaries of the Impoundment Trust; and
each such Creditor will hold a pro rata interest in the Impoundment Trust to the
--------
extent of each such Creditor's pro rata interest in the Punitive Damage Claim.
--------
The Debtor will be the settlor and the residual beneficiary of the Impoundment
Trust;
(b) The trustee of the Impoundment Trust will be an
individual or entity proposed by the Debtor or the Reorganized Debtor and
approved by the Bankruptcy Court. The trustee will be separate and independent
from the Reorganized Debtor and AMERCO;
(c) The powers and duties of the trustee of the Impoundment
Trust will be limited to the sequestration, investment, and eventual
distribution of the proceeds held in trust. The proceeds held in trust will be
sequestered by the trustee and will not be disbursed to the Creditors holding
the Punitive Damage Claim unless and until the Punitive Damage Claim becomes an
Allowed Claim. Unless otherwise agreed in writing by all of the Creditors
holding the Punitive Damage Claim which are the beneficiaries of the Impoundment
Trust (in which event such Creditors will bear all risk of losses), the trustee
<PAGE> 19
will invest any cash deposits sequestered in the Impoundment Trust only in
federally insured deposits or other investments supported by the full faith and
credit of the United States;
(d) If the Reorganized Debtor deposits into the Impoundment
Trust any property in lieu of cash, then the Reorganized Debtor will have the
right, for a period of ninety (90) days after the Punitive Damage Claim becomes
an Allowed Claim, to liquidate such property or otherwise substitute and deposit
into the Impoundment Trust cash equal to the value of such property before there
is any sale, liquidation, or other disposition of the property by the trustee of
the Impoundment Trust;
(e) All proceeds and property paid into the Impoundment
Trust, after deducting the trustee's fees and any other allowable charges by the
trustee, will be deemed payments on the Punitive Damage Claim subject to that
Claim becoming an Allowed Claim. The amounts deducted to pay the trustee's fees
and other allowable charges (if any) will be for the administration of the
Impoundment Trust, and will not be considered payments of the Punitive Damage
Claim;
(f) All proceeds or property remaining sequestered in the
Impoundment Trust after full payment of the Punitive Damage Claim will be
remitted to the Reorganized Debtor, subject to all of the Reorganized Debtor's
other obligations under the Plan, and the Impoundment Trust will terminate; and
(g) The Bankruptcy Court will have and retain jurisdiction
over the Impoundment Trust and all aspects of its administration.
2.31 Insider. This term will refer to and mean every individual and
-------
entity which is an "insider" as defined in Bankruptcy Code (SECTION)101(31),
11 U.S.C. (SECTION)101(31), or was such an "insider" when the Claim of such
individual or entity arose.
<PAGE> 20
2.32 Petition Date. This term will refer to and mean the filing
-------------
date of the voluntary Chapter 11 petition commencing the Reorganization Case,
which is February 21, 1995.
2.33 Plan. This term will refer to and mean this "Amended And
---- -----------
Restated Debtor's Plan Of Reorganization Proposed By Edward J. Shoen" and every
- --------------------------------------------------------------------
modification thereof, if any, filed by the Debtor.
2.34 Priority Unsecured Claim. This term will refer to and mean
------------------------
every Unsecured Claim against the Debtor which is not an Administrative Claim,
a Share Case Claim, a Punitive Damage Claim, a Securities Litigation Claim, or
a Share Case Judgment Codebtor Claim, and which is asserted by the Creditor
holding such Claim to be entitled to priority under any applicable provision(s)
of Bankruptcy Code (SECTION)507, 11 U.S.C. (SECTION)507.
2.35 Professional Charges. This term will refer to and mean the
--------------------
allowed interim and final professional fees and expenses charged by the
Chapter 11 professionals employed with the approval of the Bankruptcy Court in
the Reorganization Case.
2.36 Punitive Damage Claim. This term will refer to and mean every
---------------------
Claim against the Debtor which is asserted by the Creditor holding such Claim to
arise from the judgment entered in the Arizona Litigation on February 21, 1995
with respect to punitive damages against the Debtor. The Punitive Damage Claim
is a Disputed Claim, and is classified in Class 5 under the Plan and paid as the
Plan provides for that Class.
2.37 Reorganization Case. This term will refer to and mean the case
-------------------
under Chapter 11 of the Bankruptcy Code which was commenced by the filing of a
voluntary Chapter 11 petition by the Debtor on the Petition Date.
<PAGE> 21
2.38 Reorganized Debtor. This term will refer to and mean the
------------------
Debtor from and after the Confirmation Date. Unless otherwise expressly stated
or the context otherwise requires, alternative references to "the Debtor or the
Reorganized Debtor" throughout various provisions of the Plan are intended to
anticipate whether an event may occur before or after the Confirmation Date; and
such alternative references do not attempt to distinguish between the Debtor and
the Reorganized Debtor. Any settlement or agreement made by the Debtor as part
of the Plan before the Confirmation Date will survive the Confirmation Date and
the Effective Date and will bind both the Reorganized Debtor and every other
party to such settlement or agreement (including, but not limited to, the
provisions of the Plan as confirmed).
2.39 Secured Claim. This term will refer to and mean every Claim
-------------
against the Debtor (including every secured portion of a Claim which is not
fully secured) which is asserted by the Creditor holding such Claim to be
secured by a lien, security interest, or assignment encumbering property in
which the Debtor has an interest, provided, however, that such Claim will be
-----------------------
a Secured Claim only to the extent of the validity, perfection, and
enforceability of the claimed lien, security interest, or assignment and only to
the extent of the value of the interest of the Creditor holding such Claim
against such property of the Debtor.
2.40 Secured Creditor. This term will refer to and mean every
----------------
Creditor which holds a Secured Claim in the Reorganization Case.
2.41 Securities Litigation Claims. This term will refer to and mean
----------------------------
every Claim which is asserted against the Debtor in certain litigation pending
in the United States District Court for the District of Nevada in Case Nos.
CV-N-94-771-ECR, CV-N-94-810-ECR, CV-N-94-811-ECR, and CV-N-94-821-ECR. Unless
and until the Securities Litigation Claims are finally adjudicated or finally
<PAGE> 22
settled, those Claims are Disputed Claims; and those Claims are classified and
treated in Class 6 under the Plan.
2.42 Settlement Trust. This term will refer to and mean the trust
----------------
established on the Effective Date which will be the receptacle for all of the
Settlement Trust Property transferred to the Shareholder Plaintiffs in
settlement and payment of the damages included in their Share Case Claims. The
Settlement Trust will be governed by the following terms and procedures:
(a) The Settlement Trust will be an entity separate and
independent from the Reorganized Debtor and AMERCO. The beneficiaries of the
Settlement Trust will be Leonard S. Shoen, Samuel W. Shoen, Michael L. Shoen,
Mary Anna (Shoen) Eaton, Cecilia (Shoen) Hanlon, Theresa (Shoen) Romero, and
Katrina (Shoen) Carlson, or any written designee(s) of any of those individuals.
Each such Creditor will receive an undivided, fractional beneficial interest in
the Settlement Trust, which will be evidenced by a trust certificate issued by
the trustee of the trust. That fractional interest will be computed and
established in accordance with the proportions described in paragraph 1 of the
Share Case Judgment. Creditors electing to participate in the Accepting
Creditor Settlement will not participate in and will not have any interest in
the Settlement Trust; and the fractional interests of the beneficiaries of the
Settlement Trust and the aggregate of the Settlement Trust Property will be
adjusted proportionately in accordance with the total amounts of the Share Case
Claims which are settled pursuant to the Accepting Creditor Settlement. The
trustee of the Settlement Trust will be initially an individual or entity
proposed by the Debtor or the Reorganized Debtor and approved by the Bankruptcy
Court. The trustee will be separate and independent from the Reorganized Debtor
and AMERCO. When the Effective Date has occurred and the Settlement Trust has
<PAGE> 23
been funded, the beneficiaries then will have the right to terminate the
Settlement Trust or to change the trustee to any individual or entity which they
may prefer;
(b) Subject to applicable state or federal securities laws
(if any), the trust certificates issued to the Creditors holding the Share Case
Claims will be freely transferable. Each of the holders of those trust
certificates and/or their respective successors-in-interest will have the right
to direct the trustee to sell or otherwise liquidate the Settlement Trust
Property proportionate to such trust certificate holder's interest in the
Settlement Trust and to distribute the proceeds to the trust certificate holder;
(c) The assets of the Settlement Trust will be the Settlement
Trust Property (including, but not limited to, all income and proceeds thereof)
which will be transferred into the Settlement Trust as of the Effective Date;
(d) The trustee will establish a trust account into which the
net income and proceeds received by the trustee with respect to the Settlement
Trust Property will be deposited. Such net income and proceeds will be
disbursed on a monthly basis to the holders of the trust certificates in
accordance with each trust certificate holder's percentage interest in the
Settlement Trust;
(e) The powers and duties of the trustee of the Settlement
Trust will be limited to sequestration, investment, management, and disbursement
of the property held in trust and the income and proceeds of that property.
From and after the Effective Date, the holders of the trust certificates
will have the power to direct the trustee and will bear all risk of losses on
their respective trust accounts; and
(f) For the period from the Effective Date to the three (3)
month anniversary of the Effective Date, the Reorganized Debtor or AMERCO will
<PAGE> 24
pay the fees and any other allowable charges of the trustee of the Settlement
Trust proposed by the Debtor or the Reorganized Debtor and approved by the
Bankruptcy Court. Such payment may be made in cash or by increasing the
Settlement Trust Property transferred on the Effective Date. From and after the
three (3) month anniversary of the Effective Date, and since the Shareholder
Plaintiffs will have complete control of the Settlement Trust beginning on the
Effective Date (including the right to change the trustee or to terminate the
trust), all trustee's fees and other charges will be paid from the assets or by
the beneficiaries of the trust.
2.43 Settlement Trust Property. This term will refer to and mean
-------------------------
the property which will be transferred on the Effective Date into the Settlement
Trust, and which will consist of the following: (i) registered, Series "D"
cumulative, non-voting preferred stock of AMERCO; (ii) Class C Pass-Through
Certificates of U-Haul Self Storage Trust 1993-1 Commercial Mortgage Asset Pass-
Through Certificates; (iii) beneficial interests in and to certain mortgage
loans (including all rights to receive payments thereon after the Effective
Date) secured by first priority liens on the properties subject to such mortgage
loans; and (iv) certain real property. The Settlement Trust Property will be
identified and transferred into the Settlement Trust in accordance with the
following terms and procedures:
(a) The Debtor will identify in writing all of the property
which will be transferred into the Settlement Trust, and will state the values
of the property. Before, and in conjunction with, the Confirmation Hearing, the
Debtor may propose reasonable modifications and supplements of such written
statement(s) so that (among other things): (i) appropriate adjustments will be
made if any of the Shareholder Plaintiffs chooses the Accepting Creditor
<PAGE> 25
Settlement; and (ii) the Shareholder Plaintiffs participating in the Settlement
Trust will be assured of receiving value in accordance with their proportionate
shares of the Shareholder Plaintiffs' Effective Date Payoff from the Settlement
Trust and the Stock Exchange Distribution; and
(b) If there is any dispute regarding the value or
composition of the Settlement Trust Property or any other related matter, the
dispute will be resolved by the Bankruptcy Court at, or in conjunction with, the
Confirmation Hearing; and the Bankruptcy Court will have and retain jurisdiction
to address any such matters after the Confirmation Date if it is necessary and
appropriate to do so in order to facilitate consummation of the Plan.
2.44 Share Case Claim. This term will refer to and mean every Claim
----------------
against the Debtor which is asserted by the Creditor holding such Claim to arise
from the Share Case Judgment, provided, however, that the Share Case Claims will
-----------------------
not include any Share Case Judgment Codebtor Claims. Unless the Creditor elects
to be treated and paid pursuant to the Accepting Creditor Settlement, the Share
Case Claims otherwise will be classified and paid under the Plan as the Plan
provides for Class 3A, Class 3B, Class 3C, Class 3D, Class 3E, Class 3F, and
Class 3G, respectively. Specifically, the Share Case Claim of each Shareholder
Plaintiff consists of all of the following:
(a) The following amounts, which are stated in accordance
with paragraph 1 of the Share Case Judgment:
<PAGE> 26
Shares of AMERCO
Common Stock Dollar Amounts
---------------- --------------
(1) Leonard S. Shoen and/or LSS, Inc. 833,420 $ 21,100,590
(2) Samuel W. Shoen and/or SAMWILL, Inc. 4,041,924 102,256,486
(3) Michael L. Shoen and/or MICKL, Inc. 4,036,304 102,104,639
(4) Mary Anna (Shoen) Eaton
and/or MARAN, Inc. 3,343,076 84,576,312
(5) Cecilia (Shoen) Hanlon
and/or CEMAR, Inc. 2,331,984 58,996,746
(6) Theresa (Shoen) Romero
and/or THERMAR, Inc. 1,651,644 41,784,859
(7) Katrina (Shoen) Carlson and/or
KATTYDID, Inc. 2,016,624 51,018,368
------------
TOTAL $461,838,000
============
(b) Whatever interest, if any, is properly chargeable or
attributable to each such Share Case Claim and allowed by the Bankruptcy Court;
and
(c) Whatever costs, expenses, attorneys' fees, and other
charges, if any, are properly chargeable or attributable to each such Share Case
Claim and allowed by the Bankruptcy Court.
The Share Case Claim of each Shareholder Plaintiff is a Disputed
Claim. Among other remedies, the Debtor has an unexpired right to appeal the
Share Case Judgment (including the Debtor's alleged liability for the Share Case
Judgment Amount).
2.45 Share Case Judgment. This term will refer to and mean the
-------------------
judgment entered in the Arizona Litigation providing for payment of the Share
Case Judgment Amount and the Shareholder Plaintiffs' obligation to transfer
their AMERCO common stock to the Director Defendants or their designee.
<PAGE> 27
2.46 Share Case Judgment Amount. This term will refer to and mean
--------------------------
the monetary obligations owing to the respective Shareholder Plaintiffs from the
Debtor and the other Director Defendants as stated and apportioned in the Share
Case Judgment. The Shareholder Plaintiffs' Claims for the Share Case Judgment
Amount (including their respective shares thereof) are Disputed Claims subject
to, among other remedies, unexpired rights of the Debtor and the other Director
Defendants to appeal the Share Case Judgment.
2.47 Share Case Judgment Codebtor Claim. This term will refer to
----------------------------------
and mean every Claim against the Debtor which is asserted by the Creditor
holding such Claim to arise, in accordance with Bankruptcy Code (SECTION)509,
11 U.S.C. (SECTION)509, from rights of contribution, reimbursement, or
subrogation (if any such rights exist under applicable law) with respect to
payment and/or settlement and satisfaction of the Share Case Judgment. Any
Share Case Judgment Codebtor Claims (if any) will be classified and treated as
the Plan provides for Class 7.
2.48 Shareholder Plaintiffs. This term will refer to and mean,
----------------------
separately and collectively, the plaintiffs in the Arizona Litigation, which are
as follows: (i) Leonard S. Shoen and/or LSS, Inc.; (ii) Samuel W. Shoen and/or
SAMWILL, Inc.; (iii) Michael L. Shoen and/or MICKL, Inc.; (iv) Mary Anna (Shoen)
Eaton and/or MARAN, Inc.; (v) Cecilia (Shoen) Hanlon and/or CEMAR, Inc.; (vi)
Theresa (Shoen) Romero and/or THERMAR, Inc.; and (vii) Katrina (Shoen) Carlson
and/or KATTYDID, Inc. The respective corporations named in the foregoing
subdivisions (i) through (vii) are, to the best of the Debtor's knowledge,
information and belief, entities which have a legal existence separate from the
respective individuals named in those subdivisions, but which are closely held
and controlled by those individuals.
<PAGE> 28
2.49 Shareholder Plaintiffs' Effective Date Payoff. This term will
---------------------------------------------
refer to and mean the stipulated or adjudicated value of the Stock Exchange
Distribution and the Settlement Trust Property which the Debtor and the other
Director Defendants will cause to be transferred to the Shareholder Plaintiffs
in full settlement and satisfaction of the Shareholder Plaintiffs' Disputed
Claims under the Share Case Judgment. Because of the belief that the Debtor's
Estate and the estates of the other Director Defendants are insolvent, the
Debtor and the other Director Defendants propose that the stipulated or
adjudicated value of the Shareholder Plaintiffs' Effective Date Payoff will be
an amount at least equal to the total of: (a) $461,838,000; plus (b) judgment
----
interest thereon at the rate of ten percent (10%) per year from
February 14, 1995, to and including the Petition Date; plus (c) any taxable
----
costs awarded against the Debtor and the other Director Defendants pursuant to
the Share Case Judgment. The Contingency Fund, which is not included in the
Shareholder Plaintiffs' Effective Date Payoff proposed herein, will be
established to ensure the payment of interest under the Share Case Judgment
from and after the Petition Date if, and only if, it is finally adjudicated that
the Shareholder Plaintiffs are entitled to be paid such interest.
2.50 Stock Exchange Distributees. This term will refer to and mean
---------------------------
those particular Shareholder Plaintiffs which will receive the Stock Exchange
Distribution from AMERCO, and which will transfer to AMERCO (or its designee),
in exchange for the Stock Exchange Distribution, all of the AMERCO common stock
which is identified in paragraph 1 of the Share Case Judgment. The Stock
Exchange Distributees are the record owners of the AMERCO common stock which
AMERCO (or its designee) will acquire in the exchange. The Debtor is informed
and believes that the Stock Exchange Distributees are and will be LSS, Inc.,
<PAGE> 29
SAMWILL, Inc., MICKL, Inc., MARAN, Inc., CEMAR, Inc., THERMAR, Inc., KATTYDID,
Inc., and Katrina (Shoen) Carlson.
2.51 Stock Exchange Distribution. This term will refer to and mean
---------------------------
the registered, Series "B" cumulative, non-voting preferred stock of AMERCO
which will be transferred on the Effective Date to each of the Shareholder
Plaintiffs which are the Stock Exchange Distributees, in exchange for the shares
of AMERCO common stock which are to be transferred pursuant to the Share Case
Judgment. The Stock Exchange Distribution will be part of a simultaneous and
fully integrated closing on the Effective Date whereby: (a) the Stock Exchange
Distribution will be made to the Stock Exchange Distributees; (b) the Settlement
Trust Property will be transferred into the Settlement Trust; (c) the
Shareholder Plaintiffs' AMERCO common stock will be transferred to AMERCO (or
its designee), whether by voluntary delivery and/or by appropriate notations on
the books and records of AMERCO; and (d) the Contingency Fund will be
established (and distributions therefrom will be made if required on the
Effective Date). The foregoing provisions regarding the Stock Exchange
Distribution and the closing on the Effective Date are and will be subject to
the provisions of the Accepting Creditor Settlement with respect to each of the
Shareholder Plaintiffs electing that option.
2.52 Unsecured Claim. This term will refer to and mean every Claim
---------------
against the Debtor, regardless of the priority of such Claim, which is not a
Secured Claim as defined in a preceding section of this Article II.
2.53 Unsecured Committee. This term will refer to and mean the
-------------------
Official Committee of Unsecured Creditors as appointed by the United States
Trustee pursuant to Bankruptcy Code (SECTION)1102(a)(1), 11 U.S.C.
(SECTION)1102(a)(1).
<PAGE> 30
2.54 Unsecured Creditor. This term will refer to and mean every
------------------
Creditor which holds an Unsecured Claim in the Reorganization Case.
ARTICLE III
-----------
CLASSIFICATION OF CLAIMS AND THE DEBTOR'S EQUITY INTEREST
---------------------------------------------------------
All Claims and the Debtor's equity interest are classified under the
Plan as hereafter stated in this Article. As of the Confirmation Hearing, any
Class of Claims which is not occupied by an Allowed Claim (or a Claim
temporarily or provisionally allowed by the Bankruptcy Court for voting
purposes) will be deemed deleted automatically from the Plan with respect to
voting on confirmation of the Plan.
3.1 Class 1: Administrative Claims. The Class 1 Claims will be
-------------------------------
all Claims which are Administrative Claims, including all Professional Charges.
3.2 Class 2: Priority Unsecured Claims. The Class 2 Claims will
-----------------------------------
be all Claims which are Priority Unsecured Claims.
3.3 Class 3A: Leonard S. Shoen And/Or LSS, Inc. Share Case Claims.
--------------------------------------------------------------
The Class 3A Claims will be all Claims of Leonard S. Shoen and/or LSS, Inc.
which are Share Case Claims.
3.4 Class 3B: Samuel W. Shoen And/Or SAMWILL, Inc. Share Case Claims.
-----------------------------------------------------------------
The Class 3B Claims will be all Claims of Samuel W. Shoen and/or
SAMWILL, Inc. which are Share Case Claims.
3.5 Class 3C: Michael L. Shoen And/Or MICKL, Inc. Share Case Claims.
-----------------------------------------------------------------
The Class 3C Claims will be all Claims of Michael L. Shoen and/or MICKL,
Inc. which are Share Case Claims.
3.6 Class 3D: Mary Anna (Shoen) Eaton And/Or MARAN, Inc. Share
-----------------------------------------------------------
Case Claims. The Class 3D Claims will be all Claims of Mary Anna (Shoen) Eaton
- -----------
and/or MARAN, Inc. which are Share Case Claims.
<PAGE> 31
3.7 Class 3E: Cecilia (Shoen) Hanlon And/Or CEMAR, Inc. Share Case
---------------------------------------------------------------
Claims. The Class 3E Claims will be all Claims of Cecilia (Shoen) Hanlon and/or
- ------
CEMAR, Inc. which are Share Case Claims.
3.8 Class 3F: Theresa (Shoen) Romero And/Or THERMAR, Inc. Share
------------------------------------------------------------
Case Claims. The Class 3F Claims will be all Claims of Theresa (Shoen) Romero
- -----------
and/or THERMAR, Inc. which are Share Case Claims.
3.9 Class 3G: Katrina (Shoen) Carlson And/Or KATTYDID, Inc. Share
--------------------------------------------------------------
Case Claims. The Class 3G Claims will be all Claims of Katrina (Shoen) Carlson
- -----------
and/or KATTYDID, Inc. which are Share Case Claims.
3.10 Class 4: General Unsecured Claims. The Class 4 Claims will
----------------------------------
be all Claims which are General Unsecured Claims.
3.11 Class 5: Punitive Damage Claim. Class 5 Claims will be all
-------------------------------
Claims of the Creditors holding the Punitive Damage Claim.
3.12 Class 6: Securities Litigation Claims. The Class 6 Claims
--------------------------------------
will be all Claims which are the Securities Litigation Claims.
3.13 Class 7: Share Case Judgment Codebtor Claims. The Class 7
---------------------------------------------
Claims will be all Claims which are the Share Case Judgment Codebtor Claims.
3.14 Class 8: Debtor's Equity Interest. Class 8 contains the
----------------------------------
equity interest of the Debtor, who is an individual.
ARTICLE IV
----------
TREATMENT OF CLASSES INDISPUTABLY UNIMPAIRED UNDER THE PLAN
-----------------------------------------------------------
4.1 Treatment of Class 1 (Administrative Claims). The holder of
--------------------------------------------
every Class 1 Administrative Claim will be paid: (a) fully and in cash on the
Effective Date (including any interest allowed by the Bankruptcy Court) if the
Claim is then an Allowed Claim; (b) fully and in cash (including any interest
allowed by the Bankruptcy Court) when and if the Claim becomes an Allowed Claim
<PAGE> 32
after the Effective Date; or (c) as otherwise agreed in writing by the holder of
the Allowed Claim or ordered by the Bankruptcy Court. Every Allowed Class 1
Administrative Claim for an operating expense of the Debtor incurred in the
ordinary course of the Debtor's business will be paid fully and in cash in the
ordinary course of such business (including any payment terms applicable to any
such expense). The likely sources of the payments of all Allowed Class 1
Administrative Claims will be: (i) AMERCO, as to Professional Charges; and (ii)
otherwise, the Debtor's post-petition income. Accordingly, Class 1
Administrative Claims are unimpaired pursuant to the Plan and Bankruptcy Code
----------
(SECTION)1124, 11 U.S.C. (SECTION)1124, and are deemed to have accepted the
Plan pursuant to Bankruptcy Code (SECTION)1126(f), 11 U.S.C. (SECTION)1126(f).
4.2 Treatment of Class 2 (Priority Unsecured Claims). The holder
------------------------------------------------
of every Class 2 Priority Unsecured Claim will be paid: (a) fully and in cash
on the Effective Date (including any interest allowed by the Bankruptcy Court)
if the Claim is then an Allowed Claim; (b) fully and in cash (including any
interest allowed by the Bankruptcy Court) when and if the Claim becomes an
Allowed Claim after the Effective Date; (c) fully and in cash (including any
interest allowed by the Bankruptcy Court) with respect to any Allowed Claim for
unpaid taxes of the kind provided in Bankruptcy Code (SECTION)507(a)(8),
11 U.S.C. (SECTION)507(a)(8), provided, however, that as permitted by Bankruptcy
-----------------------
Code (SECTION)1129(a)(9), 11 U.S.C. (SECTION)1129(a)(9), any such Allowed Claim
will be paid in deferred quarterly cash payments of principal and market rate
interest payable in arrears over a period of six (6) years from and after the
date of assessment of such Claim; or (d) as otherwise agreed in writing by the
holder of the Allowed Claim or ordered by the Bankruptcy Court. If there is
any dispute between the Debtor and the Creditors holding the Priority Unsecured
<PAGE> 33
Claims, including any dispute regarding the appropriate market rate of interest
from and after the Effective Date, that dispute will be resolved and adjudicated
by the Bankruptcy Court at, or in conjunction with, the Confirmation Hearing.
As an appropriate market interest rate, the Debtor proposes eight percent (8%)
per year. The likely sources of the payments of all such Allowed Claims, if
there are any such Allowed Claims, will be the Debtor's post-petition income.
Accordingly, Class 2 Claims are unimpaired pursuant to the Plan and Bankruptcy
----------
Code (SECTION)1124, 11 U.S.C. (SECTION)1124, and are deemed to have accepted
the Plan pursuant to Bankruptcy Code (SECTION)1126(f), 11 U.S.C.
(SECTION)1126(f).
ARTICLE V
---------
TREATMENT OF CLASS 3A CLAIMS
----------------------------
(LEONARD S. SHOEN AND/OR LSS, INC. SHARE CASE CLAIMS)
-----------------------------------------------------
5.1 If the Creditors holding the Class 3A Claims elect to
participate in the Accepting Creditor Settlement and vote to accept the Plan as
required in the Accepting Creditor Settlement, the Class 3A Claims will be
treated and paid in accordance with the Accepting Creditor Settlement.
5.2 If the Creditors holding the Class 3A Claims do not elect to
participate in the Accepting Creditor Settlement, the Class 3A Claims will be
paid a proportionate share of the Shareholder Plaintiffs' Effective Date Payoff
pursuant to the Stock Exchange Distribution and the funding of the Settlement
Trust. The Contingency Fund will be established to ensure that the Creditors
holding the Class 3A Claims will be paid interest under the Share Case Judgment
from and after the Petition Date if, and only if, it is finally adjudicated that
the Shareholder Plaintiffs are entitled to be paid such interest.
5.3 When the Creditors holding the Class 3A Claims either: (a)
receive payment pursuant to the Accepting Creditor Settlement (if elected by the
<PAGE> 34
Creditors); or (b) receive a proportionate share of the Shareholder Plaintiffs'
Effective Date Payoff pursuant to the Stock Exchange Distribution and the
funding of the Settlement Trust (and the Contingency Fund is established as
provided in the Plan), all of the AMERCO common stock held by the Creditors as
of the Petition Date will be transferred immediately and automatically to AMERCO
(or its designee). As part of the simultaneous and fully integrated closing
which will occur between the Reorganized Debtor and the Shareholder Plaintiffs
to implement the Plan on the Effective Date, the Creditors holding the Class 3A
Claims will be obliged to deliver to AMERCO (or its designee) all evidence of
the Creditors' ownership of AMERCO common stock, including specifically, but
not limited to, the AMERCO common stock certificates. Any failure or refusal
of the Creditors to comply with this obligation will not prohibit or delay
AMERCO (or its designee) from causing and executing the transfer of the
Creditors' AMERCO common stock on the books and records of AMERCO.
5.4 The source of the money or property which will be paid or
transferred to satisfy the Class 3A Claims will be AMERCO (including any
involved affiliate, subsidiary, or designee thereof).
5.5 The Class 3A Claims are impaired pursuant to the Plan.
--------
ARTICLE VI
----------
TREATMENT OF CLASS 3B CLAIMS
----------------------------
(SAMUEL W. SHOEN AND/OR SAMWILL, INC. SHARE CASE CLAIMS)
--------------------------------------------------------
6.1 If the Creditors holding the Class 3B Claims elect to
participate in the Accepting Creditor Settlement and vote to accept the Plan as
required in the Accepting Creditor Settlement, the Class 3B Claims will be
treated and paid in accordance with the Accepting Creditor Settlement.
<PAGE> 35
6.2 If the Creditors holding the Class 3B Claims do not elect to
participate in the Accepting Creditor Settlement, the Class 3B Claims will be
paid a proportionate share of the Shareholder Plaintiffs' Effective Date Payoff
pursuant to the Stock Exchange Distribution and the funding of the Settlement
Trust. The Contingency Fund will be established to ensure that the Creditors
holding the Class 3B Claims will be paid interest under the Share Case Judgment
from and after the Petition Date if, and only if, it is finally adjudicated that
the Shareholder Plaintiffs are entitled to be paid such interest.
6.3 When the Creditors holding the Class 3B Claims either: (a)
receive payment pursuant to the Accepting Creditor Settlement (if elected by the
Creditors); or (b) receive a proportionate share of the Shareholder Plaintiffs'
Effective Date Payoff pursuant to the Stock Exchange Distribution and the
funding of the Settlement Trust (and the Contingency Fund is established as
provided in the Plan), all of the AMERCO common stock held by the Creditors as
of the Petition Date will be transferred immediately and automatically to AMERCO
(or its designee). As part of the simultaneous and fully integrated closing
which will occur between the Reorganized Debtor and the Shareholder Plaintiffs
to implement the Plan on the Effective Date, the Creditors holding the Class 3B
Claims will be obliged to deliver to AMERCO (or its designee) all evidence of
the Creditors' ownership of AMERCO common stock, including specifically, but
not limited to, the AMERCO common stock certificates. Any failure or refusal
of the Creditors to comply with this obligation will not prohibit or delay
AMERCO (or its designee) from causing and executing the transfer of the
Creditors' AMERCO common stock on the books and records of AMERCO.
<PAGE> 36
6.4 The source of the money or property which will be paid or
transferred to satisfy the Class 3B Claims will be AMERCO (including any
involved affiliate, subsidiary, or designee thereof).
6.5 The Class 3B Claims are impaired pursuant to the Plan.
--------
ARTICLE VII
-----------
TREATMENT OF CLASS 3C CLAIMS
----------------------------
(MICHAEL L. SHOEN AND/OR MICKL, INC. SHARE CASE CLAIMS)
-------------------------------------------------------
7.1 If the Creditors holding the Class 3C Claims elect to
participate in the Accepting Creditor Settlement and vote to accept the Plan as
required in the Accepting Creditor Settlement, the Class 3C Claims will be
treated and paid in accordance with the Accepting Creditor Settlement.
7.2 If the Creditors holding the Class 3C Claims do not elect to
participate in the Accepting Creditor Settlement, the Class 3C Claims will be
paid a proportionate share of the Shareholder Plaintiffs' Effective Date Payoff
pursuant to the Stock Exchange Distribution and the funding of the Settlement
Trust. The Contingency Fund will be established to ensure that the Creditors
holding the Class 3C Claims will be paid interest under the Share Case Judgment
from and after the Petition Date if, and only if, it is finally adjudicated that
the Shareholder Plaintiffs are entitled to be paid such interest.
7.3 When the Creditors holding the Class 3C Claims either: (a)
receive payment pursuant to the Accepting Creditor Settlement (if elected by the
Creditors); or (b) receive a proportionate share of the Shareholder Plaintiffs'
Effective Date Payoff pursuant to the Stock Exchange Distribution and the
funding of the Settlement Trust (and the Contingency Fund is established as
provided in the Plan), all of the AMERCO common stock held by the Creditors as
of the Petition Date will be transferred immediately and automatically to AMERCO
<PAGE> 37
(or its designee). As part of the simultaneous and fully integrated closing
which will occur between the Reorganized Debtor and the Shareholder Plaintiffs
to implement the Plan on the Effective Date, the Creditors holding the Class 3C
Claims will be obliged to deliver to AMERCO (or its designee) all evidence of
the Creditors' ownership of AMERCO common stock, including specifically, but
not limited to, the AMERCO common stock certificates. Any failure or refusal
of the Creditors to comply with this obligation will not prohibit or delay
AMERCO (or its designee) from causing and executing the transfer of the
Creditors' AMERCO common stock on the books and records of AMERCO.
7.4 The source of the money or property which will be paid or
transferred to satisfy the Class 3C Claims will be AMERCO (including any
involved affiliate, subsidiary, or designee thereof).
7.5 The Class 3C Claims are impaired pursuant to the Plan.
--------
ARTICLE VIII
------------
TREATMENT OF CLASS 3D CLAIMS
----------------------------
(MARY ANNA (SHOEN) EATON AND/OR MARAN, INC. SHARE CASE CLAIMS)
--------------------------------------------------------------
8.1 If the Creditors holding the Class 3D Claims elect to
participate in the Accepting Creditor Settlement and vote to accept the Plan as
required in the Accepting Creditor Settlement, the Class 3D Claims will be
treated and paid in accordance with the Accepting Creditor Settlement.
8.2 If the Creditors holding the Class 3D Claims do not elect to
participate in the Accepting Creditor Settlement, the Class 3D Claims will be
paid a proportionate share of the Shareholder Plaintiffs' Effective Date Payoff
pursuant to the Stock Exchange Distribution and the funding of the Settlement
Trust. The Contingency Fund will be established to ensure that the Creditors
holding the Class 3D Claims will be paid interest under the Share Case Judgment
<PAGE> 38
from and after the Petition Date if, and only if, it is finally adjudicated that
the Shareholder Plaintiffs are entitled to be paid such interest.
8.3 When the Creditors holding the Class 3D Claims either: (a)
receive payment pursuant to the Accepting Creditor Settlement (if elected by the
Creditors); or (b) receive a proportionate share of the Shareholder Plaintiffs'
Effective Date Payoff pursuant to the Stock Exchange Distribution and the
funding of the Settlement Trust (and the Contingency Fund is established as
provided in the Plan), all of the AMERCO common stock held by the Creditors as
of the Petition Date will be transferred immediately and automatically to AMERCO
(or its designee). As part of the simultaneous and fully integrated closing
which will occur between the Reorganized Debtor and the Shareholder Plaintiffs
to implement
the Plan on the Effective Date, the Creditors holding the Class 3D Claims will
be obliged to deliver to AMERCO (or its designee) all evidence of the Creditors'
ownership of AMERCO common stock, including specifically, but not limited to,
the AMERCO common stock certificates. Any failure or refusal of the Creditors
to comply with this obligation will not prohibit or delay AMERCO (or its
designee) from causing and executing the transfer of the Creditors' AMERCO
common stock on the books and records of AMERCO.
8.4 The source of the money or property which will be paid or
transferred to satisfy the Class 3D Claims will be AMERCO (including any
involved affiliate, subsidiary, or designee thereof).
8.5 The Class 3D Claims are impaired pursuant to the Plan.
--------
<PAGE> 39
ARTICLE IX
----------
TREATMENT OF CLASS 3E CLAIMS
----------------------------
(CECILIA (SHOEN) HANLON AND/OR CEMAR, INC. SHARE CASE CLAIMS)
-------------------------------------------------------------
9.1 If the Creditors holding the Class 3E Claims elect to
participate in the Accepting Creditor Settlement and vote to accept the Plan as
required in the Accepting Creditor Settlement, the Class 3E Claims will be
treated and paid in accordance with the Accepting Creditor Settlement.
9.2 If the Creditors holding the Class 3E Claims do not elect to
participate in the Accepting Creditor Settlement, the Class 3E Claims will be
paid a proportionate share of the Shareholder Plaintiffs' Effective Date Payoff
pursuant to the Stock Exchange Distribution and the funding of the Settlement
Trust. The Contingency Fund will be established to ensure that the Creditors
holding the Class 3E Claims will be paid interest under the Share Case Judgment
from and after the Petition Date if, and only if, it is finally adjudicated that
the Shareholder Plaintiffs are entitled to be paid such interest.
9.3 When the Creditors holding the Class 3E Claims either: (a)
receive payment pursuant to the Accepting Creditor Settlement (if elected by the
Creditors); or (b) receive a proportionate share of the Shareholder Plaintiffs'
Effective Date Payoff pursuant to the Stock Exchange Distribution and the
funding of the Settlement Trust (and the Contingency Fund is established as
provided in the Plan), all of the AMERCO common stock held by the Creditors as
of the Petition Date will be transferred immediately and automatically to AMERCO
(or its designee). As part of the simultaneous and fully integrated closing
which will occur between the Reorganized Debtor and the Shareholder Plaintiffs
to implement the Plan on the Effective Date, the Creditors holding the Class 3E
Claims will be obliged to deliver to AMERCO (or its designee) all evidence of
<PAGE> 40
the Creditors' ownership of AMERCO common stock, including specifically, but not
limited to, the AMERCO common stock certificates. Any failure or refusal of
the Creditors to comply with this obligation will not prohibit or delay AMERCO
(or its designee) from causing and executing the transfer of the Creditors'
AMERCO common stock on the books and records of AMERCO.
9.4 The source of the money or property which will be paid or
transferred to satisfy the Class 3E Claims will be AMERCO (including any
involved affiliate, subsidiary, or designee thereof).
9.5 The Class 3E Claims are impaired pursuant to the Plan.
--------
ARTICLE X
---------
TREATMENT OF CLASS 3F CLAIMS
----------------------------
(THERESA (SHOEN) ROMERO AND/OR THERMAR, INC. SHARE CASE CLAIMS)
---------------------------------------------------------------
10.1 If the Creditors holding the Class 3F Claims elect to
participate in the Accepting Creditor Settlement and vote to accept the Plan as
required in the Accepting Creditor Settlement, the Class 3F Claims will be
treated and paid in accordance with the Accepting Creditor Settlement.
10.2 If the Creditors holding the Class 3F Claims do not elect to
participate in the Accepting Creditor Settlement, the Class 3F Claims will be
paid a proportionate share of the Shareholder Plaintiffs' Effective Date Payoff
pursuant to the Stock Exchange Distribution and the funding of the Settlement
Trust. The Contingency Fund will be established to ensure that the Creditors
holding the Class 3F Claims will be paid interest under the Share Case Judgment
from and after the Petition Date if, and only if, it is finally adjudicated that
the Shareholder Plaintiffs are entitled to be paid such interest.
10.3 When the Creditors holding the Class 3F Claims either: (a)
receive payment pursuant to the Accepting Creditor Settlement (if elected by the
<PAGE> 41
Creditors); or (b) receive a proportionate share of the Shareholder Plaintiffs'
Effective Date Payoff pursuant to the Stock Exchange Distribution and the
funding of the Settlement Trust (and the Contingency Fund is established as
provided in the Plan), all of the AMERCO common stock held by the Creditors as
of the Petition Date will be transferred immediately and automatically to AMERCO
(or its designee). As part of the simultaneous and fully integrated closing
which will occur between the Reorganized Debtor and the Shareholder Plaintiffs
to implement the Plan on the Effective Date, the Creditors holding the Class 3F
Claims will be obliged to deliver to AMERCO (or its designee) all evidence of
the Creditors' ownership of AMERCO common stock, including specifically, but
not limited to, the AMERCO common stock certificates. Any failure or refusal
of the Creditors to comply with this obligation will not prohibit or delay
AMERCO (or its designee) from causing and executing the transfer of the
Creditors' AMERCO common stock on the books and records of AMERCO.
10.4 The source of the money or property which will be paid or
transferred to satisfy the Class 3F Claims will be AMERCO (including any
involved affiliate, subsidiary, or designee thereof).
10.5 The Class 3F Claims are impaired pursuant to the Plan.
--------
ARTICLE XI
----------
TREATMENT OF CLASS 3G CLAIMS
----------------------------
(KATRINA (SHOEN) CARLSON AND/OR KATTYDID, INC. SHARE CASE CLAIMS)
- -----------------------------------------------------------------
11.1 If the Creditors holding the Class 3G Claims elect to
participate in the Accepting Creditor Settlement and vote to accept the Plan as
required in the Accepting Creditor Settlement, the Class 3G Claims will be
treated and paid in accordance with the Accepting Creditor Settlement.
<PAGE> 42
11.2 If the Creditors holding the Class 3G Claims do not elect to
participate in the Accepting Creditor Settlement, the Class 3G Claims will be
paid a proportionate share of the Shareholder Plaintiffs' Effective Date Payoff
pursuant to the Stock Exchange Distribution and the funding of the Settlement
Trust. The Contingency Fund will be established to ensure that the Creditors
holding the Class 3G Claims will be paid interest under the Share Case Judgment
from and after the Petition Date if, and only if, it is finally adjudicated that
the Shareholder Plaintiffs are entitled to be paid such interest.
11.3 When the Creditors holding the Class 3G Claims either: (a)
receive payment pursuant to the Accepting Creditor Settlement (if elected by the
Creditors); or (b) receive a proportionate share of the Shareholder Plaintiffs'
Effective Date Payoff pursuant to the Stock Exchange Distribution and the
funding of the Settlement Trust (and the Contingency Fund is established as
provided in the Plan), all of the AMERCO common stock held by the Creditors as
of the Petition Date will be transferred immediately and automatically to
AMERCO (or its designee). As part of the simultaneous and fully integrated
closing which will occur between the Reorganized Debtor and the Shareholder
Plaintiffs to implement the Plan on the Effective Date, the Creditors holding
the Class 3G Claims will be obliged to deliver to AMERCO (or its designee) all
evidence of the Creditors' ownership of AMERCO common stock, including
specifically, but not limited to, the AMERCO common stock certificates.
Any failure or refusal of the Creditors to comply with this obligation will not
prohibit or delay AMERCO (or its designee) from causing and executing the
transfer of the Creditors' AMERCO common stock on the books and records of
AMERCO.
<PAGE> 43
11.4 The source of the money or property which will be paid or
transferred to satisfy the Class 3G Claims will be AMERCO (including any
involved affiliate, subsidiary, or designee thereof).
11.5 The Class 3G Claims are impaired pursuant to the Plan.
--------
ARTICLE XII
-----------
TREATMENT OF CLASS 4 CLAIMS
---------------------------
(GENERAL UNSECURED CLAIMS)
--------------------------
12.1 All Class 4 Claims which are Allowed Claims will be paid in
full and in cash as hereafter provided in this Article XII.
12.2 The General Unsecured Claims which are Allowed Claims will be
paid as follows from funds deposited into the Distribution Account:
(a) On the Effective Date, the Reorganized Debtor will pay
into the Distribution Account an amount in cash which is not less than one-third
(1/3) of the amount of all General Unsecured Claims which are Allowed Claims.
This amount paid into the Distribution Account will be distributed by the
Disbursing Agent to pay pro rata distributions to the General Unsecured
--------
Creditors holding Allowed Class 4 Claims;
(b) On or before the six (6) month anniversary of the
Effective Date, the Reorganized Debtor will pay into the Distribution Account an
additional amount in cash which is not less than one-third (1/3) of the amount
of all General Unsecured Claims which are Allowed Claims. This additional
amount paid into the Distribution Account will be distributed by the Disbursing
Agent to pay pro rata distributions to the General Unsecured Creditors holding
--------
Allowed Class 4 Claims;
(c) On or before the one (1) year anniversary of the
Effective Date, the Reorganized Debtor will pay into the Distribution Account a
<PAGE> 44
further amount in cash which will be sufficient to pay the unpaid balance, if
any, of all Allowed Class 4 Claims and any unpaid interest which may be allowed
by the Bankruptcy Court with respect to such Claims. The final payment will be
distributed by the Disbursing Agent to pay final pro rata distributions to the
--------
General Unsecured Creditors holding Allowed Class 4 Claims;
(d) The distribution provisions in the foregoing subsections
(a) through (c) for General Unsecured Creditors holding Allowed Class 4 Claims
will be subject to reserves for any Class 4 Claims which are or may be Disputed
Claims. Such reserves, if any, will enable the Reorganized Debtor and/or the
Disbursing Agent to make pro rata payments to the Creditors holding any such
--------
Disputed Claims when and if those Claims become Allowed Claims; and
(e) From and after the Effective Date, interest will accrue
and will be payable on the unpaid balance of each Class 4 General Unsecured
Claim which is or becomes an Allowed Claim at a market rate of interest
determined by the Bankruptcy Court. If there is any dispute between the Debtor
and the Creditor holding the General Unsecured Claims regarding the appropriate
market interest rate proposed by the Debtor, that dispute will be resolved and
adjudicated by the Bankruptcy Court at, or in conjunction with, the
Confirmation Hearing. As an appropriate market interest rate, the Debtor
proposes eight percent (8%) per year.
12.3 The likely source of the payments of the Allowed Class 4
General Unsecured Claims will be the Debtor's post-petition income.
12.4 The General Unsecured Claims which comprise the Class 4 Claims
are impaired pursuant to the Plan.
--------
<PAGE> 45
ARTICLE XIII
------------
TREATMENT OF CLASS 5 CLAIMS
---------------------------
(PUNITIVE DAMAGE CLAIM)
-----------------------
13.1 The Class 5 Punitive Damage Claim is a Disputed Claim which
will be treated as hereafter provided in this Section 13.1 and this Article
XIII:
(a) On the Effective Date, and annually thereafter on each
anniversary of the Effective Date, the Reorganized Debtor will pay cash into the
Impoundment Trust, or will deposit property in lieu of cash as provided in
Section 13.2 hereof, which will be sufficient to amortize and to pay in full the
Punitive Damage Claim, including any interest thereon which the Reorganized
Debtor is required to pay, in equal annual installments by the tenth (10th)
anniversary of the Effective Date. Subject to the above-stated amortization
provisions, the entire unpaid balance of the Punitive Damage Claim, including
any unpaid interest, will be due and payable on the tenth (10th) anniversary of
the Effective Date;
(b) From and after the Effective Date, and until the
allowance or disallowance wholly or in part of the Punitive Damage Claim, that
Claim will bear interest at a market rate of interest, which will be paid from
the payments made on account of the Punitive Damage Claim and which will reduce
the principal amount of the Punitive Damage Claim if and to the extent that it
becomes an Allowed Claim in a lesser amount. If there is any dispute between
the Debtor and the Creditors holding the Punitive Damage Claim regarding the
appropriate market interest rate, that dispute will be resolved and adjudicated
by the Bankruptcy Court at, or in conjunction with, the Confirmation Hearing.
As an appropriate market interest rate, the Debtor proposes eight percent (8%)
per year;
<PAGE> 46
(c) The payments of the Punitive Damage Claim by deposits
into the Impoundment Trust for the accounts of the Creditors holding the
Punitive Damage Claim (including all interest earned thereon) will be disbursed
pro rata to the creditors holding the Punitive Damage Claim if and when it
- --------
becomes an Allowed Claim. The Impoundment Trust will terminate at that time;
and all subsequent payments (if any) will be made directly to the Creditors
then holding the Allowed Punitive Damage Claim; and
(d) If and to the extent that the Punitive Damage Claim is
disallowed in whole or in part, the trustee of the Impoundment Trust will remit
to the Reorganized Debtor any cash, or property in lieu of cash, in excess of
the amount then required to be deposited in the Impoundment Trust in order to
amortize the Punitive Damage Claim as provided in this Article XIII.
13.2 Unless and until the Punitive Damage Claim is an Allowed Claim,
the Reorganized Debtor may, in the exercise of his sole and absolute discretion,
deposit into the Impoundment Trust property in lieu of cash comprised of shares
of AMERCO common stock then owned by the Reorganized Debtor. In order to credit
the value of that AMERCO common stock against the Reorganized Debtor's
obligation to amortize the Punitive Damage Claim, the AMERCO common stock
deposited into the Impoundment Trust will be deemed to have the value
established by the market price of that stock on the date of the deposit.
If the Reorganized Debtor deposits AMERCO common stock in lieu of cash:
(a) The trustee of the Impoundment Trust will sequester and
hold such property until the allowance or disallowance of the Punitive Damage
Claim and, for a period of ninety (90) days after the date on which the Punitive
Damage Claim becomes an Allowed Claim, the trustee will not sell, liquidate, or
otherwise dispose of such property;
<PAGE> 47
(b) Until the expiration of ninety (90) days after the date
on which the Punitive Damage Claim becomes an Allowed Claim, the Reorganized
Debtor will have and retain the right to sell, liquidate, or otherwise dispose
of such property and pay into the Impoundment Trust cash equal to the value of
such property; and
(c) Any dividend or other distribution payable with respect
to the stock held in the Impoundment Trust will be retained in the Impoundment
Trust, and will be deemed to be paid on account of the Punitive Damage Claim and
will reduce the amount of the Punitive Damage Claim if and to the extent it
becomes an Allowed Claim.
13.3 The likely source of the payments of the Punitive Damage Claim
will be the income and property of the Reorganized Debtor.
13.4 The Punitive Damage Claim which comprises the Class 5 Claim is
impaired pursuant to the Plan.
- -------
ARTICLE XIV
-----------
TREATMENT OF CLASS 6 CLAIMS
---------------------------
(SECURITIES LITIGATION CLAIMS)
------------------------------
14.1 All Securities Litigation Claims, if, when, and to the extent
that they become Allowed Claims, will be paid fully and in cash pursuant to this
Article XIV. All Securities Litigation Claims are Disputed Claims and are
subject to subordination pursuant to Bankruptcy Code (SECTION)510(b), 11 U.S.C.
(SECTION)510(b), and will be subordinated to all other Claims for purposes of
distributions under the Plan.
14.2 Unless and until the Securities Litigation Claims become
Allowed Claims, no distribution of any kind will be made on account of the
Securities Litigation Claims. If, when, and to the extent that the Securities
<PAGE> 48
Litigation Claims become Allowed Claims, they will be treated and paid as
follows:
(a) On the first anniversary of the Effective Date which
occurs after the date on which the Securities Litigation Claims become Allowed
Claims, and annually thereafter, the Debtor will pay cash into the Distribution
Account in an amount sufficient to amortize and to pay in full the Securities
Litigation Claims which are Allowed Claims, including any accrued interest
thereon, in equal annual installments by the tenth (10th) anniversary of the
Effective Date; and
(b) Subject to the above-stated amortization provisions, the
entire unpaid balance of all Securities Litigation Claims (if any) which become
Allowed Claims, including any unpaid interest, will be due and payable on the
tenth (10th) anniversary of the Effective Date.
14.3 Unless the Bankruptcy Court orders the payment of interest from
any earlier date, each Securities Litigation Claim which becomes an Allowed
Claim will bear interest at a market rate of interest from and after the later
of: (i) the Effective Date; or (ii) the date on which the Claim becomes an
Allowed Claim. If there is any dispute between the Debtor and the Creditors
holding the Securities Litigation Claim, regarding the appropriate interest
accrual date or the appropriate market interest rate, that dispute will be
resolved and adjudicated by the Bankruptcy Court at, or in conjunction with,
the Confirmation Hearing. As an appropriate market interest rate, the Debtor
proposes eight percent (8%) per year.
14.4 To the extent that any Allowed Securities Litigation Claim is
not satisfied by or through any rights to contribution, reimbursement, or
payment by any other individual or entity (all of which the Debtor and the
<PAGE> 49
Reorganized Debtor expressly reserve), the likely source of the payments of any
Allowed Securities Litigation Claim will be the post-petition income and
property of the Reorganized Debtor.
14.5 If any settlement is made of the Securities Litigation Claims,
that settlement will be deemed incorporated in this Article XIV and will
supersede any contrary or inconsistent provisions of this Article.
14.6 The Securities Litigation Claims which comprise the Class 6
Claims are impaired pursuant to the Plan.
--------
ARTICLE XV
----------
TREATMENT OF CLASS 7 CLAIMS
---------------------------
(SHARE CASE JUDGMENT CODEBTOR CLAIMS)
-------------------------------------
15.1 In light of the treatment of the Share Case Claims provided in
the Plan, the Debtor does not believe that there are (or will be) any Share Case
Judgment Codebtor Claims which are (or will become) Allowed Claims against the
Debtor. Accordingly, unless and until any Share Case Judgment Codebtor Claims
become Allowed Claims, any such Claims (if any) will be deemed Disputed Claims,
and no distributions of any kind will be made on account of any Share Case
Judgment Codebtor Claims.
15.2 If, when, and to the extent that the Share Case Judgment
Codebtor Claims become Allowed Claims, they will be treated and paid as follows:
(a) On the first anniversary of the Effective Date which
occurs after the date on which the Share Case Judgment Codebtor Claims become
Allowed Claims, and annually thereafter, the Debtor will pay cash into the
Distribution Account in an amount sufficient to amortize and to pay in full the
Share Case Judgment Codebtor Claims which are Allowed Claims, including any
<PAGE> 50
accrued interest thereon, in equal annual installments by the tenth (10th)
anniversary of the Effective Date; and
(b) Subject to the above-stated amortization provisions, the
entire unpaid balance of all Share Case Judgment Codebtor Claims (if any) which
become Allowed Claims, including any unpaid interest, will be due and payable on
the tenth (10th) anniversary of the Effective Date.
15.3 Unless the Bankruptcy Court orders the payment of interest from
any earlier date, each Share Case Judgment Codebtor Claim which becomes an
Allowed Claim will bear interest at a market rate of interest from and after the
later of: (i) the Effective Date; or (ii) the date on which the Claim becomes
an Allowed Claim. If there is any dispute between the Debtor and the Creditors
holding the Share Case Judgment Codebtor Claims regarding the appropriate
interest accrual date or the appropriate market interest rate, that dispute will
be resolved and adjudicated by the Bankruptcy Court at, or in conjunction with,
the Confirmation Hearing. As an appropriate market interest rate, the Debtor
proposes eight percent (8%) per year.
15.4 To the extent that any Allowed Share Case Judgment Codebtor
Claim is not satisfied by or through any rights to contribution, reimbursement,
or payment by any other individual or entity (all of which the Debtor and the
Reorganized Debtor expressly reserve), the likely source of the payments of any
Allowed Share Case Judgment Codebtor Claim will be the post-petition income and
property of the Reorganized Debtor.
15.5 The Share Case Judgment Codebtor Claims which comprise the
Class 7 Claims are impaired pursuant to the Plan.
--------
<PAGE> 51
ARTICLE XVI
-----------
TREATMENT OF CLASS 8 DEBTOR'S EQUITY INTEREST
---------------------------------------------
16.1 Subject to the provisions of the Plan providing for payment in
full of the Creditors holding the Allowed Claims in Classes 1 through 7, the
Debtor will retain his equity interest, which will revest in the Reorganized
Debtor on the Effective Date. In order to retain the equity interest, the
Debtor and the Reorganized Debtor have committed to fund the Plan with property
of the Debtor as well as post-petition income of the Debtor and the Reorganized
Debtor in order to ensure that Creditors will be paid in full as provided in
the Plan.
16.2 The Class 8 Debtor's equity interest is unimpaired pursuant to
----------
the Plan.
ARTICLE XVII
------------
MEANS FOR EXECUTION OF THE PLAN
-------------------------------
The means for execution of the Plan are and will be as follows:
17.1 The Plan will be funded: (a) by AMERCO with respect to the
Share Case Claims; and (b) with respect to the other Claims, by the post-
petition income and other property of the Debtor and the Reorganized Debtor
which will be available to implement the Plan. Identifications throughout
the Plan of likely sources of payments will not limit the Debtor or the
Reorganized Debtor from funding the Plan by using any lawful sources of the
necessary money or other property.
17.2 Subject to: (a) the use of the Impoundment Trust to sequester
and hold payments made with respect to the Punitive Damage Claim (which is a
Disputed Claim); and (b) the rights of the Debtor and the Reorganized Debtor to
scrutinize, to object to, and/or to subordinate any Claims, the Debtor believes
<PAGE> 52
that the Plan is a full payment plan of reorganization for the Creditors whose
Claims are classified and paid in Classes 1 through 7 under the Plan.
17.3 In accordance with Bankruptcy Code (SECTION)1123(b)(3),
11 U.S.C. (SECTION)1123(b)(3), both the Debtor and the Reorganized Debtor will
own and retain, and may enforce, compromise, settle, release, or otherwise
dispose of, any and all claims, defenses, counterclaims, setoffs, and
recoupments belonging to the Debtor or the Estate. Notwithstanding the
above-stated reservation of rights and the powers to exercise those rights, and
when and if requested by AMERCO as part of AMERCO's agreement to fund the
Settlement Trust (and if necessary, the Contingency Fund), the Reorganized Debt
or will transfer and assign to AMERCO, wholly or in part, all rights of
contribution, reimbursement, or subrogation (if any) against other individuals
or entities arising from or related to the Share Case Judgment. Such assigned
rights will or may include, without limitation, all Claims (if any) of the
Debtor and the other Director Defendants against each other which otherwise
would be (or might be) Share Case Judgment Codebtor Claims and all similar
rights and claims against Paul F. Shoen, provided, however, that any rights and
-----------------------
claims against Paul F. Shoen first will be set off and recouped by the Debtor
and the Reorganized Debtor against any Share Case Judgment Codebtor Claim which
that individual may assert.
17.4 Whenever the Plan requires a payment to be made (whether by
payment of cash or transfer of property), such payment will be deemed made and
effective as of the date when the payment is tendered to the Creditor to which
the payment is due (including the trustee of any trust to which the payment is
due). If any Creditor (including any trustee as noted above) refuses a tender,
the payment tendered and refused will be held by the individual or entity making
the tender for the benefit of that Creditor pending final adjudication of the
<PAGE> 53
dispute. However, when and if the dispute is finally adjudicated and the
Creditor receives the payment previously tendered and refused, the Creditor will
be obliged to apply the payment in accordance with the Plan as of the date of
tender; and while a dispute is pending and after adjudication thereof, the
Creditor will not have the right to claim interest or other charges on account
of the tendered payment or to exercise any other right which would be
enforceable by the Creditor if the Debtor failed to make the tendered payment.
ARTICLE XVIII
-------------
TREATMENT OF EXECUTORY CONTRACTS
--------------------------------
18.1 Before the Confirmation Hearing, if the Debtor intends to
assume or to reject any Executory Contracts, the Debtor will file one or more
motions identifying the Executory Contracts which he intends to assume as of the
Confirmation Date and those which he intends to reject as of the Confirmation
Date; and such motions and the Bankruptcy Court's orders thereon will be deemed
incorporated in the Plan.
18.2 All Executory Contracts which are assumed will be vested in the
Reorganized Debtor as of the Confirmation Date.
18.3 Notwithstanding the foregoing, the Debtor has searched his
records and, to the best of his knowledge, information, and belief, the Debtor
is not a party to any Executory Contracts.
ARTICLE XIX
-----------
DISCHARGE
---------
Except as otherwise provided in the Confirmation Order or the Plan,
entry of the Confirmation Order will discharge, as of the Effective Date, any
and all Claims against the Debtor and the Reorganized Debtor, including,
without limitation, any Claim which arose at any time before the entry of the
<PAGE> 54
Confirmation Order and any Claim of a kind described in Bankruptcy Code
(SECTION)502(g), 11 U.S.C. (SECTION)502(g). On and after the Confirmation Date,
and as to every discharged Claim, every Creditor holding such a Claim will be
precluded from asserting against the Debtor, the Reorganized Debtor, and any
assets of the Debtor or the Reorganized Debtor, any such discharged Claim and
any rights, remedies, demands, damages, or liabilities of any kind arising from
or related to any such discharged Claim. Notwithstanding the foregoing
provisions of this Article XIX, the Debtor's discharge from the matters which
are the subject of the Dischargeability Litigation will remain subject to a
condition subsequent (whereby the Debtor's discharge may be revoked wholly or in
part pursuant to such matters) until the Dischargeability Litigation is finally
adjudicated and concluded.
ARTICLE XX
----------
MODIFICATIONS OF THE PLAN
-------------------------
The Plan may be modified by the Debtor or the Reorganized Debtor (as
applicable) from time to time in accordance with, and pursuant to, Bankruptcy
Code (SECTION)1127, 11 U.S.C. (SECTION)1127.
ARTICLE XXI
-----------
RETENTION OF JURISDICTION
-------------------------
Notwithstanding confirmation of the Plan, the Bankruptcy Court will
retain jurisdiction for the following purposes:
21.1 In General. The Bankruptcy Court will retain jurisdiction to
----------
determine the allowance and payment of any Claim(s) upon any objection(s)
thereto (or other appropriate proceedings) by the Debtor, by the Reorganized
Debtor, or by any other party in interest entitled to proceed in that manner.
As part of such retained jurisdiction, the Bankruptcy Court will continue to
<PAGE> 55
determine the allowance of Administrative Claims and any request(s) for
payment(s) thereof, including Administrative Claims for Professional Charges.
21.2 Plan Disputes and Enforcement. The Bankruptcy Court will
-----------------------------
retain jurisdiction to determine any dispute(s) which may arise regarding the
interpretation of any provision(s) of the Plan. The Bankruptcy Court also will
retain jurisdiction to enforce any provisions of the Plan and any and all
documents relating to the Plan.
21.3 Further Orders. The Bankruptcy Court will retain jurisdiction
--------------
to facilitate the performance of the Plan by entering, consistent with the
provisions of the Plan, any further necessary or appropriate order(s) regarding
enforcement of the Plan and any provision(s) thereof. In addition, the
Bankruptcy Court will retain jurisdiction to facilitate or implement the
discharge of any Claim, or any portion thereof, pursuant to the Plan.
21.4 Other Claims. The Bankruptcy Court will retain jurisdiction
------------
to adjudicate any cause(s) of action or other proceeding(s) presently pending or
otherwise referenced here or elsewhere in the Plan, including, but not limited
to, the adjudication of any and all "core proceedings" under 28 U.S.C.
(SECTION)157(b) which may be pertinent to the Reorganization Case, and which
the Debtor or the Reorganized Debtor may deem appropriate to initiate and
prosecute before the Court in aid of the reorganization of the Debtor. This
provision will not restrict the rights of the Debtor or the Reorganized Debtor
to proceed in any other court of competent jurisdiction; but it will not be
construed to require or suggest that the Debtor or the Reorganized Debtor
should proceed elsewhere.
21.5 Final Decree. The Bankruptcy Court will retain jurisdiction
------------
to enter an appropriate final decree in the Reorganization Case.
<PAGE> 56
21.6 Appeals. If there is any appeal of the Confirmation Order or
-------
any other kind of review or challenge to the Confirmation Order, and provided
that no stay of the effectiveness of the Confirmation Order has been entered,
the Bankruptcy Court will retain jurisdiction to implement and enforce the
Confirmation Order and the Plan according to their terms, including, but not
limited to, jurisdiction to enter such orders regarding the Plan or the
performance thereof as may be necessary to effectuate the reorganization of the
Debtor.
21.7 Executory Contracts. The Bankruptcy Court will retain
-------------------
jurisdiction to determine any and all motions regarding assumption or rejection
of Executory Contracts and any and all Claims arising therefrom.
21.8 Committees. The Unsecured Committee will be deemed dissolved
----------
when the Effective Date occurs.
ARTICLE XXII
------------
GENERAL PROVISIONS
------------------
22.1 Extension of Payment Dates. If any payment date falls due on
--------------------------
any day which is not a Business Day, then such due date will be extended to the
next Business Day.
22.2 Confirmation by Non-Acceptance Method. The Debtor hereby
-------------------------------------
requests, if necessary, confirmation of the Plan pursuant to Bankruptcy Code
(SECTION)1129(b), 11 U.S.C. (SECTION)1129(b), with respect to any impaired
Class of Claims which does not vote to accept the Plan.
22.3 Vesting. As of the Effective Date, the Reorganized Debtor will
-------
be vested with all property of the Estate free and clear of all Claims, liens,
security interests, assignments, encumbrances, charges, and other interests of
Creditors (except those Creditors whose Claims have been modified and
<PAGE> 57
restructured and remain outstanding after the Effective Date as provided in the
Plan); and the Reorganized Debtor will be free of any restrictions imposed by
the Bankruptcy Code and may act in all respects as if there were no pending
case under any chapter or provision of the Bankruptcy Code.
22.4 Captions. Section captions used in the Plan are for
--------
convenience only, and will not affect the construction of the Plan.
22.5 Successors and Assigns. The rights and obligations of any
----------------------
Creditor referred to in the Plan will be binding upon, and will inure to the
benefit of, the successors, assigns, heirs, devisees, executors, and personal
representatives of such Creditor. Likewise, the Plan will be binding upon, and
will inure to the benefit of, the Reorganized Debtor and his successors,
assigns, heirs, devisees, executors, and personal representatives.
. . .
. . .
. . .
<PAGE> 58
22.6 Disclosure Statement. All Creditors and all other interested
--------------------
parties (if any) are referred to the Disclosure Statement, which will accompany
the Plan in conjunction with any solicitation by the Debtor of acceptances of
the Plan.
DATED: April 25, 1995
AMENDED AND
RESTATED:July 28, 1995
Phoenix, Arizona
/S/ Edward J. Shoen
--------------------------------------------
EDWARD J. SHOEN,
Debtor and Debtor-In-Possession
PREPARED AND SUBMITTED BY:
STREICH LANG
A Professional Association
Renaissance One
Two North Central Avenue
Phoenix, Arizona 85004-2391
By /S/ John J. Dawson
-------------------------
John J. Dawson (Az Bar No. 002786)
Susan G. Boswell, Esq. (Az Bar No. 004791)
Ronald E. Reinsel, Esq. (Az Bar No. 011059)
Attorneys for EDWARD J. SHOEN,
Debtor and Debtor-In-Possession
<PAGE>
EXHIBIT "A"
-----------
SUMMARY OF PLAN PROVISIONS REGARDING THE
----------------------------------------
CLASS 3A, 3B, 3C, 3D, 3E, 3F, AND 3G CLAIMS
-------------------------------------------
A. OVERVIEW OF PLAN TREATMENT OF CLASS 3A, 3B, 3C, 3D, 3E, 3F, and 3G
------------------------------------------------------------------
CLAIMS.
------
The Class 3A, 3B, 3C, 3D, 3E, 3F, and 3G Claims consist of the
Claims held by the Shareholder Plaintiffs as a result of the Share Case
Judgment. The Director Defendants, including the Debtor, were defendants in
the Arizona Litigation which resulted in the Share Case Judgment. The Share
Case Judgment provides for, among other things, a judicially ordered transfer
of the Shareholder Plaintiffs' AMERCO common stock. In this regard, the Share
Case Judgment requires the Director Defendants, jointly and severally, to pay
the monetary obligations of the Share Case Judgment in the total amount of
$461,838,000, plus accrued interest and taxable costs, as apportioned to each
----
of the Shareholder Plaintiffs according to the judgment. The Share Case
Judgment further requires each of the Shareholder Plaintiffs to relinquish any
interest in the AMERCO common stock, and directs the Shareholder Plaintiffs to
transfer their AMERCO common stock to the Director Defendants or their
designees.<F1> The Director Defendants' designee is AMERCO (or an entity
designated in writing by AMERCO).
The Share Case Judgment Claims are Disputed Claims. The Debtor has,
among other remedies, unexpired rights to appeal the Share Case Judgment.
The Director Defendants hold indemnification claims against AMERCO;
and the Debtor has preserved and scheduled those indemnification claims in his
Reorganization Case. At the same time, the Debtor and the other Director
Defendants have not attempted to make demand upon and prosecute the
indemnification claims because: (i) they believe that the enforcement of such
- ------------------------
<F1>
The Debtor is informed and believes that the AMERCO common stock is
owned by the Shareholder Plaintiffs which are identified in the Plan as the
Stock Exchange Distributees. These are not all of the Shareholder Plaintiffs.
In most instances (with the exception if Katrina (Shoen) Carlson who is also a
Stock Distributee as an individual), the individual Shareholder Plaintiffs own
the stock of the respective corporate Shareholder Plaintiffs; and the corporate
Shareholder Plaintiffs own the AMERCO common stock described in the Share Case
Judgment.
<PAGE>
indemnification claims probably would require protracted and expensive
litigation, including litigation involving other AMERCO stockholders who may try
to prevent AMERCO from performing its indemnification agreements with the
Director Defendants; (ii) they believe that the eventual outcome of any such
litigation is uncertain; (iii) they believe that the ultimate collectability of
any indemnification judgment, if and when obtained, is uncertain;<F2> and (iv)
settlement of the Share Case Judgment as provided in the Plan effectively moots
the need for the Debtor and the other Director Defendants to make demand upon
and prosecute indemnification claims against AMERCO.
Pursuant to AMERCO's corporate by-laws, AMERCO has certain rights of
first refusal with respect to sales of the Stock Exchange Distributees' common
stock in AMERCO. Moreover, the Director Defendants' rights to acquire the
Shareholder Plaintiffs' AMERCO common stock pursuant to the Share Case Judgment
may present a corporate opportunity which AMERCO is entitled to exercise. As
shown by the draft Funding Resolution attached hereto as Schedule "1" and by
this reference incorporated herein, AMERCO is agreeing with the Debtor and the
other Director Defendants to settle the Share Case Judgment pursuant to the
terms of the Plan, and to acquire the AMERCO common stock owned by the Stock
Exchange Distributees.
Therefore, in the context of the facts and circumstances described
above, and with the cooperation with AMERCO,<F3> the Debtor's Plan proposes to
fund and settle the Shareholder Plaintiffs' Disputed Claims under the Share
Case Judgment as hereafter described:
1. PLAN PROVISIONS FOR FULL SETTLEMENT OF THE SHARE
------------------------------------------------
CASE CLAIMS.
-----------
- ------------------------
<F2>
The Debtor also is informed and believes that, if AMERCO tries to
pay the Share Case Claims in cash pursuant to indemnification claims of the
Debtor and the other Director Defendants, any attempt to make such payment will
violate loan covenants affecting approximately $800,000,000 of current
borrowings of AMERCO. Also, such substantial cash payments on account of
indemnification claims may affect AMERCO's operations adversely. Conversely,
as hereafter explained, the Debtor does not believe, based on his discussions
with representatives of AMERCO, that funding the Plan's treatment and settlement
ofthe Share Case Claims will have any adverse effect upon AMERCO.
<F3>
In this context (i.e., funding of the Plan), the defined term
----
"AMERCO" also includes involved subsidiaries and affiliates of AMERCO.
<PAGE>
In full settlement and satisfaction of the Shareholder Plaintiffs'
Disputed Claims under the Share Case Judgment and on the Effective Date, the
Debtor and the other Director Defendants will cause to be transferred to the
Shareholder Plaintiffs, pursuant to the Stock Exchange Distribution and the
Settlement Trust, property having a stipulated or adjudicated value of the full
amount which the Shareholder Plaintiffs can recover from the Estate of the
Debtor and the estates of the other Director Defendants on account of the
Shareholder Plaintiffs' Disputed Claims for the Share Case Judgment Amount (if
and when those Disputed Claims are allowed). In this regard, and because the
Debtor believes that his Estate and the estates of the other Director Defendants
are insolvent, the Plan proposes that the stipulated or adjudicated value of the
property transferred will be at least equal to $461,838,000, plus interest
----
thereon at the rate of ten percent (10%) per year from February 14, 1995 to and
including the Petition Date, plus any taxable costs awarded in the Share Case
----
Litigation (the "Shareholder Plaintiffs' Effective Date Payoff").
Because of the insolvency of the Debtor's Estate and the estates of
the other Director Defendants, the Shareholder Plaintiffs' Effective Date Payoff
does not contemplate payment of interest under the Share Case Judgment from and
after the Petition Date. Nevertheless, if the Bankruptcy Court requires that
interest under the Share Case Judgment must be paid from and after the Petition
Date, the Debtor and the other Director Defendants, with the cooperation of
AMERCO, will arrange to have AMERCO establish a fund (defined in the Plan as the
"Contingency Fund") which will ensure that any such interest payment can be made
when due on or after the Effective Date.
The Contingency Fund will be funded by AMERCO common stock, which
will be apportioned among the Shareholder Plaintiffs in the same proportions as
their ownership of the AMERCO common stock described in paragraph 1 of the Share
Case Judgment. The amount of the AMERCO common stock funding the Contingency
Fund will be at least equal in value to the amount of interest under the Share
Case Judgment from and after the Petition Date. If the Bankruptcy Court
requires such interest to be paid on the Effective Date, then the Shareholder
Plaintiffs will be paid (at AMERCO's option) either pro rata distributions of
--------
the AMERCO common stock funding the Contingency Fund or pro rata cash payments
--------
of such
<PAGE>
interest from AMERCO's purchase or sale of such AMERCO common stock. The pro
---
rata stock distributions or cash payments will be made according to the
- ----
proportions established in paragraph 1 of the Share Case Judgment. Otherwise,
the Contingency Fund will be maintained by AMERCO in AMERCO common stock and/or
cash until the interest payment issue has been finally adjudicated and concluded
in all litigation where it is pending, including the Shareholder Plaintiffs'
Dischargeability Litigation against the Debtor and the other Director
Defendants.
The Shareholder Plaintiffs' Effective Date Payoff (exclusive of any
amounts reserved as the Contingency Fund) will be paid as follows:
(a) $124,131,175 (i.e., the Series "B" preferred stock
----
identified below) will be paid as the Stock Exchange Distribution to the
Shareholder Plaintiffs which are the Stock Exchange Distributees; and
(b) The rest of the Shareholder Plaintiffs' Effective Date
Payoff, which is approximately $338,000,000, will be paid pursuant to the
Settlement Trust (of which the individual Shareholder Plaintiffs are the
beneficiaries) and the Settlement Trust Property. Such payment will be in
settlement and satisfaction of the damage claims comprising the rest of the
Share Case Claims.
If and when the Contingency Fund is ever distributed to the
Shareholder Plaintiffs, any such payment from the Contingency Fund also will be
in settlement and satisfaction of the damage claims under the Share Case
Judgment.
In order to make the Shareholder Plaintiffs' Effective Date Payoff,
on the Effective Date, AMERCO will transfer the following property:
(i) Series "B" cumulative, non-voting preferred stock of AMERCO in
the amount of $124,131,175, which will be transferred to the Stock Exchange
Distributees as the Stock Exchange Distribution; and
(ii) The property which will be transferred into the Settlement
Trust, consisting of: (A) Series "D" cumulative, non-voting preferred stock of
AMERCO; (B) a Class C Pass-Through Certificate in Storage Trust 1993-1
Commercial Asset Trust Pass-Through Certificate, a copy of which is attached
hereto as Schedule "2" and by this reference incorporated herein; (C) certain
first mortgage notes and the rights to receive payments thereon, secured by
<PAGE>
first priority liens on the properties securing those mortgage loans, as more
particularly set forth in Schedule "3" attached hereto and by this reference
incorporated herein; and (D) certain parcels of real property, more particularly
described in Schedule "4" attached hereto and by this reference incorporated
herein. The Settlement Trust Property will have a stipulated or adjudicated
value equal to the balance of the Share Case Judgment after deduction of the
Stock Exchange Distribution (which balance is then approximately $338,000,000).
The beneficiaries of the Settlement Trust will be the individual Shareholder
Plaintiffs. Adjustments may be made to the Settlement Trust Property as
provided in the Plan.
In the event of any dispute concerning the value or composition of
the Stock Exchange Distribution or the Settlement Trust Property or any other
related matter, the dispute will be resolved by the Bankruptcy Court at, or in
conjunction with, the Confirmation Hearing; and the Court will have and retain
jurisdiction to address any such matters after the Confirmation Date if
necessary or appropriate to facilitate the consummation and performance of the
Plan.
2. THE SHAREHOLDER PLAINTIFFS' OPTION TO ACCEPT CASH
-------------------------------------------------
DISCOUNTS PURSUANT TO THE ACCEPTING CREDITOR
-------------------------------------------------
SETTLEMENT.
----------
Alternatively, and in lieu of their respective proportionate shares
of the property comprising the Shareholder Plaintiffs' Effective Date Payoff and
any claims to the Contingency Fund, each of the Shareholder Plaintiffs may elect
to participate in the Accepting Creditor Settlement and receive discounted cash
payments on the Effective Date in full settlement and satisfaction of their
respective Disputed Claims under the Share Case Judgment. The total discounted
cash payments available to the Shareholder Plaintiffs under the Accepting
Creditor Settlement will be $350,000,000; and each of the Shareholder Plaintiffs
choosing to participate in the Accepting Creditor Settlement will receive shares
of the $350,000,000 in the same proportions as the otherwise applicable shares
of the Shareholder Plaintiffs' Effective Date Payoff and the Contingency Fund.
If any of the Shareholder Plaintiffs accepts the discounted cash payoff on the
Effective Date, the Shareholder Plaintiffs' Effective Date Payoff and the
Contingency Fund will be reduced by what otherwise would be the proportionate
share of each settling Shareholder Plaintiff in the Shareholder Plaintiffs'
<PAGE>
Effective Date Payoff and the Contingency Fund. Acceptance of and participation
in the Accepting Creditor Settlement by each of the Shareholder Plaintiffs
requires that both the Shareholder Plaintiff who is an individual and the
Shareholder Plaintiff which is that individual's closely held corporation must
accept the Accepting Creditor Settlement and must vote to accept the Plan.
[Example: For Leonard S. Shoen and/or LSS, Inc. to accept and participate in
-------
the Accepting Creditor Settlement, both Leonard S. Shoen, individually, and
LSS, Inc. must accept the Accepting Creditor Settlement and must vote to accept
the Plan.]
3. AMERCO AS THE FUNDING SOURCE/EFFECT ON AMERCO.
---------------------------------------------
AMERCO will be the funding source of the property comprising the
Shareholder Plaintiffs' Effective Date Payoff and the alternatively available
discounted cash payments under the Accepting Creditor Settlement. AMERCO also
will be the funding source of the Contingency Fund. Based on his discussions
with representatives of AMERCO, the Debtor does not believe that funding the
Plan's treatment and settlement of the Share Case Claims under either
alternative described above will have any adverse effect on AMERCO. If the
respective Shareholder Plaintiffs accept the Plan and the Accepting Creditor
Settlement, AMERCO should be able to raise the cash necessary to fund the
discounted cash settlements from debt and equity with the cooperation of its
lenders. Conversely, if the Accepting Creditor Settlement is not accepted,
AMERCO will be able to fund both the Stock Exchange Distribution and the
Settlement Trust; and after the Effective Date, and as supported by the draft
term sheets which are attached Schedule "6" and Schedule "7", AMERCO will be
able to perform the terms of the Series "B" preferred stock (issued as the
Stock Exchange Distribution) and the Series "D" preferred stock (issued as part
of the funding of the Settlement Trust). All other AMERCO assets funding the
Settlement Trust and the Contingency Fund (if necessary) are owned by AMERCO or
are AMERCO common stock.
4. TRANSFER OF THE AMERCO COMMON STOCK.
-----------------------------------
As part of the closing which will occur to implement the Plan on the
Effective Date, the Shareholder Plaintiffs' AMERCO common stock will be
transferred to AMERCO (or its designee) in exchange for the Stock Exchange
Distribution (or a proportionate cash payment from the Accepting Creditor
Settlement Fund). If the Shareholder Plaintiffs do not cooperate in the
<PAGE>
closing, their common stock will be transferred on AMERCO's books and records
by an appropriate officer of AMERCO.
5. TAX CONSIDERATIONS.
------------------
Although determinations of tax attributes and consequences will not
be a condition of the Plan, AMERCO is attempting to structure the funding and
settlement of the Share Case Judgment in a manner which is intended to be
mutually beneficial to AMERCO, the Shareholder Plaintiffs, and the Debtor and
the other Director Defendants. In this regard, AMERCO is requiring the
structure contemplated in the Plan as part of its agreement to fund the Plan.
Accordingly, acquisition of the Shareholder Plaintiffs' AMERCO common stock
pursuant to the Stock Exchange Distribution is intended by AMERCO to be a tax
free exchange of stock; and payment of the rest of the Share Case Judgment
Amount pursuant to the Settlement Trust and the Contingency Fund (if applicable)
is intended by AMERCO to be a settlement payment(s). The Debtor's Plan is not
conditioned upon tax attributes, tax avoidance, or any determination of any tax
consequences; and all interested parties are referred to their respective tax
advisors. The Debtor and the other Director Defendants will agree with AMERCO
to structure the settlement of the Share Case Judgment and the transfer of the
Shareholder Plaintiffs' AMERCO common stock as provided in the Plan.
B. FUNDING OF THE STOCK EXCHANGE DISTRIBUTION.
------------------------------------------
In order to fund the Stock Exchange Distribution, AMERCO will issue
Series "B" cumulative, non-voting preferred stock containing the terms described
in the draft term sheet which is Schedule "6" attached hereto and incorporated
herein by this reference (the "Series B Preferred Stock"). The prospectus
pertaining to the Series B Preferred Stock is being prepared and a draft will be
available for review at the offices of Streich Lang, P.A., at Renaissance One,
Two North Central Avenue, Phoenix, Arizona 85004-2391. In addition, a copy of
the draft prospectus will be provided to counsel for the Shareholder Plaintiffs.
C. ORGANIZATION OF THE SETTLEMENT TRUST.
------------------------------------
A proposed draft of the Settlement Trust Agreement has been prepared
by the Debtor's counsel; and a copy of the draft is attached hereto as Schedule
"5" and by this reference is incorporated herein. Any disputes regarding the
terms of the Settlement Trust which are not otherwise resolved by agreement of
<PAGE>
the parties will be resolved by the Bankruptcy Court at, or in conjunction with,
the Confirmation Hearing.
The Plan provides that the trustee of the Settlement Trust will be
proposed initially by the Debtor or the Reorganized Debtor, and will be approved
by the Bankruptcy Court. The trustee: (i) will be independent;<F4> (ii) will
be an institutional or corporate trustee in good standing, licensed, and bonded
under the laws of the state in which the trustee has its principal place of
business; and (iii) will be authorized to act as a trustee of trusts of a kind
similar to the Settlement Trust. The Debtor and the other Director Defendants
are seeking quotations from institutional or corporate trustees; and when those
quotations are received, they will be provided to counsel for the Shareholder
Plaintiffs. However, when the Effective Date occurs and the Settlement Trust
has been funded, the costs of administration of the Settlement Trust will be
governed essentially by what the beneficiaries of the Settlement Trust want.
Indeed, those beneficiaries are entitled to terminate the Settlement Trust or
to have the Settlement Trust Property distributed or liquidated after the
Settlement Trust has been funded.
Each Settlement Trust beneficiary's fractional, undivided beneficial
interest in the Settlement Trust will be determined by dividing the number of
shares of the common stock of AMERCO owned by that particular Shareholder
Plaintiff (including the corporate Stock Exchange Distributee which is owned by
each individual Shareholder Plaintiff) by the total number of shares of the
common stock of AMERCO owned by all of the Shareholder Plaintiffs who have not
elected the Accepting Creditor Settlement. Each Settlement Trust beneficiary
will be issued a trust certificate for the proportionate interest of each such
Settlement Trust beneficiary as determined pursuant to the above formula.
The trust certificates issued to the Settlement Trust beneficiaries
will be transferable, subject to any state and federal securities laws (if any)
which are applicable. In addition, a Settlement Trust beneficiary, or his/her
successor-in-interest, will have the right to direct the Settlement Trust
trustee
- ------------------------
<F4>
It is intended that the trustee of the Settlement Trust will not
have any relationship to or affiliation with the Debtor, the other Director
Defendants, of AMERCO.
<PAGE>
to sell or otherwise liquidate sufficient Settlement Trust Property to redeem
the Settlement Trust beneficiary's proportionate interest in the Settlement
Trust, as more fully stated in the draft which is Schedule "5" attached hereto.
D. FUNDING THE SETTLEMENT TRUST.
----------------------------
On the Effective Date, AMERCO will transfer the Settlement Trust
Property into the Settlement Trust.
1. INFORMATION REGARDING THE SETTLEMENT TRUST PREFERRED STOCK.
----------------------------------------------------------
AMERCO will issue Series "D" cumulative, non-voting preferred
stock containing the terms described in the draft term sheet which is Schedule
"7" attached hereto and incorporated herein by this reference (the "Series D
Preferred Stock"). The prospectus pertaining to the Series D Preferred Stock is
being prepared and a draft will be available for review at the offices of
Streich Lang, P.A., at Renaissance One, Two North Central Avenue, Phoenix,
Arizona 85004-2391. In addition, a copy of the draft prospectus will be
provided to counsel for the Shareholder Plaintiffs.
2. INFORMATION REGARDING THE CLASS C CERTIFICATE.
---------------------------------------------
AMERCO holds a Class C Pass-Through Certificate of the U-Haul Self-
Storage Corporation, Storage Trust 1993-1 Commercial Mortgage Asset Pass-Through
Certificate (the "1993 REMIC Certificate"), with a face value of $11,518,452.00,
plus accrued interest as of the Effective Date. As of June 30, 1995, the value
- ----
of the 1993 REMIC Certificate, including accrued interest, is $12,525,741.18.
The 1993 REMIC Certificate results from a 1993 securitization of a pool of
sixty-one (61) fixed and adjustable rate commercial mortgage loans which are
secured by mortgages or deeds of trust on sixty (60) self-storage properties.
The 1993 REMIC Certificate represents a beneficial interest in the Class C
Interest, which is a "regular interest" in a "real estate mortgage investment
conduit," as those terms are defined, respectively, in Sections 860G and 860D
of the Internal Revenue Code of 1986, as amended.
The 1993 REMIC Certificate bears interest at a rate of 9.15% per
year. Pursuant to an agreement which governs the operation of the trust which
holds the pool of mortgage loans, this interest is paid to the holder of the
1993 REMIC Certificate monthly and principal payments are made on a quarterly
basis.
<PAGE>
Copies of the documents relating to the 1993 REMIC Certificate are
available in the offices of Streich Lang, P.A., at Renaissance One, Two North
Central Avenue, Phoenix, Arizona 85004-2391. Any person wanting more
information may contact Ronald E. Reinsel, Esq. of Streich Lang at
(602) 229-5200.
3. INFORMATION REGARDING THE MORTGAGE LOANS.
----------------------------------------
(A) OVERVIEW OF THE MORTGAGE LOANS.
------------------------------
AMERCO and one or more of its subsidiaries have acquired (or will
acquire) ownership of a number of first mortgages on income-producing properties
throughout the United States, which consist of existing and operating self-
storage facilities (the "Mortgage Loans"). The Mortgage Loans and the rights to
receive payments thereunder, together with the first lien interests which secure
the Mortgage Loans, in the approximate amounts set forth in attached Schedule
"3," will be transferred into the Settlement Trust pursuant to the Plan. In
addition, the property and rights transferred to the Settlement Trust will
consist of rights under certain insurance policies with respect to the
encumbered properties and the proceeds thereof, all amounts on deposit in any
pooled accounts representing proceeds of the Mortgage Loans for the benefit of
the holder thereof, condemnation proceeds received with respect to any one or
more of the properties, and all proceeds of the foregoing. Except for four (4)
properties (which U-Haul does not manage), the properties will be managed by U-
Haul or a subsidiary of U-Haul pursuant to management agreements between U-Haul
and the owners of the properties. U-Haul will remit to the servicer of the
Mortgage Loans all of the payments and other proceeds of the properties received
by U-Haul or its subsidiary which the servicer is entitled to collect for the
benefit of the holder of the Mortgage Loans.
Each of the Mortgage Loans is marketable, and its market value is
related to the terms of the Mortgage Loan and the cash flow and value of the
properties which are collateral for each of the various Mortgage Loans. The
Mortgage Loans are performing loans which are secured by properties having, in
the aggregate, a loan to value ratio of eighty percent (80%) or less.
<PAGE>
(B) DESCRIPTION OF THE MORTGAGE LOANS.
---------------------------------
(1) GENERAL.
-------
Except for approximately sixteen (16) properties which secure the
same number of Mortgage Loans and which are owned by third parties unrelated to
the Debtor, the other Director Defendants, and AMERCO (collectively, the "Third
Party Owners"), all of the properties are owned by SAC Self Storage Corporation
("SAC") and Two SAC Self Storage Corporation ("Two SAC"). The Third Party
Owners, SAC, and Two SAC are the makers of the first mortgage notes.
There are four different types of Mortgage Loans: (1) the
"Restructured Mortgage Loans"; (2) the "Existing Mortgage Loans"; (3) the "SAC
Mortgage Loan"; and (4) the "Two SAC Mortgage Loan." The Restructured Mortgage
Loans consist of twelve (12) Mortgage Loans with an aggregate principal balance
of $13,180,260 as of April 18, 1995. The Existing Mortgage Loans consist of
four (4) Mortgage Loans with an aggregate principal balance of $2,733,520 as of
April 18, 1995. The SAC Mortgage Loan currently consists of a single
promissory note secured by first lien mortgages as more particularly described
in attached Schedule "3", with a principal balance of $44,883,942 as of
July 1, 1995. The Two SAC Mortgage Loan currently consists of a single
promissory note secured by first lien mortgages as more particularly described
in attached Schedule "3", with a principal balance of $40,349,250 as of
July 1, 1995. Any additional or substitute properties which are acquired by SAC
and/or Two SAC and become collateral for the Mortgage Loans will be subject to
terms and conditions consistent with those described herein. Attached Schedule
"3" currently contains a complete list of the Mortgage Loans.
Each Mortgage Loan is secured by one or more first priority
mortgages, deeds-of-trust, or deeds-to-secure-debt on self-storage facilities
and their related properties (or in two (2) instances, leasehold estates with
respect to the underlying real properties) located throughout the United States
and Canada. With the exception of the properties securing the Existing Mortgage
Loans, all of the properties are operated by subsidiaries of U-Haul pursuant to
various operating agreements.
All of the Restructured Mortgage Loans bear interest at a fixed rate
of 9% per year up to maturity, with interest accruing at a fixed rate of 12% per
<PAGE>
year from and after the stated maturity date. The SAC Mortgage Loan and the Two
SAC Mortgage Loan bear interest at a fixed rate of 8.25% per year up to
maturity, with interest accruing at a fixed rate of 12% per year from and after
the stated maturity date. Interest on the Restructured Mortgage Loans is
calculated on the basis of the actual number of days in each calendar month and
each loan year. Interest on the SAC Mortgage Loan and the Two SAC Mortgage
Loan is calculated on the basis of a 360-day year consisting of twelve 30-day
months. All of the Existing Mortgage Loans bear interest at a fixed rate which
varies from loan to loan. Interest on all of the Existing Mortgage Loans is
calculated on the basis of the actual number of days in each calendar month and
each year.
Each Restructured Mortgage Loan provides for amortization of the
outstanding principal balance through the application of "Excess Cash Flow" from
the gross receipts received with respect to the property securing the
Restructured Mortgage Loan over a specified period of time, with a final balloon
payment due at the stated maturity date of each Restructured Mortgage Loan. The
SAC Mortgage Loan and the Two SAC Mortgage Loan provide for the amortization of
principal based upon an amortization period of twenty (20) years. Any and all
remaining unamortized principal due on the SAC Mortgage Loan and the Two SAC
Mortgage Loan will be due in a balloon payment on the maturity date of
January 1, 2005. All of the Existing Mortgage Loans provide for the
amortization of some principal over a certain period of months and have balloon
payments due at the stated maturity of such Mortgage Loans. At maturity, the
properties will be refinanced or sold in order to pay the balloon payments.
Information regarding the cash flows available from the properties
for debt service, payment history, and environmental studies are available for
review in the offices of Streich Lang, P.A., at Renaissance One, Two North
Central Avenue, Phoenix, Arizona 85004-2391. Any person wanting more
information may contact Ronald E. Reinsel, Esq. of Streich Lang at
(602) 229-5200.
AMERCO or its subsidiaries may acquire additional Mortgage Loans
before the Effective Date. In that event, and subject to the reservation by
AMERCO of the right to add, substitute, or delete properties securing the
Mortgage Loans so long as the loan to value ratio of the properties securing the
Mortgage Loans, in the aggregate, is eighty percent (80%) or less, the
<PAGE>
description of the properties may be subject to reasonable changes (as the Plan
provides). The Debtor and AMERCO will provide all interested parties with
updated information regarding the properties if and when changes occur.
(2) THE APPRAISAL.
-------------
AMERCO retained Robert A. Stanger & Co., Inc., an independent
appraisal firm (the "Appraiser"), to appraise all of the properties.<F5> The
purpose of such appraisal (the "Appraisal") was to estimate the "Market Value"
of the fee simple interest (or, where appropriate, the leasehold interest) in
the properties.
The Appraisal involved a site inspection of all of the appraised
properties. The Appraiser relied upon the sales comparison (or market data)
approach and the income approach in order to deliver an opinion of value of the
properties. The estimated value of the properties determined by the sales
comparison approach was reconciled with the estimated value of the properties
determined by the income approach. The income approach to valuation was given
primary consideration based upon the income producing nature of the properties
and their appeal to investors. The sales comparison approach was given
secondary consideration.
The appraised values of the properties for which appraisals
currently exist are listed in attached Schedule "3". Complete copies of the
Appraisals, including complete discussions of the Appraiser's methodology, are
available in the offices of Streich Lang, P.A., at Renaissance One,
Two North Central Avenue, Phoenix, Arizona, 85004-2391. Any person wanting more
information may contact Ronald E. Reinsel, Esq. of Streich Lang at
(602) 229-5200. The Appraisals are subject to the assumptions and limiting
conditions stated therein.
(3) SUBORDINATE LOANS.
-----------------
Each of the properties which is subject to a Restructured Mortgage
Loan, the SAC Mortgage Loan, or the Two SAC Mortgage Loan secures a "Subordinate
- ------------------------
<F5>
AMERCO also may empoly the Appraser to appraise any properties that
may be acquired and included as security for the Mortgage Loans, and for which
an appraisal has not yet been obtained.
<PAGE>
Loan" as well as the Mortgage Loan.<F6> The Subordinate Loans are secured by a
second priority lien on the related property (or properties in the case of the
SAC and Two SAC Mortgage Loans), and will be payable to the holder of the
Subordinate Loan (the "Junior Mortgagee") from subordinated excess cash flow
available from the property (or properties) after all payments are made which
are required under the Restructured Mortgage Loans, the SAC Mortgage Loan, and
the Two SAC Mortgage Loan.<F7> Properties acquired after the date of this
Disclosure Statement may be subject to Subordinate Loans, which will be junior
and subordinate to the Mortgage Loans in all respects described above.
The existence of the Subordinate Loans does not preclude or
interfere with the rights of the holder (or servicer) of the Mortgage Loans to
enforce remedies in the event of any default(s) under the Mortgage Loans.
Generally, in the event of a payment default under the Mortgage Loans, and
aside from any notice which the holder of the Mortgage Loans is required to
give to the mortgagor, the holder of the Mortgage Loans may enforce default
remedies notwithstanding the Subordinate Loans, so long as: (i) the holder of
the Mortgage Loans notifies the Junior Mortgagee (and, in the case of a
Restructured Mortgage Loan, the holder of any applicable purchase option) of
the payment default; (ii) the payment default continues for twenty-five (25)
days after such notice is given; and (iii) the Junior Mortgagee (or the holder
of the purchase option) fails to cure the payment default.
(4) EXISTING LOAN ESCROW ACCOUNTS.
-----------------------------
It may be necessary for the holder (or servicer) of the Mortgage
Loans to establish and maintain one or more "Existing Loan Escrow Accounts" on
behalf of certain mortgagors of the Existing Mortgage Loans which require tax
and/or insurance escrow accounts. The servicer of the Mortgage Loans can
establish and administer any such escrow accounts.
- ------------------------
<F6>
The Debtor does not believe that there are any Subordinate Loans
encumbering the properties which are subject to the Existing Mortgages.
<F7>
Accordingly, the effect of these provisions is that the payments due
pursuant to the first mortgage notes must be current before any payments are
made on the Suborbinate Loans.
<PAGE>
(5) INSURANCE AND CONDEMNATION
--------------------------
PROCEEDS ESCROW ACCOUNTS.
------------------------
If necessary or appropriate, the holder (or servicer) will establish
an "Insurance and Condemnation Proceeds Escrow Account" on behalf of each
mortgagor under the Restructured Mortgage Loans, the SAC Mortgage Loan, and the
Two SAC Mortgage Loan.
(6) CAPITAL EXPENDITURE
-------------------
ACCOUNTS.
--------
If necessary or appropriate, the holder (or servicer) may establish
a Capital Expenditure Account on behalf of each mortgagor under the Restructured
Mortgage Loans. The Capital Expenditure Account will be available to the U-Haul
Property Manager (as defined below) to fund any capital expenses relating to
each of the properties securing the Restructured Mortgage Loans when such
expenditures are certified as necessary by the U-Haul Property Manager, with
notice thereof given to the holder (or servicer) of the Mortgage Loans.
(7) INSURANCE POLICIES.
------------------
The U-Haul Property Manager will use its best efforts to cause the
mortgagors of the Mortgage Loans to maintain insurance in accordance with the
related mortgage.
(8) DESCRIPTION OF THE
------------------
PROPERTY MANAGERS.
-----------------
The properties securing the Restructured Mortgage Loans, the SAC Mortgage
Loan, and the Two SAC Mortgage Loan will be managed by the U-Haul Property
Manager. The properties securing the Existing Mortgage Loans will be managed by
different entities unrelated to U-Haul, which are either the owners of the
properties securing the Existing Mortgage Loans or agents thereof (the "Existing
Property Managers").
(A) THE U-HAUL
----------
PROPERTY MANAGER.
----------------
U-Haul, including any involved subsidiary thereof (collectively,
"U-Haul"), is a wholly-owned subsidiary of AMERCO and will be the U-Haul
Property Manager. U-Haul entered the management of self-storage facilities in
1973 when it opened its first self-storage facilities. U-Haul's self-storage
business has steadily expanded, having grown to 700 facilities by the end of
fiscal year 1995.
<PAGE>
(B) RESPONSIBILITIES
----------------
OF THE U-HAUL
-------------
PROPERTY MANAGER.
----------------
All of the properties securing the Restructured Mortgage Loans, the
SAC Mortgage Loan, and the Two SAC Mortgage Loan will be managed by the U-Haul
Property Manager pursuant to property management agreements (the "Property
Management Agreements") between the U-Haul Property Manager and the owners of
the properties subject to the Restructured Mortgage Loans, the SAC Mortgage
Loan, and the Two SAC Mortgage Loan. The Property Management Agreements are
generally described below. Copies of the existing Property Management
Agreements are available in the offices of Streich Lang, P.A., at
Renaissance One, Two North Central Avenue, Phoenix, Arizona, 85004-2391. Any
person wanting more information may contact Ronald E. Reinsel, Esq. of
Streich Lang at (602) 229-5200.
The U-Haul Property Manager is authorized to manage the properties
securing the Restructured Mortgage Loans, the SAC Mortgage Loan, and the Two SAC
Mortgage Loan, and to supervise and direct the daily business operations of the
properties, including the hiring and discharge of employees.
Pursuant to the Property Management Agreements, the U-Haul Property
Manager is responsible for compliance with any law, regulation, ordinance, or
order of any government or regulatory authority having jurisdiction over the
properties with respect to the use of the properties or the construction,
maintenance, or operation thereof. The U-Haul Property Manager pays all real
property and personal property taxes, and all assessments levied on the
properties. The U-Haul Property Manager maintains and keeps in force the fire,
comprehensive, liability and other insurance policies in amounts generally
carried with respect to similar facilities.
The U-Haul Property Manager controls the maintenance, repair and
landscaping of the properties and the acquisition of fixtures and supplies for
the properties. The U-Haul Property Manager also supervises and maintains the
operation of the accounting system for each property, and prepares and delivers
financial statements and other required reports. The U-Haul Property Manager
<PAGE>
directs the marketing activities of the employees and is responsible for
purchasing media advertising.
The U-Haul Property Manager is entitled to receive a management fee
quarterly, payable no later than the Business Day immediately preceding the
distribution date following the third month of each quarterly period, in an
amount equal to six percent (6%) of the gross receipts collected from each
property during such quarterly period. The U-Haul Property Manager also
receives reimbursements of operating expenses and taxes during the quarterly
period. The management fee and reimbursements payable to the U-Haul Property
Manager are consistent with fees generally charged by other experienced managers
of properties similar to the properties securing the Mortgage Loans.
The mortgagors of the Restructured Mortgage Loans and the SAC
Mortgage Loan have agreed that they will not terminate the Management Agreement
of the U-Haul Property Manager during its term unless, during the term of the
Management Agreement, net cash flow declines by a predetermined percentage
during an agreed-upon period of time.
(9) THE EXISTING PROPERTY
---------------------
MANAGERS.
--------
The properties securing the Existing Mortgages are managed by
unrelated third parties described above as the Existing Property Managers.
(C) CERTAIN LEGAL ASPECTS OF THE MORTGAGE
-------------------------------------
LOANS.
-----
The following discussion contains summaries of certain legal aspects
of mortgage loans which are general in nature. Because many of the legal
aspects of mortgage loans are governed by applicable state and local laws
(which may vary), the following summaries do not purport to be exhaustive, to
reflect the laws of any particular state or Canadian province (or any applicable
Canadian federal law), to reflect all the laws applicable to any particular
Mortgage Loan, or to encompass the laws of all states or Canadian provinces in
which the properties are situated. The summaries are qualified in their
entirety by reference to the applicable federal, state, and Canadian laws
governing the Mortgage Loans. As to Mortgage Loans, if any, which come into
existence after the date of this Disclosure Statement, the terms thereof and
certain legal aspects thereof will be consistent with the information provided
herein.
<PAGE>
(1) MORTGAGES AND DEEDS OF
----------------------
TRUST GENERALLY.
---------------
The Mortgage Loans are secured by either mortgages, deeds of trust,
or other similar security instruments, depending upon the prevailing practice in
the state or province in which the related mortgaged property is located.
(2) LEASES AND RENTS.
----------------
The Mortgage Loans generally are secured by assignments of leases
and rents which are either incorporated in the mortgages or set forth in
separate assignment documents.
(3) ENFORCEABILITY OF DUE-
----------------------
ON-SALE PROVISIONS.
------------------
Some of the Mortgage Loans contain due-on-sale clauses, which permit
the holder (or servicer) to accelerate the maturity of the loan if the mortgagor
sells, transfers, or conveys the property or its interest in the property.
(4) SECONDARY FINANCING;
--------------------
DUE-ON-ENCUMBRANCE
------------------
PROVISIONS.
----------
Some of the Mortgage Loans permit the holder (or servicer) to
accelerate the maturity of the loan if the mortgagor further encumbers the
property. Such provisions may be unenforceable in certain jurisdictions under
certain circumstances.
(5) CERTAIN LAWS AND
----------------
REGULATIONS.
-----------
The Mortgage Loans are subject to compliance with various federal,
state, local, and Canadian statutes and regulations.
(6) ACCELERATION ON DEFAULT.
-----------------------
The Mortgage Loans include debt acceleration clauses, which permit
the holder (or servicer) to accelerate the debt upon a monetary default or other
default of the mortgagor (generally after notice to the mortgagor and any other
affected parties).
(7) ENVIRONMENTAL RISKS.
-------------------
The Debtor and AMERCO make no representations or warranties
regarding compliance by the owners of the properties with applicable
environmental laws. AMERCO has obtained "Phase I" environmental assessments for
all (or substantially all) of the properties and "Phase II" environmental
<PAGE>
reports for some of the properties. The environmental assessments and reports
were performed by independent environmental consulting firms. Copies of the
environmental assessments and reports are available in the offices of
Streich Lang, P.A., at Renaissance One, Two North Central Avenue,
Phoenix, Arizona 85004-2391. Any person wanting more information may contact
Ronald E. Reinsel, Esq. of Streich Lang at (602) 229-5200.
4. INFORMATION REGARDING THE REAL PROPERTY.
---------------------------------------
(A) OVERVIEW OF THE REAL PROPERTY.
-----------------------------
AMERCO and one or more of its subsidiaries own certain Real Property
which is free and clear of any lien interests (the "Real Property"). Subject to
the reserved right of AMERCO to remove, add, or substitute properties as
described in the Plan, the Real Property will be transferred and conveyed into
the Settlement Trust pursuant to the Plan and the Funding Resolution.
(B) DETAILED DESCRIPTION OF THE REAL PROPERTY.
-----------------------------------------
Each of the individual parcels which comprise the Real Property is
marketable, and its value is related to the current market for similar
properties. Attached hereto as Schedule "4" is a schedule of the Real Property
which, among other things: (i) describes the location of each of the parcels
which comprise the Real Property; (ii) identifies the size of each of the
parcels which comprise the Real Property and any buildings thereon; and (iii)
identifies the appraised value of certain of the parcels of the Real
Property.<F8> In addition, "Phase I" environmental assessments are (or will be)
available for each parcel of Real Property listed on attached Schedule "4."
The appraisals of the Real Property are subject to the assumptions
and limiting conditions stated therein. The Debtor believes that the procedures
used in the preparation of the appraisals of the Real Property enable the
appraiser to reach accurate market valuations of the parcels comprising the Real
Property.
- ------------------------
<F8>
AMERCO is in the process of obtaining appraisals of the rest of the
parcels of the Real Property and will provide information regarding the Real
Property for which appraisals are in process to counsel for the Shareholder
Plaintiffs upon receipt of such appraisals.
<PAGE>
(C) ENCUMBRANCES.
------------
The Debtor believes that all of the parcels which comprise the Real
Property are free and clear of liens and encumbrances, except where otherwise
indicated in attached Schedule "4." AMERCO has obtained, or is in the process
of obtaining, current title reports with respect to the Real Property which will
identify all matters of record with respect to the Real Property.
(D) ENVIRONMENTAL RISKS.
-------------------
The Debtor and AMERCO make no representations or warranties
regarding compliance of the Real Property with applicable environmental laws.
AMERCO has obtained "Phase I" environmental assessments for most of the parcels
which comprise the Real Property and is in the process of obtaining Phase I
assessments of the rest of the parcels. The environmental assessments were
performed (and are being performed) by independent environmental consulting
firms.
(E) INFORMATION REGARDING THE REAL PROPERTY.
---------------------------------------
Complete copies of the appraisals, the "Phase I" environmental
assessments, the title reports, and other relevant written materials regarding
the Real Property are available in the offices of Streich Lang, P.A., at
Renaissance One, Two North Central Avenue, Phoenix, Arizona 85004-2391. Any
person wanting more information may contact Ronald E. Reinsel, Esq. of Streich
Lang at (602) 229-5200.
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM
FORM 10Q JUNE 1995 AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO
SUCH FINANCIAL STATEMENTS.
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> MAR-31-1996
<PERIOD-END> JUN-30-1995
<CASH> 0
<SECURITIES> 0
<RECEIVABLES> 322,859<F1>
<ALLOWANCES> 0
<INVENTORY> 52,422
<CURRENT-ASSETS> 0<F2>
<PP&E> 2,367,289
<DEPRECIATION> 1,098,666
<TOTAL-ASSETS> 2,688,002
<CURRENT-LIABILITIES> 0<F2>
<BONDS> 866,132
<COMMON> 10,000
0
0
<OTHER-SE> 696,635
<TOTAL-LIABILITY-AND-EQUITY> 2,688,002
<SALES> 53,116
<TOTAL-REVENUES> 330,509
<CGS> 28,959
<TOTAL-COSTS> 248,338
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 1,568
<INTEREST-EXPENSE> 18,832
<INCOME-PRETAX> 32,812
<INCOME-TAX> 11,950
<INCOME-CONTINUING> 20,862
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 20,862
<EPS-PRIMARY> .46
<EPS-DILUTED> .46
<FN>
<F1>THE VALUE FOR RECEIVABLES REPRESENTS THEIR AMOUNTS NET OF THEIR ALLOWANCES.
<F2>AN UNCLASSIFIED BALANCE SHEET EXISTS IN THE REGISTRANT'S
FINANCIAL STATEMENTS.
</FN>
</TABLE>
