SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
__________
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(D) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of report (Date of earliest event reported) JANUARY 7, 1994
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LIBERTE INVESTORS
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(Exact Name of Registrant as Specified in Charter)
MASSACHUSETTS 1-6802 75-1328153
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(State or Other Jurisdiction (Commission (IRS Employer
of Incorporation) File Number) Identification No.)
1420 VICEROY DRIVE, DALLAS, TEXAS 75235
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(Address of Principal Executive Offices) (Zip Code)
Registrant's telephone number, including area code (214) 879-5800
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(Former Name or Former Address, if Changed Since Last Report)
On January 7, 1994, Liberte Investors, certain of Liberte's
senior secured lenders, the members of the Official Unsecured Creditors
appointed in Liberte Investors' Chapter 11 case and the Official Committee
of Equity Securities Holders appointed in Liberte Investors' Chapter 11
case executed a Stipulation and Agreement Suspending Plan Litigation (the
"Stipulation") setting forth an agreement in principle which would resolve
certain potential disputes regarding the treatment of the senior secured
lenders under the plan of reorganization for Liberte. The Bankruptcy Court
overseeing Liberte Investors' Chapter 11 case has "so ordered" the
Stipulation. A copy of the Stipulation is attached hereto as Exhibit 99.1.
EXHIBIT 99.1
UNITED STATES BANKRUPTCY COURT
SOUTHERN DISTRICT OF NEW YORK
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In re :
:
:
LIBERTE INVESTORS, : In Proceedings for
f/k/a Lomas & Nettleton Mortgage : a Reorganization
Investors, : Under Chapter 11
:
Debtor. : Case No. 93 B 45262 (BRL)
:
Employer's Tax Identification :
No. 75-1328153 :
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STIPULATION AND AGREEMENT SUSPENDING PLAN LITIGATION
WHEREAS, in connection with the proposed First Amended Plan of
Reorganization of Liberte Investors, Inc. (the "Plan"), a contested matter
within the meaning of Bankruptcy Rule 9014 has arisen between the parties
hereto; and
WHEREAS, the parties hereto, to avoid further litigation and
expense, have agreed, subject to the terms and conditions herein set forth,
to compromise their dispute;
NOW THEREFORE it is stipulated and agreed that:
1. Definitions Unless otherwise defined herein, the terms used
herein shall have the respective meanings set
forth in the First Amended Plan of
Reorganization of Liberte Investors, Inc. dated
December 14, 1993.
2. Principal Amount Pursuant to the Plan, Newco will issue debt
obligations under the New Senior Bank Agreement
(the "New Senior Notes"). The outstanding
principal amount of the New Senior Notes to be
issued to the Senior Lenders pursuant to Section
2.01 of the Plan will be equal to the sum of (a)
the $83,128,000 outstanding principal amount of
Senior Bank Claims, plus (b) accrued and unpaid
interest, if any, and reasonable fees and
expenses, minus (c) $9 million, to be paid on
the Effective Date to the Senior Lenders from
Pre-Consummation Cash. On the Effective Date,
$6 million of New Senior Notes will be issued to
LBI by Newco, and the amount of Retained Cash
shall be reduced by $6 million.(1)
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(1) The notes received by LBI from Newco will be the same series of notes
as issued to the Senior Lenders and, therefore, will be subject to the same
terms and enjoy the same rights, including voting rights and rights with
respect to collateral and any rights of transferability.
3. Interest Rate LIBOR + 2.0% for the first 2 years after the
Effective Date and LIBOR + 2.5% thereafter.
Prior to the Effective Date, the Senior Debt
will continue to bear interest at the current
non-default contract rate and the Senior Lenders
will receive interest payments solely for all
LIBOR periods ending prior to the Effective Date
in the same manner as set forth in the cash
collateral stipulations entered into to date (in
addition to the $9 million payment referred to
in paragraph 2 above).
4. Final Maturity December 31, 1998, assuming that the Effective
Date occurs on or before March 31, 1994.
5. Amortization $1.62 million per quarter, commencing 3 months
after the Effective Date, plus an additional
$10.8 million by the 2nd anniversary of the
Effective Date. The source of the additional
$10.8 million may be refinancings of Original
Newco Assets. The Senior Lenders Agree to
release their liens in the assets refinanced.
The additional $10.8 million will be applied to
reduce principal.
6. Assignability The New Senior Notes will be freely assignable;
however Newco will not be obligated to register
the New Senior Notes or qualify any indenture
with respect to such New Senior Notes under the
Trust Indenture Act.
7. Amendment of Plan
and Other Terms The Agent and Representative Banks will sign this
Stipulation and Agreement Suspending Plan
Litigation (the "Stipulation"). The Plan and
Disclosure Statement will be amended to reflect
the terms set forth in this Stipulation and the
Agent and Representative Banks will vote in
favor of the Plan as amended and recommend the
amended Plan to the other Senior Lenders.
Through April 30, 1994, (or such later date as
the term hereof may be extended to by agreement
among the parties) any signatory to this
Stipulation that transfers its claim will
transfer such claim subject to the agreement of
the transferee to be bound by the terms of this
Stipulation.
8. Suspension of
Litigation Upon execution of this Stipulation by all parties,
and court approval hereof, all litigation
activity of the parties directed toward a
contested confirmation hearing will be
suspended. All court approvals needed for the
actions described herein will be sought promptly
unless the parties hereto shall otherwise agree
or the Court shall otherwise direct. By no
later than January 13, 1994, the Agent and
Representative Banks will notify the other
parties to this Stipulation whether or not the
Plan, as amended pursuant to this Stipulation,
is supported by the Requisite Claim Vote (as
defined in the Debtor's Disclosure Statement)
for that class of creditors (Class 1). If the
Agent and Representative Banks determine that
the Plan, as amended pursuant to this
Stipulation, is supported by the Requisite Claim
Vote (as defined in the Debtor's Disclosure
Statement) for Class l, the date of confirmation
hearing will be January 19, 1994, unless
otherwise directed by the Court or agreed to by
the parties. If by the close of business on
January 13, 1994, the Agent and Representative
Banks fail to notify the other parties to this
Stipulation that the Plan, as amended pursuant
to this Stipulation, is supported by the
Requisite Claim Vote (as defined in the Debtor's
Disclosure Statement) for Class l, the
litigation suspension shall immediately be
lifted, the confirmation hearing rescheduled for
January 27, 1994, the deadline for objections to
confirmation extended to January 20, l994, and,
at the option of the Creditors Committee, this
Stipulation shall be deemed null and void.
9. Termination Date The obligations of the parties to this Stipulation
will terminate if the Effective Date does not
occur by April 30, 1994, subject to extension by
mutual consent of all parties to this
Stipulation.
10. Final Documentation This Stipulation constitutes an agreement to
support the Plan (including the Exhibits
thereto) solely as amended by the terms hereof.
The agreement of the parties hereto to support
the Plan (including the New Senior Bank
Agreement and the other Exhibits thereto),
modified to the extent provided in this
Stipulation is subject to the condition that
this Stipulation is subject to the condition
that this Stipulation shall have been approved
by the Bankruptcy Court no later than January
12, 1994, legal review of final documentation
and agreement on standard provisions governing
the New Senior Notes, all related security
documents and the order confirming the Plan of
Reorganization.
11. Further Assurances The parties hereto agree to support the Plan,
modified as provided herein, and to take (or,
where applicable, support) any and all actions,
motions or further stipulations reasonably
necessary to implement the provisions of this
Stipulation, including, without limitation, a
motion, if applicable law requires, seeking
approval of plan and disclosure statement
modifications and relief attendant therewith
under Federal Bankruptcy Rules 3018 and 3019.
12. Non-Admissability In the event that this Stipulation is terminated
in accordance with paragraph 8 or 9 above, this
Stipulation shall be subject to Rule 408 of the
Federal Rules of Evidence.
DATED: As of January 6, l994
THE BANK OF NEW YORK, in its
individual capacity
By:_________________________
Title:______________________
THE CHASE MANHATTAN BANK, N.A.,
in its individual capacity
By:_________________________
Title:______________________
THE FIRST NATIONAL BANK OF CHICAGO,
in its individual capacity
By:_________________________
Title:______________________
STEINHARDT PARTNERS, L.P.,
in its individual capacity
By:________________________
Title:_____________________
INSTITUTIONAL PARTNERS, L.P.
in its individual capacity
By:_______________________
Title:____________________
GENERAL AMERICAN LIFE INSURANCE
COMPANY
By:_______________________
Title:____________________
PAN AMERICAN LIFE INSURANCE
COMPANY
By:_______________________
Title:____________________
WASHINGTON MUTUAL SAVINGS BANK
By:_______________________
Title:____________________
ROBERT SACHS
By:_______________________
Title:____________________
VANCE C. MILLER INTERESTS
By:______________________
Title:___________________
THE OFFICIAL COMMITTEE OF EQUITY
SECURITY HOLDERS
By:_________________________
Title:______________________
LIBERTE INVESTORS
By:________________________
Title:_____________________
