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 24, 1994
-------------------------
LIBERTE INVESTORS
- ---------------------------------------------------------------------------
(Exact Name of Registrant as Specified in Charter)
MASSACHUSETTS 1-6802 75-1328153
- ---------------------------------------------------------------------------
(State or Other Jurisdiction (Commission (IRS Employer
of Incorporation) File Number) Identification No.)
1420 VICEROY DRIVE, DALLAS, TEXAS 75235
- ---------------------------------------------------------------------------
(Address of Principal Executive Offices) (Zip Code)
Registrant's telephone number, including area code (214) 879-5497
-------------------------
- ---------------------------------------------------------------------------
(Former Name or Former Address, if Changed Since Last Report)
Item 3. Bankruptcy or Receivership
On October 25, 1993, Liberte Investors (the "Trust") filed a
voluntary petition for reorganization under Chapter 11 of the Federal
Bankruptcy Code in the United States Bankruptcy Court for the Southern
District of New York (the "Bankruptcy Court"). The Trust is managing its
business as a debtor-in-possession subject to Bankruptcy Court approval of
any actions outside the ordinary course of business that the Trust may
take.
On November 2, 1993, the Trust filed with the Bankruptcy Court a
disclosure statement (the "Disclosure Statement") and related Chapter 11
plan of reorganization (the "Original Plan"). The basis for the Original
Plan is a joint proposal the Trust received in June 1993 from certain
holders of its 10-1/2% Subordinated Notes due June 1, 1993 (the
"Subordinated Notes") and its shares of beneficial interest (the "Shares of
Beneficial Interest"). The Original Plan provides for the transfer of most
of the Trust's assets to a subsidiary ("Newco") and the distribution of all
Newco's common stock to the holders of Subordinated Notes in full
satisfaction of the Trust's obligations in respect thereof. Newco would
assume all of the Trust's obligations to its senior lenders on restructured
terms. The senior loans would be secured by substantially all of the
assets transferred to Newco. The restructured company (the "Reorganized
Trust") would emerge as an essentially debt-free entity and its assets
would be released from the senior lenders' existing liens. The shares of
the Reorganized Trust would continue to be owned by the existing holders of
the Shares of Beneficial Interest. As of February 4, 1994, there were
12,423,208 Shares of Beneficial Interest issued and outstanding, with no
such shares reserved for future issuance in respect of claims and interests
filed and allowed under the Plan. In addition, Newco would issue 300,000
shares of preferred stock to the Reorganized Trust in exchange for $300,000.
The Disclosure Statement was approved by the Bankruptcy Court on
December 16, 1993 and was subsequently circulated to all holders of the
Trust's senior indebtedness, Subordinated Notes and Shares of Beneficial
Interest, together with ballots to accept or reject the Original Plan. The
Trust obtained the requisite consents to the Original Plan in January 1994,
and on January 24, 1994, the Bankruptcy Court entered an order confirming
the Original Plan, as modified by the Modification dated January 19, 1994
(as so modified, the "Plan"). The Plan is substantially the same as the
Original Plan except that (i) the interest rate on the senior loan to Newco
was increased, (ii) the average maturity of such loan was reduced and (iii)
the Reorganized Trust will receive $6 million principal amount of such
senior loan in lieu of $6 million of cash that it was to have retained
under the Original Plan. The period during which an interested party may
appeal the order confirming the Plan has expired, and no interested party
has filed a notice of appeal thereof. Consummation of the Plan is subject
to the satisfaction of certain conditions, some of which are outside the
Trust's control.
As currently modified, the Plan contemplates that the Trust will
transfer a portion of its mortgage loans and all of its foreclosed real
estate to a wholly-owned subsidiary. The Trust intends to seek Bankruptcy
Court approval to modify the Plan to permit the Reorganized Trust to retain
the assets that would otherwise be transferred to this subsidiary. On the
basis of information available to it at this time, the Trust anticipates
that this modification of the Plan will be approved and that the Plan as so
modified will be consummated before the end of March 1994.
Item 7. Financial Statements, Pro Forma Financial Information and Exhibits
(c) Exhibits
99.1 First Amended Plan of Reorganization of the Registrant1
dated December 14, 1993.
99.2 Modification of the First Amended Plan of Reorganization
dated January 19, 1994.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
LIBERTE INVESTORS
By /s/ Robert Ted Enloe III
Date: February 9, 1994 _________________________
Robert Ted Enloe III
President
EXHIBIT INDEX
Exhibit No. Description
- ----------- -----------
99.1 First Amended Plan of Reorganization of the Registrant
dated December 14, 1993.
99.2 Modification of the First Amended Plan of Reorganization
dated January 19, 1994.
APPENDIX A
TO
DISCLOSURE STATEMENT
UNITED STATES BANKRUPTCY COURT
SOUTHERN DISTRICT OF NEW YORK
- - - - - - - - - - - - - - - - - - - X
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 :
- - - - - - - - - - - - - - - - - - - X
FIRST AMENDED
PLAN OF REORGANIZATION
DAVIS POLK & WARDWELL
450 LEXINGTON AVENUE
NEW YORK, NEW YORK 10017
DECEMBER 14, 1993 COUNSEL FOR THE DEBTOR
TABLE OF CONTENTS(1)
Page
____
ARTICLE I
DEFINITIONS
Section 1.01. Defined Terms.............................. A-1
1.02. Other Terms................................. A-10
1.03. Exhibits................................... A-10
ARTICLE II
CLASSIFICATION AND TREATMENT
OF CLAIMS AND EQUITY INTERESTS
Section 2.01. Administrative Expenses.................... A-10
2.02. Priority Tax Claims........................ A-11
2.03. Classification of Other Claims and
Equity Interests......................... A-11
2.04. Treatment of Other Claims and
Equity Interests......................... A-12
ARTICLE III
NONCONSENSUAL CONFIRMATION OF THE PLAN
Section 3.01. Nonconsensual Confirmation of
the Plan................................. A-14
ARTICLE IV
INCORPORATION OF NEW ENTITIES; CERTIFICATES OF INCORPORATION;
AMENDMENT OF DECLARATION OF TRUST; CASH RESERVES;
TRANSFERS OF ASSETS; NEW INVESTMENT IN DEBTOR
Section 4.01. Incorporation of New Entities; Certificates
of Incorporation; Amendment of Declaration
of Trust .................................. A-14
4.02. Cash Reserves............................... A-14
4.03. Transfers of Assets; Distribution of
Liquidating Corp. Preferred Stock......... A-15
4.04. New Investment in Debtor.................... A-16
4.05. Execution of New Senior Bank Agreements..... A-16
4.06. Asset Exchange.............................. A-16
4.07. Consulting Agreement........................ A-16
4.08. Indemnification Agreement................... A-16
4.09. Liquidating Corp. Management
Agreement................................. A-16
4.10. Newco Management Agreement.................. A-16
ARTICLE V
IMPLEMENTATION OF THE PLAN
Section 5.01. Revesting of Assets........................ A-16
5.02. Distributions Pursuant to the Plan......... A-17
5.03. Cancellation of Subordinated Notes
and Promissory Notes; Termination
of Subordinated Note Indenture........... A-17
5.04. Effectuation of Subordination.............. A-17
5.05. Surrender of Subordinated Notes............ A-17
5.06. Method of Distribution
Under the Plan........................... A-18
5.07. Listing and Trading of Common Stock........ A-19
5.08. Management of the Reorganized Debtor,
Liquidating Corp. and Newco.............. A-19
5.09. Corporate Action........................... A-19
5.10. Disputed Claims and Interests.............. A-20
ARTICLE VI
EXECUTORY CONTRACTS
Section 6.01. Executory Contracts........................ A-20
6.02. Indemnification Obligations................ A-21
ARTICLE VII
EFFECTIVENESS OF THE PLAN
Section 7.01. Conditions Precedent....................... A-21
7.02. Waiver of Conditions....................... A-22
ARTICLE VIII
EFFECTS OF CONFIRMATION
Section 8.01. Discharge of Debtor........................ A-23
8.02. Exculpation................................ A-23
8.03. Releases................................... A-23
8.04. Binding Effect............................. A-24
ARTICLE IX
MISCELLANEOUS PROVISIONS
Section 9.01. Court to Retain Jurisdiction
for Certain Purposes..................... A-24
9.02. Payment of Statutory Fees.................. A-25
9.03. Rights of Action........................... A-25
9.04. Headings................................... A-25
9.05. Revocation or Withdrawal................... A-25
9.06. Notices.................................... A-26
9.07. Withholding and Reporting Requirements..... A-26
9.08. Governing Law.............................. A-26
9.09. Filing of Additional Documents............. A-26
9.10. Dissolution of Official Committees......... A-26
9.11. Modification of the Plan................... A-26
9.12. Severability............................... A-27
Exhibits
________
A Designated Recipients of Assets
A-1 Assets To be Transferred to Lomas In Asset Exchange
A-2 Assets To Be Transferred to Newco in Asset Exchange
A-3 Summary of Terms of Asset Exchange
B Indemnification Agreement
C Certain Liquidating Corp. Assets
D-1 Restricted Cash Liabilities
D-2 Restricted Cash Accounts
E Liquidating Corp. Bylaws*
F Liquidating Corp. Certificate of Incorporation*
G [Intentionally omitted.]
H Liquidating Corp. Note
I New Senior Bank Agreement Terms*
J Newco Bylaws*
K Newco Certificate of Incorporation*
L Certain Original Newco Assets
M Libert Investors Assets
N Libert Investors Liabilities
O Liquidating Corp. Guarantees
P Newco Guarantees
Q Declaration of Trust Amendment
Schedules
________
1.01A Operating Budget
1.01B Restructuring Budget
6.01A Liberte Investors Executory Contracts
6.01B Liquidating Corp. Executory Contracts
6.01C Newco Executory Contracts
FIRST AMENDED
PLAN OF REORGANIZATION
PLAN OF REORGANIZATION under chapter 11 of Title 11 of the United
States Code of LIBERTE INVESTORS, formerly known as Lomas & Nettleton
Mortgage Investors, as debtor and debtor in possession.
ARTICLE I
DEFINITIONS
1.01. DEFINED TERMS.
As used herein, the following terms have the respective meanings
specified below unless the context otherwise requires (such meanings to be
equally applicable to both the singular and plural, and masculine and
feminine, forms of the terms defined).
"Administrative Expense" means (i) any cost or expense of
administration of the Chapter 11 Case Allowed under Sections 503(b) and
507(a)(1) of the Bankruptcy Code, including, without limitation, any
actual and necessary expenses of preserving the estate of the Debtor, any
actual and necessary expenses of operating the business of the Debtor
(including without limitation all amounts due and owing under all executory
contracts of the Debtor not rejected during the Chapter 11 Case), all
obligations of the Debtor under the Asset Exchange Agreement and all
compensation or reimbursement of expenses to the extent Allowed by the
Bankruptcy Court under Section 330 or 503 of the Bankruptcy Code, (ii) all
fees payable pursuant to Section 1930 of the Bankruptcy Code and (iii) any
other cost, expense or Claim which, pursuant to an order of the Bankruptcy
Court or under otherwise applicable law, is entitled or authorized to be
treated in a manner equivalent to such a cost or expense of administration.
"Agents" means, collectively, The First National Bank of Chicago,
The Bank of New York and The Chase Manhattan Bank, N.A., in their capacity
as agent or representative banks, as the case may be, for the Senior
Lenders under the Senior Bank Agreements and the New Senior Bank
Agreements, and their successors in such capacity.
"Allocated Amount" has the meaning set forth in Section 4.02(a)
hereof.
"Allocated Reserve" has the meaning set forth in Section 4.02(a)
hereof.
"Allowed Claim" means:
(a) with respect to a Claim other than an Administrative Expense or
a Non-Barred Claim, any Claim against the Debtor, or portion thereof
(including any claim for contract rejection damages), proof of which was
filed on or before the date designated by Final Order of the Bankruptcy
Court as the last date for filing proof of such Claim against the Debtor
or, if no proof of claim is filed, which is listed by the Debtor in the
Schedules as liquidated in amount and not disputed or contingent and, in
either case, as to which either (i) no objection to the allowance thereof
has been interposed within the applicable period of limitation fixed
herein, in the Code, the Bankruptcy Rules or a Final Order of the
Bankruptcy Court or (ii) an objection has been interposed and such Claim
has been allowed by a Final Order of the Court;
(b) with respect to Non-Barred Claims, to the extent such claim is
valid and enforceable under applicable non-bankruptcy law (whether or not
listed in the Schedules or a proof of claim has been filed), a Claim
determined, resolved or adjudicated, as the case may be, in the manner in
which such claim would have been determined, resolved or adjudicated if the
Chapter 11 Case had not been filed, except as otherwise provided in the
Plan, subject to the right of the Debtor or any other party in interest to
assert that such Claim must be determined, resolved or adjudicated before
the Bankruptcy Court; and
(c) with respect to an Administrative Expense, an Administrative
Expense as to which no objection to the allowance thereof has been
interposed within forty-five (45) days after the Confirmation Date, or such
later date as may be fixed by Final Order of the Bankruptcy Court, or as to
which any objection thereto has been determined by a Final Order to the
extent such objection is determined in favor of the holder thereof or to
the extent a Final Order has been entered allowing such Claim.
Unless otherwise specified herein or by order of the Bankruptcy Court,
"Allowed Claim" and "Allowed Administrative Expense" shall, for purposes of
computation of distributions under the Plan, not include interest on the
amount of such Claim or Administrative Expense from and after the Petition
Date. "Allowed", when used as an adjective modifying "Claims" or
"Administrative Expenses," has a corresponding meaning.
"Allowed Equity Interest" means any Equity Interest, or portion
thereof, which is recorded by the Debtor in its share register as of the
Petition Date and as to which either (i) no objection to the allowance
thereof has been interposed within the applicable period of limitation
fixed herein, in the Code, the Bankruptcy Rules or a Final Order of the
Bankruptcy Court, or (ii) an objection has been interposed and such
Interest or portion thereof has been allowed by a Final Order of the
Bankruptcy Court. "Allowed," when used as an adjective modifying "Equity
Interest," has a corresponding meaning.
"Asset Exchange" means transfer by the Debtor to Lomas of the assets
identified on Exhibit A-1 hereto in exchange for the transfer by Lomas to
Newco of the assets identified on Exhibit A-2 hereto on terms substantially
as set forth in Exhibit A-3 hereto.
"Asset Exchange Agreement" means an agreement to be entered into by
the Debtor, Newco and Lomas providing for implementation of the Asset
Exchange.
"Available Cash" means a portion of Pre-consummation Cash in an
amount equal to the amount by which Pre-consummation Cash exceeds the
aggregate value of: (i) all cash used to pay Allowed Administrative
Expenses and Allowed Claims on the Effective Date pursuant to Section 2.04
hereof (including, without limitation, cash used to prepay $3,000,000 of
the principal amount of the debt obligations to be issued to the holders of
Allowed Class 1 Claims pursuant to Section 2.04 hereof) and (ii) all cash
and cash equivalents transferred to the Cash Reserves on the Effective Date
pursuant to Section 4.02 hereof.
"Ballot" means the ballot, including a master ballot, on which each
holder of an Allowed Claim (other than those whose votes are not solicited)
or an Allowed Equity Interest votes to accept or reject the Plan.
"Bankruptcy Code" means Title 11 of the United States Code, 11
U.S.C. section 101 et. seq., as amended from time to time.
"Bankruptcy Court" means the United States Bankruptcy Court for the
Southern District of New York (or such other court as may be administering
the Chapter 11 Case).
"Bankruptcy Rules" means the Federal Rules of Bankruptcy Procedure,
as amended from time to time, as applicable to the Chapter 11 Case,
including the Local Rules of the Bankruptcy Court.
"Bar Order" means an order of the Bankruptcy court setting a date by
which proofs of claim in respect of certain Claims must be filed against
the Debtor.
"Beneficial Shares" means the issued and outstanding shares
of beneficial interest in the Debtor, no par value, of which 12,423,208
were issued and outstanding on the Petition Date.
"Business Day" means any day on which commercial banks are open for
business in New York, New York.
"Cash Collateral Stipulation" means the Stipulation and Order
Authorizing Use of Operating Cash so ordered by the Bankruptcy Court on
November 12, 1993 as supplemented and modified by the Second Stipulation
and Order Authorizing Use of Operating Cash so ordered by the Bankruptcy
Court on December 2, 1993 and by any other order of the Bankruptcy Court
entered in the Chapter 11 Case.
"Cash Reserve" means the Allocated Reserve or the Unallocated
Reserve, as the context requires.
"Certificates of Deposit" means the certificates of deposit in the
name of the Debtor with Bank One, N.A. Texas, numbers 108520776,
108521014, 108521006 and 108520784, which have been pledged to Bank One,
N.A. Texas to secure the Debtor's reimbursement obligations with respect
to letters of credit numbers 4951813245-34, 4951813245-42, and 4951813245-
26 issued by Bank One, N.A. Texas for the account of the Debtor.
"Chapter 11 Case" means the case under Chapter 11 of the Bankruptcy
Code, commenced by the Debtor, and styled "In re LIBERTE
INVESTORS, formerly known as Lomas & Nettleton Mortgage
Investors," and in respect of which this Plan has been filed.
"Claim" has the meaning set forth in Section 101(5) of the
Bankruptcy Code.
"Committee" means any official committee appointed in the Chapter 11
Case pursuant to Section 1102 of the Bankruptcy Code.
"Confirmation Date" means the date on which the Clerk of the
Bankruptcy Court enters the Confirmation Order.
"Confirmation Hearing" means the hearing, to be scheduled by the
Bankruptcy Court, at which the Bankruptcy Court shall consider whether the
Plan satisfies the requirements of Section 1129 of the Bankruptcy Code.
"Confirmation Order" means the order of the Bankruptcy Court
confirming the Plan in accordance with the provisions of Chapter 11 of the
Bankruptcy Code.
"Consulting Agreement" means a Consulting Agreement to be entered
into by the Debtor and Newco, effective on the Effective Date.
"Consultants" means L&N Consultants, Inc., a Nevada corporation.
"Continuing Collateral" means substantially all of the assets of
Newco immediately after the Effective Date.
"Creditor" means a "creditor" of the Debtor within the meaning of
Section 101(10) of the Bankruptcy Code.
"Creditors Committee" means the Official Committee of Unsecured
Creditors appointed in the Chapter 11 Case pursuant to Section 1102 of the
Bankruptcy Code.
"Debtor" means Liberte Investors, formerly known as Lomas & Nettleton
Mortgage Investors, a Massachusetts business trust, and any successor
entities.
"Declaration of Trust" means the Declaration of Trust of Liberte
Investors, formerly known as Lomas & Nettleton Mortgage Investors, dated
June 26, 1969, as amended, as in effect on and as of the Petition Date.
"Declaration of Trust Amendment" means the Fifth Amendment to
Declaration of Trust, substantially in the form of Exhibit Q hereto.
"Designated Recipient" with respect to any asset means (i)
whichever of the Reorganized Debtor, Liquidating Corp. or Newco, as the
case may be, is designated in Exhibit A hereto as the "Designated
Recipient" of such asset, or (ii) in the case of assets transferred to
Newco in connection with the Asset Exchange, Newco.
"Disclosure Statement" means the written statement, dated December
14, 1993, as amended, supplemented or modified from time to time,
describing, among other things, the Plan, prepared and distributed in
accordance with Sections 1125 and 1145 of the Bankruptcy Code.
"Disputed Administrative Expense," "Disputed Claim" and "Disputed
Equity Interest" mean any Administrative Expense, Claim or Equity Interest,
as the case may be, which is not Allowed and which has not been disallowed
by a Final Order.
"Distribution Agent" or "Distribution Agents" means the agent or
agents (which may include the Subordinated Note Indenture Trustee) that may
be retained by the Debtor to receive, hold and distribute the consideration
to be distributed to holders of Allowed Administrative Expenses, Allowed
Claims and Allowed Equity Interests pursuant to the Plan, the Confirmation
Order or such other applicable order as may be entered by the Bankruptcy
Court.
"Distribution Record Date" means the date that is five Business Days
after the Confirmation Date, which shall be the record date for determining
the holders of Allowed Claims and Allowed Equity Interests entitled to
participate in distributions pursuant to the Plan.
"Effective Date" means the Business Day on which the conditions
specified in Section 7.01 have been satisfied or waived.
"Equity Committee" means the Official Committee of Equity Security
Holders appointed in the Chapter 11 Case pursuant to Section 1102 of the
Bankruptcy Code.
"Equity Interest" means an equity interest in the Debtor evidenced
by the Beneficial Shares and any rights and entitlements represented
thereby.
"Final Order" means an order or judgment of the Bankruptcy Court as
entered on the docket that has not been reversed, stayed, modified or
amended and as to which the time to appeal or to seek reargument,
certiorari, review or rehearing has expired and as to which no appeal or
petition for reargument, certiorari, review or rehearing is pending or as
to which any right to appeal or seek reargument, certiorari, review or
rehearing has been waived in writing in a manner satisfactory to the Debtor
or, if an appeal, reargument, petition for certiorari, review or rehearing
thereof has been sought, the order or judgment of the Bankruptcy Court has
been affirmed by the highest court to which the order was appealed or from
which the reargument, review or rehearing was sought, or certiorari has
been denied, and the time to take any further appeal or to seek certiorari
or further reargument, review or rehearing has expired.
"General Unsecured Claims" means all Claims other than
Administrative Expenses, Priority Claims, Priority Tax Claims, Senior Bank
Claims, and Subordinated Note Claims.
"Indemnification Agreement" means the Indemnification Agreement
among Liberte Corp., Liquidating Corp. and Newco, substantially in the form
of Exhibit B hereto.
"Interim Period" means the period beginning on April 1, 1993 and
ending on the Effective Date.
"Liquidating Corp." means LBI Liquidating Corp., a Delaware
corporation to be organized by the Debtor on or before the Effective Date.
"Liquidating Corp. Assets" means (i) the assets listed on Exhibit C
hereto to the extent such assets have not been disposed of, or the
principal amount thereof has not been collected, on or prior to the
Effective Date, (ii) all non-cash proceeds of such assets, (iii) Available
Cash, in addition to the Restricted Cash referred to in clause (iv) below,
in an amount equal to the Liquidating Corp. Cash Proceeds, (iv)
Restricted Cash that has been deposited or escrowed with respect to the
assets described in clauses (i), (ii) and (iii) above or the liabilities
listed on Exhibit D hereto and (v) the Debtor's books and
records with respect to the assets described in clauses (i) through (iv)
above; provided that the Board of Trustees of the Debtor, with the consent
of the Creditors Committee and the Equity Committee, may exclude from
Liquidating Corp. Assets assets that would otherwise constitute
Liquidating Corp. Assets or may include in Liquidating Corp. Assets
assets that would not otherwise constitute Liquidating Corp. Assets so
long as the net increase or decrease in the book value (determined as of
the Effective Date) of the Liquidating Corp. Assets resulting from all
such exclusions and inclusions does not exceed 5% of the book value
(determined as of the Effective Date) of those assets that would constitute
Liquidating Corp. Assets if such exclusions and inclusions were not taken
into account.
"Liquidating Corp. Bylaws" means the bylaws of Liquidating Corp.,
substantially in the Form of Exhibit E hereto.
"Liquidating Corp. Cash Proceeds" means Available Cash in an amount
equal to the excess of (i) the aggregate amount of net cash proceeds, if
any, generated during the period beginning on the Petition Date and ending
on the Effective Date from the sale or other disposition of, and
collections of principal on, any assets listed on Exhibit C hereto and all
non-cash proceeds of such assets over (ii) $2,007,000.
"Liquidating Corp. Certificate of Incorporation" means the amended
and restated certificate of incorporation of Liquidating Corp.,
substantially in the form of Exhibit F hereto.
"Liquidating Corp. Common Stock" means the common stock, no par
value, of Liquidating Corp.
"Liquidating Corp. Management Agreement" means a Management
Agreement dated as of the Effective Date between Liquidating Corp. and
Lomas Management, Inc., in a form, and having terms and conditions,
satisfactory to the Debtor, the Equity Committee and Lomas.
"Liquidating Corp. Note" means a promissory note to be issued by
Liquidating Corp. to Newco on the Effective Date, substantially in the form
of Exhibit H hereto.
"Liquidating Corp. Preferred Stock" means 25,000 shares of the
preferred stock, no par value, of Liquidating Corp. having the terms and
conditions set forth in the Liquidating Corp. Certificate of
Incorporation.
"Lomas" means Lomas Management, Inc., or any other member of the
consolidated group of Lomas Financial Corporation currently holding title
to assets subject to the Asset Exchange.
"Naples" means Naples Canta Mar, Ltd., a Florida limited
partnership.
"New Investor Purchase Agreement" means any agreement in form and
substance satisfactory to the Debtor and the Equity Committee that is
entered into on or prior to the Effective Date pursuant to which an
investor will make an investment in equity securities of the Debtor.
"New Senior Bank Agreements" means debt obligations of Newco to the
holders of Allowed Class 1 Claims substantially in the form of Exhibit I
hereto, with such modifications as may be agreed to on or before the
Effective Date by the Debtor and the Creditors Committee and do not have a
materially adverse effect on the Senior Lenders.
"Newco" means a Delaware corporation to be organized by the Debtor
on or before the Effective Date.
"Newco Asset Sale Parameters" means the parameters with respect to
the sale of certain assets of the Debtor during the Interim Period agreed
between the Debtor and certain holders of Subordinated Notes.
"Newco Bylaws" means the bylaws of Newco, substantially in the form
of Exhibit J hereto.
"Newco Certificate of Incorporation" means the certificate of
incorporation of Newco, substantially in the form of Exhibit K hereto.
"Newco Common Stock" means the shares of common stock, par
value $.01 per share, of Newco authorized in the Newco Certificate of
Incorporation and to be distributed to holders of Class 4 Claims pursuant
to Section 2.04 hereof.
"Newco Preferred Stock" means the preferred stock of Newco having
the preferences, rights and other designations set forth in the Newco
Certificate of Incorporation.
"Newco Management Agreement" means a Management Agreement dated as
of the Effective Date between Newco and Lomas Management, Inc., in a form,
and having terms and conditions, satisfactory to the Debtor, the Creditors
Committee and Lomas.
"Non-Barred Claims" means Claims the holders of which are not,
pursuant to clause (e), (f) or (g) of the second decretal paragraph of the
Bar Order or any other Final Order of the Bankruptcy Court, required to
submit proofs of claim in respect thereof, including without limitation,
Claims of governmental entities under environmental laws and regulations
and Claims in respect of taxes.
"Non-Newco Property Operating Budget Overrun" means any portion of
an amount paid to satisfy Property-Related liabilities and expenses
relating to any assets the Designated Recipient of which is either the
Reorganized Debtor or Liquidating Corp. that exceeds the Unused Budgeted
Amount at the time of such payment. For purposes of this definition,
"Unused Budgeted Amount" at the time of any such payment means the amount
by which, prior to giving effect to such payment, the aggregate of the
budgeted liabilities and expenses paid or incurred through the Effective
Date, determined based upon the operating expense projection attached
hereto as Schedule 1.01A, in respect of the assets referred to in this
definition exceeds the aggregate payment actually made in respect of such
expenses and liabilities on or after April 1, 1993.
"Non-Newco Property Reserve" has the meaning set forth in Section
4.02(a) hereof.
"Non-Property Operating Budget Overrun" means any portion of an
amount paid to satisfy liabilities and expenses other than Property-Related
liabilities and expenses and other than liabilities and expenses set forth
on Schedule 1.01B hereto that exceeds the Unused Budgeted Amount at the
time of such payment. For purposes of this definition, "Unused Budgeted
Amount" at the time of any such payment means the amount by which, prior to
giving effect to such payment, the aggregate of the budgeted liabilities
and expenses paid or incurred through the Effective Date, determined based
upon the operating expense projection attached hereto as Schedule 1.01A, in
respect of liabilities and expenses other than Property-Related liabilities
exceeds the aggregate payment actually made in respect of such expenses and
liabilities on or after April 1, 1993.
"Operating Budget" means the aggregate amount of payments and
liabilities (including, without limitation, operating liabilities and
expenses and capital expenditures) of the Debtor for the period beginning
on April 1, 1993 and included in the operating expense projection attached
hereto as Schedule 1.01A (as such projection may be supplemented for any
period prior to the Effective Date and subsequent to the last date covered
by such Schedule).
"Original Newco Assets" means (a) all Available Cash on the
Effective Date not included in Retained Assets or Liquidating Corp. Assets
and (b) all of the Debtor's other assets immediately prior to the Effective
Date that do not constitute Pre-consummation Cash, Retained Assets or
Liquidating Corp. Assets, including, without limitation, (i) the assets
listed on Exhibit L hereto, (ii) the Debtor's books and records with
respect to the assets described in clause (i) above and (iii) Restricted
Cash not constituting Retained Assets or Liquidating Corp. Assets;
provided that the Board of Trustees of the Debtor, with the consent of the
Creditors Committee and the Equity Committee, may exclude from Original
Newco Assets assets that would otherwise constitute Original Newco Assets
or may include in Original Newco Assets assets that would not otherwise
constitute Original Newco Assets so long as the net increase or decrease in
the book value (determined as of the Effective Date) of the Original Newco
Assets resulting from all such exclusions and inclusions does not exceed 2%
of the book value (determined as of the Effective Date) of those assets
that would constitute Original Newco Assets if such exclusions and
inclusions were not taken into account.
"Petition Date" means October 25, 1993, the date on which the
Debtor filed its petition for relief commencing the Chapter 11 Case.
"Plan" means this Chapter 11 plan of reorganization, either in its
present form or as it may be altered, amended, modified, or supplemented
from time to time.
"Pre-consummation Cash" means all cash and cash equivalents of the
Debtor, including, without limitation, the Prepaid Amount, immediately
prior to the Effective Date and before giving effect to any transfer
required to be made hereunder on the Effective Date.
"Prepaid Amount" means an amount equal to the sum of (i) the balance
on the Effective Date in account number 9102684058 at The Chase Manhattan
Bank, N.A., held in respect of prepaid interest under the Secured Restated
Credit Agreement, and (ii) the balance on the Effective Date in account
number 1918435 at The First National Bank of Chicago, held in respect of
prepaid interest under the Secured Revolving Credit Agreement.
"Priority Claim" means any Claim (other than an Administrative
Expense or a Priority Tax Claim) accorded priority in right of payment
under Section 507(a) of the Bankruptcy Code.
"Priority Tax Claim" means a Claim of a governmental unit of the
kind specified in Section 507(a)(7) of the Bankruptcy Code.
"Property-Related" with respect to any liability, expense, Claim or
Administrative Expense means a liability, expense, Claim or Administrative
Expense that (a) does not relate to or arise out of the general overhead or
headquarters operation of the Debtor and (b) arises, directly or
indirectly, out of the ownership or operation of, or is attributable to, a
specific mortgage loan or real estate asset in which the Debtor has an
interest (including without limitation any participation interest therein).
"Reorganized Debtor" means the Debtor on and after the Effective
Date.
"Restricted Cash" means (i) cash on deposit on the Effective Date in
the accounts listed on Exhibit D-2 hereto and (ii) the Certificates of
Deposit.
"Restructuring Budget" means the aggregate amount of payments and
liabilities (including, without limitation, expenses arising out of the
restructuring of the Debtor's indebtedness and implementation of the Plan)
for the period beginning on April 1, 1993 and included in the restructuring
expense projection attached hereto as Schedule 1.01B (as such projection
may be supplemented for any period prior to the Effective Date and
subsequent to the last date covered by such Schedule).
"Restructuring Budget Overrun" means any portion of an amount paid
to satisfy liabilities and expenses set forth in Schedule 1.01B hereto that
exceeds the Unused Budgeted Amount at the time of such payment. For
purposes of this definition, "Unused Budgeted Amount" at the time of any
such payment means the amount by which, prior to giving effect to such
payment, the aggregate of the budgeted liabilities and expenses paid or
incurred through the Effective Date, determined based upon the
restructuring expense projection attached hereto as Schedule 1.01B, in
respect of liabilities and expenses set forth therein exceeds the aggregate
payment actually made in respect of such expenses and liabilities on or
after April 1, 1993.
"Retained Assets" means (i) the assets listed on Exhibit M hereto to
the extent such assets have not been disposed of, or the principal amount
thereof has not been collected, on or prior to the Effective Date, (ii) all
non-cash proceeds of such assets, (iii) Restricted Cash, including without
limitation the Certificates of Deposit, that has been deposited or escrowed
with respect to the assets described in clauses (i) and (ii) above or the
liabilities listed on Exhibit N hereto, (iv) the Retained Cash, (v) all of
the Debtor's right, title and interest with respect to the premises leased
by the Debtor at 1420 Viceroy Drive, Dallas, Texas 75235, (vi) furnishings,
fixtures, equipment and other tangible assets owned by the Debtor on the
Effective Date and located at the premises leased by the Debtor at 1420
Viceroy Drive, Dallas, Texas 75235, (vii) the life insurance policy in
respect of the Debtor's chief executive officer, (viii) the proceeds, if
any, received by the Debtor upon consummation of the transactions
contemplated by any New Investor Purchase Agreement, (ix) the Newco
Preferred Stock and (x) the Debtor's books and records with
respect to the assets described in clauses (i) through (ix) above;
provided that the Board of Trustees of the Debtor, with the consent of the
Creditors Committee and the Equity Committee, may exclude from Retained
Assets assets that would otherwise constitute Retained Assets or may
include in Retained Assets assets that would not otherwise constitute
Retained Assets so long as the net increase or decrease in the book value
(determined as of the Effective Date) of the Retained Assets resulting from
all such exclusions and inclusions does not exceed 5% of the book value
(determined as of the Effective Date) of those assets that would constitute
Retained Assets if such exclusions and inclusions were not taken into
account.
"Retained Cash" means Available Cash in an amount equal to the sum
of (a) the aggregate amount of net cash proceeds, if any, generated during
the Interim Period from the sale or other disposition of, and collections
of principal on, any assets listed on Exhibit M hereto and all non-cash
proceeds of such assets and (b) the Retained Working Capital.
"Retained Working Capital" means Available Cash in an amount, which
may be positive or negative, equal to $1,000,000 minus the sum of (i) 27%
of any payment on or prior to the Effective Date determined as of the
Effective Date to be a Restructuring Budget Overrun, plus (ii) 27% of any
payment on or prior to the Effective Date determined as of the Effective
Date to be a Non-Property Operating Budget Overrun, plus (iii) 100% of any
payment on or prior to the Effective Date determined as of the Effective
Date to be a Non-Newco Property Operating Budget Overrun, plus (iv) 27% of
the amount of Pre-consummation Cash initially deposited in the Allocated
Reserve pursuant to Section 4.02(a) hereof.
"Schedules" means the schedules of assets and liabilities and the
statement of financial affairs filed by the Debtor as required by Section
521 of the Bankruptcy Code and the Official Bankruptcy Forms of the
Bankruptcy Rules.
"Secured Restated Credit Agreement" means the $220,000,000 Amended
and Restated Secured Credit Agreement dated as of April 30, 1990 among the
Debtor, Consultants, Naples, the lenders listed on the signature pages
thereof and The Bank of New York and The Chase Manhattan Bank, N.A., as
representatives for such lenders, as amended from time to time, under which
$46,436,723 principal amount of loans was outstanding on the Petition Date.
"Secured Revolving Credit Agreement" means the $150,000,000
Revolving Credit Agreement dated as of October 26, 1988 among the Debtor,
Consultants, Naples, the lenders listed on the signature pages thereof and
The First National Bank of Chicago, as agent for such lenders, as amended
from time to time, under which $36,691,116 principal amount of loans was
outstanding on the Petition Date.
"Security Agreement" means the Pledge, Security and Custodial
Agreement dated as of May 22, 1990 among the Debtor, Consultants, the
lenders listed on Schedules I and II thereto, The Chase Manhattan Bank,
N.A., as disbursement agent for such lenders, The Bank of New York and The
Chase Manhattan Bank, N.A., as representative banks for the lenders party
to the Secured Restated Credit Agreement, The First National Bank of
Chicago, as agent for the lenders party to the Secured Revolving Credit
Agreement, and Bank One, Texas, N.A., as collateral agent, as amended from
time to time.
"Senior Bank Agreements" means, collectively, the Secured Revolving
Credit Agreement (and any promissory note of the Debtor issued thereunder),
the Secured Restated Credit Agreement (and any promissory note of the
Debtor issued thereunder), the Security Agreement and any other instrument
or document executed and delivered pursuant to any such agreement for the
benefit of the secured parties under the Security Agreement.
"Senior Bank Claims" means all Claims arising under or in respect of
any Senior Bank Agreement.
"Senior Lenders" means the lenders party to the Senior Bank
Agreements.
"Subordinated Note Claims" means all Claims evidenced by the
Subordinated Notes or arising under the Subordinated Note Indenture.
"Subordinated Note Indenture" means that certain Indenture dated as
of June 1, 1988, as modified by a First Supplemental Indenture dated as of
December 15, 1989 and an Instrument of Resignation, Appointment and
Acceptance dated as of December 15, 1989.
"Subordinated Note Indenture Trustee" means Shawmut Bank
Connecticut, N.A., in its capacity as trustee under the Subordinated Note
Indenture, and any successor Trustee appointed thereunder.
"Subordinated Notes" means $100,000,000 principal amount of 10-1/2%
Subordinated Notes due June 1, 1993 issued by the Debtor pursuant to the
Subordinated Note Indenture.
"Unallocated Amount" has the meaning set forth in Section 4.02(a)
hereof.
"Unallocated Reserve" has the meaning set forth in Section 4.02(a)
hereof.
"Unclaimed Prepetition Dividends" means the total amount of cash
dividends declared on Beneficial Shares prior to the Petition Date minus
that portion of such dividends actually paid in cash by the Debtor on or
prior to the Petition Date.
1.02. OTHER TERMS. (a) The words "herein," "hereof," "hereto,"
"hereunder" and others of similar import refer to the Plan as a whole and
not to any particular section, subsection or clause contained in the Plan.
(b) The phrase "substantially in the form," as used herein, shall
with respect to any document or instrument to which it applies, include any
subsequent version of any such document or instrument as to which only non-
material changes have been made.
(c) A term used herein that is not defined herein shall have the
meaning, if any, ascribed to that term in the Bankruptcy Code.
1.03. EXHIBITS. All Exhibits hereto are incorporated into and made
a part hereof as if set forth in full herein.
ARTICLE II
CLASSIFICATION AND TREATMENT OF CLAIMS AND EQUITY
INTERESTS
2.01. ADMINISTRATIVE EXPENSES. (a) Treatment. Each Allowed
Administrative Expense shall be paid in full in cash as promptly as
practicable after the date such Administrative Expense becomes payable by
its terms, except to the extent that the holder of such Allowed
Administrative Expense agrees to different treatment.
(b) Method of Payment. Allowed Administrative Expenses that are
due and payable under applicable non-bankruptcy law on or before the
Effective Date shall be paid from Pre-consummation Cash. Allowed
Administrative Expenses that are not due and payable under applicable non-
bankruptcy law on or before the Effective Date shall be paid by Newco,
except as follows:
(i) to the extent that the payment of any such Allowed
Administrative Expense would constitute a Restructuring Budget Overrun or
a Non-Property Operating Budget Overrun, 27% of such Administrative
Expense shall be paid by the Debtor and the remainder thereof shall be
paid by Newco; and
(ii) each Allowed Property-Related Administrative Expense shall be
paid by whichever of the Reorganized Debtor, Liquidating Corp. and Newco
was the Designated Recipient of the asset to which such Administrative
Expenses relates.
(c) The Debtor reserves the right, in its sole discretion, pending
resolution of any appeal of an order allowing any Administrative Expense,
to pay such Administrative Expense subject to receipt of such assurance or
security as it may deem appropriate for the return of any distribution in
respect thereof should such Administration Expense be disallowed, in whole
or in part, by Final Order.
2.02. PRIORITY TAX CLAIMS. (a) Treatment. Each Allowed Priority
Tax Claim shall be paid in full in cash on or as promptly as practicable
after the latest of the Effective Date, the date such Priority Tax Claim
becomes Allowed and the date such Priority Tax Claim becomes payable by its
terms, except to the extent that the holder thereof agrees to different
treatment.
(b) Method of Payment. Allowed Priority Tax Claims that are due
and payable under applicable non-bankruptcy law on or before the Effective
Date shall be paid from Pre-consummation Cash. To the extent not paid on
the Effective Date, (i) payments in respect of Allowed Priority Tax Claims
which are Unallocated Amounts shall be obligations of Newco payable from
the Unallocated Reserve, (ii) payments in respect of Allowed Priority Tax
Claims which are Allocated Amounts shall be made from the Allocated
Reserve, and (iii) payments in respect of Allowed Priority Tax Claims which
are Property-Related shall be made by whichever of the Reorganized Debtor,
Liquidating Corp. and Newco owns, after consummation of the transfers
contemplated by Section 4.03 hereof, the respective assets to which such
Priority Tax Claims relate.
2.03. CLASSIFICATION OF OTHER CLAIMS AND EQUITY INTERESTS. For all
purposes of the Plan, including voting, confirmation and distribution,
Claims (other than Administrative Expenses and Priority Tax Claims) and
Equity Interests are classified as follows:
CLASS 1. SECURED SENIOR BANK CLAIMS.
Class 1 consists of the Senior Bank Claims, including (i) the
principal amount of the loans outstanding under the Senior Bank Agreements,
(ii) accrued and unpaid interest to the Effective Date on such outstanding
principal amount to the extent Allowed under Section 506(b) of the
Bankruptcy Code, as adjusted pursuant to the Cash Collateral Stipulation,
as in effect from time to time, and (iii) unreimbursed expenses provided
for under the Senior Bank Agreements and Allowed under Section 506(b) of
the Bankruptcy Code. Class 1 Claims are secured.
CLASS 2. PRIORITY UNSECURED CLAIMS.
Class 2 consists of all Priority Claims.
CLAIM 3. GENERAL UNSECURED CLAIMS.
Class 3 consists of all General Unsecured Claims.
CLAIM 4. SUBORDINATED NOTE CLAIMS.
Class 4 consists of the Subordinated Note Claims.
CLAIM 5. EQUITY INTERESTS.
Class 5 consists of all Equity Interests.
2.04. TREATMENT OF OTHER CLAIMS AND EQUITY INTERESTS
CLASS 1. SECURED SENIOR BANK CLAIMS
On the Effective Date or as soon thereafter as is practicable,
holders of Allowed Class 1 Claims shall receive distributions consisting of
(i) the Prepaid Amount, (ii) Pre-consummation Cash in an amount equal to
the amount, if any, by which accrued and unpaid interest Allowed pursuant
to Section 506(b) of the Bankruptcy Code, as adjusted pursuant to the Cash
Collateral Stipulation, as in effect from time to time, exceeds the Prepaid
Amount and (iii) debt obligations of Newco having a principal amount equal
to the sum of (A) the unpaid principal amount of the Senior Bank Claims on
the Petition Date and (B) unreimbursed expenses provided for under the
Senior Bank Agreements and Allowed under Section 5.06(b) of the Bankruptcy
Code minus (C) an amount equal to that portion, if any, of the distribution
under clause (i) above which exceeds the interest referred to in clause
(ii) above. The debt obligations of Newco referred to in clause (iii)
above will have terms substantially as set forth in Exhibit I hereto, with
such modifications as may be agreed to by the Debtor and the Creditors
Committee which do not have a material adverse effect on the Senior
Lenders, and will be secured by the Continuing Collateral. Immediately
following the Effective Date, $3,000,000 in principal amount of such debt
obligations shall be repaid from Pre-consummation Cash dedicated to such
purpose. Such repayment shall constitute a prepayment of such debt
obligations for purposes of the New Senior Bank Agreements.
Class 1 Claims are impaired.
CLASS 2. PRIORITY CLAIMS.
(a) Treatment. Each Allowed Class 2 Claim shall be paid in full in
cash on or as promptly as practicable after the latest of the Effective
Date, the date such Priority Claim becomes Allowed and the date such
Priority Claim becomes payable by its terms, except to the extent that the
holder of such Priority Claim agrees to different treatment.
Class 2 Claims are not impaired.
(b) Method of Payment. Allowed Priority Claims that are due and
payable under applicable non-bankruptcy law on or before the Effective Date
shall be paid from Pre-consummation Cash. To the extent not paid on the
Effective Date, (i) payments in respect of Allowed Priority Claims which
are Unallocated Amounts shall be obligations of Newco payable from the
Unallocated Reserve, (ii) payments in respect of Allowed Priority Claims
which are Allocated Amounts shall be made from the Allocated Reserve, and
(iii) payments in respect of Allowed Priority Claims which are Property-
Related shall be made by whichever of the Reorganized Debtor, Liquidating
Corp. or Newco owns, after consummation of the transactions contemplated by
Section 4.03 hereof, the respective assets to which such Property-Related
Priority Claims relate.
CLASS 3. GENERAL UNSECURED CLAIMS
(a) Treatment. Each Allowed Class 3 Claim shall be paid in full in
cash on or as promptly as practicable after the latest of the Effective
Date, the date such Claim becomes Allowed and the date such Claim becomes
payable by its terms, except to the extent the holder of such Claim agrees
to different treatment.
Class 3 Claims are not impaired.
(b) Method of Payment. Allowed General Unsecured Claims that are
due and payable under applicable non-bankruptcy law on or before the
Effective Date shall be paid from Pre-consummation Cash. To the extent not
paid on the Effective Date, (i) payments in respect of Allowed General
Unsecured Claims which are Unallocated Amounts shall be obligations of
Newco payable from the Unallocated Reserve, (ii) payments in respect of
Allowed General Unsecured Claims which are Allocated Amounts shall be made
from the Allocated Reserve, and (iii) payments in respect of Allowed
General Unsecured Claims which are Property-Related shall be treated as
follows:
(i) the Reorganized Debtor shall pay in full in cash at the
respective times, if any, that they become due and payable all such
General Unsecured Claims that arise out of the ownership or operation of
Retained Assets, including without limitation the guarantees listed on
Exhibit N hereto;
(ii) Liquidating Corp. shall assume and pay in full in cash at the
respective times that they become due and payable all such General
Unsecured Claims that arise out of the ownership or operation of
Liquidating Corp. Assets, including without limitation the guarantees
listed on Exhibit O hereto; and
(iii) Newco shall assume and pay in full in cash at the respective
times, if any, that they become due and payable all other of such General
Unsecured Claims, including without limitation the guarantees listed on
Exhibit P hereto.
CLASS 4. SUBORDINATED NOTE CLAIMS
On the Effective Date or as soon thereafter as is practicable, the
following consideration shall be delivered to the Subordinated Note
Indenture Trustee in respect of Allowed Class 4 Claims: (i) an amount of
Pre-consummation Cash equal to accrued and unpaid trustee's fees and
expenses provided for under the Subordinated Note Indenture, and (ii) 100
shares of Newco Common Stock for each $1,000 principal amount of
Subordinated Notes held by such holder on the Distribution Record Date.
The cash so distributed shall be applied to satisfy such trustee's fees and
expenses, and the Newco Common Stock shall be distributed pro rata to
holders of Subordinated Notes.
Class 4 Claims are impaired.
CLASS 5. BENEFICIAL SHARE EQUITY INTERESTS
The holders of Beneficial Shares shall retain such shares. In
addition, if the transactions contemplated by a New Investor Purchase
Agreement are consummated on the Effective Date, the Debtor shall, to the
extent contemplated by such New Investor Purchase Agreement, on the
Effective Date or as soon thereafter as is practicable, distribute to each
holder of an Allowed Class 5 Equity Interest, for each Beneficial Share
held by such holder on the Distribution Record Date, one share of
Liquidating Corp. Common Stock.
Class 5 Equity Interests are impaired.
ARTICLE III
NONCONSENSUAL CONFIRMATION OF THE PLAN
3.01. NONCONSENSUAL CONFIRMATION OF THE PLAN. In the event that
holders of Class 1 Claims, Class 4 Claims or Class 5 Equity Interests shall
fail to accept the Plan in accordance with Section 1129(a)(8) of the
Bankruptcy Code, or in the event it is determined that any Class treated as
unimpaired hereunder shall be deemed to be impaired, the Debtor reserves
the right to (i) request that the Bankruptcy Court confirm the Plan
pursuant to Section 1129(b) of the Bankruptcy Code or (ii) modify the Plan
in accordance with Section 9.11 hereof.
ARTICLE IV
INCORPORATION OF NEW ENTITIES;
CERTIFICATES OF INCORPORATION;
AMENDMENT OF DECLARATION OF TRUST;
CASH RESERVES; TRANSFERS OF ASSETS;
NEW INVESTMENT IN DEBTOR
4.01. INCORPORATION OF NEW ENTITIES; CERTIFICATES OF INCORPORATION;
AMENDMENT OF DECLARATION OF TRUST.
(a) On or prior to the Effective Date, (i) the Debtor shall cause
Liquidating Corp. and Newco to be organized as corporations under the laws
of the State of Delaware. The certificate of incorporation for Liquidating
Corp. shall conform to the Liquidating Corp. Certificate of Incorporation,
and the certificate of incorporation for Newco shall conform to the Newco
Certificate of Incorporation. On or prior to the Effective Date, the
Debtor shall cause Liquidating Corp. to adopt the Liquidating Corp. Bylaws
as its bylaws and shall cause Newco to adopt the Newco Bylaws as its the
bylaws.
(b) On or prior to the Effective Date, the Debtor shall cause the
Declaration of Trust Amendment to be filed with the appropriate office or
offices in the Commonwealth of Massachusetts.
(c) On or prior to the Effective Date, the Debtor shall file or
cause to be filed in the appropriate public offices all documentation, and
shall take or cause to be taken all action, as may be required to effect
the transactions contemplated by this Section 4.01. Pursuant to Section
5.09 hereof, all such filings and actions shall be authorized and approved
in all respects without further action by any party.
4.02. CASH RESERVES.
(a) ESTABLISHMENT AND FUNDING OF CASH RESERVES. In order to
provide for certain cash distributions to be made after the Effective Date
in respect of Allowed Claims as contemplated in Section 2.04 hereof, the
Debtor, on or prior to the Effective Date, shall establish two reserves:
(1) a reserve (the "Unallocated Reserve") for cash distributions
("Unallocated Amounts") which are not in respect of Property-Related
expenses or liabilities, Non-Newco Property Operating Budget Overruns,
Non-Property Operating Budget Overruns or Restructuring Budget
Overruns; and
(2) a reserve (the "Allocated Reserve") for cash distributions
("Allocated Amounts") which are in respect of Non-Property Operating
Budget Overruns or Restructuring Budget Overruns.
Not later than the Effective Date, the Debtor shall contribute to each such
reserve cash or cash investments from Pre-consummation Cash in an amount
equal to the aggregate amount of Allowed Claims and Disputed Claims not
paid on the Effective Date arising out of the category of expenses or
liabilities to which such reserve relates. For purposes of determining the
amounts of cash to be contributed to each Cash Reserve, the "Unused
Budgeted Amount", as such term is used in the definitions of Non-Newco
Property Operating Budget Overrun, Non-Property Operating Budget Overrun
and Restructuring Budget Overrun, shall in each such case be determined as
of the Effective Date as though all such expenses and liabilities were
being paid on such date with the amounts being contributed to the Cash
Reserves. For purposes of determining the amount in which any Cash Reserve
will be funded in respect of any Disputed Claim, the amount of such Claim
shall be deemed to be (i) the higher of the amount, if any, in which such
Claim is set forth in the Schedules and the amount, if any, claimed in any
proof of claim filed in respect of such Claim or (ii) if no amount can be
determined pursuant to clause (i), an amount estimated in good faith by the
Debtor.
(b) ADDITIONS TO CASH RESERVES. If any Claim becomes payable from
the Unallocated Reserve pursuant to Section 2.04 hereof and such Cash
Reserve does not contain sufficient resources to pay such Claim, Newco will
make a payment to such Cash Reserve in such amount as is necessary to cause
such Cash Reserve to have sufficient resources to pay such Claim. If any
Claim becomes payable from the Allocated Reserve pursuant to Section 2.04
hereof and such Cash Reserve does not contain sufficient resources to pay
such Claim, Newco will make a payment to such Cash Reserve of 73%, and the
Reorganized Debtor will make a payment to such Cash Reserve of 27%, of such
amount as is necessary to cause such Cash Reserve to have sufficient
resources to pay such Claim.
(c) DISTRIBUTION OF RESIDUAL. At such time as all of the
distributions required by the Plan to be made from the Unallocated Reserve
have been made, any cash or cash equivalents remaining in such Cash Reserve
shall be distributed to Newco. At such time as all of the distributions
required by the Plan to be made from the Allocated Reserve have been made,
27% of any cash or cash equivalents remaining in such Cash Reserve shall be
distributed to the Reorganized Debtor and 73% thereof shall be distributed
to Newco.
4.03. TRANSFERS OF ASSETS; DISTRIBUTION OF LIQUIDATING CORP.
PREFERRED STOCK. (a) On the Effective Date, after taking into account (i)
the payment of all Allowed Administrative Expenses and Allowed Claims
required to be paid in cash on the Effective Date under the Plan and (ii)
the transfer of funds to the Cash Reserves pursuant to Section 4.02 hereof:
(A) the Debtor shall cause the Liquidating Corp. Assets to be
transferred to Liquidating Corp. in consideration for the issuance to the
Debtor of 12,423,208 shares of Liquidating Corp. Common Stock, the
Liquidating Corp. Preferred Stock and the Liquidating Corp. Note;
(B) the Debtor shall cause the Original Newco Assets and the
Liquidating Corp. Note to be transferred to Newco in consideration for
the issuance to the Debtor of 10,000,000 shares of Newco Common Stock and
the Newco Preferred Stock; and
(C) the Debtor shall retain the Retained Assets.
(b) On the Effective Date, following completion of the asset
transfers contemplated by Section 4.03(a) hereof, if the transactions
contemplated by any New Investor Purchase Agreement are consummated on the
Effective Date, the Debtor shall, to the extent contemplated by such New
Investor Purchase Agreement, distribute the Liquidating Corp. Preferred
Stock to a charitable organization identified by the Debtor.
4.04. NEW INVESTMENT IN DEBTOR. (a) If (i) the Board of Trustees
of the Debtor approves a New Investor Purchase Agreement and the
transactions contemplated thereby and (ii) the conditions to the closing of
such transactions are satisfied, the parties to such New Investor Purchase
Agreement shall perform their obligations under such Agreement as
contemplated thereby.
(b) The performance by the parties thereto of any New Investor
Purchase Agreement is not a condition to the consummation of the Plan, and
the failure of the closing of any New Investor Purchase Agreement to occur
or the failure of any party to perform its obligations thereunder shall not
preclude the implementation of or invalidate any other provision of the
Plan.
4.05. EXECUTION OF NEW SENIOR BANK AGREEMENTS. On or prior to the
Effective Date, the parties to the New Senior Bank Agreements shall execute
and deliver such Agreements.
4.06. ASSET EXCHANGE. On or prior to the Effective Date, the Asset
Exchange shall be consummated.
4.07. CONSULTING AGREEMENT. On or prior to the Effective Date, the
parties to the Consulting Agreement shall execute and deliver such
Agreement.
4.08. INDEMNIFICATION AGREEMENT. On or prior to the Effective
Date, the parties to the Indemnification Agreement shall execute and
deliver such Agreement.
4.09. LIQUIDATING CORP. MANAGEMENT AGREEMENT. On or prior to the
Effective Date, the parties to the Liquidating Corp. Management Agreement
shall execute and deliver such Agreement.
4.10. NEWCO MANAGEMENT AGREEMENT. On or prior to the Effective
Date, the parties to the Newco Management Agreement shall execute and
deliver such Agreement.
ARTICLE V
IMPLEMENTATION OF THE PLAN
5.01. REVESTING OF ASSETS. Except to the extent it is transferred to
Liquidating Corp. or Newco pursuant to the provisions of this Plan, the
property of the estate of the Debtor shall revest in the Reorganized Debtor
on the Effective Date. The Reorganized Debtor, Liquidating Corp. and Newco
may operate their respective business, and may use, acquire and dispose of
property, free of any restrictions of the Bankruptcy Code. As of the
Effective Date, all property of the Reorganized Debtor, Liquidating Corp.
and Newco shall be free and clear of all Claims, liens and interests of
Creditors and holders of Equity Interests, except as expressly provided
herein. Following the Effective Date, no asset that has vested in the
Reorganized Debtor or Liquidating Corp. shall secure the obligations of or
claims against Newco under the New Senior Bank Agreements; such obligations
and claims shall be secured only by the Continuing Collateral, to the
extent contemplated by the New Senior Bank Agreements.
5.02. DISTRIBUTIONS PURSUANT TO THE PLAN. At the times and in the
manner contemplated in Section 2.04, the Debtor (i) shall distribute cash
and Newco Common Stock to holders of Claims entitled to distributions
thereof pursuant to the Plan and (ii) if the transactions contemplated by
any New Investor Purchase Agreement are consummated on the Effective Date,
shall, to the extent contemplated by such New Investor Purchaser Agreement,
distribute the Liquidating Corp. Common Stock to the holders of Equity
Interests as described in Section 2.04 hereof and distribute the
Liquidating Corp. Preferred Stock to a charitable organization identified
by the Debtor.
5.03. CANCELLATION OF SUBORDINATED NOTES AND PROMISSORY NOTES;
TERMINATION OF SUBORDINATED NOTE INDENTURE. (a) On the Effective Date:
(i) the Subordinated Notes shall be canceled and the obligations of the
Debtor under the Subordinated Note Indenture shall be discharged, and (ii)
the promissory notes issued by the Debtor to the Senior Lenders pursuant to
the terms of the Senior Bank Agreements shall be canceled.
(b) Upon the earlier to occur of one year after the Confirmation
Date and the completion by the Subordinated Note Indenture Trustee of the
distributions to be made by the Subordinated Note Indenture Trustee to the
holders of Allowed Class 4 Claims pursuant to the Plan, the Subordinated
Note Indenture shall terminate.
5.04. EFFECTUATION OF SUBORDINATION. The classification of Claims
under the Plan and the distributions to be made pursuant to the Plan take
into account the relative priorities of the Claims in each class in
connection with any contractual subordination provisions relating thereto.
Accordingly, the distributions to be made pursuant to the Plan on account
of Class 4 Claims shall not be subject to levy, garnishment, attachment or
other legal process by any holder of Senior Indebtedness (as such term is
defined in the Subordinated Note Indenture) by reason of claimed
contractual subordination rights. On the Effective Date, all Creditors
shall be deemed, pursuant to Sections 510 and 1129 of the Bankruptcy Code,
to have realized the benefit of any and all contractual subordination
rights they may have, and, effective as of the Effective Date, all holders
of Senior Indebtedness shall be permanently enjoined from enforcing or
attempting to enforce any such rights with respect to the distributions
under the Plan to the holders of Class 4 Claims or otherwise.
5.05. SURRENDER OF SUBORDINATED NOTES.
(a) Each holder of an instrument evidencing a Class 4 Claim shall
surrender such instrument (in proper form for transfer) to the Subordinated
Note Indenture Trustee. No distribution of property hereunder shall be
made to or on behalf of any such holder unless and until such instrument is
received by the Subordinated Note Indenture Trustee or, in the event such
instrument has been lost, stolen, mutilated or destroyed, such holder has
delivered to the Reorganized Debtor (or its designated agent) (i) evidence
satisfactory to the Reorganized Debtor of the loss, theft, mutilation or
destruction of such instrument and (ii) such security or indemnity as may
be reasonably required by the Reorganized Debtor to hold it harmless with
respect thereto. Any such holder that fails to surrender or cause to be
surrendered such instrument or to provide such security or indemnity within
five (5) years after the Confirmation Date shall be deemed to have
forfeited all rights, claims and interests with respect thereto and shall
not participate in any distribution hereunder in respect thereof.
(b) As of the close of business on the Distribution Record Date,
the transfer ledger for the Subordinated Notes shall be closed, there shall
be no registration of or other changes in the holders of any Subordinated
Notes on the books of the Debtor (or any trustees, transfer agents or
registrars it may have employed in connection therewith), and neither the
Debtor nor any such trustee, transfer agent or registrar shall have any
obligation to recognize any transfer of Subordinated Notes occurring
thereafter (but shall be entitled instead to recognize and deal with, for
all purposes under the Plan, except as otherwise provided herein, only
those holders reflected on its books as of the close of business on the
Distribution Record Date).
(c) Until the holders of record of the Subordinated Notes on the
Distribution Record Date or their lawful successors or assigns surrender
pursuant to subparagraph (a) above the instruments which had previously
evidenced the Subordinated Notes, they shall have no rights (and the
instruments shall evidence no rights) except the right, upon surrender of
such instruments pursuant to such subparagraph, to receive in exchange
therefor the distributions to which such holders are entitled pursuant to
the Plan.
(d) Upon satisfaction of any conditions precedent set forth in the
New Senior Bank Agreements (including without limitation surrender of any
promissory note issued under a Senior Bank Agreement), each holder,
immediately prior to such surrender, of a promissory note issued under a
Senior Bank Agreement shall receive the cash distribution provided for
under Section 2.04 and the promissory notes issued by Newco evidencing its
obligations under the New Senior Bank Agreements. As of the Effective
Date, the New Senior Bank Agreements shall replace and supersede the Senior
Bank Agreements.
(e) Notwithstanding anything to the contrary contained in the Plan,
all distributions to be made in respect of Allowed Class 4 Claims may, at
the option of the Reorganized Debtor, be made directly to the Subordinated
Note Indenture Trustee, which shall as soon thereafter as practicable
distribute any property so received to the respective holders of Allowed
Class 4 Claims except to the extent that the Subordinated Note Indenture
Trustee is entitled to retain such property for its own account. Any proof
of claim filed by the direct, indirect or beneficial holder of a Class 4
Claim shall be considered duplicative of the Claims of the Subordinated
Note Indenture Trustee.
5.06. METHOD OF DISTRIBUTION UNDER THE PLAN.
(a) DISTRIBUTION AGENTS. The Debtor may retain one or more
Distribution Agents to assist in the making of distributions under the Plan
and will compensate such Distribution Agents under the respective terms of
their retention agreements. Pending distributions by a Distribution Agent
of any cash distributed to such Distribution Agent pursuant to the Plan,
such Distribution Agent shall invest such cash in such manner as the Debtor
and such Distribution Agent shall agree.
(b) MANNER OF PAYMENT UNDER THE PLAN. Any payment of cash made by
a Distribution Agent pursuant to the Plan may be made either by check drawn
on a domestic bank or by wire transfer from a domestic bank, at the option
of such Distribution Agent.
(c) SETOFFS. The Debtor may, but shall not be required to, set off
against any Claim, and the payments to be made pursuant to the Plan in
respect of any Claim, any claims of any nature whatsoever the Debtor may
have against the claimant, but neither the failure to do so nor the
allowance of any Claim hereunder shall constitute a waiver or release by
the Debtor of any such claim the Debtor may have against such claimant.
(d) DISTRIBUTION OF UNCLAIMED PROPERTY. Any distribution of cash
(and all interest, if any, earned thereon) or other property under the Plan
that is unclaimed after five (5) years following the Confirmation Date
shall be distributed to whichever of the Reorganized Debtor, Liquidating
Corp. and Newco would have been required hereunder to make such
distribution, for its own account, and the holder of the Claim shall be
deemed to have forfeited all rights thereto; provided, however, that
nothing contained in this Plan shall require the Reorganized Debtor,
Liquidating Corp., Newco or the Distribution Agent to locate the holder of
a Claim or Equity Interest that fails to claim its distribution hereunder.
(e) SATURDAY, SUNDAY OR LEGAL HOLIDAY. If any payment or act under
the Plan is required to be made or performed on a date that is not a
Business Day, then the making of such payment or the performance of such
act may be completed on the next succeeding Business Day, but shall be
deemed to have been completed as of the required date.
(f) FRACTIONAL SHARES. The distribution of shares of Newco Common
Stock as provided in the Plan may mathematically entitle the holder of an
Allowed Class 4 Claim to a fractional share of Newco Common Stock.
Notwithstanding the foregoing, fractional shares will not be issued. A
holder of an Allowed Class 4 Claim that would otherwise receive a
fractional share of Newco Common Stock will receive one share on account of
such fractional share.
5.07. LISTING AND TRADING OF COMMON STOCK. On or before the
Effective Date, Liquidating Corp. (if it is to distribute shares of
Liquidating Corp. Common Stock to holders of Allowed Equity Interests
pursuant to Section 2.04 hereof) and Newco shall each prepare and file with
the Securities and Exchange Commission a registration statement on Form 10
registering the Liquidating Corp. Common Stock or the Newco Common Stock,
as the case may be, under the Securities Exchange Act of 1934 and shall use
all reasonable efforts to cause such registration statement to be declared
effective and to cause such Common Stock to be listed for trading on a
national securities exchange or an over-the-counter market. If the
Liquidating Corp. Common Stock is distributed to holders of Allowed Equity
Interests pursuant to Section 2.04 hereof, shares of Liquidating Corp.
Common Stock will not trade separately from Beneficial Shares and no
transfer of a Beneficial Share shall be registered without an accompanying
registration of transfer of a share of Liquidating Corp. Common Stock.
5.08. MANAGEMENT OF THE REORGANIZED DEBTOR, LIQUIDATING CORP. AND
NEWCO. Immediately following the Effective Date, the Board of Trustees of
the Reorganized debtor and the Boards of Directors of Liquidating Corp. and
Newco shall consist, respectively, of those individuals whose names are set
forth in the Disclosure Statement. Immediately following the Effective
Date, the officers of the Reorganized Debtor, Liquidating Corp. and Newco
shall consist, respectively, of the individuals whose names are set forth
in the Disclosure Statement. All such directors and officers shall be
deemed elected pursuant to the Plan.
5.09. CORPORATE ACTION. Upon entry of the Confirmation Order by
the Clerk of the Bankruptcy Court, all actions, agreements and transactions
contemplated by the Plan, including, without limitation, the amendment of
the Declaration of Trust, the filing of Newco's certificate of
incorporation and Liquidating Corp.'s certificate of incorporation and the
execution, delivery and performance by the parties thereto of the New
Senior Bank Agreements, the Indemnification Agreement, the Consulting
Agreement and, if applicable, the New Investor Purchase Agreement, shall be
authorized and approved in all respects, without further action by any
party. Without limiting the generality of the foregoing, on the Effective
Date, the issuance of Liquidating Corp. Common Stock and Newco Common
Stock pursuant to Section 5.02 hereof, the election of directors and
officers pursuant to Section 5.08 hereof and the other matters and actions
provided for under or contemplated by the Plan, and any corporate or trust
action in furtherance thereof by or on behalf of the Debtor, the
Reorganized Debtor, Liquidating Corp., Newco or their respective
shareholders, partners, trustees or directors, shall be duly authorized,
shall occur and shall be in effect from and after the Effective Date
without any requirement of further action by the holders of Beneficial
Shares or the trustees of the Debtor or by the stockholders, partners or
directors of Liquidating Corp. or Newco. On the Effective Date, all
agreements entered into pursuant to the Plan, including, without
limitation, the New Senior Bank Agreements, the Indemnification Agreement,
the Consulting Agreement and, if applicable, the New Investor Purchase
Agreement, and any agreements entered into in connection with the
foregoing, shall be valid, binding and in full force and effect. The
President or any Vice President of the Debtor, the Treasurer of the Debtor
and the Secretary of the Debtor shall, upon entry of the Bankruptcy Court,
be authorized in all respects, without further action by any party, to take
all actions necessary to effectuate the transactions contemplated by the
Plan.
5.10. DISPUTED CLAIMS AND INTERESTS. Except as set forth below,
the Debtor or the Reorganized Debtor, as the case may be, will have the
exclusive right to object to the allowance of Administrative Expenses,
Claims (other than Non-Barred Claims) and Equity Interests filed with the
Bankruptcy Court with respect to which the Debtor or the Reorganized Debtor
disputes liability in whole or in part; provided that the Equity Committee
shall have the non-exclusive right to object, prior to the Effective Date,
to the allowance of Claims and Administrative Expenses filed with the
Bankruptcy Court by insiders, as such term is defined in the Bankruptcy
Code. Notwithstanding the foregoing, Newco will have the exclusive right
after the Effective Date to object to the allowance of Priority Claims and
General Unsecured Claims for which Newco will assume liability on the
Effective Date pursuant to Section 2.04 and with respect to which Newco
disputes liability in whole or in part. All objections will be litigated
to Final Order; provided, however, that the Debtor, the Reorganized Debtor
or Newco, as the case may be, may compromise and settle, withdraw or
resolve by any other method approved by the Bankruptcy Court, any
objections to Administrative Expenses, Claims or Equity Interests.
ARTICLE VI
EXECUTORY CONTRACTS
6.01. EXECUTORY CONTRACTS.
(a) Effective upon the Effective Date, all executory contracts that
exist between the Debtor and any other person are hereby expressly
rejected, provided, however, that all executory contracts listed on
Schedule 6.01A, 6.01B or 6.01C hereto (as such schedules may be modified,
by inclusion of additional contracts, on or before the Confirmation Date)
and any other executory contract that is specifically assumed by the
Debtor, with the approval of the Bankruptcy Court and the Creditors
Committee, prior to the Effective Date shall be assumed. Entry of the
Confirmation Order by the Clerk of the Bankruptcy Court shall constitute
approval of the assumptions and rejections provided for in this Section, in
each case pursuant to Section 365(a) of the Bankruptcy Code.
(b) The executory contracts listed on Schedule 6.01B shall be
assigned to Liquidating Corp. on the Effective Date, Liquidating Corp.
shall make any cash payments necessary to cure defaults, if any, under such
contracts, and the Debtor, the Reorganized Debtor and Newco will have no
liability or obligation under such contracts after the Effective Date. The
executory contracts listed on Schedule 6.01C shall be assigned to Newco on
the Effective Date, Newco shall make any cash payments necessary to cure
defaults, if any, under such contracts, and the Debtor, the Reorganized
Debtor and Liquidating Corp. will have no liability or obligation under
such contracts after the Effective Date. Payments, if any, necessary to
cure any defaults under contracts listed on Schedule 6.01A will be made by
the Debtor from Retained Assets.
(c) Claims, if any, created by the rejection of executory
contracts must be filed with the Bankruptcy Court and served on the Debtor
no later than the date set forth in the Bar Order as the last date to file
such Claims or such other date as may be fixed by an order of the
Bankruptcy Court for such purpose. Any such Claims not filed within such
time will be forever barred from assertion against the Debtor (or its
successors, including without limitation Liquidating Corp. and Newco), its
estate and its property. Unless otherwise ordered by the Bankruptcy Court
or otherwise required by applicable law, all Allowed Claims, if any,
arising by reason of the rejection of any executory contract by the Debtor
shall constitute Class 3 Claims for the purposes of the Plan.
6.02. INDEMNIFICATION OBLIGATIONS. For purposes of the Plan, the
obligations of the Debtor to indemnify (i) its present and former trustees
and officers against any liabilities pursuant to the Declaration of Trust,
applicable state law or specific agreement, or any combination of the
foregoing, or (ii) any other person against any liability pursuant to the
terms of any agreement entered into by the Debtor prior to the Petition
Date (except for the Senior Bank Agreements, the Subordinated Notes, the
Subordinated Note Indenture, the Agreement dated January 13, 1993 between
the Debtor and the Senior Lenders and any agreement between the Debtor and
any non-statutory committee of creditors or equity security holders of the
Debtor or any member thereof or counsel or advisor thereto) that has not
been specifically rejected by the Debtor as contemplated herein, shall in
each case survive confirmation of the Plan, remain unaffected thereby, be
subject to the same conditions for indemnification and not be discharged,
regardless of whether indemnification is owed in connection with an event
occurring before, on or after the Petition Date. On and after the
Effective Date, any claim arising under any such indemnification obligation
or agreement shall be satisfied 27% by the Reorganized Debtor and 73% by
Newco.
ARTICLE VII
EFFECTIVENESS OF THE PLAN
7.01. CONDITIONS PRECEDENT. The Plan shall become effective at such
time as the following conditions shall have been satisfied:
(a) the Confirmation Order shall have been entered, shall be in full
force and effect and shall not be subject to any stay;
(b) the New Senior Bank Agreements shall have been executed by
Newco;
(c) the amount of Class 3 Claims which, as of the Effective Date,
are either Allowed Claims or Disputed Claims (other than Property-Related
Claims, Claims for Unclaimed Prepetition Dividends, Non-Barred Claims and
Claims contemplated by the Operating Budget or the Restructuring Budget to
the extent payments in respect thereof will not constitute Allocated
Amounts, including without limitation claims arising out of the guarantees
and other items listed on Exhibits N, O and P hereto) that have not been
disallowed by order of the Bankruptcy Court shall not exceed $100,000 and
the amount of Claims for Unclaimed Prepetition Dividends that have not
been disallowed by order of the Bankruptcy Court shall not exceed
$311,601;
(d) the Debtor's accounts shall reflect at least $2,783,000 in
prepaid interest on the principal amount of the Senior Bank Claims or such
lesser amount as results solely from the payment of principal of or
interest on such Claims after March 31, 1993;
(e) the Debtor shall have operated its business in the ordinary
course since March 31, 1993, provided that the disposition of assets, the
prepayment of ordinary course liabilities as contemplated by the Budget,
the payment of costs for capital expenditures related to the Debtor's
assets as contemplated by the Budget, the payment of fees and expenses in
connection with the restructuring of the Debtor's assets and liabilities
(including without limitation the fees and expenses of professionals
retained in the Chapter 11 Case), additions to reserves related to asset
carrying values, and the addition to reserves in connection with a change
in accounting principles, as described in the Debtor's report on Form 10-Q
for the quarter ended March 31, 1993, shall not be considered outside the
ordinary course of business;
(f) the Debtor shall have complied in all material respects
with the Newco Asset Sale Parameters;
(g) the Debtor shall have certified to the Creditors Committee that
its unaudited statements of income and financial condition as of March 31,
1993 reflect, in all material respects, taken as a whole, the results of
operations of the Debtor for the quarter then ended and the financial
position of the Debtor as at such date in accordance with generally
accepted accounting principles, subject to normal quarterly and year-end
adjustments; provided that such certification may exclude from its
coverage the taking of any reserves against, and the carrying value of,
the Debtor's assets;
(h) the Consulting Agreement, the Indemnification Agreement and the
Liquidating Corp. Note shall have been executed and delivered;
(i) the Asset Exchange shall have been consummated; and
(j) the Liquidating Corp. Management Agreement and the Newco
Management Agreement shall have been executed and delivered.
The conditions set forth in subsections (e) and (f) above shall be deemed
satisfied at any time if the President of the Debtor certifies that such
conditions are satisfied at such time and such certification is not
disputed by the Creditors Committee in writing with one business day
following delivery of the form of such certification to the Creditors
Committee.
7.02. WAIVER OF CONDITIONS. The condition to effectiveness of the
Plan set forth in Section 7.01(e) may be waived in writing by the Debtor,
the Creditors Committee and the Equity Committee, the conditions set forth
in Section 7.01(c), (d) and (f) through (i) may each be waived in writing
by the Debtor and the Creditors Committee and the condition set forth in
Section 7.01(j) may be waived in writing by the Debtor.
ARTICLE VIII
EFFECTS OF CONFIRMATION
8.01. DISCHARGE OF DEBTOR. The rights afforded in the Plan and the
treatment of all Claims and Equity Interests therein shall be in exchange
for and in complete satisfaction, discharge and release of Claims and
Equity Interests of any nature whatsoever against the Debtor and its
successors (including, without limitation, the Reorganized Debtor,
Liquidating Corp. and Newco) or any of their respective assets or
properties. Except as otherwise provided herein, (i) on the Effective
Date, all such Claims against, and Equity Interests in, the Debtor shall be
satisfied, discharged and released in full and (ii) all persons shall be
precluded from asserting against the Reorganized Debtor, Liquidating Corp.,
Newco, their successors or their respective assets or properties any other
or further Claims or Equity Interests based upon any act or omission,
transaction or other activity of any kind or nature that occurred prior to
the Confirmation Date.
8.02. EXCULPATION. None of the Debtor, the Reorganized Debtor,
Liquidating Corp., Newco, the members of any Committee, the members of any
unofficial committee or group of holders of Claims against or Interests in
the Debtor formed prior to the Petition Date, nor any of their respective
members, officers, directors, trustees, employees, agents or advisors,
attorneys or representatives, shall have or incur any liability to any
holder of a Claim or Equity Interest for any act or omission in connection
with, or arising out of, the pursuit of confirmation of the Plan, the
consummation of the Plan or the administration of the Plan or the property
to be distributed under the Plan except for willful misconduct or gross
negligence, and the Debtor, the Reorganized Debtor, Liquidating Corp.,
Newco, and the members of any Committee shall in all respects be entitled
to rely upon the advice of counsel with respect to their duties and
responsibilities under the Plan.
8.03. RELEASES.
(a) On the Effective Date, in consideration for the obligations of
the Debtor under the Plan, all Persons who have held, hold or may hold
Claims against or Equity Interests in the Debtor shall be deemed to have
released the Debtor, the Reorganized Debtor, Liquidating Corp., Newco, the
members of any Committee, the members of any unofficial committee or group
of holders of Claims against or Interests in the Debtor formed prior to the
Petition Date and, in each case, their respective agents, advisors,
attorneys and representatives (including, without limitation, their
respective current and former officers, directors, trustees and employees),
of and from any and all claims, obligations, rights, causes of action and
liabilities (other than the right to enforce the Debtor's, the Reorganized
Debtor's, Liquidating Corp.'s and Newco's obligations under the Plan) that
such holder may be entitled to assert, whether known or unknown, foreseen
or unforseen, then existing or thereafter arising, based in whole or in
part upon any act, omission or other occurrence taking place on or prior to
the Effective Date in any way relating to the Debtor, the Chapter 11 Case
or the Plan.
(b) On the Effective Date, the Debtor, on behalf of itself and its
successors, (i) as consideration for services rendered by the Debtor's
officers, trustees and employees prior to and during the pendency of the
Chapter 11 Case, shall be deemed to have waived and released any and all
claims, obligations, rights, causes of action and liabilities, whether
known or unknown, foreseen or unforseen, then existing or thereafter
arising, that are based in whole or in part upon any act, omission or other
occurrence taking place on or prior to the Effective Date and which may be
asserted by or on behalf of the Debtor (or its successors) against such
officers, trustees and employees, and (ii) for good and valuable
consideration, the adequacy of which is hereby confirmed, shall be deemed
to have waived and released any and all claims, obligations, rights, causes
of action and liabilities (including, without limitation, causes of action
arising under Sections 541, 544, 547 and 548 of the Bankruptcy Code, but
excluding any rights of the Debtor to enforce the Plan), whether known or
unknown, foreseen or unforseen, then existing or thereafter arising, that
are based in whole or in part upon any act, omission or other occurrence
taking place on or prior to the Effective Date and which may be asserted by
or on behalf of the Debtor (or its successors) against any holder of a
Claim or Equity Interest that holds no Disputed Claim or Disputed Equity
Interest, and each of such holder's agents, advisors, attorneys and
representatives.
8.04. BINDING EFFECT. The Plan shall be binding upon and inure to
the benefit of the Debtor, its Creditors, the holders of Equity Interests
and their respective successors and assigns.
ARTICLE IX
MISCELLANEOUS PROVISIONS
9.01. COURT TO RETAIN JURISDICTION FOR CERTAIN PURPOSES. The Bankruptcy
Court shall have exclusive jurisdiction of all matters arising out of, and
related to, the Chapter 11 Case and the Plan pursuant to, and for the
purposes of, Sections 105(a) and 1142 of the Bankruptcy Code and for, among
other things, the following purposes:
(a) to hear and determine pending applications for the assumption or
rejection of executory contracts or unexpired leases, if any are pending,
and the allowance of Claims resulting therefrom or from the rejection of
executory contracts or unexpired leases pursuant to the Plan;
(b) to determine any and all pending adversary proceedings,
applications and contested matters;
(c) to ensure that distributions to holders of Allowed
Administrative Expenses, Allowed Claims and Allowed Equity Interests are
accomplished as provided herein;
(d) to hear and determine any objections to Administrative Expenses
or to proofs of Claims and Equity Interests filed either before or after
the Confirmation Date, including any objections to the classification of
any Claim or Equity Interest, and to allow or disallow any Disputed
Administrative Expense, Disputed Claim or Disputed Equity Interest, in
whole or in part;
(e) to enter and implement such orders as may be appropriate in the
event the Confirmation Order is for any reason stayed, revoked, modified
or vacated;
(f) to enter and implement such orders as may be necessary or
appropriate in aid of confirmation of the Plan or to facilitate
implementation of the Plan;
(g) to consider any modifications of the Plan to cure any defect or
omission, or reconcile any inconsistency in any order of the Bankruptcy
Court, including, without limitation, the Confirmation Order;
(h) to hear and determine all applications for compensation and
reimbursement of expenses arising out of or relating to the Plan or the
Chapter 11 Case;
(i) to hear and determine disputes arising in connection with the
interpretation, implementation or enforcement of the Plan (including,
without limitation, those regarding the effect of any release or discharge
provided for herein or effected hereby);
(j) to recover all assets of the Debtor and property of the estate,
wherever located;
(k) to hear and determine matters concerning state, local and
federal taxes in accordance with Sections 346, 505 and 1146 of the
Bankruptcy Code;
(l) to hear any other matter not inconsistent with the Bankruptcy
Code; and
(m) to enter a final decree closing the Chapter 11 Case.
9.02. PAYMENT OF STATUTORY FEES. All fees payable pursuant to
Section 1930 of Title 28 of the United States Code, as determined by the
Bankruptcy Court at the hearing pursuant to Section 1128 of the Bankruptcy
Code, shall be paid on or before the Effective Date.
9.03. RIGHTS OF ACTION. Any rights or causes of action accruing to
the Debtor (to the extent not released pursuant to the Plan or transferred
pursuant to Section 4.03 hereof) shall remain assets of the Reorganized
Debtor except that all potential claims for the recovery of preferences
pursuant to Section 547 of the Bankruptcy Code shall be waived. The
Reorganized Debtor may pursue those rights of action, as appropriate, in
accordance with what is in the best interests, and for the benefit, of the
Reorganized Debtor.
9.04. HEADINGS. Headings are used in the Plan for convenience and
reference only, and shall not constitute a part of the Plan for any other
purpose.
9.05. REVOCATION OR WITHDRAWAL.
(a) The Debtor reserves the right to revoke or withdraw the Plan
prior to the Confirmation Date.
(b) If the Debtor revokes or withdraws the Plan prior to the
Confirmation Date, then the Plan shall be deemed null and void. In such
event, nothing contained herein shall be deemed to constitute a waiver or
release of any claims by or against the Debtor or any other person or to
prejudice in any manner the rights of the Debtor or any person in any
further proceedings involving the Debtor.
9.06. NOTICES. Any notice required or permitted to be provided
under the Plan shall be in writing and served by either (a) certified mail,
return receipt requested, postage prepaid, (b) hand delivery, or (c)
reputable overnight delivery service, freight prepaid, to be addressed as
follows:
LIBERTE INVESTORS
c/o Davis Polk & Wardwell
450 Lexington Avenue
New York, New York 10017
Attention: Donald S. Bernstein, Esq.
CREDITORS COMMITTEE
c/o Schulte Roth & Zabel
900 Third Avenue
New York, New York 10022
Attention: Mark A. Neporent, Esq.
EQUITY COMMITTEE
c/o Stutman, Treister & Glatt, Professional Corporation
3699 Wilshire Boulevard Suite 900
Los Angeles, California 90010
Attention: Kenneth N. Klee, Esq.
9.07. WITHHOLDING AND REPORTING REQUIREMENTS. In connection with
the Plan and all instruments issued in connection therewith and
distributions thereon, the Debtor shall comply with all withholding and
reporting requirements imposed by any federal, state, local or foreign
taxing authority, and all distributions hereunder shall be subject to any
such withholding and reporting requirements.
9.08. GOVERNING LAW. Except to the extent that the Bankruptcy Code
or other federal law is applicable, the rights, duties and obligations
arising under the Plan shall be governed by, and construed and enforced in
accordance with, the laws of the State of New York.
9.09. FILING OF ADDITIONAL DOCUMENTS. On or before substantial
consummation of the Plan, the Debtor shall file with the Bankruptcy Court
such agreements and other documents as may be necessary or appropriate to
effectuate and further evidence the terms and conditions of the Plan.
9.10. DISSOLUTION OF OFFICIAL COMMITTEES. On the Effective Date,
each Committee shall be dissolved and the members of such Committee shall
thereupon be released and discharged of and from any further authority,
duties, responsibilities and obligations related to and arising from and in
connection with the Chapter 11 Case.
9.11. MODIFICATION OF THE PLAN. The Debtor may alter, amend or
modify the Plan in accordance with Section 1127 of the Bankruptcy Code at
any time.
9.12. SEVERABILITY. Should any provision in the Plan be determined
to be unenforceable following the Effective Date, such determination shall
in no way limit or affect the enforceability and operative effect of any
and all other provisions of the Plan.
Dated: December 14, 1993
Respectfully submitted,
LIBERTE INVESTORS
By /s/ Robert Ted Enloe III
------------------------
Title: President
ENDNOTES
(1) The Table of Contents is included for convenience and ease of
reference only, and shall not constitute a part of the Plan for any
purpose.
* The Exhibits marked with an asterisk are voluminous and, consequently,
are not being distributed with the Disclosure Statement. The table of
contents for the Plan indicates which exhibits are attached to the Plan as
distributed with the Disclosure Statement and which are only available for
review in the Bankruptcy Court or by appointment during normal business
hours at the location set forth below. Exhibits not attached to the Plan
may also be obtained by contacting Ms. Kindall Dube at the telephone
number set forth below.
1420 Viceroy Drive
Dallas, Texas 75235
(214) 879-5800
EXHIBIT A
TO THE
PLAN OF REORGANIZATION
EXHIBIT A
DESIGNATED RECIPIENTS OF ASSETS
The Designated Recipient of the following assets is either the Debtor
or Liquidating Corp., as indicated. The Designated Recipient of all other
assets is Newco.
Asset Designated
Number Asset Name Recipient
______ __________ __________
2269 Century Airport Hotel Reorganized Debtor
3477 Rosewood Property Company Reorganized Debtor
3825 WC of Texas Reorganized Debtor
4167 Club Income Properties Reorganized Debtor
4178 Buckhead Inc. Reorganized Debtor
4241 VMI Properties Reorganized Debtor
4523 Greenbriar Associates Reorganized Debtor
4524 Greenbriar Associates Reorganized Debtor
538602 Pacifica Homes No. 6 Liquidating Corp.
3766 Sharfe Homes Liquidating Corp.
1184 McCoy Liquidating Corp.
528701 P&V Enterprises Liquidating Corp.
4553 Blume Eastlake Limit Liquidating Corp.
3685 Lieberman Homes Liquidating Corp.
540101 Bel Tiara Ventures I Liquidating Corp.
3437 Ike Harris Liquidating Corp.
3592 Marsh Lane Self Storage, Inc Liquidating Corp.
4584 Texas Portfolio Join Liquidating Corp.
3395 Pavlakos/McNair Dev Co Liquidating Corp.
4373 McKinney Acquisitions, Inc. Liquidating Corp.
4397 Michael R. Walker Liquidating Corp.
4398 Mark R. Wagner Liquidating Corp.
4307 Richard Tuley Homes, Inc. Liquidating Corp.
4470 Highland Lakes Joint Liquidating Corp.
518333 The Housing Group, Inc. Liquidating Corp.
4620 Koch Enterprises, Inc. Liquidating Corp.
518317 The Housing Group, Inc. Liquidating Corp.
4614 Thomas and Farquhar Liquidating Corp.
4628 Lane & Altman, Escro Liquidating Corp.
3128 Lieven J Van Riet, T Liquidating Corp.
527900 Scharfe Homes Liquidating Corp.
4627 Sports Inc., No. 1 Liquidating Corp.
4630 Lexington Square-Rec Liquidating Corp.
4382 D R Horton Land Co Liquidating Corp.
4490 Yi-Jang Shu Liquidating Corp.
4502 Yi-Wen Shu Liquidating Corp.
4623 Sovereign Homes Inc. Liquidating Corp.
4489 Chin Chen Wu Liquidating Corp.
4498 Benny Hu Ting Wu Liquidating Corp.
538715 Homeland Communities Liquidating Corp.
538712 Homeland Communities Liquidating Corp.
3822 Nash Phillips/Copus Liquidating Corp.
4401 Johnny L. Swaim Liquidating Corp.
4402 Victor R. Means, Jr. Liquidating Corp.
4601 New Worthy JV Liquidating Corp.
4625 Roger Lawler Liquidating Corp.
4632 Lawler Liquidating Corp.
512610 Richard Tuley Homes - Res Liquidating Corp.
1746 High Vista Liquidating Corp.
2010 Post St Properties L Liquidating Corp.
2324 B Tillman Nowlin, Jr Liquidating Corp.
2783 James P. Charnquiest Liquidating Corp.
3320 John S. Stuhmer Liquidating Corp.
3647 Ronald Homes Liquidating Corp.
3780 Penterra Corporation Liquidating Corp.
3848 Eskan Construction C Liquidating Corp.
3891 Tamaron Corporation Liquidating Corp.
3957 Greystone Housing Co Liquidating Corp.
4137 Kenwood Homes, Inc. Liquidating Corp.
4150 American Land & Expl Liquidating Corp.
4169 Israel Fogiel Liquidating Corp.
4391 Timbercrest Companies Liquidating Corp.
4531 Alan L & Harold G U Liquidating Corp.
4540 Dennis E. Murphree Liquidating Corp.
4541 Brendan P Smith Liquidating Corp.
4542 Hugh J Vaughan Liquidating Corp.
4543 David G Hunter Liquidating Corp.
4545 Michael A Howland A Liquidating Corp.
4546 Sherwood Blount Jr Liquidating Corp.
4547 Robert G. Broderick Liquidating Corp.
4561 Anthony F. Cutaia Liquidating Corp.
4571 Robert K. Utley, III Liquidating Corp.
4572 Mark R. Wagner Liquidating Corp.
4573 Michael R. Walker Liquidating Corp.
4580 Meyer Turken Liquidating Corp.
4583 Gene Eidelman/Yuri E Liquidating Corp.
4587 Ed H. Street, Jr. Liquidating Corp.
4598 Bruce Utterback Liquidating Corp.
4599 Jack Wilson Liquidating Corp.
4602 Richard E Leblanc Liquidating Corp.
4604 Hicks Road Associates Liquidating Corp.
4609 Van Holm, Brian, EID Liquidating Corp.
4624 Alden, Brian Liquidating Corp.
4631 James R. Stuhmer Liquidating Corp.
4565 Linpro Pierce Street Liquidating Corp.
4566 Linpro Westgold Mead Liquidating Corp.
4600 Walnut Grove Land PA Liquidating Corp.
4439 Village Park Homes Liquidating Corp.
4463 Live Oak Ltd Liquidating Corp.
2745 Westland Oil Liquidating Corp.
3048 Talley Corporation Liquidating Corp.
3134 Talley Corporation Liquidating Corp.
3211 Greystone Housing Liquidating Corp.
3296 Greystone Parkway Liquidating Corp.
3382 SWLN Liquidating Corp.
3674 SWLN Liquidating Corp.
3701 Dunning Partnership Liquidating Corp.
3715 RD Gass/Brickyard Liquidating Corp.
3725 Pine Glen Partners Liquidating Corp.
3934 Porten Sullivan Liquidating Corp.
4189 Ventura Properties Liquidating Corp.
4403 Mark Dickinson Liquidating Corp.
4452 Potomac 4D Liquidating Corp.
4471 Cal-Oaks Liquidating Corp.
EXHIBIT A-1
TO THE
PLAN OF REORGANIZATION
EXHIBIT A-1
ASSETS TO BE TRANSFERRED TO LOMAS IN ASSET EXCHANGE
(As of November 30, 1993)
As described in more detail in Exhibit A-3 to the Plan of
Reorganization, the Debtor's 80% participation interests in the
following assets will be transferred to Lomas in consideration for
the transfer by Lomas to Newco of Lomas' 20% participation interests
in the assets set forth in Exhibit A-2 to the Plan of Reorganization.
ASSET
NUMBER ASSET NAME ASSET
- ------ ---------- ----------
2872 Lieven J Van Riet Loan
3335 Bob Spies Homes, Inc. Loan
3469 Trammell Crow Colorado Reo
3469 Trammell Crow Texas Reo
3514 Huron Partnership Loan
3718 Joyal Enterprises, Inc. Loan
3819 Essex-Royal 400 Assoc. Loan
3947 Dividend Development Loan
4055 Anozira Partnership Reo
4220 Cabot Associates Reo
4272 Michael Howland Reo
4348 Bird of Paradise Ranch Loan
4385 New Worth I, Ltd. Reo
Partnership
4450 Zellner - Lake Hills Loan
4472 Sun City Springhaven Loan
4481 Vallejo Corona Partn Loan
4551 Eustis Ventures, Inc. Reo
4593 Market In Kingwood Loan
Partners
4607 Regional Builders Co. Loan
4618 Sunlife Homes, Inc. Loan
7035 GSW Two Limited Partners Reo
517100 Hallcraft Villas Reo
528703 P&V Enterprises Loan
528704 P&V Enterprises Loan
528705 P&V Enterprises Loan
534300 Tablero Dunes Reo
538709 Homeland Communities Loan
541101 Cal - Oaks Investors - 89 LP Reo
543201 Friedman Homes, Inc. Loan
999999 Conventional Loans Loan
EXHIBIT A-2
TO THE
PLAN OF REORGANIZATION
EXHIBIT A-2
ASSETS TO BE TRANSFERRED TO NEWCO IN ASSET EXCHANGE
(As of November 30, 1993)
As described in more detail in Exhibit A-3 to the Plan of
Reorganization, Lomas' 20% participation interests in the following
assets will be transferred to Newco in consideration for the transfer
by the Debtor to Lomas of the Debtor's 80% participation interests in
the assets set forth in Exhibit A-1 to the Plan of Reorganization.
ASSET
NO. ASSET NAME ASSET
- ----- ---------- ----------
1391 Village Walk Loan
2821 Lieven J Van Riet Loan
3208 Lieven J Van Riet Loan
3470 Robert K & Ann Utley Loan
3681 LaSalle National Bank Loan
4144 Friedman Homes, Inc. Loan
4255 Centerpointe JV Loan
4265 Ramser Development Corp. Loan
4321 The Commons XXII, Ltd. Loan
4326 University Service Corp. Loan
4333 The Breighton-Copper Loan
Creek
4357 Jersey Business Park Loan
4371 Dr. Horton Land Co. 1 Loan
4381 KHB Investments Inc. Loan
4396 Robert Kutley III Loan
4400 James I Howe Land Loan
4410 Honey Creek Ltd. Loan
4412 Harbor Bay Isle Assoc. Loan
4460 P&V Enterprises Loan
4469 Story Business Park Loan
4538 Texas Waggoner Corp. Loan
4564 Linpro Ken - Caryl Loan
4570 Lincoln The Place Loan
4574 New Market Loan
4575 New Market Loan
4576 New Market Loan
4585 James C.P. Chen Loan
4586 Pao Lo Chang Loan
4589 LaSalle National Bank Loan
4596 TCK Mockingbird Inc. Loan
4597 TCK Mockingbird Inc. Loan
4603 The Fort Smith Quarry Loan
4615 Rosecrest Properties Loan
4617 Summerhill Del Rey Loan
4621 Rayco Ltd. Loan
4622 Union Square Loan
538501 Richard A Tappan Loan
2261 Fairview JV Reo
(L&N Consultants Inc.)
2263 River Plantation
(L&N Consultants Inc.) Reo
2948 Spring Branch Lake Reo
3186 Sharfe Homes Reo
3212 Dorado Corporation Reo
3215 Dorado Corporation Reo
3378 Myers - Chud Partnership Reo
3392 MTP Associates Reo
3394 Andrew & Ellen Pavlakos Reo
3411 Talley Corporation Reo
3421 Village Green Reo
3431 Linpro-Brochet Reo
3438 Crimson Ridge JV Reo
3464 Linpro Westgold Reo
3511 Venture Corp. Properties Reo
3568 Northern Lights Inn Reo
(L&N Consultants Inc.)
3579 Blue Heron Industires Reo
3598 Mid - Capital Investments Reo
3640 N M Plaza Assoc. Reo
3704 Pike Plaza, Ltd. Reo
3752 Naples Canta Mar Reo
3767 Brian Gagne/Oak Wood Reo
3801 Village Center Reo
3837 Ed. J. Street Reo
3871 Cimarron Holding Trust Reo
3915 Eastern Market Reo
3919 J. Ferguson Partners Reo
3929 Olympia Corners Reo
3939 The Housing Group Reo
3943 Robert P. Dupre Reo
3969 Ray Ellison Industries Reo
3971 155 Pfingsten Reo
4001 Gilbert Lakes Reo
4053 7th Street & Union Reo
4059 Sharon Commerce Reo
4072 Crow - Watson Reo
4075 Greenway Village Reo
4180 N. Richland Hills Reo
4195 Riverwood Plaza Reo
4196 Riverwood - Nova Reo
4260 Four Star Assoc. Reo
4315 Clt of Orlando, Inc. Reo
4329 Caribbean Isle Reo
4370 Clover Ventures Reo
4420 Bel Tiara Venture Assoc. Loan
4451 Hillside Residential Reo
4454 Hillside Residential Reo
4577 Turknell Inc. Reo
4610 Southridge Plaza, Inc. Reo
4635 Linpro Lonestar Reo
7022 3MBS Inc. Reo
533906 Hillside Residential Reo
541401 Hillside Residential Reo
999997 L&N Consultants Inc. Reo
Receivable/Payable
91300179 Faergerberg Reo
EXHIBIT A-3
TO THE
PLAN OF REORGANIZATION
EXHIBIT A-3
SUMMARY OF TERMS OF ASSET EXCHANGE
1. The Asset Exchange will be implemented by the following
steps, which will occur on or before the Effective Date:
A. Lomas will transfer to Newco title to the mortgage loans
and real property identified on Exhibit A-2 to the Plan and the
Debtor will transfer to Newco its participation interests therein.
B. In consideration for the transfer of title described in
paragraph A, the Debtor will transfer to Lomas its participation
interests in the mortgage loans and real estate identified on
Exhibit A-1 to the Plan. Such participation interests constitute
STL's portion of the proceeds of the transfer of title of assets by
Lomas to Newco described in paragraph A.
C. Lomas will transfer to STL the participation interests it
receives under paragraph B in full satisfaction of STL's
entitlement to receive proceeds from the transfer of title to
assets pursuant to paragraph A.
D. As a result of the transfers described in paragraph C, STL
will own 100% of the participation interests in the assets
identified on Exhibit A-1 to the Plan. At the option of STL, after
the Effective Date, title to any or all of such assets will be
transferred to STL or a nominee for STL.
2. Upon completion of the transfers described in paragraphs
1.A through 1.C, STL will execute documentation confirming that its
rights under its participation interests in the assets identified on
Exhibit A-2 have been satisfied in full.
3. Following the consummation of the Asset Exchange, STL will
remain liable for such portion of any liabilities accrued before the
Effective Date in respect of the assets identified on Exhibit A-2 to
the Plan as it would have been responsible for under the
Participation Agreement dated as of July 28, 1970 (the
"Participation Agreement") between Lomas Financial Corporation and
the Debtor and will indemnify the Debtor and Newco against and hold
each of them harmless from any loss, liability, damage, claim or
expense incurred or suffered by either of them arising out of any
such liability. On the Effective Date, Newco will become liable for
such portion of any liabilities accrued before the Effective Date in
respect of the assets identified in Exhibit A-1 to the Plan as the
Debtor would have been responsible for under the Participation
Agreement and will indemnify the Debtor and STL against and hold each
of them harmless from any loss, liability, damage, claim or expense
incurred or suffered by either of them arising out of any such
liability.
4. STL will be reimbursed from Pre-consummation Cash or the
Allocated Cash Reserve for all transaction expenses incurred by it in
consummating the Asset Exchange.
5. Consummation of the Asset Exchange is subject to
satisfaction or waiver by STL of the following conditions.
A. Approval by the Trustee under the Indenture dated as of
November 1, 1991 between STL and Team Bank, as Trustee, and by the
holders of a majority of the indebtedness outstanding thereunder,
of the transactions contemplated by the Asset Exchange to the
extent such approval is required thereunder.
B. The obtaining by STL of appraisals by an independent
appraiser of any asset identified on Exhibit A-1 to the Plan that
had a book value as of June 30, 1993 in excess of $1,000,000 and
the determination by STL, in good faith and on the basis of such
appraisals, that the fair value of the participation interests to
be received by STL pursuant to paragraph 1.C is not materially less
than the fair value of its participation interests in the assets to
be transferred to Newco pursuant to paragraph 1.A.
EXHIBIT B
TO THE
PLAN OF REORGANIZATION
EXHIBIT B
INDEMNIFICATION AGREEMENT
Agreement dated as of [Effective Date] among Liberte
Investors, a Massachusetts business trust ("Liberte"), LBI
Liquidating Corp., a Delaware corporation ("Liquidating Corp."), and
Abaris Properties Inc., a Delaware Corporation ("Newco").
WHEREAS, on October 25, 1993, Liberte Investors filed a
voluntary petition for relief under chapter 11 at the United States
Bankruptcy Code;
WHEREAS, on ___________, 1994, the United States Bankruptcy
Court for the Southern District of New York (the "Bankruptcy Court")
entered an order confirming a Plan of Reorganization dated
____________, 1993 for Liberte (the "Plan");
WHEREAS, the Plan provides, among other things, for the
assumption by Liquidating Corp. and by Newco of certain obligations
of Liberte on and as of the Effective Date (as such term is defined
in the Plan) and obligates Liberte and Newco to make contributions
from time to time to certain Cash Reserves (as such term is defined
in the Plan; the liabilities of Liberte assumed by Liquidating Corp.
and the obligations of Liquidating Corp. under the Plan being
referred to herein as the "Liquidating Corp. Liabilities"; the
liabilities of Liberte assumed by Newco and the obligations of Newco
under the Plan being referred to herein as the "Newco Liabilities";
and the liabilities of Liberte not assumed by Liquidating Corp. or
Newco and the obligations of Liberte under the Plan being referred to
herein as the "Liberte Liabilities");
WHEREAS, each party, hereto desires to indemnify each other
party hereto against any loss or liability that any such other party
may incur or suffer in respect of the liabilities assumed or
remaining with such party pursuant to, and the obligations of such
party under, the Plan;
NOW, THEREFORE, the parties hereto agree as follows:
1. Newco agrees to indemnify Liberte and Liquidating Corp.
against and to hold each of them harmless from any and all losses,
liabilities, damages, claims and expenses (including without
limitation reasonable expenses of investigation and reasonable
attorneys fees and expenses in connection with any action, suit,
claim or proceeding brought against Liberte or Liquidating Corp. or
any of their respective affiliates) incurred or suffered by Liberte
or Liquidating Corp. or any of their respective affiliates arising
after the Effective Date out of any Newco Liability.
2. Liquidating Corp. agrees to indemnify Liberte and Newco
against and to hold each of them harmless from any and all losses,
liabilities, damages, claims and expenses (including without
limitation reasonable expenses of investigation and reasonable
attorneys fees and expenses in connection with any action, suit,
claim or proceeding brought against Liberte or Newco or any of their
respective affiliates) incurred or suffered by Liberte or Newco or
any of their respective affiliates arising after the Effective Date
out of any Liquidating Corp. Liability.
3. Liberte agrees to indemnify Newco and Liquidating Corp.
against and to hold each of them harmless from any and all losses,
liabilities, damages, claims and expenses (including without
limitation reasonable expenses of investigation and reasonable
attorneys fees and expenses in connection with any action, suit,
claim or proceeding brought against Newco or Liquidating Corp. or any
of their respective affiliates) incurred or suffered by Newco or
Liquidating Corp. or any of their respective affiliates arising after
the Effective Date out of any Liberte Liability.
4. Any party hereto (the "Indemnitee") that believes it or
any of its affiliates is entitled to indemnification by another party
hereto (the "Indemnitor") in respect of the assertion of any claim or
the commencement of any suit, action or proceeding by a third party
shall give prompt notice thereof to the Indemnitor. If the
Indemnitor has reason to believe such claim, action, suit or
proceeding was barred or discharged pursuant to Liberte's chapter 11
case, it shall bring such matter to the attention of Liberte. If
Liberte determines in good faith that there is a reasonable
likelihood that such claim, action, suit or proceeding was barred or
discharged, it will commence and prosecute appropriate proceedings in
the Bankruptcy Court seeking to enjoin the assertion of such claim or
the commencement of such action, suit or proceeding. The costs,
including, without limitation, reasonable attorneys fees and
expenses, of any such proceedings (including, without limitation, any
appeals thereof) will be borne, on a current basis, 27% by Liberte
and 73% by Newco. If Liberte determines in good faith that there is
not a reasonable likelihood that such claim, action, suit or
proceeding was barred or discharged or if it is determined by final,
nonappealable order of a court of competent jurisdiction that such
claim, action, suit or proceeding was not barred or discharged, then,
within 30 days after the date of such determination, the Indemnitor
may, at its option, elect to assume control of the defense of any
such claim, suit, action or proceeding at its own expense and with
counsel reasonably satisfactory to the Indemnitee. If the Indemnitor
does not, within such 30-day period, provide the Indemnitee with
notice of its election to assume such control, the Indemnitee may
assume control of such defense with counsel reasonably satisfactory
to the Indemnitor. The party not controlling such defense may
participate therein at its own expense. The party controlling such
defense shall keep the other party advised of the status of such
claim, suit, action or proceeding and the defense thereof and shall
consider in good faith recommendations made by the other party with
respect thereto. The Indemnitee may not agree to any settlement of
such claim, suit, action or proceeding without the consent of the
Indemnitor, which shall not be unreasonably withheld. The Indemnitor
may not agree to any settlement of such claim, suit, action or
proceeding unless such settlement provides for the unconditional
release of the Indemnitee and its affiliates from all liability in
respect thereof.
This agreement shall be binding upon Liberte Investors,
Liquidating Corp. and Newco and their respective successors and
assigns.
This agreement shall be governed by and construed in
accordance with the laws of the State of [New York].
IN WITNESS WHEREOF, the parties hereto have executed this
Agreement as of the day and year first above written.
LIBERTE INVESTORS
By:______________________
Title:
LBI LIQUIDATING CORP.
By:______________________
Title:
ABARIS PROPERTIES INC.
By:______________________
Title:
EXHIBIT C
TO THE
PLAN OF REORGANIZATION
EXHIBIT C
CERTAIN LIQUIDATING CORP. ASSETS
ASSET
NUMBER ASSET NAME ASSET
- ------ ---------- ----------
4439 Village Park Homes Loan
4463 Live Oak Ltd Loan
2745 Westland Oil Reo
3048 Talley Corporation Reo
3134 Talley Corporation Reo
3211 Greystone Housing Reo
3296 Greystone Parkway Reo
3382 SWLN Reo
3674 SWLN Reo
3701 Dunning Partnership Reo
3715 RD Gass/Brickyard Reo
3725 Pine Glen Partners Reo
3934 Porten Sullivan Reo
4189 Ventura Properties Reo
4403 Mark Dickinson Reo
4452 Potomac 4D Reo
4471 Cal-Oaks Reo
538602 Pacifica Homes No. 6 Loan
3766 Sharfe Homes Reo
1184 McCoy Reo
528701 P&V Enterprises Loan
4553 Blume Eastlake Limit Loan
3685 Lieberman Homes Reo
540101 Bel Tiara Ventures I Loan
3437 Ike Harris Reo
3592 Marsh Lane Self Reo
Storage, Inc.
4584 Texas Portfolio JV Loan
3395 Pavlakos/McNair Dev. Co. Reo
4373 McKinney/Acquisitions, Reo
Inc.
4397 Michael R. Walker Loan
4398 Mark R. Wagner Loan
4307 Richard Tuley Homes, Inc. Reo
4470 Highland Lakes JV Loan
518333 The Housing Group, Inc. Reo
4614 Thomas and Farquhar Loan
4628 Lane & Altman, Escrow Loan
3128 Lieven J Van Riet Loan
527900 Scharfe Homes Reo
4627 Sports Inc., No.1 Loan
4630 Lexington Square Loan
4382 D R Horton Land Co. Loan
4490 Yi-Jang Shu Reo
4502 Yi-Wen Shu Reo
4623 Sovereign Homes Inc. Loan
4489 Chin Chen Wu Loan
4498 Benny Hu Ting Wu Loan
538715 Homeland Communities Loan
528712 Homeland Communities Loan
3822 Nash Phillips/Copus Reo
4401 Johnny L. Swaim Loan
4402 Victor R. Means, Jr. Loan
4601 New Worth JV Reo
4625 Roger Lawler Reo
4632 Lawler Reo
512610 Richard Tuley Homes Reo
1746 High Vista Loan
2010 Post St Properties Loan
Land
2324 B. Tillman Nowlin, Jr. Loan
2783 James P. Charnquiest Loan
3320 John S. Stuhmer Loan
3647 Ronald Homes Loan
3780 Penterra Corporation Loan
3848 Eskan Construction Loan
Corp.
3891 Tamaron Corporation Loan
3957 Greystone Housing Co. Loan
4137 Kenwood Homes, Inc. Loan
4150 American Land & Loan
Exploration Co.
4169 Israel Fogiel Loan
4391 Timbercrest Companies Loan
4531 Lieberman Loan
4540 Dennis E. Murphree Loan
4541 Brendan P Smith Loan
4542 Hugh J. Vaughan Loan
4543 David G. Hunter Loan
4545 Michael A Howland Loan
4546 Sherwood Blount Jr. Loan
4547 Robert G. Broderick Loan
4561 Anthony F. Cutaia Loan
4571 Robert K. Utley, III Loan
4572 Mark R Wagner Loan
4573 Michael R. Walker Loan
4580 Meyer Turken Loan
4583 Gene Eidelman/Yuri Loan
Eidelman, Brian Van
Holm
4587 Ed H. Street, Jr. Loan
4598 Bruce Utterback Loan
4599 Jack Wilson Loan
4602 Richard E. Leblanc Loan
4604 Hicks Road Associates Loan
4609 Gene Eidelman/Yuri Loan
Eidelman, Brian Van
Holm
4624 Brian Alden Loan
4631 James R. Struhmer Loan
4565 Linpro Pierce Street Loan
4566 Linpro Westgold Loan
Meadows
4600 Walnut Grove Land Loan
Partners
EXHIBIT D-1
TO THE
PLAN OF REORGANIZATION
EXHIBIT D-1
RESTRICTED CASH LIABILITIES
AS OF THE PETITION DATE
Name Description Amount
- ---- ----------- ------
LOC #4951813245-18 Employment Agreement $420,000.00
LOC #4951813245-26 Employment Agreement $ 38,000.00
LOC #4951813245-42 Employment Agreement $ 22,500.00
Various Borrower Escrows $2,359,642.34
EXHIBIT D-2
TO THE
PLAN OF REORGANIZATION
EXHIBIT D-2
RESTRICTED CASH ACCOUNTS
AS OF THE PETITION DATE
Bank and Account
Name Number Balance on Petition Date
- ---- ---------------- ------------------------
Collateral Proceeds Reserve #910-1-355890 $3,612,652.71
Chase Manhattan Bank
Cash Collateral #910-2-630267 00.00
Chase Manhattan Bank
Collateral Proceeds #910-2-571388 $4,898,910.06
Chase Manhattan Bank
ITF Liberte #910-2-684058 00.00
Chase Manhattan Bank
As Trustee for Various #0100074517 $9,642.34
Third Parties Bank One - Texas, N.A.
(Borrower Escrows)
As Trustee for Various Money Market-Dreyfus $2,350,000.00
Third Parties Govt. Cash
(Borrower Escrows) Bank One - Texas, N.A.
Certificate of Deposit #108520776 $400,000.00
Collateral for LOC Bank One - Texas, N.A.
#4951813245-18
Certificate of Deposit #108521014 $38,000.00
Collateral for LOC Bank One - Texas, N.A.
#4951813245-18
Certificate of Deposit #108520784 $22,500.00
Collateral for LOC Bank One - Texas, N.A.
#4951813245-26
Certificate of Deposit #108521006 $20,000.00
Collateral for LOC Bank One - Texas, N.A.
#4951813245-42
EXHIBIT E
TO THE
PLAN OF REORGANIZATION
EXHIBIT E
This exhibit is not being distributed with the Disclosure Statement.
It is available for review in the Bankruptcy Court or by appointment during
normal business hours at the location set forth below. It may also be
obtained by contacting Ms. Kindall Dube at the Telephone number set forth
below.
1420 Viceroy Drive
Dallas, Texas 75235
(214) 879-5800
EXHIBIT F
TO THE
PLAN OF REORGANIZATION
EXHIBIT F
This exhibit is not being distributed with the Disclosure Statement.
It is available for review in the Bankruptcy Court or by appointment during
normal business hours at the location set forth below. It may also be
obtained by contacting Ms. Kindall Dube at the Telephone number set forth
below.
1420 Viceroy Drive
Dallas, Texas 75235
(214) 879-5800
EXHIBIT G
TO THE
PLAN OF REORGANIZATION
EXHIBIT G
[Intentionally Omitted from Plan of Reorganization]
EXHIBIT H
TO THE
PLAN OF REORGANIZATION
ON FILE WITH LIBERTE
1420 Viceroy Drive
Dallas, Texas 75235
(214) 879-5800
EXHIBIT I
TO THE
PLAN OF REORGANIZATION
EXHIBIT I
This exhibit is not being distributed with the Disclosure Statement.
It is available for review in the Bankruptcy Court or by appointment during
normal business hours at the location set forth below. It may also be
obtained by contacting Ms. Kindall Dube at the Telephone number set forth
below.
1420 Viceroy Drive
Dallas, Texas 75235
(214) 879-5800
EXHIBIT J
TO THE
PLAN OF REORGANIZATION
EXHIBIT J
This exhibit is not being distributed with the Disclosure Statement.
It is available for review in the Bankruptcy Court or by appointment during
normal business hours at the location set forth below. It may also be
obtained by contacting Ms. Kindall Dube at the Telephone number set forth
below.
1420 Viceroy Drive
Dallas, Texas 75235
(214) 879-5800
EXHIBIT K
TO THE
PLAN OF REORGANIZATION
EXHIBIT K
This exhibit is not being distributed with the Disclosure Statement.
It is available for review in the Bankruptcy Court or by appointment during
normal business hours at the location set forth below. It may also be
obtained by contacting Ms. Kindall Dube at the Telephone number set forth
below.
1420 Viceroy Drive
Dallas, Texas 75235
(214) 879-5800
EXHIBIT L
TO THE
PLAN OF REORGANIZATION
EXHIBIT L
CERTAIN ORIGINAL NEWCO ASSETS
ASSET
NO. ASSET NAME ASSET
- ----- ---------- ----------
1391 Village Walk Loan
2821 Lieven J Van Riet Loan
3208 Lieven J Van Riet Loan
3470 Robert K & Ann Utley Loan
3681 LaSalle National Bank Loan
3718 Joyal Enterprises, Inc. Loan
4144 Friedman Homes, Inc. Loan
4255 Centerpointe JV Loan
4265 Ramser Development Corp. Loan
4321 The Commons XXII, Ltd. Loan
4326 University Service Loan
Center
4333 The Breighton-Copper Loan
Creek
4348 Bird of Paradise Ranch Loan
4357 Jersey Business Park Loan
4371 Dr. Horton Land Co. 1 Loan
4381 KHB Investments Inc. Loan
4396 Robert Kutley III Loan
4400 James I Howe Land Loan
4410 Honey Creek Ltd. Loan
4412 Harbor Bay Isle Assoc. Loan
4460 P&V Enterprises Loan
4469 Story Business Park Loan
4538 Texas Waggoner Corp. Loan
4564 Linpro Ken - Caryl Loan
4570 Lincoln The Place Loan
4574 New Market Loan
4575 New Market Loan
4576 New Market Loan
4585 James C.P. Chen Loan
4586 Pao Lo Chang Loan
4589 LaSalle National Bank Loan
4596 TCK Mockingbird Inc. Loan
4597 TCK Mockingbird Inc. Loan
4603 The Fort Smith Quarry Loan
4607 Regional Builders Co. Loan
4615 Bermuda Dunes Loan
4617 Summerhill Del Rey Loan
4621 Rayco Ltd. Loan
4622 Union Square Loan
538501 Richard A Tappan Loan
2261 Fairview JV Reo
(L&N Consultants Inc.)
2263 River Plantation Reo
(L&N Consultants Inc.)
2948 Spring Branch Lake Reo
3186 Sharfe Homes Reo
3212 Dorado Corporation Reo
3215 Dorado Corporation Reo
3378 Myers - Chud Partnership Reo
3392 MTP Associates Reo
3394 Andrew & Ellen Pavlakos Reo
3411 Talley Corporation Reo
3421 Village Green Reo
3431 Linpro-Brochet JV Reo
3438 Crimson Ridge JV Reo
3464 Linpro Westgold Reo
3511 Venture Corp. Properties Reo
3568 Northern Lights Inn Reo
(L&N Consultants Inc.)
3579 Blue Heron Industries Reo
3598 Mid - Capital Investments Reo
3640 N M Plaza Assoc. Reo
3704 Pike Plaza, Ltd. Reo
3752 Naples Canta Mar Reo
3767 Brian Gagne/Oak Wood Reo
3801 Village Center Reo
3837 Ed. J. Street Reo
3871 Cimarron Holding Trust Reo
3915 Eastern Market Reo
3919 J. Ferguson Partners Reo
3929 Olympia Corners Reo
3939 The Housing Group Reo
3943 Robert P. Dupre Reo
3969 Ray Ellison Industries Reo
3971 155 Pfingsten Reo
4001 Gilbert Lakes Reo
4053 7th Street & Union Reo
4059 Sharon Commerce Reo
4072 Crow - Watson Reo
4075 Greenway Village Reo
4180 N. Richland Hills Reo
4195 Riverwood Plaza Reo
4196 Riverwood - Nova Reo
4260 Four Star Assoc. Reo
4315 Clt of Orlando, Inc. Reo
4329 Caribbean Isle Reo
4370 Clover Ventures Reo
4420 Bel Tiara Venture Loan
4451 Hillside Residential Reo
4454 Hillside Residential Reo
4577 Turknell Inc. Reo
4610 Southridge Plaza, Inc. Reo
4635 Linpro Lonestar Reo
533906 Hillside Residential Reo
541401 Hillside Residential Reo
999997 L&N Consultants Inc. Reo
Receivable/Payable
91300179 Faegerberg Reo
EXHIBIT M
TO THE
PLAN OF REORGANIZATION
EXHIBIT M
CERTAIN LIBERTE INVESTORS ASSETS
Asset
Number Asset Name Asset Type
______ __________ __________
2269 Century Airport Hotel Loan
3477 Rosewood Property Co. Loan
3825 WC of Texas Loan
4167 Club Income Properties Loan
4178 Buckhead Inc. Loan
4241 VMI Properties Loan
4523 Greenbriar Associates Loan
4524 Greenbriar Associates Loan
EXHIBIT N
TO THE
PLAN OF REORGANIZATION
EXHIBIT N
LIBERTE INVESTORS LIABILITIES
Liberte Investors Liabilities consist of the Letter of Credit
issued and the proceeds in the Restricted Cash Accounts as listed
below.
LETTER OF CREDIT
Eighty percent (80%) of any disbursement under Letter of Credit
number 16329 dated July 30, 1987 in the amount of $20,000.00 issued
by Lomas Financial Corporation to the Broward County Board of County
Commissioners for the benefit of Buckhead, Inc. Expires July 31,
1994.
RESTRICTED CASH ACCOUNTS
AS OF THE PETITION DATE
Bank and Account Balance on
Name Number Petition Date
- ---- ---------------- -------------
Collateral Proceeds Reserve #910-1-355890 $3,612,652.71
Chase Manhattan Bank
Cash Collateral #910-2-630267 00.00
Chase Manhattan Bank
Collateral Proceeds #910-2-571388 $4,898,910.06
Chase Manhattan Bank
ITF Liberte #910-2-684058 00.00
Chase Manhattan Bank
As Trustee for Various #0100074517 $9,642.34
Third Parties Bank One - Texas, N.A.
(Borrower Escrows)
As Trustee for Various Money Market-Dreyfus $2,350,000.00
Third Parties Govt. Cash
(Borrower Escrows) Bank One - Texas, N.A.
Certificate of Deposit #108520776 $400,000.00
Collateral for LOC Bank One - Texas, N.A.
#4951813245-18
Certificate of Deposit #108521014 $38,000.00
Collateral for LOC Bank One - Texas, N.A.
#4951813245-18
Certificate of Deposit #108520784 $22,500.00
Collateral for LOC Bank One - Texas, N.A.
#4951813245-26
Certificate of Deposit #108521006 $20,000.00
Collateral for LOC Bank One - Texas, N.A.
#4951813245-42
EXHIBIT O
TO THE
PLAN OF REORGANIZATION
EXHIBIT O
LIQUIDATING CORP. GUARANTEES
LETTERS OF CREDIT
1. Eighty percent (80%) of any disbursement under Letter of Credit number
16294 dated January 21, 1987 in the amount of $50,000.00 issued by Lomas
Financial Corporation to Ticor Title Insurance Co. for the benefit of
Hebron/Denton Joint Venture. Expires December 31, 1993.
2. Eighty percent (80%) of any disbursement under Letter of Credit
number 16625/1 dated June 12, 1990 issued by Lomas Financial Corporation to
Developers Insurance Company for the benefit of Cal-Oaks Investors - 89.
L.P. The expiration date and amount of this Letter of Credit are subject
to annual review and adjustment by Lomas Financial Corporation in
accordance with the terms thereof.
GUARANTEES
1. Eighty percent (80%) of any disbursement under Guaranty number
15071 dated October 3, 1977 issued by Lomas Financial Corporation to First
Federal S & L Association for the benefit of Twin Oaks Associates of any
outstanding principal of a $1,800,000.00 loan in excess of $900,000.00 if
Twin Oaks Associates defaults. Expires December 31, 1993.
2. Eighty percent (80%) of any disbursement under Guaranty number
15056 dated June 28, 1977 issued by Lomas Financial Corporation and the
Debtor to American Bankers Life Insurance Co. for the benefit of L & N
Consultants Inc. of any outstanding principle of a $1,600,000.00 loan if L
& N Consultants Inc. defaults. Expires July 1, 2002.
EXHIBIT P
TO THE
PLAN OF REORGANIZATION
EXHIBIT P
NEWCO GUARANTEES
1. Letter of Credit number 16543 dated November 4, 1988 in the amount
of $128,000.00 issued by Lomas Financial Corporation to the Clerk of the
Board of Supervisors of Los Angeles County, California for the benefit of P
& V Enterprises. Expires November 4, 1994.
2. Letter of Credit number 16577/1 dated June 7, 1989 issued by Lomas
Financial Corporation to American Motorists Insurance Co. for the benefit
of Hillside Residential, Inc. The expiration date and amount of this
Letter of Credit are subject to annual review and adjustment in accordance
with the terms thereof.
EXHIBIT Q
TO THE
PLAN OF REORGANIZATION
EXHIBIT Q
LIBERTE INVESTORS
Book No._______ Page______
FIFTH AMENDMENT TO THE DECLARATION OF TRUST OF
LIBERTE INVESTORS
The undersigned, being duly qualified Trustees of LibertX Investors, a
business trust organized under the laws of Massachusetts pursuant to a
Declaration of Trust dated June 26, 1969, and recorded in the Registry of
Deeds of Suffolk County on June 27, 1969, in Book 8293 at Page 278, as
amended by instruments dated (i) September 19, 1969, recorded in such
Registry on October 3, 1969, in Book 8316 at Page 217, (ii) January 24,
1986, recorded in such Registry on February 19, 1986, in Book 12298 at Page
204, (iii) January 19, 1989, recorded in such Registry on January 31,
1989, in Book 15338 at Page 46, and (iv) December 11, 1992, recorded in
such Registry on , 1989, in Book at Page , and being at least two-thirds
(2/3rds) of the Trustees of LibertX, do hereby adopt the following
amendment to the Declaration of Trust of LibertX Investors, pursuant to the
authority granted in Sections 4.01(b) and 5.09 of the Plan of
Reorganization of LibertX Investors confirmed by the United States
Bankruptcy Court for the Southern District of New York on , 1994.
(1) SECTION 2.1 is hereby replaced in its entirety by
the following:
SECTION 2.1. Definition of Trustees, number of Trustees, definition
of Majority of Trustees. The signatories to this Declaration of Trust,
so long as they shall continue in office in accordance with the terms
hereof, and all other persons who at the time in question have been duly
elected or appointed as trustees in accordance with the provisions
hereof and are then in office, are herein referred to as the "Trustees."
The number of trustees shall be fixed by, or in the manner provided in,
the by-laws [do we need a by-law amendment?], but in no case less than
three (3) nor more than seven (7). At least a majority of the Trustees
shall be persons who shall not be an officer, director or employee of
the Manager or any parent or subsidiary thereof and who shall not
individually be the holder of more than one-half per cent (1/2%) of any
class of securities of the Manager or any parent or subsidiary thereof,
directly or indirectly through the members of the immediate family
thereof or corporations or other entities in which such Trustee shall
own an equity interest of ten per cent (10%) or more, provided, that
upon the death, resignation or removal of any Trustee who shall be a
member of such majority, this requirement shall not be applicable for a
period of sixty (60) days. A Trustee shall be an individual at least
twenty-one (21) years of age who is not under legal disability. No
increase or decrease in the number of trustees shall be effected, except
in a manner which will not result in any class of trustees containing
more than one more trustee than any other class. Whenever a vacancy in
the number of trustees shall occur, until such vacancy is filled as
provided in Section 2.4, the Trustee or Trustees continuing in office,
regardless of their number, shall have all the powers granted to the
Trustees and shall discharge all the duties imposed upon the Trustees by
this Declaration of Trust. The term "Majority of the Trustees" whenever
used herein shall mean more than one-half of the total number of
Trustees then in office when three or more Trustees are then in office,
and shall mean one Trustee if only one Trustee is at the time in office,
and shall mean both Trustees if only two Trustees are then in office.
(2) New SECTION 5.20 shall be added to read in its entirety as follows:
SECTION 5.20.No nonvoting equity securities of the Trust may be
issued; this provision, included in this Declaration of Trust in
compliance with Section 1123(a)(6) of the United States Bankruptcy Code,
11 U.S.C. X 1123(a)(6), shall have no force and effect except to the
extent required by such Section so long as such Section is in effect and
applicable to the Trust.
(3) Section 5.7 is amended by replacing such section in its entirety
with the following:
SECTION 5.7 Restrictions on Transfer of Beneficial Shares
(a) In order to preserve the Trust's status as a real estate
investment trust ("REIT") under the Internal Revenue Code of 1986, as
amended, or any successor statute (collectively, the "Code"), the
following restrictions upon transfer of the Trust's Beneficial Shares
shall apply until the Board of Trustees determines otherwise:
(i) No person other than the Trust shall transfer any
beneficial shares of the Trust to any person to the extent that such
transfer, if effective, would cause the Ownership Interest Percentage
of the transferee or any other person to increase to 5 percent or
above, or from 5 percent or above to a greater Ownership Interest
Percentage.
For purposes of this ARTICLE FIFTH, (x) "person" refers to any
individual, corporation, estate, trust, association, company,
partnership, joint venture, or similar organization; (y) a person's
Ownership Interest Percentage shall be the value of its beneficial
shares of the Trust owned directly or indirectly (under the
constructive ownership rules of Section 544 of the Code) as a
percentage of the value of all issued and outstanding Beneficial
Shares of the Trust and (z) "transfer" refers to any means of
conveying legal or beneficial ownership of beneficial shares of the
Trust, whether such means is direct or indirect, voluntary or
involuntary, including, without limitation, the transfer of ownership
of any entity that directly or indirectly owns beneficial shares of
the Trust (a "Higher Tier Entity"), and "transferee" means any person
to whom beneficial shares of the Trust are transferred.
(ii) Any transfer of beneficial shares of the Trust that would
otherwise be prohibited pursuant to the preceding subparagraph shall
nonetheless be permitted if information relating to a specific proposed
transaction is presented to the Board of Trustees and the Board determines
(x) that such transaction will not create an undue risk of disqualifying
the Trust as a REIT, or (y) that the benefits of such transaction to the
Trust outweigh the detriment, if any, of such transfer. Nothing in this
subparagraph shall be construed to limit or restrict the Board of Trustees
in the exercise of its fiduciary duties under applicable law.
(b) Unless approval of the Board of Trustees is obtained as provided
in subparagraph (a)(ii) of this ARTICLE FIFTH, any attempted transfer of
beneficial shares of the Trust in excess of the shares that could be
transferred to the transferee without restriction under subparagraph (a)(i)
of this ARTICLE FIFTH shall not be effective to transfer ownership of such
excess shares (the "Prohibited Shares") to the purported acquiror thereof
(the "Purported Acquiror"), who shall not be entitled to any rights as a
shareholder of the Trust with respect to the Prohibited Shares (including,
without limitation, the right to vote or to receive dividends with respect
thereto). Subject to the Trust's election to apply subparagraph (b)(1)
below, all rights with respect to the Prohibited Shares shall remain the
property of the person who initially purported to transfer the Prohibited
Shares to the Purported Acquiror (the "Initial Transferor"). The Purported
Acquiror, by acquiring ownership of beneficial shares of the Trust that are
not Prohibited Shares, shall be deemed to have consented to all the
provisions of this ARTICLE FIFTH and to have agreed to act as provided in
the following subparagraph (b)(i) if the Trust so demands. For the
purposes of subparagraphs (b)(i) and (b)(ii) below, the term "Purported
Acquiror" includes an owner of Prohibited Shares with respect to which the
attempted transfer is an attempted transfer by means of the transfer of
ownership of a Higher Tier Entity (as that term is defined in Section
5(a)(i)(z)).
(i) Upon demand by the Trust, the Purported Acquiror shall
transfer any certificate or other evidence of ownership of the
Prohibited Shares within the Purported Acquiror's possession or control,
along with any dividends or other distributions paid by the Trust with
respect to the Prohibited Shares that were received by the Purported
Acquiror (the "Prohibited Distributions"), to an agent designated by the
Trust (the "Agent"). If the Purported Acquiror has sold the Prohibited
Shares to an unrelated party in an arm's-length transaction after
purportedly acquiring them, the Purported Acquiror shall be deemed to
have sold the Prohibited Shares as agent for the Initial Transferor, and
in lieu of transferring the Prohibited Shares and Prohibited
Distributions to the Agent shall transfer to the Agent the Prohibited
Distributions and the proceeds of such sale (the "Resale Proceeds")
except to the extent that the Agent grants written permission to the
Purported Acquiror to retain a portion of the Resale Proceeds not
exceeding the amount that would have been payable by the Agent to the
Purported Acquiror pursuant to the following subparagraph (b)(ii) if the
Prohibited Shares had been sold by the Agent rather than by the
Purported Acquiror. Any purported transfer of the Prohibited Shares by
the Purported Acquiror other than a transfer described in one of the two
preceding sentences shall not be effective to transfer any ownership of
the Prohibited Shares.
(ii) The Agent shall sell in an arm's-length transaction through
the facilities of a national securities exchange or an over-the-counter
market, if possible) any Prohibited Shares transferred to the Agent by
the Purported Acquiror, and the proceeds of such sale (the "Sales
Proceeds"), or the Resale Proceeds, if applicable, shall be allocated to
the Purported Acquiror up to the following amount: (x) where
applicable, the purported purchase price paid or value of consideration
surrendered by the Purported Acquiror for the Prohibited Shares, and (y)
where the purported transfer of the Prohibited Shares to the Purported
Acquiror was by gift, inheritance, or any similar purported transfer,
the fair market value of the Prohibited Shares at the time of such
purported transfer. Subject to the succeeding provisions of this
subparagraph, any Resale Proceeds or Sales Proceeds in excess of the
amount allocable to the Purported Acquiror pursuant to the preceding
sentence, together with any Prohibited Distributions, shall be the
property of the Initial Transferor. If the identity of the Initial
Transferor cannot be determined by the Agent through inquiry made to the
Purported Acquiror, the Agent shall public appropriate notice (in The
Wall Street Journal, if possible) for seven consecutive business days in
an attempt to identify the Initial Transferor in order to transmit any
Resale Proceeds or Sales Proceeds or Prohibited Distributions due to the
Initial Transferor pursuant to this subparagraph. The Agent may also
take, but is not required to take, other reasonable actions to attempt
to identify the Initial Transferor. If after 90 days following the
final publication of such notice the Initial Transferor has not been
identified, any amounts due to the Initial Transferor pursuant to this
subparagraph may be paid over to a court or governmental agency, if
applicable law permits, or otherwise shall be transferred to an entity
designated by the Trust that is described in Section 501(c)(3) of the
Code. In no event shall any such amounts due to the Initial Transferor
inure to the benefit of the Trust or the Agent, but such amounts may be
used to cover expenses (including but not limited to the expenses of
publication) incurred by the Agent in attempting to identify the Initial
Transferor.
(c) Upon a determination by the Board of Trustees that there has been
or is threatened a purported transfer of Prohibited Shares to a Purported
Acquiror, the Board of Trustees may take such action in addition to any
action permitted by this ARTICLE FIFTH as it deems advisable to give effect
to the provisions of this ARTICLE FIFTH, including, without limitation,
refusing to give effect on the books of this Trust to such purported
transfer or instituting proceedings to enjoin such purported transfer.
(d) The Trust may require as a condition to the registration of the
transfer of any beneficial shares that the proposed transferee furnish to
the Trust all information reasonably requested by the Trust with respect to
all the proposed transferee's direct or indirect ownership interests in
beneficial shares of the Trust.
(e) With such exceptions as the Board of Trustees shall, in its sold
discretion, permit, (i) each Beneficial Share of the Trust shall be
combined with a share of Common Stock of Liquidating Corp., a Delaware
corporation, organized under the laws of Delaware pursuant to a Certificate
of Incorporation dated __________, 1994, to form a unit, certificates
representing the Beneficial Shares of the Trust being printed on the
reverse side of certificates representing such Common Stock, and (ii) no
person may transfer or trade shares of the Corporation's Common Stock
except as a unit, as defined above, with the Reorganized Debtor's
Beneficial Shares. For the purpose of this subsection, a "persona" refers
to any individual, corporation, estate trust, association, company,
partnership, joint venture, or similar organization.
(f) All certificates evidencing ownership of beneficial shares of
this Trust that are subject to the restrictions on transfer contained in
this ARTICLE FIFTH shall bear a conspicuous legend referencing the
restrictions set forth in this ARTICLE FIFTH.
(g) Nothing contained in this ARTICLE FIFTH shall limit the authority
of the Board of Trustees to take such other action to the extent permitted
by law as it deems necessary or advisable to protect the Trust and the
interests of the holders of its securities in preserving the Trust's REIT
status. Without limiting the generality of the foregoing, in the event of
a change in law marking one or more of the following actions necessary or
desirable, the Board of Trustees may modify the Ownership Interest
Percentage in the Trust specified in the first sentence of subparagraph
(a)(i), or (ii) modify the definitions of any terms set forth in this
ARTICLE FIFTH.
(h) The Board of Trustees shall have the power to resolve (1) any
ambiguity in the terms of this ARTICLE FIFTH and (2) based on the facts
known to it and making a "worst-case" assumption about the facts not known
to it, any uncertainty as to the application of this ARTICLE FIFTH in a
particular factual situation.
(i) Nothing contained in this ARTICLE FIFTH shall require the Board
of Trustees to preserve the Trust's status as a REIT.
In WITNESS WHEREOF, the undersigned have this day signed these
presents.
SCHEDULE 1.01.A
TO THE
PLAN OF REORGANIZATION
ON FILE WITH LIBERTE
1420 Viceroy Drive
Dallas, Texas 75235
(214) 879-5800
SCHEDULE 1.01.B
TO THE
PLAN OF REORGANIZATION
ON FILE WITH LIBERTE
1420 Viceroy Drive
Dallas, Texas 75235
(214) 879-5800
SCHEDULE 6.01.A
TO THE
PLAN OF REORGANIZATION
SCHEDULE 6.01 A
LIBERTE INVESTORS EXECUTORY CONTRACTS
Employment Agreement dated January 31, 1993 between Liberte Investors and
Mr. Ted Enloe.
Employment Agreement dated July 17, 1992, and as revised on October 18,
1993, between Liberte Investors and Ms. Kindall Dube.
Management Agreement dated July 1, 1992, as amended, between Liberte
Investors, Lomas Management, Inc. and Lomas Financial Corporation, as
extended pursuant to an Extension of Management Agreement dated July 1,
1993, between Liberte Investors, Lomas Management, Inc. and Lomas Financial
Corporation.
Proceeds Agreement dated May 1, 1990 between Liberte Investors, Lomas
Financial Corporation, L & N Consultants, Inc., Lomas Mortgage USA, Inc.,
Naples Canta Mar, Ltd. and Lomas Management, Inc.
SCHEDULE 6.01.B
TO THE
PLAN OF REORGANIZATION
SCHEDULE 6.01.B
LIQUIDATING CORP. EXECUTORY CONTRACTS
None
SCHEDULE 6.01.C
TO THE
PLAN OF REORGANIZATION
SCHEDULE 6.01.C
NEWCO EXECUTORY CONTRACTS
None
UNITED STATES BANKRUPTCY COURT
SOUTHERN DISTRICT OF NEW YORK
- - - - - - - - - - - - - - - - - - - X
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 :
- - - - - - - - - - - - - - - - - - - X
MODIFICATION OF THE DEBTOR'S
FIRST AMENDED PLAN OF REORGANIZATION
LIBERTE INVESTORS, debtor and debtor in
possession (the "Debtor"), hereby modifies the
Debtor's First Amended Plan of Reorganization dated
December 14, 1993 (the "Plan") in the manner set forth
below.
1. The definition of "Available Cash" is
hereby modified by deleting the parenthetical clause
contained in clause (i) thereof.
2. The definition of "Asset Exchange" is
hereby modified to add the parenthetical phrase "(or
any wholly owned subsidiary of Newco designated in the
Asset Exchange Agreement)" immediately after the word
"Newco".
3. The definition of "New Senior Bank
Agreements" is hereby modified to read in full as
follows:
"New Senior Bank Agreements" means debt
obligations of Newco issued pursuant to
documentation substantially in the form of
Exhibit I hereto."
4. The definition of "Prepaid Amount" is
hereby modified by inserting therein, immediately
before the period, the following:
", in each case after making any
distributions thereof to the Senior Lenders
contemplated to be made on or prior to the
Effective Date under the Cash Collateral
Stipulation"
5. The definition of "Retained Assets" is
hereby modified by
(a) changing the word "and" at the end
of clause (ix) thereof to a comma;
(b) inserting the following new clause
(x) after clause (ix):
"(x) the debt obligation of Newco issued
to the Debtor is in accordance with
Section 4.03(a)(B) hereof and"; and
(c) renumbering clause (x) to become
clause (xi) and changing the reference to
clause (ix) therein to clause (x).
6. The definition of "Retained Cash" is
hereby modified to read in full as follows:
"Retained Cash" means Available Cash in
an amount equal to the sum of (a) the amount
by which (i) the aggregate amount of net cash
proceeds, if any, generated during the
Interim Period from the sale or other
disposition of, and collections of principal
on, any assets listed on Exhibit M hereto and
all non-cash proceeds of such assets exceeds
(ii) $6,000,000 and (b) the Retained Working
Capital
7. The treatment of Class 1 Claims under
Section 2.04 of the Plan is hereby modified to read in
full as follows:
"On the Effective Date or as soon thereafter
as is practicable, holders of Allowed Class 1 Claims
shall receive distributions consisting of (i) the
Prepaid Amount, (ii) Pre-consummation Cash in an
amount equal to the excess of $9,000,000 over the
Prepaid Amount and (iii) debt obligations of Newco
having a principal amount equal to the sum of (A)
$74,128,000, (B) the amount of unreimbursed fees and
expenses provided for under the Senior Bank Agreements
and Allowed under Section 506(b) of the Bankruptcy
Code and (C) the amount, if any, of accrued and unpaid
interest under the Senior Bank Agreements Allowed
pursuant to Section 506(b) of the Bankruptcy Code, as
adjusted pursuant to the Cash Collateral Stipulation,
as in effect from time to time. The debt obligations
of Newco referred to in clause (iii) above will be
issued in a single series together with the debt
obligation of Newco to be issued by the Debtor
pursuant to Section 4.03(a)(B), will have terms
substantially as set forth in Exhibit I hereto and
will be secured by the Continuing Collateral."
8. The heading to Section 4.03 of the Plan
is hereby modified by inserting therein immediately
after the semicolon the following:
"Issuance of Newco Debt Obligation to
the Debtor;"
9. Section 4.03(a)(B) of the Plan is hereby
modified by changing the word "and" immediately after
"Newco Common Stock" to a comma, and inserting the
following immediately before the semicolon:
"and a debt obligation of Newco in a
principal amount of $6,000,000 having
terms substantially as set forth in
Exhibit I hereto, secured by the
Continuing Collateral, and issued in a
single series with and having rights and
terms identical in all respects to those
of the debt obligations issued to the
Senior Lenders pursuant to Section 2.04
hereof"
10. Section 9.05(b) of the Plan is hereby
modified by inserting therein, immediately after
"Confirmation Date," the following:
"or if the Effective Date does not occur
on or before April 30, 1994 or such
later date to which such date may be
extended by agreement of all of the
parties to the Stipulation and Agreement
Suspending Plan Litigation dated as of
January 6, 1994,"
January 19, 1994 DAVIS POLK & WARDWELL
By: /s/ Donald S. Bernstein
-----------------------------
Donald S. Bernstein (DB-6681)
A Member of the Firm
450 Lexington Avenue
New York, New York 10017
(212) 450-4000
Counsel for the Debtor
