UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of
the Securities Exchange Act of 1934
Date of Report: April 12, 1996
(date of earliest event reported)
NATIONAL WESTERN LIFE INSURANCE COMPANY
(Exact Name of Registrant as Specified in Its Charter)
Colorado
(State or Other Jurisdiction of Incorporation)
2-17039 84-0467208
(Commission File Number) (I.R.S. Employer Identification Number)
850 East Anderson Lane, Austin, Texas 78752-1602
(Address of Principal Executive Offices and Zip Code)
(512) 836-1010
(Registrant's Telephone Number, Including Area Code)
Item 5. Other Events
On April 12, 1996, The Westcap Corporation and its wholly owned subsidiary,
Westcap Enterprises, Inc., Houston, Texas, separately filed voluntary
petitions for reorganization under Chapter 11 of the U.S. Bankruptcy Code in
the United States Bankruptcy Court, Southern District of Texas, Houston
Division. The Westcap Corporation is the successor by merger to Westcap
Securities Investment, Inc., and Westcap Securities Management, Inc.
Westcap Enterprises, Inc. is the successor by merger to Westcap Securities,
L.P. The Westcap Corporation is a wholly owned subsidiary of National
Western Life Insurance Company, Austin, Texas, the Registrant.
The Debtors' First Proposed Joint Plan of Reorganization filed in the
Bankruptcy Court provides for the merger of Westcap Enterprises, Inc. into
The Westcap Corporation, with the survivor to conduct business as a real
estate investment trust under sections 856-58 of the Federal Tax Code. The
Registrant has agreed to participate in the proposed plan of reorganization
by the contribution of approximately $5,000,000 of cash and $5,000,000 of
income producing real properties in exchange for a complete settlement and
release of any claims by the Debtors against the Registrant and a continuing
equity interest in the reorganized entity. The proposed reorganization
plan is subject to approval by the Debtors' creditors and the bankruptcy
court. A copy of the Debtors' First Proposed Joint Plan of Reorganization
is attached hereto and referenced herein.
As previously reported in Registrant's Form 10-K for the fiscal year ended
December 31, 1995, Registrant's investment in The Westcap Corporation was
completely written off during 1995 as losses of the subsidiary were
recognized on a consolidated basis until the subsidiary's equity was reduced
to zero. Potential losses relating to the above-mentioned contributions
will depend primarily on results of Debtors' litigation and claims that will
be adjudicated in the bankruptcy proceedings and expenses related to such
proceedings.
Item 7. Financial Statements and Exhibits
(c) Exhibits
Exhibit 2 - Debtors' First Proposed Joint Plan of Reorganization
(filed on page 4 of this report)
Signatures
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
National Western Life Insurance Company
(Registrant)
Date: April 18, 1996 By: /S/Ross R. Moody
Ross R. Moody
President and
Chief Operating Officer
EXHIBIT 2 - PLAN OF REORGANIZATION
UNITED STATES BANKRUPTCY COURT
SOUTHERN DISTRICT OF TEXAS
HOUSTON DIVISION
IN RE: X
X
WESTCAP ENTERPRISES, INC., X CASE NO. 96-43191-H5-11
(SUCCESSOR BY MERGER TO X
WESTCAP SECURITIES, L.P.),AND X
THE WESTCAP CORPORATION, X CASE NO.
(SUCCESSOR BY MERGER TO X
WESTCAP SECURITIES X
INVESTMENT, INC. AND X
WESTCAP SECURITIES X
MANAGEMENT, INC.) X (Motion for Joint
X Administration Pending)
Debtors X
DEBTORS' FIRST PROPOSED JOINT PLAN OF REORGANIZATION
DATED: APRIL 12, 1996
Houston, Texas
Zack A. Clement Myron M. Sheinfeld
Fulbright & Jaworski, L.L.P. Mitchell A. Seider
1301 McKinney, Suite 5100 Teresa L. Maines
Houston, Texas 77010-3095 Sheinfeld, Maley & Kay, P.C.
(713) 651-5151 1001 Fannin, Suite 3700
(713) 651-5246 (FAX) Houston, Texas 77002
ATTORNEYS FOR THE (713) 658-8881
WESTCAP CORPORATION, (713) 658-9756 (FAX)
DEBTOR AND DEBTOR IN ATTORNEYS FOR WESTCAP
POSSESSION ENTERPRISES, INC., DEBTOR
AND DEBTOR IN POSSESSION
Westcap Enterprises, Inc., Debtor and Debtor in Possession and The
Westcap Corporation, Debtor and Debtor in Possession, jointly propose this
First Proposed Plan of Reorganization pursuant to section 1121(a), title 11,
United States Code, for the resolution and satisfaction of their existing
outstanding Claims and Interests.
ARTICLE I
SUMMARY OF THE PLAN
This Plan treats all Claims and Interests fairly and equitably. This
summary describes some of the more important aspects of the Plan, but does
not describe all the details of the Plan. For that, it is necessary to read
the entire Plan and the Related Documents.
Priority Non-Tax Claims and Priority Tax Claims will be paid in full in
cash on the Effective Date.
Holders of Allowed Settled Claims will receive an agreed combination of
Cash and Class A Shares of West One on the Effective Date of a value equal
as of the Effective Date to the amount of such holder's Allowed Settled
Claim. Holders of Allowed Undisputed Liquidated Claims will receive Class A
Shares of West One on the Effective Date of a value equal as of the
Effective Date to the amount of such holder's Allowed Undisputed Liquidated
Claim. Holder's of Salesmen Claims will receive Class A Shares of West One
on the Effective Date of a value equal as of the Effective Date to the
amount of such holder's Allowed Claim. Holders of Disputed Unliquidated
Claims will receive Claim Tickets entitling such holders to receive Class A
Shares of West One of a value equal to the amount of such holder's Claim,
when and to the extent such Claim becomes an Allowed Undisputed Liquidated
Claim or an Allowed Settled Claim as of the later of the time of allowance
or the Effective Date.
National Western Life Insurance or its nominee(s) shall receive all of
the Class B Shares of West One on the Effective Date in satisfaction of
National Western Life Insurance Company's Allowed Claim against the Debtors
and Allowed Interest in the Westcap Corporation.
The holders of Class A Shares of West One will be entitled to receive
dividends from West One and dividends will not be paid to the holders of
Class B Shares until the aggregate of dividends paid the holders of Class A
Shares equals of the amount Allowed Claims as of the Effective Date. When
the holders of Class A Shares have received dividends in such amount, Class
B Shares will convert to 67% of the Class A Shares.
West One will be capitalized with all of the assets of the Debtors and
the proceeds of the National Western Settlement from which the Debtors will
receive $5,000,000 in Cash and real property of a value of $5,000,000 as
established by MAI appraisal, and other consideration. West One will be
obligated to prepare and file with the SEC (or, if not permitted, make
available to holders or prospective holders of Class A Shares) periodic
reports substantially equivalent to those required to be filed under the
1934 Exchange Act to facilitate the public trading of the shares of West
One.
ARTICLE II
DEFINITIONS, RULES OF CONSTRUCTION, AND RULES OF INTERPRETATION
As used in this Plan, the following terms shall have the respective
meanings specified below. In the event of any conflict between this Plan
and the Related Documents (including the Disclosure Statement), the Plan
controls.
2. Definitions. The capitalized terms used herein shall have the
respective meanings set forth below.
2.1 "Administrative Creditor" shall mean any creditor entitled to
payment of an Administrative Expense.
2.2 "Administrative Expense" shall mean any Claim constituting a cost
or expense of administration of the Chapter 11 Case Allowed under
Section 503(b) of the Bankruptcy Code, including, without limitation,
any actual and necessary costs and expenses of preserving the estate of
the Debtors, any actual and necessary costs and expenses of operating the
businesses of the Debtors, any indebtedness or obligations incurred or
assumed by the Debtors in connection with the conduct of its business or
for the acquisition or lease of property or the rendition of services,
any allowances of compensation and reimbursement of expenses to the
extent allowed by Final Order under Section 330 of the Bankruptcy Code,
whether arising before or after the Effective Date, and any fees or
charges assessed against the estate of the Debtors under Section 1930,
chapter 123, title 28, United States Code.
2.3 "Affiliate" shall mean a Person described in Section 101(2) of the
Bankruptcy Code.
2.4 "Allowed", when used with respect to a Claim, shall mean (i) a
Claim against one or both of the Debtors, proof of which was filed on or
before the Bar Date as to which no Objection has been interposed; or
(ii) if no proof of Claim was filed, a Claim that has been or hereafter
is set forth on the Schedules and Statements of the Debtors and is
described therein as liquidated in amount and not contingent, as to
which no Objection has been interposed; or (iii) a Claim as to which any
Objection has been interposed, to the extent such Claim has been
Allowed in whole or in part by a Final Order of the Bankruptcy Court.
2.5 "Bankruptcy Code" shall mean title I of the Bankruptcy Reform Act
of 1978, as amended, and codified at title 11 of the United States Code,
as applicable to the Chapter 11 Cases and as in effect as of the date
hereof or as hereafter amended.
2.6 "Bankruptcy Court" shall mean the Bankruptcy Court unit of the
United States District Court for the Southern District of Texas, Houston
Division, or such other court having jurisdiction over all or any part
of the Chapter 11 Case.
2.7 "Bankruptcy Rules" shall mean the Federal Rules of Bankruptcy
Procedure.
2.8 "Bar Date" shall mean the day that is ten days before the day
first set for the commencement of the Confirmation Hearing unless a
Final Order to the contrary has been entered.
2.9 "Bar Date Notice" shall mean that portion of the order approving
the Disclosure Statement which contains notice of the Bar Date and which
is (i) mailed either alone or as part of the order approving the
Disclosure Statement to the last known address of all former customers
of Westcap Securities L.P. and Westcap Government Securities, Inc., all
creditors set forth on the Schedules and Statements, and (ii) published
in a newspaper of general circulation.
2.10 "Capital Fee" shall mean the fees and expenses of $5,122,817 paid
to National Western Life Insurance Company by Westcap Securities, L.P.
and its predecessor Westcap Government Securities, Inc. from October 1,
1991 through September 30, 1995.
2.11 "Cash" shall mean and include U.S. currency on hand, U.S. currency
on deposit in any bank account, and cash equivalents including, but not
limited, to any check or other similar negotiable instrument denominated
in U.S. currency, shares in any money market or similar fund that are
actively traded on any established securities market located within the
United States, commercial paper having a maturity of 90 days or less and
denominated in U.S. currency, and any obligation of the United States of
America (or any agency or instrumentality thereof) denominated in U.S.
currency.
2.12 "Chapter 5 Action" shall mean a cause of action arising under
chapter 5 of the Bankruptcy Code or a cause of action which is property
of the estate under section 541 of the Bankruptcy Code.
2.13 "Chapter 11 Case(s)" shall mean the cases commenced under the
Bankruptcy Code by the voluntary petitions filed by Westcap Enterprises,
Inc. and The Westcap Corporation on April 12, 1996.
2.14 "Charter" shall mean the corporate charter of West One filed as a
Related Document.
2.15 "Claim" shall mean any right to payment from the Debtor, whether or
not such right is reduced to judgment, liquidated, unliquidated, fixed,
contingent, matured, unmatured, contested, uncontested, legal,
equitable, secured, or unsecured; or any right to an equitable remedy
for breach of performance if such breach gives rise to a right of
payment from the Debtor, whether or not such right to an equitable
remedy is reduced to judgment, fixed, contingent, matured, unmatured,
contested, uncontested, secured, or unsecured.
2.16 "Claim Tickets" shall mean the documents distributed as of the
Effective Date to the holders of Disputed Unliquidated Claims
evidencing the direct right of the holder to receive Class A Shares of
West One in exchange for the Allowed amount of such Claims following the
satisfaction of the conditions set forth for the exchange of Claim
Tickets in this Plan.
2.17 "Class" shall mean a category or group of holders of Claims or
Equity Interests as designated pursuant to Article III of this Plan.
2.18 "Class A Shares" shall mean the equity securities of West One
issued under this Plan to the holders of certain Claims on a basis such
that each Class A Share will be exchanged for ten dollars of Claims
eligible to receive Class A Shares and entitling the holders of such
securities to the voting rights and dividend preference described in
this Plan. The Class A Shares will have preference in liquidation over
the Class B Shares.
2.19 "Class B Shares" shall mean the equity securities of West One
issued under this Plan to National Western entitling National Western
or its nominee to the conversion and restricted voting and dividend
rights described in this Plan. 100,000 Class B Shares shall be issued.
2.20 "Confirmation Date" shall mean the date of entry of the
Confirmation Order.
2.21 "Confirmation Hearing" shall mean the hearing scheduled pursuant to
section 1128(a) of the Bankruptcy Code at which the Bankruptcy Court
will consider confirmation of this Plan.
2.22 "Confirmation Order" shall mean the order of the Bankruptcy Court
confirming this Plan.
2.23 "Consolidated Tax Agreement" shall mean the agreement dated March
9, 1995 among The Westcap Corporation, Westcap Securities Investment,
Inc., Westcap Securities Management, Inc. and National Western for the
sharing of tax benefits and burdens among the parties.
2.24 "Contingent" when used with respect to a Claim, shall mean a Claim
that has not accrued and which is dependent upon a future event that has
not occurred or may never occur.
2.25 "Convenience Claim" shall mean an Allowed Claim of $2,000 or less
or an Allowed Claim in excess of $2,000 voluntarily reduced to $2,000;
all Allowed Claims of one holder shall be aggregated for determining the
$2,000 or less limit.
2.26 "Credit Line Borrowing" shall mean advances made under the line of
credit facility extended by National Western to the Westcap Corporation
on March 25, 1994 in the amount of $3,000,000 and bearing interest at
10% and subsequently repaid.
2.27 "Creditor" shall mean the holder of a Claim.
2.28 "Creditors' Committee" shall mean the Official Unsecured Creditors'
Committee appointed in the Chapter 11 Case pursuant to Section 1102 of
the Bankruptcy Code, as reconstituted from time to time pursuant to
order of the Bankruptcy Court or determination of the United States
Trustee for the Southern District of Texas.
2.29 "Debtor" shall mean either Westcap Enterprises, Inc. or The Westcap
Corporation as the context may warrant.
2.30 "Debtors" shall mean Westcap Enterprises, Inc. and The Westcap
Corporation, collectively.
2.31 "Debtors" Release of National Western shall mean the release by the
Debtors and their estates pursuant to the National Western Settlement of
all Claims, if any, of the Debtors and their estates, including any
Chapter 5 Action against National Western, its Insiders and Affiliates
arising from or related to (i) the Consolidated Tax Agreement, the
Capital Fee, the Credit Line Borrowing, the Intercompany Dividends, and
any other transfers or transactions between or among the Debtors and
National Western and (ii) theories of alter ego, domination and control,
usurpation of corporate opportunity, waste, disregard of the corporate
form, control, or instrumentality, regardless of whether such Claim
arises under state statute or regulation, federal statute or regulation,
or common law.
2.32 "Debtor in Possession" shall mean the Debtor in its capacity as
debtor-in-possession under Section 1101(1) of the Bankruptcy Code.
2.33 "Disallowed", when used with respect to all or any part of a Claim,
shall mean the status of that portion of a Claim that is Disputed, upon
entry of an order by the Bankruptcy Court upholding the objection.
2.34 "Disclosure Statement" shall mean the Debtors' Joint Disclosure
Statement Under Section 1125 of the Bankruptcy Code With Respect to the
Debtors' First Proposed Joint Plan of Reorganization.
2.35 "Disputed" shall mean, when used with respect to a Claim, that
portion of the Claim against one or both of the Debtors that is not an
Allowed Claim.
2.36 "Effective Date" shall mean the first business day that is 11
calendar days after entry of the Confirmation Order or the first date
thereafter on which the actions contemplated in sections 16.1, 16.2,
16.3, and 16.4 of this Plan occur.
2.37 "Equity Interest" shall mean a share in a corporation, whether or
not transferable or denominated "stock," or any similar security.
2.38 "Escrow Account" shall mean the segregated account established on
the Effective Date for the limited purpose of holding Class A Shares of
West One in respect of the Claim Tickets and which shall remain in
existence until all such shares are exchanged for Claim Tickets or
canceled, as provided under this Plan.
2.39 "Estimation Motion" shall mean the Debtors Joint Motion to Estimate
claims Arising From or Related to the Sales of Securities.
2.40 "Estimation Procedure" shall mean the procedure for the estimation
of Disputed Unliquidated Claims requested by the Debtors in the
Estimation Motion as approved by the Bankruptcy Court.
2.41 "Exchange Act" shall mean the Securities Exchange Act of 1934 or
any successor law, and regulations, and rules issued pursuant to such
Act or any successor law.
2.42 "Final Order" shall mean an order or judgment of the Bankruptcy
Court or any other court or adjudicative body, as to which the time to
appeal or seek rehearing or petition for certiorari shall have expired
or which order or judgment shall no longer be subject to appeal,
rehearing or certiorari proceeding and with respect to which no appeal,
motion for rehearing or certiorari proceeding or stay shall then be
pending.
2.43 "Indemnification Claims" shall mean Claims arising under an
Indemnification Obligation.
2.44 "Indemnification Obligation" shall mean the obligations, if any, of
the Debtors (i) to indemnify the Debtors' present and former directors
and officers and the former directors and officers of its Affiliates
pursuant to any separate indemnification agreements and any provisions
of the Debtors' charter, its by-laws, and/or applicable state law and
(ii) pursuant to any separate agreements with respect to directors and
officers liability insurance entered into between either of the Debtors
and its directors and officers and the directors and officers of its
Affiliates.
2.45 "Indemnification Policies" shall mean the insurance policy or
policies obtained to cover Indemnification Obligations, which is
payable to the Debtors' directors and officers and the directors and
officers of the Debtors' Affiliates to whom either of the Debtors owes
the Indemnification Obligations.
2.46 "Intercompany Dividends" shall mean the dividends of $45,986,368
paid to National Western between October 1, 1991 and March 31, 1994 by
The Westcap Corporation, Westcap Securities L.P., and Westcap Government
Securities, Inc.
2.47 "Interest" shall mean an equity share in a corporation, whether or
not transferable or denominated "stock" or any similar security.
2.48 "Lien" shall mean charge against or interest in property to secure
payment of a debt or enforcement of an obligation.
2.49 "National Western" shall mean National Western Life Insurance
Company, a Colorado Corporation.
2.50 "National Western Allowed Claim" shall mean the Allowed Claim of
National Western of $1,000,000 which is subordinated in payment to all
other Allowed Claims.
2.51 "National Western Settlement" shall mean the agreement among the
Debtors and National Western for the compromise and settlement of all
Claims, if any, of the Debtors against National Western on the one hand,
and all Claims, if any, of National Western against the Debtors on the
other hand pursuant to which the Debtors will receive Cash of
$5,000,000, the Properties, and the National Western Release of
Debtors and pursuant to which National Western will receive the National
Western Allowed Claim and the Debtors Release of National Western.
2.52 "National Western Release of Debtors" shall mean the release of all
Claims of National Western other than the National Western Allowed Claim
against Debtors, their Insiders, and Affiliates arising from or related
to the feasance, misfeasance, or nonfeasance of the Debtors, their
Insiders and Affiliates.
2.53 "Objection" shall mean an objection to the allowance of a Claim
interposed within the applicable period of limitation fixed by the Plan,
the Bankruptcy Code, the Bankruptcy Rules, or the Bankruptcy Court.
2.54 "Person" shall mean an individual, corporation, partnership, joint
venture, trust, estate, unincorporated association, unincorporated
organization, governmental entity or unit or political subdivision
thereof, or any other entity.
2.55 "Petition Date" shall mean April 12, 1996.
2.56 "Plan" shall mean this chapter 11 plan for the Debtors as it may be
modified from time to time, and the Related Documents.
2.57 "Plan Ballot Deadline" shall mean the date fixed by the Bankruptcy
Court by which the ballot that accompanies this Plan validly executed by
the holder of an Allowed Claim must be received by the Debtors or their
agent, which date iset forth inthe Disclosure Statement.
2.58 "Priority Non-Tax Claim" shall mean a Claim entitled to priority
pursuant to Section 507(a)(3), 507(a)(4), or 507(a)(6) of the Bankruptcy
Code.
2.59 "Priority Tax Claim" shall mean a Claim entitled to priority
pursuant to Section 507(a)(8) of the Bankruptcy Code.
2.60 "Properties" shall mean the real property conveyed by National
Western pursuant to the National Western Settlement which shall consist
of the Sierra Mall in Ruidoso, New Mexico, the Adler Office Building in
Temple, Texas, the 303 Stafford Office Building in Houston, Texas and
the office building at 806 Main Street in Houston, or such real property
of a value equal to or greater than $5,000,000 as of the Effective Date.
2.61 "Related Documents" shall mean the documents referred to in this
Plan and in support of this Plan which will be filed not less than ten
days before the commencement of the Confirmation Hearing.
2.62 "SEC" shall mean the Securities and Exchange Commission.
2.63 "Salesmen" shall mean those persons who were employed by a
predecessor in interest to Westcap Enterprises, Inc. and who sold,
brokered, traded, or otherwise engaged in the transfer of securities
during the time of employment by a predecessor in interest to Westcap
Enterprises, Inc.
2.64 "Schedules and Statements" shall mean the documents the Debtors
filed with the Bankruptcy Court under Bankruptcy Rule 1007 as such
documents may be amended from time to time.
2.65 "Securities Act of 1933" shall mean the Securities Act of 1993 or
any successor law, and regulations and rules issued pursuant to that Act
or any successor law.
2.66 "SEC Settlement" shall mean the agreement between the SEC and
Westcap Securities, L.P. memorialized in the Order Instituting Public
Proceedings, Making Findings and Imposing Remedial Sanctions entered by
the SEC on February 14, 1996 pursuant to which Westcap Securities, L.P.
disgorged $445,340.60, paid prejudgment interest of $83,878.90, and paid
a civil money penalty of $300,000 to the SEC and pursuant to which the
SEC accepted Westcap Securities, L.P.'s voluntary relinquishment of its
authority to engage in the purchase and sale of securities which Westcap
Securities, L.P. filed with the SEC on December 20, 1995.
2.67 "Settled Claim" shall mean a Disputed Claim that has been settled
and compromised by the Debtors and the holder of such Disputed Claim
prior to the Effective Date. A Settled Claim is deemed Allowed unless a
Final Order to the contrary has been entered by the Bankruptcy Court.
2.68 "Tax Code" shall mean the Internal Revenue Code of 1986, as
amended, or corresponding provisions of any subsequent federal revenue
act.
2.69 "Tax Return" shall mean any consolidated federal income tax return
filed including either or both of the Debtors or on behalf of either or
both of the Debtors.
2.70 "Undisputed Liquidated" shall mean, when used to describe a Claim,
a Claim listed on the Schedules and Statements and not described as
contingent, unliquidated, or disputed or a Claim listed on the Schedules
and Statements as contingent, unliquidated or disputed which becomes
subject to an agreement among the Debtors and the holder of such Claim
for such Claim to be Allowed and is approved by the Bankruptcy Court.
2.71 "Unliquidated" shall mean, when used to describe a Claim, a
Disputed Claim or Claim otherwise subject to contest by the Debtors,
whether made or unmade, that is not the subject of an order of a court
or other tribunal of competent jurisdiction setting the amount of such
Claim.
2.72 "Unopposed Objection" shall mean an objection to a Claim filed with
the Bankruptcy Court that is subject to a pending agreed order, motion
for default judgment, motion to withdraw, or motion for summary judgment
for which the response time has expired with no response filed.
2.73 "West One" shall mean the surviving corporation in the merger of
Westcap Enterprises, Inc. with and into The Westcap Corporation on the
Effective Date which will be a corporation organized under the laws of
the state of Delaware and which will seek as soon as practicable and to
extent consistent with its obligations under this Plan the the
treatment available to a qualified real estate investment trust under
sections 856-58 of the Tax Code.
2.74 Interpretation. Unless otherwise specified, all Section, article
and exhibit references in this Plan are to the respective Section in,
article of, or exhibit to, this Plan, as the same may be amended,
waived, or modified from time to time. The headings in this Plan are
for convenience of reference only and shall not limit or otherwise
affect the provisions hereof. Words denoting the singular number shall
include the plural number and vice versa, and words denoting one gender
shall include the other gender.
ARTICLE III
CLASSIFICATION OF CLAIMS AND INTERESTS
3.1 Claims and Interests of the Debtors.
(a) Allowed Administrative Expense Claims, Class 1
(b) Allowed Priority Non-Tax Claims, Class 2
(c) Allowed Priority Tax Claims, Class 3
(d) Allowed Convenience Claims, Class 4
(e) Allowed Settled Claims, Class 5
(f) Allowed Undisputed Liquidated Claims, Class 6
(g) Allowed Salesmen Claims, Class 7
(h) Disputed Unliquidated Claims, Class 8
(i) Allowed Indemnification Claims, Class 9
(j) Allowed Claims of National Western, Class 10
(k) Allowed Equity Interest of National Western, Class 11
ARTICLE IV
IDENTIFICATION OF CLAIMS AND INTERESTS IMPAIRED BY THE PLAN
4.1 Unimpaired Classes. The Claims specified in Classes 1, 2, 3, 4,
and 9 are not impaired under this Plan and are not entitled to vote to
accept or reject this Plan.
4.2 Impaired Classes to Vote on Plan. The Claims specified in Classes
5, 6, 7, 8, and 10 and the Equity Interest of Class 11 are impaired and
are entitled to vote to accept or reject this Plan.
4.3 Controversy Concerning Impairment, Right to Vote, Amount of Claim
or Number of Class A Shares to be Placed in Escrow. In the event of a
controversy (i) as to whether any Claim or Interest or Classes of Claims
or Interests is impaired under this Plan, (ii) as to whether the holder
of any Claim or Interest is entitled to vote with respect to this Plan,
(iii) regarding the Allowed amount of any Claim or Interest for voting
purposes or allowance purposes, or (iv) the number of shares to be
placed in the Escrow; then any such controversy shall be determined by
the Bankruptcy Court at or before the Confirmation Hearing.
ARTICLE V
PROVISIONS FOR TREATMENT OF ALLOWED
ADMINISTRATIVE EXPENSE CLAIMS
5.1 Treatment. On the later of the Effective Date or the due date for
a particular Allowed Administrative Expense Claim, each Allowed
Administrative Expense Claim shall be paid in full in Cash or from any
retainers on hand, or upon such other less favorable terms as may be
agreed to in writing between the holder of that claim and the Debtors.
5.2 Impairment. Allowed administrative expense claims are unimpaired
under this Plan.
ARTICLE VI
PROVISIONS FOR TREATMENT OF ALLOWED
PRIORITY NON-TAX CLAIMS
6.1 Treatment. On the later of the Effective Date or the due date for
a particular Allowed Priority non-tax claim, each Allowed priority
non-tax claim shall be paid in full in Cash or upon such other less
favorable terms as may be agreed upon in writing between the holder of
that claim and the Debtors.
6.2 Impairment. Allowed priority non-tax claims are unimpaired under
this Plan.
ARTICLE VII
PROVISION FOR TREATMENT OF ALLOWED PRIORITY TAX CLAIMS
7.1 Treatment. On the later of the Effective Date or the due date
for a particular Allowed Priority Tax Claim, each Allowed Priority Tax
Claim shall be paid in full in Cash or upon such other less favorable
terms as may be agreed upon in writing between the holder of such Claim
and the Debtors.
7.2 Impairment. Allowed Priority Tax Claims are unimpaired under
this Plan.
ARTICLE VIII
PROVISIONS FOR TREATMENT OF ALLOWED CONVENIENCE CLAIMS
8.1 Treatment. On the Effective Date the holders of Allowed
Convenience Claims will receive a payment in Cash equal to the amount of
such holder's Allowed Convenience Claim.
8.2 Time and Manner of Election. Any holder of an Allowed Claim that
desires treatment of such Claim as a Convenience Claim, shall have made
such election on the ballot provided to holders of Allowed Claims and
returned such ballot before the Plan Ballot Deadline. Any election made
after the Plan Ballot Deadline will not be binding, unless the Plan
Ballot Deadline is expressly waived in writing by the Debtors.
8.3 Impairment. Allowed Convenience Claims are unimpaired under this
Plan.
ARTICLE IX
PROVISIONS FOR TREATMENT OF ALLOWED SETTLED CLAIMS
9.1 Treatment. On the later of the Effective Date or a mutually agreed
to date, the holders of Allowed Settled Claims will receive the
combination of Cash and shares of West One agreed to by the holder of
such Allowed Settled Claim and the Debtors, which will equal in value
the amount of the Allowed Settled Claim.
9.2 Impairment. Allowed Settled Claims are impaired under this Plan.
ARTICLE X
PROVISIONS FOR TREATMENT OF ALLOWED
UNDISPUTED LIQUIDATED CLAIMS
10.1 Treatment. On the Effective Date each holder of an Allowed
Undisputed Liquidated Claim will receive Class A Shares of West One of a
value equal to the amount of such holder's Allowed Undisputed Liquidated
Claim.
10.2 Impairment. Allowed Undisputed Liquidated Claims are impaired
under this Plan.
ARTICLE XI
PROVISIONS FOR TREATMENT OF ALLOWED SALESMEN CLAIMS
11.1 Treatment. On the Effective Date each holder of an Allowed
Salesmen Claim will receive Class A Shares of West One of a value equal
to the amount of such holder's Allowed Salesmen Claim.
11.2 Impairment. Allowed Salesmen Claims are impaired under this Plan.
ARTICLE XII
PROVISIONS FOR TREATMENT OF DISPUTED UNLIQUIDATED CLAIMS
12.1 Treatment. On the Effective Date each holder of a Disputed
Unliquidated Claim will receive the Claim Tickets which entitle such
holder to receive upon the satisfaction of the conditions set forth in
this Plan the number of Class A Shares of West One as if such holder's
Disputed Unliquidated Claim were Allowed in an amount equal to the
greater of the amount of such Disputed Unliquidated Claim on the
Debtors' Schedules and Statements or the amount of such Disputed
Unliquidated Claim as set forth in a proof of Claim filed before the Bar
Date.
12.2 Impairment. Disputed Unliquidated Claims are impaired under this
Plan.
ARTICLE XIII
PROVISIONS FOR TREATMENT OF ALLOWED INDEMNIFICATION CLAIMS
13.1 Treatment. This Plan leaves unaltered the legal, equitable, and
contractual rights of the holders of Allowed Indemnification Claims
under the Indemnification Obligations and the Indemnification Policies.
13.2 Impairment. Allowed Indemnification Claims are unimpaired under
this Plan.
ARTICLE XIV
PROVISIONS FOR TREATMENT OF THE CLAIM
AND INTEREST OF NATIONAL WESTERN
14.1 Treatment. On the Effective Date the holder of the National
Western Claim and Interest or its nominee(s) will receive all of the
Class B Shares of West One. The Class B Shares of West One will convert
to 67% of the Class A Shares of West One when the present value,
measured as of the Effective Date, of the cumulative dividends paid in
respect of the Class A Shares of West One authorized on the Effective
Date equals the amount of Allowed Settled Claims, Allowed Undisputed
Liquidated Claims, and Allowed Salesmen Claims on the Effective Date
plus the amount of Allowed Claims for which Claim Tickets are exchanged
for Class A Shares of West One held in the Escrow Account as of the time
of such allowance.
ARTICLE XV
MEANS FOR EXECUTION OF THE PLAN
15.1Reorganized Debtors.
(a) As of the Effective Date Westcap Enterprises, Inc. will be
merged with and into The Westcap Corporation. From the Effective Date
forward, West One will conduct business as a corporation under the laws
of the state of Delaware. West One will seek the favorable tax status
available to qualifying real estate investment trusts under sections
856-58 of the Tax Code to the extent the assets of West One allow West
One such status or the assets of West One can be exchanged, sold, or
otherwise allocated to allow West One such status while West One
satisfies the obligations of this Plan.
(b) West One will engage in the ownership of rental real property
and real estate mortgages for the purpose of providing its shareholders
with income and capital appreciation to the extent allowed by its
corporate Charter (which shall not conflict with the terms of this
Plan), the laws of the state of Delaware, sections 856-58 of the Tax
Code, and the 1934 Exchange Act. In the event West One fails to qualify
or loses its status as a real estate investment trust under the Tax
Code, then West One shall continue in the business of owning rental
real property and real estate mortgages for the purpose of providing its
shareholders with income and capital appreciation. Nothing in this
Plan, however, shall prohibit the directors of West One from changing
the business plan of West One if in such directors business judgment the
purpose of West One to provide its shareholders with income and capital
appreciation is more likely to be realized through pursuit of an other
or several other forms of business.
(c) West One will be capitalized with all assets of the Debtors
including, without limitation, all claims and causes of action of the
Debtors under Chapter 5 of the Bankruptcy Code, all tax attributes of
the Debtors, and the proceeds of the National Western Settlement.
15.2 The National Western Settlement.
(a) On or before the Effective Date, the National Western
Settlement will be closed.
(b) Pursuant to the National Western Settlement, National Western
will transfer to the Debtors Cash of $5,000,000, the Properties, and the
National Western Release of Debtors and pursuant to which National
Western will receive the National Western Allowed Claim and the Debtors
Release of National Western.
ARTICLE XVI
THE IMPLEMENTATION OF THIS PLAN
16.1 Cash Payments on the Effective Date. On the Effective Date all
Cash payments required to be made pursuant to this Plan and any
agreement made prior to the Effective Date, which has been approved by
Final Order, for Cash payment on the Effective Date, will be made to the
holder of the Claim entitled to such Cash payment.
16.2 Issuance of Shares of West One.
(a) On the Effective Date West One will issue to the holders of
Settled Claims, Undisputed Liquidated Claims, and the Salesmen Claims
the Class A Shares to which such holders are entitled under this Plan.
(b) On the Effective Date West One will issue to the holder of
National Western Claim and Interest all of the Class B Shares of West
One.
16.3 Issuance of Claim Tickets for Class A Shares of West One. On the
Effective Date West One will issue to the holders of Disputed
Unliquidated Claims, Claim Tickets for the issuance of Class A Shares of
West One. West One will hold such Class A Shares for which the Claim
Tickets may be exchanged in the Escrow Account subject to the terms for
exchange of the Claim Tickets set forth in this Plan.
16.4 Establishment of the Escrow Account.
(a) On the Effective Date West One will establish the Escrow
Account and will fund the Escrow Account with the Class A Shares of West
One reserved for the holders of Disputed Unliquidated Claims. The
ledger of the Escrow Account will be available for review during regular
business hours on the reasonable request of any holder of Claim Tickets,
Class A Shares of West One, or Class B Shares of West One.
(b) The Escrow Account will hold Class A Shares of West One of a
value equal to the aggregate amount of the Disputed Unliquidated Claims
as scheduled by the Debtors on the Debtors' Schedules and Statements
provided, however, that if the holder of a Disputed Unliquidated Claim
has filed a proof of Claim before the Bar Date the calculation of value
for purposes of placing Class A Shares of West One in the Escrow Account
will be based on the amount asserted in such timely proof of Claim(s),
but only to the extent such proof has not been the subject of an order
liquidating or estimating the underlying Claim, in which case such
calculation will be based on the amount set forth in the order
liquidating or estimating the underlying Claim. In the event the sum of
the Disputed Unliquidated Claims (as measured under the provisions of
this section 16.4(b)), Allowed Settled Claims, Allowed Undisputed
Liquidated Claims, and Allowed Salesmen Claims total an amount in excess
of the fair market value of the assets of the West One, then (i) the
Class A Shares in the Escrow Account will be of an amount equal to the
pro rata amount of the Disputed Unliquidated Claims as against the
amount of all other Claims entitled to receive Class A Shares of West
One on the Effective Date and (ii) the value of the Class A Shares
issued to the holders of Allowed Settled Claims, Allowed Undisputed
Liquidated Claims, and Allowed Salesmen Claims will reflect the pari
passu treatment of all Allowed Claims satisfied through the receipt or
reserve of Class A Shares as of the Effective Date.
16.5 Distributions From the Escrow Account.
(a) Claim Tickets will be exchanged for Class A Shares of West
One in the Escrow Account upon presentation by the holder of Claim
Tickets of the Claim Tickets to be exchanged for Class A Shares of West
One and any of the following:
1) an order approving an agreement among the Debtors and such
holder fixing the amount of such holder's Disputed Unliquidated Claim
as an Allowed Settled Claim;
2) an order issued pursuant to the relief requested in the
Estimation Motion estimating for distribution purposes a Claim that is a
Disputed Unliquidated Claim; or
3) a Final Order of an adjudicative body other than the
Bankruptcy Court liquidating such holder's Disputed Unliquidated Claim
and establishing such holder's Allowed Liquidated Undisputed Claim.
(b) As the holders of Disputed Unliquidated Claims become
entitled to exchange their Claim Tickets for Class A Shares of West One
in amounts fractional of the total number of Class A Shares of West One
held in the Escrow Account for such holders, then the number of Class A
Shares of West One corresponding to the Claim Tickets of such holders
which are not exchangeable for Class A Shares of West One will be
cancelled. Any Class A Shares of West One not distributed after all
Disputed Unliquidated Claims have been either Disallowed or become
either Allowed Settled Claims or Allowed Liquidated Undisputed Claims
will be cancelled.
(c) The Escrow Account will be closed when all Class A Shares of
West One have been disposed of either through distribution or
cancellation.
16.6 Procedure for Estimation of Disputed Unliquidated Claims.
Contemporaneously with the filing of this Plan, the Debtors have filed
their Estimation Motion. The Estimation Motion is an exhibit to the
Disclosure Statement. In summary, the Estimation Motion requests the
Bankruptcy Court estimate the Disputed Unliquidated Claims to set the
distributions to be made under this Plan. The Estimation Motion
proposes procedures and timetables that will allow for the completion of
the estimation process in time for this Plan to be consummated before
the end of the Debtors' fiscal year on September 30, 1996.
16.7 Procedure for Resolution of Claims Unknown as of the Filing of this
Plan.
(a) Claims constituting Administrative Expenses of the Debtors
under section 503(b)(1), (3), (4), and (6) of the Bankruptcy Code must
be filed on or before the Effective Date and written notice of the
amount of such Claims must be served on counsel to the Debtors before
the day first set for the commencement of the hearing on confirmation of
this Plan.
(b) Claims constituting Administrative Expenses of the Debtors
under section 503(b)(2) of the Bankruptcy Code must be filed no later
than 45 days following the Effective Date.
(c) Unless a Final Order to the contrary has been entered by the
Bankruptcy Court before the Effective Date, the Bar Date for all
Claims, other than Claims described in sections 16.7(a) and 16.7(b) of
this Plan, arising from or related to the prepetition actions or
inactions of the Debtors will be the day that is ten days before the day
first scheduled for the commencement of the Confirmation Hearing. The
Bar Date will be strictly enforced against the holder of any Claim who
received actual or constructive notice of the Bar Date. The
transmission and publication of the Bar Date Notice as set forth in the
Disclosure Statement will be deemed to create a rebuttable presumption
that a late coming claimant had sufficient notice of the Bar Date.
16.8 Revesting of Assets. Except as otherwise provided in this Plan or
the Related Documents, the property and assets of the Debtors'
bankruptcy estates shall revest in West One on the Effective Date free
and clear of all Claims or Interests, but subject only to the
obligations that are set forth in this Plan. Commencing on the
Effective Date, West One may conduct its business without any
supervision by the Bankruptcy Court or the office of the United States
Trustee and free of any restriction imposed by the Bankruptcy Code or by
the Bankruptcy Court during the Chapter 11 Case. From and after the
Effective Date, West One may use, operate and deal with its assets and
property without any such supervision and free of any such restriction.
16.9 Securities Law Matters. The issuance of securities pursuant to
this Plan, including without limitation the issuance of the Class A
Shares, the Class B Shares and the Claim Tickets (and the issuance of
Class A Shares to the holders of the Claim Tickets following the
satisfaction of the conditions set forth for the exchange of Claim
Tickets in this Plan), are intended to be and shall be exempt from
the application of Section 5 of the Securities Act of 1933, 15 U.S.C.
77e, and any other applicable federal, state or local law requiring
registration for offer or sale of a security or registration of an
issuer of, underwriter of, or broker or dealer in a security, pursuant
to Section 1145(a) of the Bankruptcy Code. If at anytime more than two
years after the Effective Date a holder of Class A Shares holds a large
enough percentage of Class A Shares, whether by distribution from the
Escrow Account or conversion of Class B Shares to Class A Shares, such
holder shall have the right to require West One to register the Class A
Shares under applicable securities law.
All securities issued pursuant to the Plan shall bear a legend
substantially in the form below:
THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR
UNDER THE SECURITIES LAWS OF ANY STATE OR OTHER JURISDICTION
AND MAY NOT BE SOLD, OFFERED FOR SALE, OR OTHERWISE
TRANSFERRED UNLESS REGISTERED OR QUALIFIED UNDER SAID ACT AND
APPLICABLE STATE SECURITIES LAWS. TO THE EXTENT THAT PERSONS
DEEMED "UNDERWRITERS" RECEIVE SECURITIES PURSUANT TO THE PLAN,
RESALES BY SUCH PERSONS WOULD NOT BE EXEMPTED BY SECTION 1145
OF THE BANKRUPTCY CODE FROM REGISTRATION UNDER THE SECURITIES
ACT OF 1933 OR UNDER THE SECURITIES LAWS OF ANY STATE OR OTHER
JURISDICTION. GIVEN THE COMPLEX, SUBJECTIVE NATURE OF THE
QUESTION OF WHETHER A PARTICULAR HOLDER MAY BE AN UNDERWRITER,
NO REPRESENTATION IS MADE CONCERNING THE RIGHT OF ANY PERSON
TO TRADE THESE SECURITIES. WEST ONE RECOMMENDS THAT
RECIPIENTS OF THESE SECURITIES CONSULT THEIR OWN COUNSEL
CONCERNING WHETHER THEY MAY FREELY TRANSFER THESE SECURITIES.
16.10 Fractional Shares. No fractional shares of West One shall be
issued. Fractional shares shall be rounded to the next greater or next
lower number of shares as follows: (a) fractions of 0.5 or greater shall be
rounded to the next greater whole number, and (b) fractions of less than 0.5
shall be rounded to the next lesser whole number.
16.11 Conditions to Substantial Consummation of the Plan.
Consummation of this Plan is contingent on: entry of the Confirmation Order
or a separate order under Bankruptcy Rule 9019 approving the National
Western Settlement, the Debtors Release of National Western, and the
National Western Release of Debtors, and the closing of the National Western
Settlement and the occurrence of the events discussed in sections 16.1 -
16.4 of this Plan.
ARTICLE XVII
OPERATION OF WEST ONE FOLLOWING THE EFFECTIVE DATE
17.1 Commencement of Operations Following the Effective Date.
(a) West One will in an orderly fashion divest itself of assets
which may jeopardize West One's qualification as a real estate investment
trust under sections 856-58 of the Tax Code; provided, however, that such
divestiture is subject to the obligation of West One to generate and pay
dividends to the holders of the Class A Shares of West One.
(b) West One will invest its Cash in assets which, in the
discretion of its management, will provide its shareholders with income and
capital appreciation and will not disqualify West One from operating as a
real estate investment trust under the Tax Code.
(c) The Charter of West One will require the payment of
dividends quarterly to the holders of Class A Shares of West One to the
extent West One has capacity under applicable state and federal law to pay
such dividends until such time as the Class B Shares of West One have
converted to Class A Shares of West One under the terms of this Plan.
(d) The initial officers of West One will be Charles D. Milos,
Jr., President and Robert Randolph, Treasurer and Secretary. The initial
Directors will be Charles D. Milos, Jr., Robert Randolph, and Robert
Johnson.
(e) West One will hold a meeting of shareholders on notice within
30 days of the Effective Date for the purpose of electing a Board of
Directors. Holders of Class A Shares of West One at the time set in this
Plan for such meeting will be entitled to elect four of the seven directors
and holders of the Class B Shares of West One will be entitled to elect
three of the seven directors. Upon conversion of the Class B Shares to
Class A Shares, shareholders will be entitled to one vote for each Class A
Share of such holder.
(f) West One will be obligated to prepare and file with the SEC
(or, if not permitted, make available to holders or prospective holders of
Class A Shares) periodic reports substantially equivalent to those required
to be filed under the 1934 Exchange Act to facilitate public trading of the
Class A Shares. The expenses of such compliance are an anticipated
recurring administrative cost of West One from the Effective Date until such
time as West One ceases to be a public company.
17.2 Future Operations of West One. Until such time as the Class B
Shares of West One convert to Class A Shares of West One pursuant to the
terms of this Plan, West One will be operated for the purpose of providing
shareholders with income and capital appreciation. Following such
conversion, the directors of West One may provide for the operation of West
One in their discretion in any fashion not inconsistent with the laws of the
state of Delaware and applicable federal law. The Charter will prohibit
any action by the directors of West One between the Effective Date and the
time the Class B Shares of West One convert to Class A Shares of West One
that would fetter the discretion of the directors of West One following such
conversion.
ARTICLE XVIII
EXECUTORY CONTRACTS AND UNEXPIRED LEASES
18.1 Rejection of Executory Contracts and Unexpired Leases. The Plan
shall be deemed to constitute and incorporate a motion by the Debtors to
reject all executory contracts and unexpired leases to which the Debtors are
or one of the Debtors is party or is otherwise bound, except for such
contracts and leases that (a) have been assumed or rejected pursuant to an
order of the Bankruptcy Court, (b) are specifically treated otherwise in
this Plan, or (c) are the subject of a motion to assume that is pending
before the Bankruptcy Court on the Confirmation Date. Notwithstanding the
foregoing, any agreement of the Debtors to indemnify or reimburse any Person
are, unless previously rejected or otherwise treated in this Plan, deemed
rejected as of the filing of this Plan upon the entry of the Confirmation
Order. The Debtors assume the Consolidated Tax Agreement under this Plan,
subject to the terms of this Plan, the Debtors Release of National Western,
and the National Western Release of Debtors. The Confirmation Order shall
represent and reflect an order of the Bankruptcy Court approving such
assumptions or rejections as of the Confirmation Date, unless otherwise
provided in this section 18.1.
18.2 Bar to Rejection Damages. If the rejection of an executory
contract or unexpired lease by the Debtors or one of the Debtors results in
damages to the other party or parties to such contracts or leases, a claim
for such damages, if not heretofore evidenced by a filed proof of claim,
shall be forever barred and shall not be enforceable against either Debtor,
its successors, or its properties unless a proof of claim is filed with the
Bankruptcy Court and served upon the president of West One by the later of
thirty days after entry of the Confirmation Order or by such earlier date as
may be fixed by an order of the Bankruptcy Court authorizing rejection of
the contract or lease.
ARTICLE XIX
EFFECT OF REJECTION BY ONE OR MORE CLASSES OF CLAIMS
19.1 Impaired Classes to Vote. Each impaired Class of claims listed in
section 4.2 of this Plan shall be entitled to vote separately to accept or
reject this Plan. A holder of a Disputed Claim which has not been
temporarily Allowed under Bankruptcy Rule 3018(a) for purposes of voting on
this Plan may only vote such Disputed Claim in an amount equal to the
portion, if any, of such claim shown as fixed, liquidated and undisputed on
the Debtors' schedules.
19.2 Acceptance by Class of Creditors. A Class shall have accepted this
Plan if this Plan is accepted by at least two-thirds in amount and, in the
case of a Class of claims, more than one-half in number of the Allowed
Claims of such Class that have voted to accept or reject this Plan.
19.3 Cramdown. Each of the Debtors reserves the right to request the
Bankruptcy Court to confirm this Plan in accordance with the provisions of
section 1129(b) of the Bankruptcy Code with respect to any Class that
receives nothing under this Plan and is deemed to reject it and with respect
to any impaired Class that fails to accept this Plan.
ARTICLE XX
PROVISION FOR RETENTION, PROSECUTION, AND SETTLEMENT OF
CLAIMS AND OTHER RIGHTS WHICH ARE PROPERTY OF THE ESTATE
20.1 Causes of Action Arising Under Chapter 5 of the Bankruptcy Code.
All Chapter 5 Actions will become the sole property of West One on the
Effective Date. West One may prosecute to Final Order, settle, transfer,
assign, convey or not prosecute any Chapter 5 Action following the Effective
Date as West One may decide in its discretion.
20.2 Causes of Action and other Rights not Arising Under Chapter 5 of
the Bankruptcy Code. West One may prosecute to Final Order, settle,
transfer, assign, convey or not prosecute any cause of action or other right
not arising under Chapter 5 of the Bankruptcy Code following the Effective
Date as West One may decide in its discretion.
20.3 Limitation on Prosecution of Claims. Notwithstanding anything in
this Plan to the contrary, West One, its successors, and assigns are
prohibited by this Plan from pursuing Claims or rights, if any, compromised
and settled in the National Western Settlement and the SEC Settlement.
20.4 Legally Binding Effect of Discharge of Claims and Interests. The
provisions of this Plan shall(a) bind holders of all claims and interests,
whether or not they accept this Plan, and (b) discharge the reorganized
Debtors from all claims, interests or debts that arose before the Effective
Date. In addition, the distributions of Cash and securities provided for
under this Plan shall be in exchange for and in complete satisfaction,
discharge and release of all claims against and interests in the Debtors or
any of their assets or properties, including any claim or interest accruing
after the Petition Date and prior to the Effective Date. On and after the
Effective Date, all holders of claims and interests shall be precluded from
asserting any claim against the reorganized Debtors or their assets or
properties based on any transaction, claim, interest or activity of any kind
that occurred prior to the Effective Date, except as provided in this Plan.
Furthermore, the distributions of Cash and securities provided for under
this Plan shall be in exchange for, among other things, the discharge of all
Claims arising from or related to (i) the prepetition actions or inactions
of the Debtors, their Insiders, Affiliates, and agents for which the Debtors
could have been found liable under state or federal law, if any and (ii) the
actions or inactions of Debtors' Insiders, Affiliates, and agents giving
rise to Claims by the Debtors against such parties under state or federal
law, if any.
ARTICLE XXI
CREDITORS' COMMITTEE
21.1 Dissolution of Committees Appointed Under Section 1102 of the
Bankruptcy Code. Any committee appointed under section 1102 of the
Bankruptcy Code will be dissolved on the Confirmation Date.
ARTICLE XXII
MISCELLANEOUS PROVISIONS
22.1 Interest on Claims. In determining the time of conversion of the
Class B Shares into 67% of the Class A Shares, an interest rate of 7% per
annum will be used to measure present value.
22.2 Compliance with Tax Requirements. In connection with this Plan,
West One will comply with all withholding and reporting requirements imposed
by federal, state, local, and foreign taxing authorities and all
distributions hereunder shall be subject to such withholding and reporting
requirements.
22.3 Compliance with all Applicable Laws. If notified by any
governmental authority that it is in violation of any applicable law, rule,
regulation, or order of such governmental authority relating to its
business, West One shall comply with such law, rule, regulation, or order;
provided that nothing contained herein shall require such compliance if the
legality or applicability of any such requirement is being contested in good
faith in appropriate proceedings and, if appropriate, for which an adequate
reserve has been set aside on the books of West One.
22.4 Setoffs. Except as otherwise provided in the Plan, West One may,
but shall not be required to, set off against any claim and the payments or
other distributions to be made pursuant to this Plan in respect of such
claim, claims of any nature whatsoever the estate may have against the
holder of such claim, but neither the failure to do so nor the allowance of
any claim hereunder shall constitute a waiver or release by West One of any
such claim that the estate may have against such holder.
22.5 Settlements Deemed Approved. At the Confirmation Hearing the
Bankruptcy Court shall determine the reasonableness of all settlements
contemplated herein under the standards of Bankruptcy Rule 9019, and to the
extent applicable section 1129(a)(4) of the Bankruptcy Code. The
Confirmation Order will represent and reflect an order of the Bankruptcy
Court approving all settlements described or reasonably contemplated in
this Plan.
22.6 Modification of Plan. Modifications of this Plan may be proposed
in writing by the Debtors. Debtors at any time before the Effective Date,
provided that this Plan, as modified, meets the requirements of sections
1122 and 1123 of the Bankruptcy Code, and the Debtors shall have complied
with section 1125 of the Bankruptcy Code. This Plan may be modified at any
time after confirmation and before its substantial consummation, provided
that the Plan, as modified, meets the requirements of sections 1122 and 1123
of the Bankruptcy Code and the Bankruptcy Court, after notice and a hearing,
confirms the Plan, as modified, under section 1129 of the Bankruptcy Code,
and the circumstances warrant such modification. A holder of a claim that
has accepted or rejected this Plan shall be deemed to have accepted or
rejected, as the case may be, such Plan as modified, unless, within the time
fixed by the Bankruptcy Court, such holder changes its previous acceptance
or rejection.
22.7 Revocation of Plan. The Debtors reserve the right to unanimously
revoke and withdraw this Plan prior to entry of the entry of the
Confirmation Order. If the Debtors revoke or withdraw this Plan, then this
Plan shall be deemed null and void and nothing contained herein shall be
deemed to constitute a waiver or release of any claims or rights by or
against the Debtors or any other Person or to prejudice in any manner the
rights of the Debtors or any Person in any further proceedings involving the
Debtors or claims against the estate.
22.8 Effect of Withdrawal or Revocation. If a Debtor revokes or
withdraws this Plan prior to the Confirmation Date, or if the Confirmation
Date or the Effective Date does not occur, then this Plan shall be deemed
null and void. In such event, nothing contained herein shall be deemed to
constitute a waiver, release or admission of any fact or claim by or against
any Debtor or any other Person, or to prejudice in any manner the rights of
any Debtor or any Person in any further proceedings involving any Debtor.
22.9 Due Authorization by Creditors. Each and every Creditor who elects
to participate in the distributions provided for herein warranties that he
is authorized to accept in consideration of his claim against the Debtors
the distributions provided for in this Plan and that there are no
outstanding commitments, agreements, or understandings, express or implied,
that may or can in any way defeat or modify the rights conveyed or
obligations undertaken by him under this Plan.
22.10 Filing of Additional Documentation. On or before the
Effective Date, the Debtors 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 this Plan in
addition to the Related Documents.
22.11 Implementation. Each Debtor shall be authorized to take all
necessary steps, and perform all necessary acts, to consummate the terms and
conditions of this Plan.
22.12 Ratification. The Confirmation Order shall ratify all
transactions effectuated by the Debtors during the pendency of this Chapter
11 Case.
ARTICLE XXIII
RETENTION OF JURISDICTION
23.1 Jurisdiction. Until this Chapter 11 Case is closed, the Bankruptcy
Court shall retain such jurisdiction as is legally permissible, including
that necessary to insure the purpose and intent of this Plan are carried out
and to hear and determine all Claims that existed before the Effective Date.
The Bankruptcy Court will retain jurisdiction to hear and determine all
Claims against the Debtors, all Claims released by the Debtors, and to
enforce all causes of action that may exist on behalf of the Debtors.
Nothing herein contained shall prevent the reorganized Debtors, West One or
its assigns or transferees from taking such action as may be necessary in
the enforcement of any cause of action that may exist on their behalf and
which may not have been enforced or prosecuted by the Debtors.
23.2 Examination of Claims. Following the Confirmation Date, the
Bankruptcy Court shall further retain jurisdiction to decide disputes
concerning the classification and allowance of the Claim of any Creditor and
the re-examination of Claims that have been Allowed for the purposes of
voting, and the determination of such Objections as may be filed to
Creditors' Claims. The failure by Debtors to object to, or to examine, any
Claims for the purposes of voting, shall not be deemed a waiver of Debtors'
right or West One's right to object to, or to re-examine, the Claim, in
whole or in part.
23.3 Determination of Disputes. The Bankruptcy Court shall retain
jurisdiction after the Confirmation Date to determine all questions and
disputes regarding title to the assets of the estate, disputes concerning
the allowance of Claims, and determination of all causes of action,
controversies, disputes, or conflicts, whether or not subject to any pending
action, as of the Confirmation Date or subsequent thereto, for the Debtors
to recover assets pursuant to the provisions of the Bankruptcy Code.
23.4 Additional Purposes. The Bankruptcy Court shall retain
jurisdiction for the following additional purposes after the Effective Date:
(A) to modify this Plan after confirmation pursuant to the
Bankruptcy Rules and the Bankruptcy Code;
(B) to assure the performance by West One of its obligations to
make distributions under this Plan;
(C) to enforce and interpret the terms and conditions of this
Plan;
(D) to enter such orders, including injunctions, as are necessary
to enforce the (i) title, rights, and powers of West One, (ii) the National
Western Settlement, and to impose such limitations, restrictions,
conditions on such title, rights, and powers as this Bankruptcy Court may
deem necessary;
(E) to enter an order terminating this Chapter 11 Case;
(F) to correct any defect, cure any omission, or reconcile any
inconsistency in this Plan or the Confirmation Order as may be necessary to
carry out the purposes and intent of this Plan;
(G) to hear, determine, deny or allow applications for
administrative expenses and for fees and expenses pursuant to section 503(b)
of the Bankruptcy Code, incurred before the Effective Date or subsequent
thereto; and
(H) to decide issues concerning federal tax liability, reporting
and withholding which arise in connection with the confirmation or
consummation of this Plan.
THE WESTCAP CORPORATION WESTCAP ENTERPRISES, INC.
By: /S/ Sharon Lester By: /S/ Linda Sterett Hannan
Sharon Lester, President Linda Sterett Hannan,
Secretary/Treasurer
/S/ Zack A. Clement /S/ Mitchell A. Seider
Zack A. Clement Myron M. Sheinfeld
Fulbright & Jaworski, L.L.P. Mitchell A. Seider
1301 McKinney, Suite 5100 Teresa L. Maines
Houston, Texas 77010-3095 Sheinfeld, Maley & Kay, P.C.
(713) 651-5151 1001 Fannin, Suite 3700
(713) 651-5246 (FAX) Houston, Texas 77002
ATTORNEYS FOR THE (713) 658-8881
WESTCAP CORPORATION, (713) 658-9756 (FAX)
DEBTOR AND DEBTOR IN ATTORNEYS FOR WESTCAP
POSSESSION ENTERPRISES, INC., DEBTOR
AND DEBTOR IN POSSESSION
