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: August 28, 1998
(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
By order dated August 28, 1998, the United States Bankruptcy Court, Southern
District of Texas, Houston Division, confirmed and approved the Third Amended
Joint Consensual Plan of Reorganization (the "Plan") of The Westcap
Corporation and its wholly owned subsidiary Westcap Enterprises, Inc. (jointly
"Westcap"). Westcap is a wholly owned subsidiary of National Western Life
Insurance Company (the "Registrant"). The Plan will be effective September
16, 1998, in the absence of any unexpected contingency. Pursuant to the Plan,
Registrant will receive credit for $1,000,000 previously contributed to
Westcap in bankruptcy in March, 1997, and will pay an additional $14,125,000
to compromise and settle (i) all claims of Westcap against Registrant, and
(ii) all claims and litigation of certain settling creditors of Westcap who
have alleged federal or state securities law "control person" violations by
Registrant relating to Westcap's brokerage business, in exchange for full and
complete releases from all of such claims, litigation and alleged violations.
Approximately $7,979,000 will be paid and transmitted to a Disbursing Trust
Committee on behalf of Westcap for payment to holders of allowed claims
against the Westcap debtors. Included in this amount are Westcap assets
totaling approximately $568,000 which remain primarily from the Registrant's
$1,000,000 contribution as described above. Registrant will also pay a total
of approximately $6,714,000 to other settling Westcap creditors with allowed
claims against the Westcap debtors who are also settling with and releasing
Registrant from alleged federal or state securities law "control person"
violations relating to Westcap. The settling creditors are:
City of Tracy, California; Michigan South Central Power Agency; Covafer,
S.A. and Sergio Covarrubias; Sheriff of Palm Beach County, Florida; San
Antonio River Authority; Tom Green County, Texas; Eduardo and Antonietta
Saad; City of La Mesa; Darlington County, South Carolina; Greenwood County,
South Carolina; Bernice and Sarah Finger; Winston-Salem State University
Foundation; Mary Robin Christison; Mason Tenders; Clerk of the Circuit Court
of St. Lucie County, Florida.
Pursuant to the Plan, Registrant will retain 100% continuing ownership of the
reorganized Westcap. Westcap will no longer engage in brokerage operations,
but will operate as a real estate management company.
The Chicago City Colleges is excluded from the compromise and settlement by
Registrant with the settling creditors, but will participate with all
creditors in the distribution from Westcap. Chicago City Colleges previously
obtained a bankruptcy court judgment for approximately $56 million against the
Westcap debtors. Under the Plan, Chicago City Colleges will participate in
the $7,979,000 creditor distribution relating to an allowed $30 million claim,
with any distribution relating to the remaining $26 million claim in dispute
pending an appeal by Westcap of the $56 million judgment. Should Westcap
prevail in the appeal, Registrant will be entitled to recover 23.1% of the
reduced amount of the Chicago City Colleges judgment, but not to exceed
$600,000. Should Westcap lose the appeal, Chicago City Colleges will receive
a higher prorata percentage of the $7,979,000 creditor distribution. However,
pursuant to the Plan, Registrant will have no additional liability for
settlement payments in excess of the $14,125,000 as described above. Under
the Plan, Registrant will pay all of the attorneys' fees and court costs
incurred by Westcap in the appeal of the Chicago City Colleges' judgment.
The $14,125,000 settlement payment will be reflected as a loss from
discontinued brokerage operations in the consolidated financial statements of
National Western Life Insurance Company for the quarter ended September 30,
1998. The $1,000,000 previously contributed to Westcap in bankruptcy was
reflected as a loss from discontinued brokerage operations in the first
quarter of 1997. Any additional losses will depend on the results of the
Chicago City Colleges lawsuit filed against National Western Life Insurance
Company on March 28, 1994, for alleged federal or state securities law
"control person" violations relating to Westcap, and which is pending in the
United States District Court, Western District of Texas. Registrant believes
it has reasonable and adequate defenses to this suit and, accordingly, no
amounts have been accrued in the Registrant's consolidated financial
statements for potential losses relating to such suit.
Item 7. Financial Statements and Exhibits.
(c) Exhibits
Exhibit 2 - Order Confirming Third Amended Joint Consensual Plan Of
Reorganization Proposed By The Debtors And The Official
Committee Of Unsecured Creditors (As Modified As Of August 28,
1998).
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: September 10, 1998 By: /S/ Ross R. Moody
Ross R. Moody
President and Chief Operating Officer
EXHIBIT 2
Order Confirming Third Amended Joint Consensual
Plan Of Reorganization Proposed By The Debtors And
The Official Committee Of Unsecured Creditors
(As Modified As Of August 28, 1998)
UNITED STATES BANKRUPTCY COURT
SOUTHERN DISTRICT OF TEXAS
HOUSTON DIVISION
IN RE: x
x
WESTCAP ENTERPRISES,INC. x Case No. 96-43191-H2-11
(SUCCESSOR BY MERGER TO WESTCAP x
SECURITIES, L.P.) AND x Case No. 96-43192-H2-11
THE WESTCAP CORPORATION x
(SUCCESSOR BY MERGER TO WESTCAP x (Jointly Administered Under
SECURITIES INVESTMENT, INC. AND x Case No. 96-43191-H2-11)
WESTCAP SECURITIES x
MANAGEMENT, INC.), x
x
Debtors. x
ORDER CONFIRMING THIRD AMENDED JOINT CONSENSUAL
PLAN OF REORGANIZATION PROPOSED BY THE DEBTORS AND
THE OFFICIAL COMMITTEE OF UNSECURED CREDITORS
(AS MODIFIED AS OF AUGUST 28, 1998)
The Third Amended Joint Consensual Plan of Reorganization Proposed
by the Debtors and the Official Committee of Unsecured Creditors dated July
16, 1998 (the "Plan"),* having been filed with the Bankruptcy Court (the
"Court") by Westcap Enterprises, Inc. and The Westcap Corporation (the
"Debtors"), together with the Official Committee of Unsecured Creditors (the
"Creditors' Committee"); and the Third Amended Joint Consensual Disclosure
Statement Under Section 1125 of the Bankruptcy Code with Respect to the
Third Amended Joint Consensual Plan of Reorganization Proposed by the
Debtors and the Official Committee of Unsecured Creditors dated July 16,
1998 (the "Disclosure Statement") having been approved by the Court and duly
transmitted to holders of Claims and Equity Interests of the Debtors and
other parties in interest in accordance with the order of the Court dated
July 20, 1998 (the "Solicitation Order"), approving the Disclosure Statement
pursuant to section 1125 of title 11 of the United States Code (the
"Bankruptcy Code"), establishing solicitation and tabulation procedures, and
providing for certain other relief; and a hearing having been held before
the Court on August 28, 1998 to consider confirmation of the Plan (the
"Confirmation Hearing"); and due notice of the Confirmation Hearing having
been provided to holders of Claims against and Equity Interests in the
Debtors and other parties in interest in accordance with the Solicitation
Order, the Bankruptcy Code and the Federal Rules of Bankruptcy Procedure
(the "Bankruptcy Rules"), as established by the affidavits of service filed
with the Court; and the Court having considered all objections to
confirmation of the Plan; and all objections to confirmation of the Plan
having been withdrawn, resolved or otherwise overruled and denied as set
forth in the record of the Confirmation Hearing; and upon all of the
proceedings had before the Court, and after due deliberation and
consideration and sufficient cause appearing therefor, it is hereby
DETERMINED, FOUND, ADJUDGED, DECREED and ORDERED:
[FN]
* Unless otherwise defined herein, capitalized terms used herein shall
have the meanings ascribed to them in the Plan.
</FN>
JURISDICTION
1. The Court has jurisdiction to confirm the Plan pursuant
to 28 U.S.C. sections 157 and 1334.
2. Confirmation of the Plan is a core proceeding pursuant
to 28 U.S.C. section 157(b)(2)(L).
3. Venue of the Debtors' Chapter 11 Cases is proper
pursuant to 28 U.S.C. sections 1408 and 1409.
4. The Debtors are entities eligible for relief under
section 109 of the Bankruptcy Code.
SOLICITATION AND NOTICE
5. The procedures used to distribute and tabulate the
ballots were fair, properly conducted, and such procedures
were in accordance with the Solicitation Order and/or all
applicable Bankruptcy Rules.
6. The Disclosure Statement and the Plan, along with notice
of the Confirmation Hearing and the ballots were transmitted
and served in compliance with the Bankruptcy Rules. As
described in the affidavits of service on file herein, the
transmittal and service were adequate and sufficient under
the circumstances of these Chapter 11 Cases. Adequate and
sufficient notice of the Confirmation Hearing (including the
August 21, 1998 deadline for filing and serving objections to
confirmation of the Plan) and other requirements and
deadlines, hearings and matters described in the Solicitation
Order were given in compliance with the Bankruptcy Rules and
the Solicitation Order, and no other or further notice is
required.
MODIFICATIONS TO THE PLAN
7. The Debtors and the Committee have modified the Plan as
set forth in the Third Amended Joint Consensual Plan of
Reorganization Proposed by the Debtors and the Official
Committee of Unsecured Creditors (as Modified as of August
28, 1998) ("Modified Plan"), a copy of which is attached
hereto as Exhibit A.
8. The modifications contained in the Modified Plan are not
material, and they do not adversely affect the treatment of
any Claims against or Equity Interests in the Debtors under
the Plan.
9. In accordance with Bankruptcy Rule 3019, all holders of
Claims against and Equity Interests in the Debtors who voted
to accept the Plan are hereby deemed to have accepted the
Modified Plan.
10. No holder of a Claim against or Equity Interest in the
Debtors who has voted to accept the Plan shall be permitted
to change its acceptance to a rejection as a consequence of
the Modified Plan.
11. The Modified Plan complies with section 1127 of the
Bankruptcy Code and Bankruptcy Rule 3019. No additional
disclosure under section 1125 of the Bankruptcy Code is
required with respect to the Modified Plan.
CONFIRMATION OF THE MODIFIED PLAN
12. As required by section 1129(a)(1) of the Bankruptcy
Code, the Modified Plan complies with the applicable
provisions of the Bankruptcy Code.
13. The Modified Plan adequately and properly classifies all
Claims and Equity Interests and complies with section
1123(a)(1) of the Bankruptcy Code.
14. A reasonable basis exists for the classification of
Claims and Equity Interests in the Modified Plan, the Claims
and Equity Interests within each particular Class are
substantially similar, the classification of Claims and
Equity Interests in the Modified Plan is reasonable and
necessary to implement the Modified Plan, and the Modified
Plan complies with section 1122(a) of the Bankruptcy Code.
15. As required by section 1123(a)(2) of the Bankruptcy
Code, Article III of the Modified Plan identifies Classes 1,
2, 3 and 9 as unimpaired, and Classes 4, 5, 6, 7, 8 and 10 as
impaired.
16. As required by section 1123(a)(3) of the Bankruptcy
Code, Articles IX, X, XI, XII, XIII and XV of the Modified
Plan specify the treatment of each impaired Class of Claims
and Equity Interests.
17. As required by section 1123(a)(4) of the Bankruptcy
Code, the Modified Plan provides the same treatment for each
Claim or Equity Interest in each Class, unless the holder of
a particular Claim or Equity Interest agrees to less
favorable treatment.
18. As required by section 1123(a)(5), the Modified Plan
provides adequate means for its implementation.
19. Pursuant to section 1123(a)(6) of the Bankruptcy Code,
section 18.1(a) of the Modified Plan provides that the
Debtors' articles of incorporation and bylaws shall be
amended and restated as of the Effective Date as necessary to
provide for the inclusion of provisions prohibiting the
issuance of non-voting equity securities, subject to further
amendment of such bylaws and articles of incorporation as
permitted by applicable law, and providing, as to the classes
of securities possessing voting power, an appropriate
distribution of such power among such classes.
20. The Debtors and the Creditors' Committee, as the
Proponents of the Modified Plan, have complied with the
applicable provisions of the Bankruptcy Code and, therefore,
have satisfied the requirements of section 1129(a)(2) of the
Bankruptcy Code.
21. The Modified Plan has been proposed in good faith and
not by any means forbidden by law, as required by section
1129(a)(3) of the Bankruptcy Code.
22. As required by section 1129(a)(4) of the Bankruptcy
Code, all payments made or to be made by the Debtors, the
Creditors' Committee, or by a person issuing securities or
acquiring property under the Modified Plan, for services or
for costs and expenses in or in connection with the Chapter
11 Cases, or in connection with the Modified Plan and
incident to the Chapter 11 Cases, have been approved by, or
are subject to the approval of, the Court as reasonable.
23. Pursuant to section 1129(a)(5)(A) of the Bankruptcy
Code, the identities and affiliations of the persons proposed
to serve as the initial directors or officers of the Debtors
after confirmation of the Modified Plan have been fully
disclosed, and the continuance in such offices of such
persons is consistent with the interests of holders of Claims
and Equity Interests of the Debtors and with public policy.
24. Pursuant to section 1129(a)(5)(B) of the Bankruptcy
Code, the identity of any insider that will be employed or
retained by the Debtors and the nature of such insider's
compensation have been fully disclosed.
25. After confirmation of the Modified Plan, the Debtors'
businesses will not involve rates established or approved by,
or otherwise subject to, any governmental regulatory
commission. Accordingly, section 1129(a)(6) of the
Bankruptcy Code is inapplicable.
26. With respect to each impaired Class of Claims, each
holder of an impaired Claim of such Class has accepted the
Modified Plan or will receive or retain under the Modified
Plan property of a value, as of the Effective Date, that is
not less than the amount that such holder would receive or
retain if the Debtors were liquidated under chapter 7 of the
Bankruptcy Code on such date, no elections have been made
under section 1111(b) of the Bankruptcy Code, and the
Modified Plan complies with section 1129(a)(7) of the
Bankruptcy Code.
27. Classes 1, 2, 3 and 9 of the Modified Plan are not
impaired by the Modified Plan and, in accordance with section
1126(f) of the Bankruptcy Code, are deemed to have accepted
the Modified Plan.
28. Classes 4, 5, 6, 7, 8 and 10 of the Modified Plan are
impaired by the Modified Plan, each of such Classes has
accepted the Modified Plan by more than two-thirds in amount
and more than one-half in number of the Claims voting, and
the Modified Plan complies with section 1129(a)(8) of the
Bankruptcy Code.
29. As required by section 1129(a)(9)(A) of the Bankruptcy
Code, except to the extent that the holder of a Claim of a
kind specified in section 507(a)(1) or 507(a)(2) of the
Bankruptcy Code has agreed to a different treatment of such
Claim, the Modified Plan provides that on the later of the
Effective Date or the date such Claim becomes an Allowed
Claim, or as soon thereafter as is practicable, the holder of
such Claim will receive on account of such Claim Cash equal
to the full Allowed amount of such Claim, provided, however,
that Administrative Expense Claims representing liabilities
incurred in the ordinary course of business by the Debtors,
to the extent authorized and approved by the Court if such
authorization and approval was required under the Bankruptcy
Code, will be paid in full and performed by the Debtors in
the ordinary course of business in accordance with the terms
and subject to the conditions of any non-bankruptcy law
applicable to, or any agreements governing, instruments
evidencing or other documents relating to, such transactions.
30. As required by section 1129(a)(9)(B) of the Bankruptcy
Code, the Modified Plan provides that on the later of the
Effective Date or the date such Claim becomes an Allowed
Claim, or as soon thereafter as is practicable, each holder
of a Claim of a kind specified in section 507(a)(3),
507(a)(4), 507(a)(5), 507(a)(6) or 507(a)(7) of the
Bankruptcy Code will receive Cash in the full Allowed amount
of such Claim.
31. As required by section 1129(a)(9)(C) of the Bankruptcy
Code, except to the extent that the holder of a Claim of a
kind specified in section 507(a)(8) of the Bankruptcy Code
has agreed to a different treatment of such Claim, the
Modified Plan provides that on the later of the Effective
Date or the date such Claim becomes an Allowed Claim, or as
soon thereafter as is practicable, the holder of such Claim
will receive Cash in an amount equal to the full Allowed
amount of such Claim.
32. Pursuant to section 1129(a)(10) of the Bankruptcy Code,
at least one Class of Claims against the Debtors that is
impaired under the Modified Plan has accepted the Modified
Plan, determined without including any acceptance of the
Modified Plan by any insider.
33. Confirmation of the Modified Plan is not likely to be
followed by the liquidation, or the need for further
financial reorganization, of the Debtors and, therefore, the
requirements of section 1129(a)(11) of the Bankruptcy Code
are satisfied.
34. In compliance with section 1129(a)(12) of the Bankruptcy
Code, all fees payable under 28 U.S.C. section 1930 have been
paid or the Modified Plan provides for the payment of all such
fees on the Effective Date.
35. The Debtors have no continuing retiree benefit
obligations, and the requirement in section 1129(a)(13) of
the Bankruptcy Code that the Modified Plan provide for the
continuation of retiree benefits is inapplicable to these
Chapter 11 Cases.
36. No opposition to confirmation of the Modified Plan on
grounds of tax avoidance or avoidance of sections of the
Securities Act of 1933 has been filed, thus the provisions of
section 1129(d) of the Bankruptcy Code are inapplicable.
37. The Modified Plan complies with section 1123(b)(3)(A) of
the Bankruptcy Code and Bankruptcy Rule 9019(a) because the
settlements and compromises described or reasonably
contemplated in the Modified Plan, including the compromise
relating to Settled Claims pursuant to Article IX, the
compromise relating to the City Colleges' Claim pursuant to
Article X, and the National Western Settlement pursuant to
section 16.3 (the "Settlements"), are reasonable, the terms
and provisions of such Settlements are fully disclosed, and
notice thereof was properly given; there are no objections to
any of the Settlements, which are the product of extensive
arms' length negotiations among the Debtors, the Creditors'
Committee, the Settling Creditors, City Colleges and National
Western. Each of the Settlements is essential to the
Modified Plan. The Settlements further (a) reflect a
reasonable balance of the risks based upon the probability of
success of the litigation, with due consideration for
uncertainty in law and fact; (b) reflect a reasonable balance
of the risks based upon the complexity and likely duration of
the litigation and any attendant expense, inconvenience and
delay; (c) are fair and equitable and in the best interests
of the Debtors, the Debtors' estates and all holders of
Claims and Equity Interests; (d) reflect that the Debtors
have advanced sound business judgment, and it is a reasonable
exercise of the Debtors' business judgment to enter into the
Settlements; and (e) reflect that transactions contemplated
by the Modified Plan and Settlements are in the best
interests of the Debtors' estate.
38. Pursuant to section 1129 of the Bankruptcy Code, the
Modified Plan is hereby confirmed. Each section, term,
provision and condition of the Modified Plan is incorporated
by reference into this Order, and is valid, binding and
enforceable as though fully set forth and specifically
ordered herein.
SPECIAL IMPLEMENTING PROVISIONS
39. Pursuant to sections 1.36 and 16.1(c) of the Modified
Plan, the Board of Trustees of Community College District No.
508, County of Cook, State of Illinois, the City of Tracy,
California, and Linda Sterett Hannan shall serve, and are
hereby approved to serve, as the initial members of the
Disbursing Trust Committee in accordance with the provisions
of the Modified Plan and the Disbursing Trust Agreement
attached as Exhibit F to the Modified Plan.
40. Pursuant to section 2.3 of the Modified Plan, all claims
and causes of action of the Debtors (other than defenses of
the Debtors against City Colleges and claims and causes of
action against National Western) shall be transferred to the
Disbursing Trust on the Effective Date, and the Disbursing
Trust Committee shall be the successor to the Debtors for
purposes of prosecuting such claims and causes of action
(other than defenses of the Debtors against City Colleges and
claims and causes of action against National Western) subject
to and in accordance with the terms and provisions of the
Modified Plan.
41. Pursuant to section 9.1(a) of the Modified Plan, Settled
Claims, in the aggregate against the Debtors and National
Western, shall be Allowed as of the Effective Date in the
following amounts:
<TABLE>
<CAPTION>
Claimant Allowed Settled
Claim Amount
<S> <C>
City of Tracy, California $ 13,504,092.00
Michigan South Central Power
Agency $ 3,825,000.00
Covafer, S.A. and Sergio
Covarrubias $ 1,589,959.95
Sheriff of Palm Beach County,
Florida $ 4,054,281.82
San Antonio River Authority $ 4,134,559.35
Tom Green County, Texas $ 1,204,523.79
Eduardo and Antonietta Saad $ 1,218,857.21
City of La Mesa $ 213,219.25
Darlington County, South Carolina $ 286,444.83
Greenwood County, South Carolina $ 2,240,335.98
Bernice and Sarah Finger $ 107,608.84
Winston-Salem State University
Foundation $ 75,000.00
Mary Robin Christison $ 181,281.22
Mason Tenders $ 1,125,000.00
Clerk of the Circuit Court of
St. Lucie County, Florida* $ 250,000.00
<FN>
* Subject to approval of the pending settlement by separate order of this
Court.
</FN>
</TABLE>
42. For purposes of sections 9.1(e) and 11.1(c) of the
Modified Plan, the SEC is authorized and directed to make any
and all payments required by that certain Notice of Proposed
Plan of Disgorgement and Opportunity for Comment by
Non-Parties dated May 8, 1996 and entered in SEC Administrative
Procedure File No. 3-8947.
43. Pursuant to sections 9.3 and 25.1 of the Modified Plan,
the compromises embodied in the treatment of Settled Claims
pursuant to Article IX of the Modified Plan are fair and
equitable and within the bounds of reasonableness, and such
compromises are approved.
44. Pursuant to section 10.1(a) of the Modified Plan, the
City Colleges' Claim shall be Allowed as of the Effective
Date in the amount $30 million, and shall remain a Disputed
Claim for the balance of the City Colleges' Claim pending
resolution of the City Colleges' Appeal.
45. Pursuant to section 10.2 of the Modified Plan, City
Colleges shall have an Allowed Administrative Expense Claim
in the amount of $500,000.00.
46. Pursuant to sections 10.3 and 25.1 of the Modified Plan,
the compromise embodied in the treatment of the City
Colleges' Claim pursuant to Article X of the Modified Plan is
fair and equitable and within the bounds of reasonableness,
and such compromise is approved.
47. Pursuant to section 16.1 of the Modified Plan, the
creation of the Disbursing Trust is approved, and each of the
terms and provisions of the Modified Plan pertaining to the
Disbursing Trust and of the Disbursing Trust Agreement is
approved.
48. Pursuant to section 16.3(j) of the Modified Plan, (a)
alter ego, instrumentality and control claims against
National Western are claims belonging to the Debtors'
bankruptcy estates that have been compromised and released by
the Debtors as part of the National Western Settlement, and
no such claims remain for assertion against National Western
by any holder of a Claim or Equity Interest, but subject to
the provisions of section 10.1(e) of the Modified Plan; and
(b) all claims of the Debtors and their estates against
National Western, and all claims of the Settling Creditors
against National Western, are compromised, settled and
released pursuant to the terms of the Debtors Release of
National Western and the Creditor Release of National Western.
49. Pursuant to section 16.3(k) of the Modified Plan, the
statutes of limitation applicable to all claims, demands or
causes of action against National Western, based upon or
relating to securities transactions involving the Debtors,
assertable by Mason Tenders, Clerk of the Circuit Court for
St. Lucie County, Florida, North Cincinnati Savings Bank and
Greenville County, South Carolina have expired, without
exception; any such claims, demands or causes of action
against National Western are barred for all purposes; and
Mason Tenders, Clerk of the Circuit Court for St. Lucie
County, Florida, North Cincinnati Savings Bank and Greenville
County, South Carolina are enjoined from asserting any such
claims, demands or causes of action against National Western
in any court or other forum.
50. Pursuant to sections 16.3(m) and 25.1 of the Modified
Plan, the compromises embodied in the terms of the National
Western Settlement as set forth in Article XVI of the
Modified Plan are fair and equitable and within the bounds of
reasonableness, and such compromises are approved.
51. Pursuant to section 17.1(g) of the Modified Plan, the
Debtors have demonstrated that the aggregate of Claims (both
Allowed and Disputed) in Classes 4, 5 and 6 amounts to no
more than $95 million.
52. Pursuant to section 19.1 of the Modified Plan, and as
permitted by section 1123(b)(2) of the Bankruptcy Code, (a)
all executory contracts and unexpired leases to which the
Debtors are or one of the Debtors is a party or is otherwise
bound are rejected as of the Effective Date, with the express
exception of contracts and leases that (i) have been assumed
or rejected pursuant to any other order of the Court, (ii)
are specifically treated otherwise in the Modified Plan,
(iii) are the subject of a motion to assume that is pending
before the Court on the Confirmation Date, or (iv) are
identified in Exhibit D to the Disclosure Statement and
hereinafter assumed; (b) any agreements of the Debtors to
indemnify or reimburse any Person are, unless previously
rejected or otherwise treated in the plan, deemed rejected
upon the date of entry of this Order; and (c) the Debtors are
authorized to assume the contracts identified in Exhibit D to
the Disclosure Statement, and accordingly the (i) Agreement
dated March 9, 1995 among The Westcap Corporation, Westcap
Securities Investment, Inc., Westcap Securities Management,
Inc. and National Western and (ii) Storage and Service
Agreement dated December 29, 1995, as supplemented by a
January 1996 addendum, between Krestrel Records Management
and Westcap Securities, L.P. are assumed as of the Effective
Date.
53. The Debtors and any other necessary parties are
authorized and directed to, and shall, carry out the Modified
Plan, comply with the orders of this Court, execute and
deliver instruments, and perform any other act, that is
necessary for the consummation of the Modified Plan, to the
fullest extent as provided for in section 1142 of the
Bankruptcy Code.
54. Notwithstanding any of the foregoing special
implementing provisions, in the event of any inconsistency
between the terms and provisions of this Order and the terms
and provisions of the Modified Plan, the Modified Plan shall
control.
FINDINGS OF FACT AND CONCLUSIONS OF LAW
55. The determinations, findings, judgments, decrees and
orders set forth herein constitute this Court's findings of
fact and conclusions of law pursuant to Bankruptcy Rule 7052,
made applicable to this proceeding pursuant to Bankruptcy
Rule 9014. Each finding of fact set forth herein, to the
extent it is or may be so deemed a conclusion of law, shall
also constitute a conclusion of law. Each conclusion of law
set forth herein, to the extent it is or may be so deemed a
finding of fact, shall also constitute a finding of fact.
Dated: August 28, 1998
Houston, Texas
BY THE COURT:
/s/ Wesley W. Steen
Wesley W. Steen
United States Bankruptcy Court Judge
EXHIBIT A
Third Amended Joint Consensual Plan of Reorganization Proposed
by the Debtors and the Official Committee of Unsecured Creditors
(as Modified as of August 28, 1998)
UNITED STATES BANKRUPTCY COURT
SOUTHERN DISTRICT OF TEXAS
HOUSTON DIVISION
IN RE: X
X
WESTCAP ENTERPRISES, INC. X CASE NO. 96-43191-H2-11
(SUCCESSOR BY MERGER TO X
WESTCAP SECURITIES, L.P.) AND X
THE WESTCAP CORPORATION X CASE NO. 96-43192-H2-11
(SUCCESSOR BY MERGER TO X
WESTCAP SECURITIES X
INVESTMENT, INC. AND X
WESTCAP SECURITIES X
MANAGEMENT, INC.), X (Jointly Administered Under
X Case No. 96-43191-H2-11)
Debtors. X
THIRD AMENDED JOINT CONSENSUAL PLAN OF
REORGANIZATION PROPOSED BY THE DEBTORS AND
THE OFFICIAL COMMITTEE OF UNSECURED CREDITORS
(AS MODIFIED AS OF AUGUST 28, 1998)
DATED: JULY 16, 1998
Houston, Texas
Zack A. Clement Myron M. Scheinfeld Hugh M. Ray
Fulbright & Jarrel D. McDaniel Jeffrey E. Spiers
Jaworski, L.L.P. Edward Lee Morris Douglas G. Walter
1301 McKinney, Sheinfeld, Maley & Andrews & Kurth L.L.P.
Suite 5100 Kay, P.C. 600 Travis Street,
Houston, Texas 1001 Fannin, Suite 3700 Suite 4200
77010-3095 Houston, Texas 77002 Houston, Texas 77002
(713) 651-5151 (713) 658-8881 (713) 220-4103
(713) 651-5246 (FAX) (713) 658-9756 (FAX) (713) 220-4285 (FAX)
ATTORNEYS FOR THE ATTORNEYS FOR ATTORNEYS FOR THE
WESTCAP WESTCAP ENTERPRISES, OFFICIAL COMMITTEE
CORPORATION, INC., DEBTOR AND OF UNSECURED
DEBTOR AND DEBTOR IN DEBTOR IN POSSESSION CREDITORS
POSSESSION
TABLE OF CONTENTS
ARTICLE I
DEFINITIONS, RULES OF CONSTRUCTION,
AND RULES OF INTERPRETATION
1. Definitions
ARTICLE II
CONSOLIDATION OF CLAIMS AND INTERESTS
2.1 Substantive Consolidation
2.2 Effect of Substantive Consolidation
2.3 Claims Transferred to Disbursing Trust
ARTICLE III
CLASSIFICATION OF CLAIMS AND INTERESTS; IDENTIFICATION OF IMPAIRED
CLASSES
3.1 Unclassified Claims Against the Debtors
3.2 Classified Claims Against and Equity Interests in the Debtors
3.3 Unimpaired Classes
3.4 Impaired Classes Entitled to Vote on Plan
3.5 Controversy Concerning Impairment, Right to Vote, or Amount of
Claim
ARTICLE IV
PROVISIONS FOR TREATMENT OF ALLOWED ADMINISTRATIVE EXPENSE CLAIMS
4.1 Treatment
ARTICLE V
PROVISIONS FOR TREATMENT OF ALLOWED PRIORITY TAX CLAIMS
5.1 Treatment
ARTICLE VI
ALLOWED PRIORITY NON-TAX CLAIMS - CLASS 1
6.1 Treatment
6.2 Impairment
ARTICLE VII
ALLOWED CONVENIENCE CLAIMS - CLASS 2
7.1 Treatment
7.2 Impairment
ARTICLE VIII
ALLOWED SECURED CLAIMS - CLASS 3
8.1 Treatment
8.2 Impairment
ARTICLE IX
PROVISIONS FOR TREATMENT OF ALLOWED
SETTLED CLAIMS - CLASS 4
9.1 Treatment
9.2 Separate Sub-Classes
9.3 Compromises as Part of Plan
9.4 Impairment
ARTICLE X
PROVISIONS FOR TREATMENT OF CITY
COLLEGES' CLAIM - CLASS 5
10.1 Treatment
10.2 Other Provisions Relating to Settlement of City Colleges' Claim
10.3 Compromise as Part of Plan
10.4 Impairment
ARTICLE XI
PROVISIONS FOR TREATMENT OF ALLOWED GENERAL UNSECURED CLAIMS - CLASS 6
11.1 Treatment
11.2 Impairment
ARTICLE XII
PROVISIONS FOR TREATMENT OF THE CLAIMS OF NATIONAL WESTERN - CLASS 7
12.1 Treatment
12.2 Impairment
ARTICLE XIII
PROVISIONS FOR THE TREATMENT OF INTERCOMPANY CLAIMS OF THE DEBTORS - CLASS 8
13.1 Treatment
13.2 Impairment
ARTICLE XIV
PROVISIONS FOR THE TREATMENT OF ALLOWED EQUITY INTERESTS IN WESTCAP
ENTERPRISES, INC. - CLASS 9
14.1 Treatment
14.2 Impairment
ARTICLE XV
PROVISIONS FOR THE TREATMENT OF ALLOWED EQUITY INTERESTS IN THE WESTCAP
CORPORATION - CLASS 10
15.1 Treatment
15.2 Impairment
ARTICLE XVI
MEANS FOR EXECUTION AND IMPLEMENTATION OF THE PLAN
16.1 The Disbursing Trust
16.2 Reorganized Debtors
16.3 The National Western Settlement
16.4 Cash Payments on the Effective Date
16.5 Establishment of the Escrow Account and Other Accounts
16.6 Bar Date Provisions
16.7 Distributions Relating to Disputed Claims and
Reserved Funds Upon Disallowance of Disputed Claim
16.8 Revesting of Assets
ARTICLE XVII
CONDITIONS PRECEDENT TO CONFIRMATION AND EFFECTIVENESS OF THE PLAN
17.1 Conditions to Confirmation
17.2 Conditions to Effectiveness
17.3 Waiver of Conditions
ARTICLE XVIII
OPERATION OF DEBTORS FOLLOWING THE EFFECTIVE DATE
18.1 Commencement of Operations Following the Effective Date
18.2 Future Operations of Reorganized Debtors
ARTICLE XIX
EXECUTORY CONTRACTS AND UNEXPIRED LEASES
19.1 Rejection of Executory Contracts and Unexpired Leases
19.2 Bar to Rejection Damages
ARTICLE XX
EFFECT OF REJECTION BY ONE OR MORE CLASSES OF CLAIMS
20.1 Impaired Classes Entitled to Vote
20.2 Acceptance by Classes of Creditors
20.3 Cramdown
20.4 Ballots
ARTICLE XXI
PROVISIONS FOR RETENTION, PROSECUTION,
AND SETTLEMENT OF CLAIMS AND OTHER RIGHTS
WHICH ARE PROPERTY OF THE ESTATE
21.1 Causes of Action Arising Under Chapter 5 of the Bankruptcy Code
21.2 Causes of Action and other Rights Not Arising Under
Chapter 5 of the Bankruptcy Code
21.3 Limitation on Prosecution of Claims
ARTICLE XXII
EFFECTS OF CONFIRMATION AND DISCHARGE
22.1 Binding Effect of Plan and Confirmation Order
22.2 Property of the Estate
22.3 Liens, Claims and Encumbrances
22.4 Discharge
22.5 Effectiveness of Discharge against Holders of Claims
22.6 Breadth of Discharge
ARTICLE XXIII
RELEASES, INJUNCTIONS AND LIMITS OF LIABILITY
23.1 No Action Against Distributable Assets
23.2 Releases
23.3 Injunction Against Interference With Plan
23.4 Rights of Holders of Unimpaired Claims
23.5 Injunction to Prohibit Certain Suits or Actions
23.6 Releases and Limits on Liability Relating to Chapter 11 Cases
23.7 Release in Favor of National Western
ARTICLE XXIV
CREDITORS' COMMITTEE
24.1 Dissolution of Creditors' Committee
ARTICLE XXV
MISCELLANEOUS PROVISIONS
25.1 Settlements Deemed Approved
25.2 Modification of Plan
25.3 Revocation and Withdrawal
25.4 Successors and Assigns
25.5 No Interest Allowed
25.6 No Attorneys' Fees
25.7 Due Authorization by Creditors
25.8 Filing of Additional Documentation
25.9 Implementation
25.10 Extension of Payment Dates
25.11 Construction
25.12 Time
25.13 Headings
ARTICLE XXVI
NOTICES
26.1 Notices
ARTICLE XXVII
RETENTION OF JURISDICTION
27.1 Jurisdiction
Westcap Enterprises, Inc., Debtor and Debtor in Possession, The Westcap
Corporation, Debtor and Debtor in Possession, and the Official Committee of
Unsecured Creditors of the Debtors jointly propose this Third Amended Joint
Consensual Plan of Reorganization pursuant to section 1121(a), title 11,
United States Code, for the resolution and satisfaction of outstanding
Claims and Equity Interests. The Plan also provides for the settlement by
certain Creditors of claims against National Western Life Insurance Company,
the ultimate parent corporation of both Debtors.
ARTICLE I
DEFINITIONS, RULES OF CONSTRUCTION, AND RULES OF INTERPRETATION
As used in this Plan, the following terms shall have the respective
meanings specified below. Unless otherwise provided for in the Plan, all
terms used herein that are defined in the Bankruptcy Code shall have the
meanings assigned to them by the Bankruptcy Code. Defined terms will be
equally applicable to both the singular and plural forms, and to the
masculine, feminine or gender-neutral forms, of such defined terms. In the
event of any conflict between the Plan and the Related Documents, the Plan
controls. Unless otherwise specified, all Section, article and exhibit
references in the Plan are to the respective Section in, article of, or
exhibit to, the Plan, as the same may be amended, waived, or modified from
time to time.
1. Definitions. The capitalized terms used herein shall have the
respective meanings set forth below.
1.1 "Administrative Expense Claim" shall mean any Claim
constituting a cost or expense of administration of the Chapter 11 Cases
Allowed under section 503(b) of the Bankruptcy Code, including, without
limitation, any actual and necessary costs and expenses of preserving the
estates of the Debtors, any actual and necessary costs and expenses of
operating the businesses of the Debtors (including any Claim incurred by the
Debtors in the ordinary course of business during the Chapter 11 Cases and
which may be paid in the ordinary course of the Debtors' business without
further order of the Bankruptcy Court), any indebtedness or obligations
incurred or assumed by the Debtors in connection with the conduct of their
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, any
allowance of compensation and reimbursement of expenses pursuant to sections
503(b)(3), (4) or (5) of the Bankruptcy Code for substantial contribution to
the Chapter 11 Cases arising before the Effective Date, and any fees or
charges assessed against the estates of the Debtors under section 1930,
chapter 123, title 28, United States Code.
1.2 "Affiliate" shall mean a Person described in section 101(2) of the
Bankruptcy Code.
1.3 "Allowed", when used with respect to a Claim, in whole or in
part, 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 of the Debtors and is described
therein as liquidated in amount and not contingent or disputed, and as to
which no Objection has been interposed; or (iii) a Claim Allowed in whole or
in part by a Final Order of the Bankruptcy Court.
1.4 "Bankruptcy Code" shall mean 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.
1.5 "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 Cases.
1.6 "Bankruptcy Rules" shall mean the Federal Rules of Bankruptcy
Procedure.
1.7 "Bar Date" shall mean September 5, 1996, the date set by the
Bankruptcy Court pursuant to the Bar Date Notice by which proofs of Claim were
to be filed in the Chapter 11 Cases.
1.8 "Bar Date Notice" shall mean that certain Notice of
Commencement of Case Under Chapter 11 of the Bankruptcy Code, Meeting of
Creditors, and Fixing of Dates dated May 1, 1996.
1.9 "Business Day" shall mean a day other than a Saturday, Sunday
or other day on which the commercial banks in Houston, Texas are authorized or
required by law to close.
1.10 "Capital Fee" shall mean the capital fees and expenses in the
approximate amount of $5,122,817 paid to National Western by Westcap
Securities, L.P. and its predecessor Westcap Government Securities, Inc. from
October 1, 1991 through September 30, 1995.
1.11 "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.
1.12 "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.
1.13 "Chapter 11 Cases" 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.
1.14 "City Colleges" shall mean Board of Trustees of Community
College District No. 508, County of Cook, State of Illinois.
1.15 "City Colleges' Appeal" shall mean the appeal of the City
Colleges' Claim Award filed by the Debtors and any proceedings on remand or
subsequent appeals resulting from any appellate decision.
1.16 "City Colleges' Claim" shall mean the Claim of City Colleges.
1.17 "City Colleges' Claim Award" shall mean the order of the
Bankruptcy Court entered on September 29, 1997 that allowed City Colleges a
Claim of $56,173,060.00. The City Colleges' Claim Award is subject to the
City Colleges' Appeal.
1.18 "City Colleges' Claim Escrow Account" shall mean the account
established pursuant to Section 16.5(b) of the Plan.
1.19 "Claim" shall mean any right to payment from one or both of the
Debtors, 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
either of the Debtors, whether or not such right to an equitable remedy is
reduced to judgment, fixed, contingent, matured, unmatured, contested,
uncontested, secured, or unsecured.
1.20 "Class" shall mean a category or group of holders of Claims or
Equity Interests as designated pursuant to Article III of the Plan.
1.21 "Confirmation Date" shall mean the date of entry of the
Confirmation Order.
1.22 "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 the Plan.
1.23 "Confirmation Order" shall mean the order of the Bankruptcy
Court confirming the Plan.
1.24 "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.
1.25 "Convenience Claim" shall mean a Claim of $2,000 or less, or a
Claim in excess of $2,000 voluntarily reduced by the holder of such Claim to
$2,000; all Claims of one holder shall be aggregated for determining the
$2,000 limit.
1.26 "Credit Line Borrowing" shall mean the advances of $1,500,000
made under the line of credit facility extended by National Western to The
Westcap Corporation on March 25, 1994 and bearing interest at 10% per annum
and subsequently repaid.
1.27 "Creditor" shall mean the holder of a Claim.
1.28 "Creditor Release of National Western" shall mean the release
pursuant to the National Western Settlement of all claims of each of the
Settling Creditors against National Western and its non-Debtor affiliates,
subsidiaries, shareholders, officers, directors, agents (including, without
limitation, attorneys, advisors and other professionals), successors or
employees, which release shall consist of (i) for all Settling Creditors, a
mutual release substantially in the form of Exhibit C, but as approved prior
to the Confirmation Date by National Western for each of the Settling
Creditors, (ii) for those Settling Creditors who have instituted legal
proceedings against National Western with respect to their Settled Claims, an
order of dismissal with prejudice of such legal proceedings in a form as
approved prior to the Confirmation Date by National Western for each of the
Settling Creditors, and (iii) for those Settling Creditors who are public
entities, (x) a public entity authorization substantially in the form of
Exhibit E, but as approved prior to the Confirmation Date by National Western
for each such Settling Creditor, and (y) an opinion of counsel in form
reasonably satisfactory to National Western that such public entity has taken
all steps necessary to make the release effective.
1.29 "Creditor Settlement" shall mean the compromises and
settlements of the Settled Claims.
1.30 "Creditors' Committee" shall mean the Official Unsecured
Creditors' Committee appointed in the Chapter 11 Cases 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, each of its members individually, counsel
to the Creditors' Committee and counsel to individual members of the
Creditors' Committee.
1.31 "Debtors" shall mean either or both Westcap Enterprises, Inc.
or The Westcap Corporation as the context may warrant, as debtors-in-
possession under section 1101(1) of the Bankruptcy Code.
1.32 "Debtors Release of National Western" shall mean the release
pursuant to the National Western Settlement of all claims, demands and causes
of action that the Debtors or their chapter 11 estates may have asserted
against National Western and its non-Debtor affiliates, subsidiaries,
shareholders, officers, directors, agents (including, without limitation,
attorneys, advisors and other professionals), successors or employees, that
persons other than the Debtors may have asserted on a derivative basis against
National Western, or that are properly assertable through or on behalf of the
Debtors and/or their chapter 11 estates against National Western, as of the
Effective Date, including, without limitation, any Chapter 5 Actions and any
claim arising from or related to (i) the Consolidated Tax Agreement, the
Capital Fee, the Credit Line Borrowing, the Intercompany Dividends, (ii) alter
ego, instrumentality or control issues, or (iii) any other transfers,
transactions or events between or among the Debtors and National Western,
which release shall be in substantially the form of the mutual release
attached hereto as Exhibit B, but as approved prior to the Confirmation Date
by National Western.
1.33 "Disallowed", when used with respect to all or any part of a
Claim or Equity Interest, shall mean (i) that portion of a Claim or Equity
Interest as to which a Final Order is entered upholding an Objection, or (ii)
that was scheduled in the Debtors' Schedules as contingent, disputed or
unliquidated, and on account of such Claim or Equity Interest no proof of
Claim or proof of Equity Interest was filed by the holder thereof by the Bar
Date. Disallowed Claims are not entitled to any distributions under the Plan.
1.34 "Disbursing Trust" shall mean the trust established pursuant to
Article XVI of the Plan.
1.35 "Disbursing Trust Agreement" shall mean the Agreement creating
the Disbursing Trust, substantially in the form of Exhibit F.
1.36 "Disbursing Trust Committee" shall mean the Committee appointed
pursuant to the Disbursing Trust Agreement to administer the Disbursing Trust
whose initial membership will be approved by the Bankruptcy Court at the
Confirmation Hearing.
1.37 "Disclosure Statement" shall mean the Third Amended Joint
Consensual Disclosure Statement Under Section 1125 of the Bankruptcy Code With
Respect to the Third Amended Joint Consensual Plan of Reorganization Proposed
by the Debtors and the Official Committee of Unsecured Creditors.
1.38 "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 or a Disallowed Claim.
1.39 "Effective Date" shall mean the first Business Day on or after
the eleventh Business Day after entry of the Confirmation Order on which (a)
no stay or injunction that forbids implementation of the Plan is in effect;
and (b) all of the conditions set forth in Sections 17.1 and 17.2 of the Plan
have been satisfied or, to the extent permitted by Section 17.3 of the Plan,
waived.
1.40 "Equity Interest" shall mean any "equity security" of the
Debtors as that term is defined in section 101(16) of the Bankruptcy Code.
1.41 "Escrow Account" shall mean the account established pursuant to
Section 16.5(a) of the Plan.
1.42 "Final Order" shall mean an order, judgment or decree as
entered on the docket maintained by the clerk of the court signing same (a) as
to which the time to appeal, petition for certiorari, or to move for
reargument or rehearing has expired and as to which no appeal, petition for
certiorari, or other proceedings for reargument or rehearing shall then be
pending, (b) as to which any right to appeal, petition for certiorari,
reargument, or rehearing shall have been waived in writing in form and
substance reasonably satisfactory to the Debtors or the Reorganized Debtors
and the Creditors' Committee or the Disbursing Trust Committee, as the case
may be, or (c) in the event that any appeal, writ of certiorari, or reargument
or rehearing thereof has been sought, such order shall have been upheld or
certiorari, reargument or rehearing shall have been denied and in either case
the time to take any further appeal, petition for certiorari or move for
reargument shall have expired.
1.43 "General Unsecured Claim" shall mean any claim that is not an
Administrative Expense Claim, a Priority Tax Claim, a Priority Non-Tax Claim,
a Convenience Claim, a Secured Claim, a Settled Claim, the City Colleges'
Claim, the National Western Claim or the Intercompany Claims.
1.44 "Initial Distribution" shall mean the distribution (or reserve
in the case of Disputed Claims), to or for the benefit of Creditors (excluding
holders of Allowed Settled Claims), of the National Western Settlement Debtor
Payment, net of all other payments and reserves authorized under this Plan.
1.45 "Insider" shall mean a Person described in section 101(31) of the
Bankruptcy Code.
1.46 "Intercompany Claim" shall mean any Claim of The Westcap
Corporation against Westcap Enterprises, Inc. or any Claim of Westcap
Enterprises, Inc. against The Westcap Corporation.
1.47 "Intercompany Dividends" shall mean the dividends in the
approximate amount 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.
1.48 "Lien" shall mean charge against or interest in property to
secure payment of a debt or enforcement of an obligation.
1.49 "Litigation and Administrative Expense Reserve" shall mean the
reserve to be established pursuant to Section 16.1(f) of the Plan and the
Disbursing Trust Agreement in the amount of $250,000.
1.50 "Mason Tenders" shall mean Mason Tenders' District Council
Annuity Fund.
1.51 "Mason Tenders' Settled Claim" shall mean the Allowed Claim of
Mason Tenders in the amount of $1,125,000, as approved by the Bankruptcy Court
as part of the Mason Tenders' Settlement Agreement.
1.52 "Mason Tenders' Settlement Agreement" shall mean the Settlement
Agreement between Mason Tenders, Westcap Enterprises, Inc. and National
Western, as approved by order of the Bankruptcy Court on July 16, 1998.
1.53 "National Western" shall mean National Western Life Insurance
Company, a Colorado Corporation.
1.54 "National Western Claim" shall mean the Claim of National
Western in the approximate amount of $100,000, plus accrued interest, plus the
amount representing the Debtors' share of litigation fees and expenses
relating to pending lawsuits and claims asserted against the Debtors and
National Western, as set forth in the proof of Claim filed by National
Western.
1.55 "National Western Funding Order" shall mean that certain Agreed
Order Approving Unsecured, Non-Administrative, Subordinated Funding Pursuant
to section 364(a) of the Bankruptcy Code entered by the Bankruptcy Court on
February 25, 1997.
1.56 "National Western Release of Creditor" shall mean the release
pursuant to the National Western Settlement of all claims of National Western
against a Settling Creditor, which release shall consist of a mutual release
substantially in the form of Exhibit C, but as approved prior to the
Confirmation Date by National Western and each Settling Creditor.
1.57 "National Western Release of Debtors" shall mean the release
pursuant to the National Western Settlement of all claims of National Western
against the Debtors, their directors, officers, employees, attorneys, advisors
and other professionals, who were acting in any of the foregoing capacities on
the date of the filing of the Chapter 11 Cases or thereafter through the date
of the release, with the express exception of the following solely in relation
to the release of the Debtors and not as to the Debtors' directors, officers,
employees, attorneys, advisors and other professionals, who were acting in
any of the foregoing capacities on the date of the filing of the Chapter 11
Cases or thereafter through the date of the release:(i) the National Western
Claim, (ii) the National Western Consolidated Tax Agreement, which is being
assumed by the Debtors pursuant to section 365(a) of the Bankruptcy Code,
(iii) Claims and rights arising from and relating to the Debtors' obligations
(and those of its successors, including the Disbursing Trust) under the Plan
and the National Western Settlement including, without limitation, National
Western's contingent rights to share in the City Colleges' Claim Escrow
Account, and (iv) Claims and rights arising from or relating to the Debtors'
common stock interests owned and to be retained by National Western in The
Westcap Corporation and by The Westcap Corporation in Westcap Enterprises,
Inc.; which release shall be substantially in the form of the mutual release
attached hereto as Exhibit B, but as approved prior to the Confirmation Date
by National Western.
1.58 "National Western Settlement" shall mean the agreement among
the Debtors, Creditors, and National Western as set forth in Section 16.3 of
the Plan, providing for the compromise and settlement of (i) all claims of the
Debtors against National Western on the one hand (except as otherwise provided
in the Debtors Release of National Western) and all Claims of National Western
against the Debtors on the other hand (except as otherwise provided in the
National Western Release of Debtors), and (ii) all claims of the Settling
Creditors against National Western on the one hand, and all claims, if any, of
National Western against the Settling Creditors, on the other hand, each on
the terms set forth in the Plan.
1.59 "National Western Settlement Creditor Payment" shall mean such
portion of the National Western Settlement Payment Amount that equals no less
than seventeen percent (17%) of the aggregate of Allowed Settled Claims, which
portion shall be paid by National Western to the holders of Allowed Settled
Claims in accordance with Section 16.3 of the Plan as part of the National
Western Settlement; provided, however, that in no event shall the amount of
such portion of the National Western Settlement Payment Amount, when
aggregated with the amount of the National Western Settlement Debtor Payment,
exceed $14.125 million.
1.60 "National Western Settlement Debtor Payment" shall mean such
portion of the National Western Settlement Payment Amount as shall be
sufficient to make an Initial Distribution of ten percent (10%) on account of
the Class 5 Claim and Class 6 Claims, which portion shall be paid by National
Western to the Debtors' estates and transferred to the Disbursing Trust for
the benefit of Creditors, as part of the National Western Settlement;
provided, however, that in no event shall the amount of such portion of the
National Western Settlement Payment Amount, when aggregated with the amount of
the National Western Settlement Creditor Payment, exceed $14.125 million.
1.61 "National Western Settlement Payment Amount" shall mean the
aggregate of (i) the National Western Settlement Creditor Payment, and (ii)
the National Western Settlement Debtor Payment, which in the aggregate shall
equal $14.125 million. As part of the National Western Settlement, in
addition to the National Western Settlement Payment Amount, National Western
shall be deemed to have contributed an additional amount of $1.0 million
through its previous advance of such amount to the Debtors pursuant to the
National Western Funding Order.
1.62 "Objection" shall mean an objection to the allowance of a Claim
or Equity Interest interposed within the applicable period of limitation fixed
by the Plan, the Bankruptcy Code, the Bankruptcy Rules, or the Bankruptcy
Court.
1.63 "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.
1.64 "Petition Date" shall mean April 12, 1996.
1.65 "Plan" shall mean this Third Amended Joint Consensual Plan of
Reorganization Proposed by the Debtors and the Official Committee of Unsecured
Creditors, as it may be modified from time to time.
1.66 "Plan Ballot Deadline" shall mean the date fixed by the
Bankruptcy Court by which the ballot that accompanies the Plan as validly
executed by the holder of an Allowed Claim must be received by the Debtors or
their agent, which date is set forth in the Disclosure Statement.
1.67 "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.
1.68 "Priority Tax Claim" shall mean a Claim entitled to priority
pursuant to section 507(a)(8) of the Bankruptcy Code.
1.69 "Pro Rata" shall mean proportionately, so that a Pro Rata
distribution with respect to an Allowed Claim of a particular Class bears the
same ratio to all distributions (and, in the case of Disputed Claims,
reserves) on account of a particular Class, as the dollar amount of such
Allowed Claim bears to the dollar amount of all Allowed Claims and Disputed
Claims in such Class, and a Pro Rata Distribution with respect to a Disputed
Claim of a particular Class means a reserve that bears the same ratio to all
distributions (and, in the case of Disputed Claims, reserves) on account of
a particular Class, as the dollar amount of such Disputed Claim bears to the
dollar amount of all Allowed Claims and Disputed Claims in such Class.
1.70 "Proponents" shall mean the Debtors and the Official Committee
of Unsecured Creditors of the Debtors.
1.71 "Related Documents" shall mean the documents referred to in
this Plan and in support of this Plan, including but not limited to the
following:
(a) The Mutual Release attached as Exhibit B to the Plan
providing for the Debtors Release of National Western and the National Western
Release of Debtors;
(b) The Mutual Release attached as Exhibit C to the Plan
providing for the Creditor Releases of National Western (including, where
applicable, an order of dismissal with prejudice, a public entity
authorization and an opinion of counsel with respect thereto, as the case may
be) and the National Western Releases of Creditors;
(c) Disbursing Trust Agreement attached as Exhibit F to the
Plan; and
(d) Tolling Agreement.
1.72 "Reorganized Debtors" shall mean Westcap Enterprises, Inc. and
The Westcap Corporation subsequent to the Effective Date.
1.73 "Schedules" shall mean the Schedules of Assets and Liabilities,
as amended, filed with the Bankruptcy Court under Rule 1007 of the Bankruptcy
Rules as such documents may be further amended from time to time.
1.74 "SEC" shall mean the Securities and Exchange Commission.
1.75 "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 voluntary relinquishment was filed
with the SEC on December 20, 1995.
1.76 "Secured Claim" shall mean the portion of any Claim which is
secured, in whole or in part, as of the Petition Date, by a valid, unavoidable
and otherwise perfected Lien, whether arising by contract, operation of law or
otherwise, as determined in accordance with section 506(a) of the Bankruptcy
Code.
1.77 "Securities" shall mean any claim or interest commonly known as
or referred to as a "security," including and excluding those claims and
interests included and excluded, respectively, in section 101 (49) of the
Bankruptcy Code, purchased by a Creditor directly or indirectly from the
Debtors or through an agent of the Debtors.
1.78 "Service List" shall mean the list of Creditors attached as
Exhibit "1" to the Disbursing Trust Agreement.
1.79 "Settled Claim" shall mean a Claim of a Settling Creditor and
any and all claims of a Settling Creditor against National Western.
1.80 "Settling Creditors" shall mean Michigan South Central Power
Agency; San Antonio River Authority; City of Tracy, California; Covafer, S.A.
and Sergio Covarrubias; Greenwood County, South Carolina; Eduardo and
Antonietta Saad; Tom Green County, Texas; Sheriff of Palm Beach County,
Florida; City of La Mesa; Darlington County, South Carolina; Bernice and Sarah
Finger; Winston-Salem State University Foundation; Mary Robin Christison;
Clerk of the Circuit Court for St. Lucie County, Florida*; and Mason
Tenders.
[FN]
*Subject to Bankruptcy Court approval of settlement agreement between the
Debtors and Clerk of the Circuit Court of St. Lucie County, Florida.
</FN>
1.81 "Subsequent Distributions" shall mean distributions (or amounts
deposited in the Subsequent Distribution Reserve Account in the case of
Disputed Claims), if any, to Creditors after the Initial Distribution.
Distributions from the Escrow Account, the City Colleges' Claim Escrow Account
and the proceeds of the National Western Settlement Creditor Payment shall not
be considered "Subsequent Distributions."
1.82 "Subsequent Distribution Reserve Account" shall mean the
account established pursuant to Section 16.5(c) of the Plan.
1.83 "Tolling Agreement" shall mean the Tolling Agreement dated
March 5, 1998 between the Debtors, the Official Committee of Unsecured
Creditors and National Western, pursuant to which the prosecution of causes of
action settled by the National Western Settlement was tolled.
ARTICLE II
CONSOLIDATION OF CLAIMS AND INTERESTS
2.1 Substantive Consolidation. The assets and liabilities of the Debtors
shall be substantively consolidated on the Effective Date for purposes of the
Plan and the distributions provided for in the Plan; provided, however, that
such consolidation shall not affect the separate corporate existence of the
Debtors.
2.2 Effect of Substantive Consolidation. As a result of the substantive
consolidation of the liabilities and properties of all Debtors, (a) the
Chapter 11 Cases shall be consolidated into a single consolidated case (the
"Consolidated Estate"); (b) all property of each Debtor shall be deemed to be
property of the Consolidated Estate; (c) all Claims against each Debtor shall
be deemed to be Claims against the Consolidated Estate, any proof of Claim
filed against one or more of Debtors shall be deemed to be a single claim
filed against the Consolidated Estate, and all duplicate proofs of Claim for
the same claim filed against more than one Debtor shall be deemed expunged;
and (d) for purposes of determining the availability of the right of setoff
under section 553 of the Bankruptcy Code, the Debtors shall be treated as one
consolidated entity so that subject to the other provisions of section 553,
debts due to one of the Debtors may be set off against the debts of the other
Debtor. Substantive consolidation shall not merge or otherwise affect the
separate legal existence of each Debtor, other than with respect to
distribution rights under the Plan; substantive consolidation shall have no
effect on valid, enforceable and unavoidable liens, except for liens that
secure a Claim that is eliminated by virtue of substantive consolidation and
liens against Collateral that are extinguished by virtue of substantive
consolidation; and substantive consolidation shall not have the effect of
creating a Claim in a class different from the class in which a Claim would
have been placed in the absence of substantive consolidation.
2.3 Claims Transferred to Disbursing Trust. Except as otherwise provided
in the Plan, on the Effective Date, all Claims against the Debtors shall
become Claims solely against the Disbursing Trust. The Confirmation Order
shall specifically transfer to the Disbursing Trust all Claims and causes of
action of the Debtors (other than defenses of the Debtors against City
Colleges and claims and causes of action against National Western) for the
benefit of the Disbursing Trust, and the Disbursing Trust Committee shall
serve as a successor to the Debtors for purposes of prosecuting such claims or
causes of action (other than defenses of the Debtors against City Colleges and
claims and causes of action against National Western) subject to and in
accordance with the terms and provisions of the Plan. On the Effective Date,
neither holders of Intercompany Claims, the holder of the National Western
Claim nor the holders of Equity Interests in either Debtor shall have any
interest in the Disbursing Trust.
ARTICLE III
CLASSIFICATION OF CLAIMS AND INTERESTS;
IDENTIFICATION OF IMPAIRED CLASSES
3.1 Unclassified Claims Against the Debtors.
(a) Allowed Administrative Expense Claims
(b) Allowed Priority Tax Claims
3.2 Classified Claims Against and Equity Interests in the Debtors.
(a) Allowed Priority Non-Tax Claims, Class 1
(b) Allowed Convenience Claims, Class 2
(c) Allowed Secured Claims, Class 3
(d) Allowed Settled Claims, Class 4
(e) City Colleges' Claim, Class 5
(f) Allowed General Unsecured Claims, Class 6
(g) National Western Claim, Class 7
(h) Intercompany Claims, Class 8
(i) Allowed Equity Interests in Westcap Enterprises, Inc., Class 9
(j) Allowed Equity Interests in The Westcap Corporation, Class 10
3.3 Unimpaired Classes. The Claims classified in Classes 1, 2 and 3,
and the Equity Interests classified in Class 9, are unimpaired under the Plan,
are deemed to have accepted the Plan and are not entitled to vote to accept
or reject the Plan.
3.4 Impaired Classes Entitled to Vote on Plan. The Claims classified in
Classes 4, 5, 6, 7 and 8, and the Equity Interests classified in Class 10, are
impaired under the Plan and are entitled to vote to accept or reject the Plan.
3.5 Controversy Concerning Impairment, Right to Vote, or Amount of
Claim. In the event of a controversy (i) as to whether any Claim or Equity
Interest or Class of Claims or Equity Interests is impaired under the Plan,
(ii) as to whether the holder of any Claim or Equity Interest is entitled to
vote with respect to the Plan, or (iii) regarding the Allowed amount of any
Claim or Equity Interest for voting purposes, then any such controversy shall
be determined by the Bankruptcy Court at or before the Confirmation Hearing.
ARTICLE IV
PROVISIONS FOR TREATMENT OF ALLOWED
ADMINISTRATIVE EXPENSE CLAIMS
4.1 Treatment. Any Administrative Expense Claim incurred by the Debtors
in the ordinary course of business may be paid by the Debtors in the ordinary
course of business without further order of the Bankruptcy Court. With
respect to any other Administrative Expense Claim, on the later of the
Effective Date or the date upon which an Administrative Expense Claim becomes
an Allowed Administrative Expense Claim (or as soon thereafter as is
practicable), each Allowed Administrative Expense Claim shall be paid in full,
in Cash or by setoff against any retainers on hand (with any excess retainer
after such setoff payable to the Disbursing Trust), or upon such other less
favorable terms as may be agreed to in writing between the holder of such
Allowed Administrative Expense Claim and the Debtors; provided, however, that
neither the Debtors, the Reorganized Debtors nor the Disbursing Trust shall
have any duty or obligation to pay, nor shall any of their assets be available
to pay, (i) any expense, claim, cost or fee attributable to the filing and
prosecution by the Debtors of the City Colleges Appeal, including without
limitation, any fees, costs or expenses charged by Kirkland & Ellis, and (ii)
more than one-half of the Allowed Administrative Expense Claim of Kirkland &
Ellis in connection with the Debtors' prosecution of the Objection filed to
the City Colleges' Claim.
ARTICLE V
PROVISIONS FOR TREATMENT OF ALLOWED PRIORITY TAX CLAIMS
5.1 Treatment. On the later of the Effective Date or the date upon which
a Priority Tax Claim becomes an Allowed Priority Tax Claim (or as soon
thereafter as is practicable), 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 Allowed Priority Tax Claim and the
Debtors.
ARTICLE VI
ALLOWED PRIORITY NON-TAX CLAIMS - CLASS 1
6.1 Treatment. On the later of the Effective Date or the date upon which
a Priority Non-Tax Claim becomes an Allowed Priority Non-Tax Claim (or as soon
thereafter as is practicable), 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 such Claim and the Debtors.
6.2 Impairment. Allowed Priority Non-Tax Claims are unimpaired under
this Plan.
ARTICLE VII
ALLOWED CONVENIENCE CLAIMS - CLASS 2
7.1 Treatment. On the later of the Effective Date or the date upon which
a Convenience Claim becomes an Allowed Convenience Claim (or as soon
thereafter as is practicable), each holder of an Allowed Convenience Claim
will receive a payment in Cash equal to the amount of such holder's Allowed
Convenience Claim.
7.2 Impairment. Allowed Convenience Claims are unimpaired under the
Plan.
ARTICLE VIII
ALLOWED SECURED CLAIMS - CLASS 3
8.1 Treatment. (a) At the option of the Debtors (i) the Plan may
leave unaltered the legal, equitable and contractual rights of the holder of
an Allowed Secured Claim, or (ii) notwithstanding any contractual provision or
applicable law that entitles the holder of any Allowed Secured Claim to
demand or receive accelerated payment of such Allowed Secured Claim after the
occurrence of a default, the Debtors shall (A) cure any such default, other
than a default of a kind specified in section 365(b)(2) of the Bankruptcy
Code; (B) reinstate the maturity of such Claim as such maturity existed
before such default; (C) compensate the holder of such Allowed Secured Claim
for any damages incurred as a result of any reasonable reliance by such
holder on any contractual provision creating a default other than a default
of a kind specified in section 365(b) (2) of the Bankruptcy Code; and (D) not
otherwise alter the legal, equitable or contractual rights to which such
Allowed Secured Claim entitles the holder thereof; or (iii) the Debtors may
abandon to the holder of an Allowed Secured Claim the security or other
collateral securing such Allowed Secured Claim; or (iv) on the later of the
Effective Date or the date upon which a Secured Claim becomes an Allowed
Secured Claim, the Debtors may pay each holder of an Allowed Secured Claim in
full, in Cash, or upon such less favorable terms as may be agreed to in
writing between the holder of such Allowed Secured Claim and the Debtors.
(b) On or prior to the Effective Date, with respect to each
particular Allowed Secured Claim, the Debtors shall notify each holder of such
Allowed Secured Claim in writing as to the treatment option chosen by the
Debtors as set forth in subsection (a) of this Section 8.1 which the Debtor
has elected to apply to such holder.
8.2 Impairment. Allowed Secured Claims are unimpaired under the Plan.
ARTICLE IX
PROVISIONS FOR TREATMENT OF ALLOWED SETTLED CLAIMS - CLASS 4
9.1 Treatment. (a) Each Settling Creditor will have its Settled
Claim, in the aggregate against the Debtors and National Western, Allowed in
the Confirmation Order, effective as of the Effective Date, in the following
amounts:
<TABLE>
<CAPTION>
Allowed Settled
Claimant Claim Amount(1)/
<S> <C>
(1) City of Tracy, California $ 13,504,092.00
(2) Michigan South Central
Power Agency $ 3,825,000.00
(3) Covafer, S.A. and
Sergio Covarrubias $ 1,589,959.95
(4) Sheriff of Palm Beach
County, Florida $ 4,054,281.82
(5) San Antonio River
Authority $ 4,134,559.35
(6) Tom Green County,
Texas $ 1,204,523.79
(7) Eduardo and Antonietta
Saad $ 1,218,857.21
(8) City of La Mesa $ 213,219.25
(9) Darlington County,
South Carolina $ 286,444.83
(10) Greenwood County,
South Carolina $ 2,240,335.98
(11) Bernice and Sarah
Finger $ 107,608.84
(12) Winston-Salem State
University Foundation $ 75,000.00
(13) Mary Robin Christison $ 181,281.22
(14) Mason Tenders $ 1,125,000.00
(15) Clerk of the
Circuit Court of
St. Lucie County,
Florida ** $ 250,000.00
<FN>
(1) As of the date of the filing of the Plan, the Proponents are continuing
to verify the Settled Claim Amounts. The following Settled Claim Amounts
shall neither constitute an admission of the Proponents as to such Settled
Claim Amounts nor evidence any agreement of the Proponents with respect to
such Settled Claim Amounts (with the exception of the Mason Tenders Settled
Claim and, subject to Bankruptcy Court approval, the Settled Claim of the
Clerk of the Circuit Court of St. Lucie County, Florida).
** Subject to Bankruptcy Court approval of settlement agreement between
the Debtor and Clerk of the Circuit Court for St. Lucie County, Florida.
</FN>
</TABLE>
(b) On the Effective Date, each Settling Creditor shall execute and
deliver a Creditor Release of National Western in accordance with the
procedures set forth in Section 16.3(c) of the Plan, and in exchange therefor
each Settling Creditor shall receive (i) a National Western Release of
Creditor in accordance with the provisions of Section 16.3(c), and (ii) (with
the exception of Mason Tenders, whose Allowed Settled Claim shall be treated
in accordance with the provisions of Section 9.1(g) below) a Pro Rata share of
the National Western Settlement Creditor Payment.
(c) The holders of Allowed Settled Claims shall not, and hereby
waive any right to, participate in the Initial Distribution; however, the
holders of Allowed Settled Claims (with the exception of Mason Tenders) shall
receive their Pro Rata share of Subsequent Distributions prior to any
Subsequent Distribution to holders of Allowed Claims in Classes 5 and 6 until
the total of payments received by each Settling Creditor from the National
Western Settlement Creditor Payment and Subsequent Distributions equals twenty
percent (20%) of such Settling Creditor's Allowed Settled Claim. Thereafter,
holders of Allowed Claims in Classes 4 (with the exception of Mason Tenders),
5 and 6 shall receive their Pro Rata share of Subsequent Distributions.
(d) For purposes of calculating a Settling Creditor's Pro Rata
share of Subsequent Distributions, the Allowed Settled Claim of each Settling
Creditor shall not be reduced until each Settling Creditor has received
payments equal to twenty percent (20%) of its Allowed Settled Claim, at which
time such Allowed Settled Claim shall be reduced by (i) an amount equal to ten
percent (10%) of its Allowed Settled Claim for purposes of the next Subsequent
Distribution, plus (ii) the amount of any additional payments received for
purposes of additional Subsequent Distributions.
(e) Any payment received from the SEC by the holder of a Settled
Claim, which payment arises out of or relates to the SEC Settlement, shall
reduce such Settled Claim by the amount so received from the SEC.
(f) The holders of Allowed Settled Claims shall retain all
Securities purchased from the Debtors, to be held or disposed of at the sole
discretion of such holders.
(g) Pursuant to the Mason Tenders' Settlement Agreement, on or
before the Effective Date, Mason Tenders shall receive a payment in Cash in
the amount of $225,000 on account of, and in full and final satisfaction of,
the Mason Tenders' Settled Claim. Mason Tenders shall not, and hereby waives
any right to, participate in the Initial Distribution and Subsequent
Distributions. The proceeds of the National Western Settlement Creditor
Payment shall be the source of payment on account of the Mason Tenders'
Settled Claim.
9.2 Separate Sub-Classes. Each of the Settling Creditors will be
considered a separate sub-Class for voting purposes.
9.3 Compromises as Part of Plan. The foregoing treatment of Settled
Claims represents compromises negotiated and agreed to by the Settling
Creditors, the Debtors, the Creditors' Committee and National Western. The
foregoing compromises do not constitute, and shall not be construed as, an
admission of liability on the part of any Person. Rather, the foregoing
compromises have been agreed to solely for distribution and voting purposes
under the Plan. The compromises are included in the Plan pursuant to section
1123(b)(6) of the Bankruptcy Code, and Bankruptcy Court approval of these
compromises is requested as part of the confirmation of the Plan. To the
extent required, the Plan is deemed to constitute a motion pursuant to Rule
9019 of the Bankruptcy Rules to approve these compromises. No documentation
other than the Plan, the Confirmation Order and the Related Documents are
required to evidence these compromises, although the parties may execute such
other documents as they may mutually agree are necessary or appropriate to
implement these compromises.
9.4 Impairment. Allowed Settled Claims are impaired under the Plan.
ARTICLE X
PROVISIONS FOR TREATMENT OF CITY COLLEGES' CLAIM - CLASS 5
10.1 Treatment. (a) The City Colleges' Claim will be Allowed in
the Confirmation Order, effective as of the Effective Date, in the amount of
$30 million, and will remain a Disputed Claim for the balance of the City
Colleges' Claim. The City Colleges' Claim Escrow Account will be established
and funded from the National Western Settlement Debtor Payment for that
portion of the City Colleges' Claim that is a Disputed Claim. Allowance of
any portion of the City Colleges' Claim over and above $30 million shall be
determined by future judicial proceedings or settlement. Any such settlement
which results in the Allowance of any portion of the City Colleges' Claim over
and above $30 million must be agreed to unanimously by City Colleges, the
Reorganized Debtors, National Western and the Disbursing Trust Committee
(which agreement may not be unreasonably withheld) and must be approved by
Final Order after notice to the Service List and a hearing. To the extent
that, after entry of a Final Order in the City Colleges' Appeal, the City
Colleges' Claim is Allowed in an amount greater than $30 million, City
Colleges will receive a distribution from amounts reserved on account of its
Disputed Claim in the City Colleges' Claim Escrow Account in accordance with
the provisions of this Plan and in accordance with such Allowance. Under no
circumstance will the Allowed City Colleges' Claim be less than $30 million.
(b) City Colleges will receive a Pro Rata share of the Initial
Distribution on the Effective Date, or as soon thereafter as is practicable,
on account of City Colleges' Allowed Claim in the amount of $30 million. City
Colleges shall not be entitled to share in any Subsequent Distributions made
by the Disbursing Trust Committee until such time as each Settling Creditor
has received aggregate distributions on account of such Settling Creditor's
Allowed Settled Claim equal to twenty percent (20%) of such Allowed Settled
Claim. Thereafter, Subsequent Distributions made by the Disbursing Trust
Committee pursuant to the Plan to holders of Allowed Claims in Classes 4 (with
the exception of Mason Tenders), 5 and 6 shall be made on a Pro Rata basis.
In the event that a portion of the City Colleges' Claim remains a Disputed
Claim as of the date of any Subsequent Distribution, City Colleges' Pro Rata
share of such Subsequent Distribution on account of such Disputed Claim shall
be deposited in the Subsequent Distribution Reserve Account. To the extent
that, after entry of a Final Order in the City Colleges' Appeal, the City
Colleges' Claim is Allowed in an Amount greater than $30 million, City
Colleges' will receive a distribution from amounts reserved on account of its
Disputed Claim in the Subsequent Distribution Reserve Account in accordance
with the provisions of this Plan and in accordance with such Allowance. Any
distribution to City Colleges from the City Colleges' Claim Escrow Account
shall not be considered a "Subsequent Distribution."
(c) Any Initial Distribution, Subsequent Distribution or
distribution from the Subsequent Distribution Reserve Account received by City
Colleges shall reduce City Colleges' Allowed Claim for purposes of Subsequent
Distributions.
(d) City Colleges will not receive a National Western Release of
Creditor, nor will National Western receive a Creditor Release of National
Western from City Colleges.
(e) Notwithstanding any other provision of the Plan, the Plan (and
the releases contained therein) shall not impact, affect or in any other
manner limit (or create) any direct claim, right or cause of action that City
Colleges has or may have against National Western, whether previously asserted
or asserted in the future, including, without limitation, any claim, right or
cause of action under section 20 of the Securities Exchange Act of 1934, 15
U.S.C. section 78A, or similar claim, right or cause of action under state
securities laws, but excluding any claim, right or cause of action that is
derivative of the Debtors.
(f) City Colleges will not receive any portion of the National
Western Settlement Creditor Payment. Payments on City Colleges' Allowed Claim
will be made from the National Western Settlement Debtor Payment and
Subsequent Distributions in accordance with the Plan.
(g) City Colleges shall retain all Securities purchased from the
Debtors, to be held or disposed of at the sole discretion of City Colleges.
10.2 Other Provisions Relating to Settlement of City Colleges'
Claim. On or before June 23, 1998, City Colleges shall file an application
for approval of an Administrative Expense Claim in an amount not to exceed
$500,000 for reimbursement of fees and expenses for making a substantial
contribution to the Chapter 11 Cases. Failure of City Colleges to file such
an application on or before June 23, 1998 shall result in any such
Administrative Expense Claim being forever barred and discharged. It is a
condition precedent to the occurrence of the Effective Date that (i) no
objection to such application is filed by the Debtors or National Western, and
(ii) the Bankruptcy Court approves such application. National Western shall
have no liability for, and shall not be obligated to pay, any portion of any
Administrative Expense Claim allowed on behalf of City Colleges, except that
the proceeds of the National Western Settlement Debtor Payment may be used for
such purposes.
10.3 Compromise as Part of Plan. The foregoing treatment of the City
Colleges' Claim represents a compromise negotiated and agreed to by City
Colleges, the Debtors, the Creditors' Committee and National Western. The
compromise is included in the Plan pursuant to section 1123(b)(6) of the
Bankruptcy Code, and Bankruptcy Court approval of the compromise is requested
as part of the confirmation of the Plan. To the extent required, the Plan is
deemed to constitute a motion pursuant to Rule 9019 of the Bankruptcy Rules to
approve the compromise. No documentation other than the Plan, the
Confirmation Order and the Related Documents are required to evidence the
compromise, although the parties may execute such other documents as they may
mutually agree are necessary or appropriate to implement the compromise.
10.4 Impairment. The City Colleges' Claim is impaired under the
Plan.
ARTICLE XI
PROVISIONS FOR TREATMENT OF ALLOWED
GENERAL UNSECURED CLAIMS - CLASS 6
11.1 Treatment. (a) Holders of Allowed General Unsecured Claims
will receive a Pro Rata share of the Initial Distribution on the Effective
Date, or as soon thereafter as is practicable. Holders of Allowed General
Unsecured Claims shall receive a Pro Rata share of Subsequent Distributions in
accordance with and pursuant to the terms of the Plan. The Escrow Account
will be established and funded for Disputed Claims in connection with the
Initial Distribution, also on a Pro Rata basis. In the event that any General
Unsecured Claim remains a Disputed Claim as of the date of any Subsequent
Distribution, the Subsequent Distribution Reserve Account will be established
and funded for Disputed Claims, also on a Pro Rata basis. On the date that a
Disputed General Unsecured Claim becomes an Allowed General Unsecured Claim by
Final Order, or as soon thereafter as is practicable, the holder of such
Allowed General Unsecured Claim shall receive a distribution from the Escrow
Account and the Subsequent Distribution Reserve Account in accordance with
Section 16.7 of the Plan. Any Initial Distribution, Subsequent Distribution
or distribution from the Subsequent Distribution Reserve Account received by
the holder of an Allowed General Unsecured Claim shall reduce such holders
Allowed Claim for purposes of any Subsequent Distributions by the amount so
received. Distributions from the Escrow Account to holders of Allowed General
Unsecured Claims shall not be considered "Subsequent Distributions."
(b) Holders of Allowed General Unsecured Claims shall not be
entitled to share in any Subsequent Distributions made by the Disbursing Trust
Committee until such time as each Settling Creditor has received aggregate
distributions on account of such Settling Creditor's Allowed Settled Claim
equal to twenty percent (20%) of such Allowed Settled Claim. Thereafter,
Subsequent Distributions (or amounts deposited in the Subsequent Distribution
Reserve Account on account of Disputed Claims) made by the Disbursing Trust
Committee pursuant to the Plan to holders of Allowed Claims in Classes 4
(with the exception of Mason Tenders), 5 and 6 shall be made on a Pro Rata
basis.
(c) Any payment received from the SEC by a holder of a General
Unsecured Claim, which payment arises out of or relates to the SEC Settlement,
shall serve to reduce such General Unsecured Claim by the amount so received
from the SEC.
(d) Any holder of a General Unsecured Claim in excess of $2,000 may
elect to voluntarily reduce such General Unsecured Claim to $2,000 and have
such reduced General Unsecured Claim treated as a Convenience Claim in
accordance with Section 7.1 of the Plan. Any holder of a General Unsecured
Claim that desires treatment of such General Unsecured Claim as a Convenience
Claim shall make such election on the ballot provided to holders of Claims and
shall have 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 Proponents.
(e) Any holder of a Security shall retain same, to be held or
disposed of at the sole discretion of such holder(s).
11.2 Impairment. Allowed General Unsecured Claims are impaired
under the Plan.
ARTICLE XII
PROVISIONS FOR TREATMENT OF THE CLAIMS
OF NATIONAL WESTERN - CLASS 7
12.1 Treatment. The National Western Claim shall be treated as
follows:
(a) The National Western Claim shall not be transferred to the
Disbursing Trust, but shall remain obligations of and Claims against the
Reorganized Debtors;
(b) The National Western Claim shall not be Allowed or Disallowed
under the Plan;
(c) Notwithstanding the provisions of Section 22.4 of the Plan, the
National Western Claim shall not be discharged by the Plan; provided, however,
that National Western shall be precluded from asserting any claim, right or
cause of action, based on any transaction, claim, interest or activity of any
kind that occurred prior to the Effective Date, against the Disbursing Trust
or the Disbursing Trust Committee, their assets or properties, or any
immediate or subsequent transferees of such assets or properties; provided,
however, that this paragraph shall limit National Western's rights against
such transferees solely as to the claims, rights or causes of action otherwise
assertable against the Disbursing Trust or the Disbursing Trust Committee or
their assets or properties; provided further, however, that this paragraph
shall not limit or otherwise impair National Western's rights under
Section 16.3(f) of the Plan;
(d) Notwithstanding the provisions of Section 23.2 of the Plan, the
release of the Debtors and Reorganized Debtors provided for therein shall not
be applicable to National Western; provided, however, that National Western
shall be precluded from asserting any claim, right or cause of action, based
on any transaction, claim, interest or activity of any kind that occurred
prior to the Effective Date, against the Disbursing Trust or the Disbursing
Trust Committee, their assets or properties, or any immediate or subsequent
transferees of such assets or properties; provided, however, that this
paragraph shall limit National Western's rights against such transferees
solely as to the claims, rights or causes of action otherwise assertable
against the Disbursing Trust or the Disbursing Trust Committee or their assets
or properties; provided further, however, that this paragraph shall not limit
or otherwise impair National Western's rights under Section 16.3(f) of the
Plan; and
(e) National Western shall not be entitled to and shall receive no
distributions on account of any Claims under the Plan except as specifically
provided for in the Plan.
(f) Any Claims of National Western under the National Western
Funding Order shall be waived. As part of the National Western Settlement, in
addition to the National Western Settlement Payment Amount, National Western
shall be deemed to have contributed an additional amount of $1.0 million
through its previous advance of such amount to the Debtors pursuant to the
National Western Funding Order. All other Claims of National Western shall be
released as set forth in the National Western Release of Debtors, but subject
to the exclusions contained therein.
12.2 Impairment. The Claims of National Western are impaired under
the Plan.
ARTICLE XIII
PROVISIONS FOR THE TREATMENT OF
INTERCOMPANY CLAIMS OF THE DEBTORS - CLASS 8
13.1 Treatment. (a) Any and all Claims of The Westcap
Corporation against Westcap Enterprises, Inc. shall be treated as follows:
(1) The Claims of The Westcap Corporation against Westcap
Enterprises, Inc. shall not be transferred to the Disbursing Trust, but shall
remain obligations of and Claims against the Reorganized Debtors;
(2) The Claims of The Westcap Corporation against Westcap
Enterprises, Inc., shall not be Allowed or Disallowed under the Plan;
(3) Notwithstanding the provisions of Section 22.4 of the
Plan, the Claims of The Westcap Corporation against Westcap Enterprises, Inc.
shall not be discharged by the Plan; provided, however, that The Westcap
Corporation shall be precluded from asserting any claim, right or cause of
action, based on any transaction, claim, interest or activity of any kind that
occurred prior to the Effective Date, against the Disbursing Trust or the
Disbursing Trust Committee, their assets or properties, or any immediate or
subsequent transferees of such assets or properties; provided further,
however, that this paragraph shall limit The Westcap Corporation's rights
against such transferees solely as to the claims, rights or causes of action
otherwise assertable against the Disbursing Trust or the Disbursing Trust
Committee or their assets or properties;
(4) Notwithstanding the provisions of Section 23.2 of the
Plan, the release of the Debtors and Reorganized Debtors provided for therein
shall not be applicable to The Westcap Corporation; provided, however, that
The Westcap Corporation shall be precluded from asserting any claim, right or
cause of action, based on any transaction, claim, interest or activity of any
kind that occurred prior to the Effective Date, against the Disbursing Trust
or the Disbursing Trust Committee, their assets or properties, or any
immediate or subsequent transferees of such assets or properties; provided,
however, that this paragraph shall limit The Westcap Corporation's rights
against such transferees solely as to the claims, rights or causes of action
otherwise assertable against the Disbursing Trust or the Disbursing Trust
Committee or their assets or properties; and
(5) The Westcap Corporation shall not be entitled to and shall
receive no distribution on account of any Claims under the Plan and have no
interest in the Disbursing Trust.
(b) Any and all Claims of Westcap Enterprises, Inc. against The
Westcap Corporation shall be treated as follows:
(1) The Claims of Westcap Enterprises, Inc. against The
Westcap Corporation shall not be transferred to the Disbursing Trust, but
shall remain obligations of and Claims against the Reorganized Debtors;
(2) The Claims of Westcap Enterprises, Inc., against The
Westcap Corporation shall not be Allowed or Disallowed under the Plan;
(3) Notwithstanding the provisions of Section 22.4 of the
Plan, the Claims of Westcap Enterprises, Inc. against The Westcap Corporation
shall not be discharged by the Plan; provided, however, that Westcap
Enterprises, Inc. shall be precluded from asserting any claim, right or cause
of action, based on any transaction, claim, interest or activity of any kind
that occurred prior to the Effective Date, against the Disbursing Trust or the
Disbursing Trust Committee, their assets or properties, or any immediate or
subsequent transferees of such assets or properties; provided, however, that
this paragraph shall limit Westcap Enterprises, Inc.'s rights against such
transferees solely as to the claims, rights or causes of action otherwise
assertable against the Disbursing Trust or the Disbursing Trust Committee or
their assets or properties;
(4) Notwithstanding the provisions of Section 23.2 of the
Plan, the release of the Debtors and Reorganized Debtors provided for therein
shall not be applicable to Westcap Enterprises, Inc.; provided, however, that
Westcap Enterprises, Inc. shall be precluded from asserting any claim, right
or cause of action, based on any transaction, claim, interest or activity of
any kind that occurred prior to the Effective Date, against the Disbursing
Trust or the Disbursing Trust Committee, or their assets or properties or any
immediate or subsequent transferee of such assets or properties; provided,
however, that this paragraph shall limit Westcap Enterprises, Inc.'s rights
against such transferees solely as to the claims, rights or causes of action
otherwise assertable against the Disbursing Trust or the Disbursing Trust
Committee or their assets or properties; and
(5) Westcap Enterprises, Inc. shall receive no distribution on
account of such Claims and have no interest in the Disbursing Trust.
13.2 Impairment. The Intercompany Claims of The Westcap Corporation
and Westcap Enterprises, Inc. are impaired under the Plan.
ARTICLE XIV
PROVISIONS FOR THE TREATMENT OF ALLOWED
EQUITY INTERESTS IN WESTCAP ENTERPRISES, INC. - CLASS 9
14.1 Treatment. The Westcap Corporation shall retain its Equity
Interest in Westcap Enterprises, Inc. Westcap Enterprises, Inc. shall retain
the assets set forth and specifically identified in Exhibit A. The Westcap
Corporation shall have no interest in the Disbursing Trust.
14.2 Impairment. The Equity Interest of The Westcap Corporation is
unimpaired under the Plan.
ARTICLE XV
PROVISIONS FOR THE TREATMENT OF ALLOWED
EQUITY INTERESTS IN THE WESTCAP CORPORATION - CLASS 10
15.1 Treatment. National Western shall contribute its preferred
stock interests in The Westcap Corporation to The Westcap Corporation; and
National Western shall retain its common stock interests in The Westcap
Corporation. The Westcap Corporation shall retain those assets set forth and
specifically identified in Exhibit A. National Western shall have no interest
in the Disbursing Trust on account of its Equity Interest in The Westcap
Corporation.
15.2 Impairment. The Equity Interest of National Western is
impaired under the Plan.
ARTICLE XVI
MEANS FOR EXECUTION AND IMPLEMENTATION OF THE PLAN
16.1 The Disbursing Trust.
(a) Establishment of Disbursing Trust. On the Effective Date, the
Disbursing Trust will be established. The Disbursing Trust Agreement shall be
substantially in the form of Exhibit F. As of the Effective Date, the
Proponents, Creditors and the Disbursing Trust Committee will be deemed to
have adopted the Disbursing Trust Agreement, and the Disbursing Trust
Committee will establish the Disbursing Trust according to the terms of the
Plan and the Disbursing Trust Agreement.
(b) Transfer of Debtors' Assets and Claims Against the Debtors to
Disbursing Trust. Except with respect to those assets set forth and
specifically identified in Exhibit A, on the Effective Date, all of the assets
(including, without limitation, the proceeds of the National Western
Settlement Debtor Payment) and all of the Claims against the Debtors and their
bankruptcy estates (with the exception of the National Western Claim and the
Intercompany Claims) will be transferred to the Disbursing Trust. The
transfer of assets to the Disbursing Trust shall be free and clear of all
liens, claims and encumbrances, and will be treated for tax purposes as a
transfer of assets to the Creditors and a transfer by the Creditors to the
Disbursing Trust. The Proponents and the holders of Allowed Claims will use
a consistent valuation of these assets for federal income tax purposes.
(c) The Disbursing Trust Committee. The Disbursing Trust Committee
shall administer the Disbursing Trust and shall have and perform the duties,
responsibilities, rights and obligations set forth in the Disbursing Trust
Agreement. The Bankruptcy Court shall approve the initial Disbursing Trust
Committee.
(d) Disbursing Trust Governance. The Disbursing Trust Committee
shall have the right and power to deal with, file Objections to, settle and
dispose of all claims owned by and claims against the Disbursing Trust (other
than Settled Claims and the City Colleges' Claim), subject only to the
requirement that the following items shall be dealt with, settled or disposed
of only after notice and hearing before the Bankruptcy Court:
(1) The settlement of any Objection that results in cumulative
payments to a Creditor of more than $25,000.
(2) The settlement of any lawsuit or adversary proceeding
commenced by the Proponents or by the Disbursing Trust.
(3) The settlement of any lawsuit or adversary proceeding
commenced against the Debtors or the Disbursing Trust, which settlement
results in cumulative payments of more than $25,000.
(4) The establishment of cash reserves in an amount greater
than $250,000 for the purposes of administration of the Disbursing Trust
or for the purposes of paying anticipated litigation costs of the
Disbursing Trust or the maintenance of cash reserves for such purposes
beyond four (4) years from the Effective Date.
The foregoing shall be done only after receipt of an order from the Bankruptcy
Court approving the matters identified in this Section 16.1(d)(1)-(4), which
order shall be sought on motion with notice given only to the Service List.
Except as specifically set forth above, no holder of a Claim or Equity
Interest shall participate in the management of or have the right to object to
actions taken by or on behalf of the Disbursing Trust.
(e) Distributions from the Disbursing Trust. Beginning on the
Effective Date and continuing until the Disbursing Trust Committee has
distributed all assets of the Disbursing Trust, the Disbursing Trust Committee
is authorized to make distributions to the holders of Allowed Claims in
accordance with the Plan.
(f) Litigation and Administrative Expense Reserve. On the
Effective Date, the Disbursing Trust Committee will establish a Litigation and
Administrative Expense Reserve to pay the fees and expenses anticipated in
connection with the litigation of any Disputed Claims (except the fees and
expenses in connection with the City Colleges' Appeal, which fees and expenses
shall be paid by National Western), the prosecution of causes of action
transferred to the Disbursing Trust and administrative expenses of the
Disbursing Trust. Unless the Bankruptcy Court, after notice and hearing as
provided in Section 16.1(d) of the Plan, authorizes the retention of the
Litigation and Administrative Expense Reserve for a longer period, (i) the
funds contained in the Litigation and Administrative Expense Reserve will be
held for four (4) years following the Effective Date; and (ii) at the
expiration of such four (4) year period any remaining funds will be available
for distribution to holders of Allowed Claims. The Litigation and
Administrative Expense Reserve may be replenished from time-to-time by the
Disbursing Trust Committee. The Litigation and Administrative Expense Reserve
may, in the discretion of the Disbursing Trust Committee, be co-mingled with
other funds of the Disbursing Trust. To the extent not prohibited by the
Disbursing Trust Agreement, funds in the Litigation and Administrative Expense
Reserve may be invested along with other funds of the Disbursing Trust.
(g) Reserve for Disputed Claims. On the Effective Date, the
Disbursing Trust Committee will establish reserves for Disputed Claims
(including the City Colleges' Disputed Claim in accordance with Section
16.1(h) of the Plan), which reserves shall be deposited in the Escrow Account
as described in Section 16.5(a) of the Plan. The Disbursing Trust Committee
will hold the Disputed Claims reserves in trust for the benefit of holders of
Disputed Claims pending determination of their entitlement thereto. In the
event a Disputed Claim becomes a Disallowed Claim, the amount held in reserve
for such Disputed Claim will be transferred out of the Escrow Account and will
then be available for distribution with other funds of the Disbursing Trust
according to the terms of the Plan. To the extent not prohibited by the
Disbursing Trust Agreement, funds in the Escrow Account may be invested along
with other funds of the Disbursing Trust.
(h) Reserve for City Colleges' Disputed Claim. On the Effective
Date, the Disbursing Trust Committee will establish a reserve for that portion
of the City Colleges' Claim that is a Disputed Claim, which reserve shall be
deposited in the City Colleges' Claim Escrow Account described in Section 16.5
(b) of the Plan. The Disbursing Trust Committee will hold the reserve in the
City Colleges' Claim Escrow Account in trust for the benefit of City Colleges
and National Western pending determination of their entitlement thereto, and
then shall distribute such reserve in accordance with Sections 10.1(a) and
16.3(f) of the Plan. To the extent not prohibited by the Disbursing Trust
Agreement, funds in the City Colleges' Claim Escrow Account may be invested
along with other funds of the Disbursing Trust.
(i) If the Disputed Claims reserved for in the Escrow Account, the
City Colleges' Claim Escrow Account or the Subsequent Distribution Reserve
Account cannot be resolved in a timely manner, the Disbursing Trust Committee
shall report any taxes attributable to the net income earned on the funds held
in the Escrow Account, in the City Colleges' Claim Escrow Account and in the
Subsequent Distribution Reserve Account, and shall pay any such taxes on
behalf of the beneficiaries of the Disbursing Trust. The amount of such taxes
paid on behalf of the beneficiaries shall be withheld from the beneficiaries'
ultimate distributions from the Disbursing Trust.
(j) Expenses of Disbursing Trust Committee. After the Effective
Date, the Disbursing Trust Committee may retain and compensate professionals
for services rendered without further order of the Court. The Disbursing
Trust Committee will pay any fees and expenses incurred with respect to the
retention of professionals from the Disbursing Trust upon ten (10) days
written notice to the Service List. In the event that a written objection is
filed with the Bankruptcy Court and served upon the Disbursing Trust Committee
within ten (10) days of service of the notice, the amounts to which an
objection has been filed shall not be paid until receipt of an order from the
Bankruptcy Court. In all other instances, the amounts may be paid. In
addition to the foregoing, the Disbursing Trust Committee may pay the
ordinary, necessary costs of operating and administering the Disbursing Trust.
The source of any payments authorized by this Section 16.1(j) shall be from
the Litigation and Administrative Reserve.
(k) Compensation to Disbursing Trust Committee Members. The
members of the Disbursing Trust Committee shall receive no compensation for
their services, but will be entitled to reimbursement for out-of-pocket
expenses (including reasonable attorneys' fees) in connection with membership
on the Disbursing Trust Committee. The source of any payments authorized by
this Section 16.1(k) shall be from funds of the Disbursing Trust.
(l) Distribution Responsibility. The Disbursing Trust Committee or
any agents that it may in its discretion employ will have responsibility for
making distributions required to be made under the Plan from the assets of the
Disbursing Trust.
(m) Subsequent Distributions.
(i) Priority of Subsequent Distributions. Subsequent
Distributions (or amounts deposited in the Subsequent Distribution
Reserve Account on account of Disputed Claims) shall be made in the
following order of priority: first, to holders of Allowed Administrative
Expense Claims and Allowed Priority Tax Claims on a Pro Rata basis, until
such Claims are paid in full; second, to holders of Allowed Priority Non-
Tax Claims on a Pro Rata basis, until such Claims are paid in full;
third, to holders of Allowed Convenience Claims on a Pro Rata basis,
until such Claims are paid in full; fourth, to holders of Allowed Settled
Claims (with the exception of Mason Tenders) on a Pro Rata basis until
the total of payments received by each Settling Creditor equals twenty
percent (20%) of such Settling Creditor's Allowed Settled Claim; fifth,
to holders of Allowed Class 4 (with the exception of Mason Tenders), 5
and 6 Claims on a Pro Rata basis, until such Claims are paid in full; and
sixth, to the Reorganized Debtors.
(ii) Application of Payments. The Plan requires that the
Disbursing Trust Committee make the Initial Distribution and contemplates
the possibility of one or more Subsequent Distributions to holders of
Allowed Claims. Any payment received by the holder of an Allowed Claim
shall reduce such Allowed Claim by the amount of such payment, except
that the Allowed Settled Claim of each Settling Creditor shall not be
reduced until each Settling Creditor has received payments equal to
twenty percent (20%) of its Allowed Settled Claim, at which time such
Allowed Settled Claim shall be reduced by (x) an amount equal to ten
percent (10%) of its Allowed Settled Claim for purposes of the next
Subsequent Distribution, plus (y) the amount of any additional payments
received for purposes of additional Subsequent Distributions.
Distributions from a Disputed Claim reserve held in the Escrow Account or
the City Colleges' Claim Escrow Account on account of a Disputed Claim
that has been Allowed, in whole or in part, are not "Subsequent
Distributions."
(iii) Timing of Subsequent Distributions. The timing of
the release of Subsequent Distributions shall be in the sole discretion
of the Disbursing Trust Committee.
(n) Delivery of Distributions from the Disbursing Trust. Subject
to Bankruptcy Rule 9010, distributions to holders of Allowed Claims from the
Disbursing Trust will be made at the address of each such holder as set forth
on the proof(s) of Claim filed by such holders, or at the last known address
of such holder if no proof of Claim is filed or if the Proponents have been
notified in writing of a change of address. If any holder's distribution is
returned as undeliverable, no further distribution(s) to such holder will be
made unless and until the Disbursing Trust Committee, or its agent, is
notified of such holder's then current address. Amounts in respect of
undeliverable distribution(s) made through any agent employed by the
Disbursing Trust Committee will be retained by the Disbursing Trust Committee
or agent making such distribution(s) until the earlier of the date on which
such distributions are claimed by a Creditor providing adequate evidence with
respect thereto or the second anniversary after the Effective Date.
(o) Unclaimed Distributions and Uncashed Checks. All claims
against the Disbursing Trust for undeliverable distributions must be made on
or before the second anniversary of the Effective Date. After such date, all
unclaimed distributions will revert to the Disbursing Trust, and the Claim of
any holder with respect to such distribution will be discharged and forever
barred. Checks issued in respect of Allowed Claims will be null and void if
not negotiated within six (6) months after the date of issuance thereof.
Requests for reissuance of any check must be made on or before the later of
the second anniversary of the Effective Date or the date ninety (90) days
after such check becomes null and void, directly to the Disbursing Trust
Committee by the holder of the Allowed Claim with respect to which such check
originally was issued.
(p) Disbursing Trust Committee's Authority to Object to Claims and
to Act as Successor to Pending Objections. On and after the Effective Date,
the Disbursing Trust Committee shall have the sole and exclusive right to file
Objections to Claims. In addition to its right to bring Objections, the
Disbursing Trust Committee shall be the successor with responsibility to
prosecute Objections pending as of the Effective Date, except that the
Disbursing Trust Committee shall not be the successor with respect to the City
Colleges' Appeal, which shall be prosecuted by the Reorganized Debtors.
(q) Any settlement or other resolution of a Securities-related
Disputed Claim (other than the City Colleges' Disputed Claim) shall not
constitute, and shall not be construed as, an admission of liability on the
part of any Person. Any such settlement or resolution shall be solely for
purposes of distributions and voting under the Plan.
(r) Cooperation with Disbursing Trust Committee. The Reorganized
Debtors and the officers and directors of the Reorganized Debtors shall
reasonably cooperate with the Disbursing Trust Committee with respect to the
prosecution of litigation, contested matters, Objections and adversary
proceedings, provided that neither the Reorganized Debtors nor the officers
and directors shall be required to expend funds in support of the Disbursing
Trust pursuant to this Section 16.1(r), and such officers and directors shall
not be required to expend unreasonable amounts of time in doing so unless (i)
such expenditure of time does not significantly infringe on such officer's or
director's employment if for a Person other than one of the Reorganized
Debtors, and (ii) such officer or director is reasonably compensated by the
Disbursing Trust.
(s) Payment of United States Trustee's Fees. On the Effective
Date, the Disbursing Trust Committee shall pay all fees payable pursuant to
section 1930 of title 28 of the United States Code, as determined by the
Bankruptcy Court at the Confirmation Hearing, that are due on or before the
Effective Date. All fees payable pursuant to section 1930 of title 28, if
any, that are due after the Effective Date shall be paid on behalf of the
Debtors' bankruptcy estates by the Disbursing Trust Committee, which fees
shall terminate as of the date that each Chapter 11 Case is closed. In
addition, after confirmation, the Disbursing Trust Committee shall file with
the Bankruptcy Court and shall serve on the United States Trustee, a
quarterly financial report (in accordance with Section 5.3 of the Disbursing
Trust Agreement) for each quarter, or portion thereof, that the Bankruptcy
Case remains open.
16.2 Reorganized Debtors.
(a) As of the Effective Date, Debtor Westcap Enterprises, Inc. and
Debtor The Westcap Corporation shall exist as Reorganized Debtors. National
Western shall contribute its preferred stock interests in The Westcap
Corporation to The Westcap Corporation, and National Western shall retain its
common stock interests in The Westcap Corporation. The Westcap Corporation,
in turn, shall retain its common stock interest in Westcap Enterprises, Inc.
The Reorganized Debtors shall retain those assets set forth and specifically
identified in Exhibit A. Subsequent to or on and after the Effective Date,
the Reorganized Debtors may acquire new assets (including by way of transfer
from National Western, at the discretion of National Western) and may conduct
one or more new businesses. The Reorganized Debtors shall have all rights
granted to corporations under applicable state laws.
(b) The Reorganized Debtors are authorized to continue prosecution
of the City Colleges Appeal. Neither the Disbursing Trust nor the Disbursing
Trust Committee shall have any obligation to fund prosecution of the City
Colleges' Appeal.
16.3 The National Western Settlement. National Western agrees to
the terms of the National Western Settlement, the terms of which are:
(a) On the Effective Date, the National Western Settlement shall
close.
(b) On the Effective Date, the Debtors shall execute and deliver
the Debtors Release of National Western; and contemporaneously National
Western shall (i) transfer to the Debtors the National Western Settlement
Debtor Payment, and (ii) execute and deliver the National Western Release of
Debtors.
(c) On or before the Effective Date, the Creditor Releases of
National Western, the National Western Release of Creditors and the National
Western Settlement Creditor Payment shall be executed and/or delivered in
accordance with the following provisions:
(i) each Settling Creditor shall execute in duplicate and
forward to counsel for the Creditors' Committee executed duplicates of a
Creditor Release of National Western, which shall be held in escrow by
counsel for the Creditors' Committee until delivery to National Western
is authorized pursuant to the terms hereof;
(ii) upon receipt thereof from all Settling Creditors, counsel
for the Creditors' Committee shall provide written notice to National
Western that it is holding in escrow executed duplicates of a Creditor
Release of National Western on behalf of each Settling Creditor; and upon
request of National Western, counsel for the Creditors' Committee shall
permit National Western, in the presence of counsel for the Creditors'
Committee, to review the executed duplicates of the Creditor Releases of
National Western and determine the acceptability thereof;
(iii) upon reviewing and determining the acceptability of
the executed duplicates of the Creditor Releases of National Western,
National Western shall forward to counsel for the Creditors' Committee
the National Western Settlement Creditor Payment, which shall be held in
escrow by counsel for the Creditors' Committee until distribution to the
Settling Creditors is authorized pursuant to the terms hereof; and
National Western shall execute in duplicate and forward to counsel for
the Creditors' Committee executed duplicates of the National Western
Release of Creditors on behalf of each Settling Creditor; and
(iv) upon receipt of the National Western Settlement Creditor
Payment and of the executed duplicates of the National Western Release of
Creditors, counsel for the Creditors' Committee shall be authorized
contemporaneously to (x) release to National Western the executed
Creditor Releases of National Western, (y) release to each Settling
Creditor the executed National Western Release of Creditors, and (z)
distribute the proceeds of the National Western Settlement Creditor
Payment in accordance with and pursuant to the terms of the Plan.
(d) [Left intentionally blank.]
(e) Credit for Post-Petition Borrowing. As part of the National
Western Settlement, in addition to the National Western Settlement Payment
Amount, National Western shall be deemed to have contributed, and shall be
credited for, the amount of $1.0 million through its previous advance of such
amount to the Debtors pursuant to the National Western Funding Order.
(f) Payment and Recovery of City Colleges Appeal Costs. As part of
the National Western Settlement, National Western shall pay any expense,
claim, cost or fee incurred by or on behalf of the Debtors, the Reorganized
Debtors or National Western attributable to the filing and prosecution by the
Debtors of the City Colleges' Appeal, including without limitation, any fees,
costs or expenses charged by Kirkland & Ellis. Any funds reserved on account
of the Disputed Claim of City Colleges and not ultimately paid to City
Colleges as a result of a reduction of such Disputed Claim as finally Allowed
shall be split, with 23.1% (up to a maximum of $600,000) to be paid to
National Western, and 76.9% to be paid to the Disbursing Trust for the benefit
of holders of Allowed Claims (including, without limitation, the Allowed
portion of the City Colleges' Claim). National Western shall have the sole
right to direct the Reorganized Debtors in the prosecution of the City
Colleges' Appeal. Notwithstanding the foregoing, any settlement of the City
Colleges' Appeal which results in the Allowance of any portion of the City
Colleges' Claim over and above $30 million must be agreed to unanimously by
City Colleges, the Reorganized Debtors, National Western and the Disbursing
Trust Committee (which agreement may not be unreasonably withheld) and must be
approved by Final Order after notice to the Service List and a hearing.
(g) National Western shall pay, to the extent not previously paid,
one-half of the Allowed Administrative Expense Claim, if any, of Kirkland &
Ellis in connection with the Debtors' prosecution of the Objection filed to
the City Colleges' Claim. Notwithstanding the foregoing, the Proponents, or
the Reorganized Debtors and Disbursing Trust Committee, as the case may be,
reserve their rights to file an Objection to any Administrative Expense Claim
filed by Kirkland & Ellis.
(h) Upon entry of the Confirmation Order, but subject to the
satisfaction or waiver of the conditions precedent contained in Article 17 of
this Plan, National Western agrees to all of the terms and provisions of this
Plan, and agrees to be bound thereby, implementation of which are incorporated
as terms of the National Western Settlement.
(i) The National Western Claim and the National Western Equity
Interest shall be treated in accordance with Articles XII and XV of the Plan.
(j) The Confirmation Order shall contain a specific finding and
holding that (i) alter ego, instrumentality and control claims against
National Western are claims belonging to the Debtors' bankruptcy estates that
have been compromised and released by the Debtors as part of the National
Western Settlement, and no such claims remain for assertion against National
Western by any holder of a Claim or Equity Interest, but subject to the
provisions of section 10.1(e) of the Plan; and (ii) all claims of the Debtors
and their estates against National Western, and all claims of the Settling
Creditors against National Western, are compromised, settled and released
pursuant to the terms of the Debtors Release of National Western and the
Creditor Release of National Western.
(k) Expiration of Statutes of Limitation as to National Western.
The Confirmation Order shall contain a specific finding and holding that the
statutes of limitation applicable to all claims, demands or causes of action
against National Western, based upon or relating to securities transactions
involving the Debtors, assertable by Mason Tenders, Clerk of the Circuit Court
for St. Lucie County, Florida, North Cincinnati Savings Bank and Greenville
County, South Carolina have expired, without exception; any such claims,
demands or causes of action against National Western are barred for all
purposes; and Mason Tenders, Clerk of the Circuit Court for St. Lucie County,
Florida, North Cincinnati Savings Bank and Greenville County, South Carolina
are enjoined from asserting any such claims, demands or causes of action
against National Western in any court or other forum.
(l) National Western shall have the benefit of the release and
discharge provided by Section 23.7 of this Plan.
(m) The foregoing provisions represent a compromise negotiated and
agreed to by the Debtors, the Creditors' Committee, City Colleges, the
Settling Creditors and National Western. The compromise is included in the
Plan pursuant to section 1123(b)(3) and (6) of the Bankruptcy Code as the
National Western Settlement, and Bankruptcy Court approval of the National
Western Settlement is requested as part of confirmation of the Plan. To the
extent required, the Plan is deemed to constitute a motion pursuant to Rule
9019 of the Bankruptcy Rules to approve the National Western Settlement. No
documentation other than the Plan, the Confirmation Order and the Related
Documents are required to evidence the compromise, although the parties may
execute such other documents as they may mutually agree are necessary or
appropriate to implement the National Western Settlement.
16.4 Cash Payments on the Effective Date. All Cash payments
required to be made on or after the Effective Date pursuant to (i) the Plan,
and (ii) any agreement made prior to the Effective Date which has been
approved by Final Order will be made by the Debtors, National Western or the
Disbursing Trust Committee, as the case may be, to the holder of the Allowed
Claim entitled to such Cash payment.
16.5 Establishment of the Escrow Account and Other Accounts.
(a) Escrow Account. On the Effective Date, the Disbursing Trust
Committee will establish the Escrow Account and will fund the Escrow Account
with Cash held by the Disbursing Trust. The Disbursing Trust Committee shall
maintain the Escrow Account in an interest bearing bank account. The ledger
of the Escrow Account will be available for review during regular business
hours on the reasonable request of any holder of a Disputed Claim. The
Disbursing Trust Committee shall reserve in the Escrow Account on account of
each Disputed Claim (other than the Disputed portion of the City Colleges'
Claim) an amount equal to such Disputed Claim's Pro Rata portion of funds
available for distribution (after taking account of all reserves) as of the
Effective Date, using the amount of the Disputed Claim as the basis for
calculating such reserve.
(b) City Colleges' Claim Escrow Account. On the Effective Date,
the Disbursing Trust Committee will establish the City Colleges' Claim Escrow
Account and will fund the City Colleges' Claim Escrow Account with Cash held
by the Disbursing Trust. The Disbursing Trust Committee shall maintain the
City Colleges' Claims Escrow Account in an interest bearing account. The
ledger of the Escrow Account will be available for review during regular
business hours on the reasonable request of City Colleges or National Western.
The Disbursing Trust Committee shall reserve in the City Colleges' Claim
Escrow Account the amount of $2,617,306.
(c) Subsequent Distribution Reserve Account. In the event that any
Claim is a Disputed Claim as of the date of a Subsequent Distribution, the
Disbursing Trust Committee will establish the Subsequent Distribution Reserve
Account and will fund the Subsequent Distribution Reserve Account with Cash
held by the Disbursing Trust. The Disbursing Trust Committee shall maintain
the Subsequent Distribution Reserve Account in an interest bearing account.
The ledger of the Subsequent Distribution Reserve Account will be available
for review during regular business hours on the reasonable request of any
holder of a Disputed Claim or National Western. The Disbursing Trust
Committee shall deposit in the Subsequent Distribution Reserve Account on
account of each Disputed Claim (including the Disputed portion of the City
Colleges' Claim) an amount equal to such Disputed Claim's Pro Rata portion of
funds available for such Subsequent Distribution (after taking account of all
reserves, including, without limitation, the Litigation and Administrative
Expense Reserve) as of the date of such Subsequent Distribution, using the
total claimed amount of the Disputed Claim as the basis for calculating such
reserve.
(d) Other Accounts. The Disbursing Trust Agreement shall authorize
the Disbursing Trust Committee to open such other accounts as it deems
appropriate.
16.6 Bar Date Provisions.
(a) Applications for payment of Claims constituting Administrative
Expense Claims under sections 503(b)(1), (2), (3), (4), (5) and (6) of the
Bankruptcy Code (other than Administrative Expense Claims incurred in the
ordinary course of the Debtors' business and any Administrative Expense Claim
of City Colleges) must be filed no later than thirty (30) days after the
Effective Date. Written notice of the amount of such Claims incurred through
May 31, 1998, must be served on counsel to the Proponents five (5) days before
the day first set for the commencement of the Confirmation Hearing.
(b) The Bar Date for all Claims, other than Claims described in
Section 16.6(a) above, arising from or related to the pre-petition actions or
inactions of the Debtors has been set in this case as September 5, 1996.
16.7 Distributions Relating to Disputed Claims and Reserved Funds
Upon Disallowance of Disputed Claims.
(a) At such time as all or any portion of a Disputed Claim becomes
an Allowed Claim, the distributions reserved for such Disputed Claim or such
portion that becomes an Allowed Claim, together with the actual interest
earned on account of such reserved distributions or portion thereof, shall be
released and delivered to the holder of such Allowed Claim. To the extent
distribution comes from the Escrow Account or the City Colleges' Claim Escrow
Account, such distribution shall not be considered a Subsequent Distribution.
To the extent distribution comes from the Subsequent Distribution Reserve
Account, such distribution shall constitute a Subsequent Distribution.
(b) (i) To the extent that all or a portion of a Disputed Claim
(other than the City Colleges' Claim) is Disallowed, funds held in
reserve and attributable to the Disallowed portion of the Disputed Claim
shall be transferred from the Escrow Account or the Subsequent
Distribution Reserve Account to the Disbursing Trust's general operating
account and made available for payment of other Allowed Claims as
Subsequent Distributions in the following order of priority: first, to
holders of Allowed Administrative Expense Claims and Allowed Priority Tax
Claims on a Pro Rata basis, until such Claims are paid in full; second,
to holders of Allowed Priority Non-Tax Claims on a Pro Rata basis, until
such Claims are paid in full; third, to holders of Allowed Convenience
Claims on a Pro Rata basis, until such Claims are paid in full; fourth,
to holders of Allowed Settled Claims (with the exception of Mason
Tenders) on a Pro Rata basis until the total of payments received by each
Settling Creditor equals twenty percent (20%) of such Settling Creditor's
Allowed Settled Claim; fifth, to holders of Allowed Class 4 (with the
exception of Mason Tenders), 5 and 6 Claims on a Pro Rata basis, until
such Claims are paid in full; and sixth, to the Reorganized Debtors.
(ii) To the extent that all or a portion of the City Colleges
Claim is Disallowed, funds held in reserve and attributable to the
Disallowed portion of the City Colleges Claim shall be split, with 23.1%
(up to a maximum of $600,000) to be paid to National Western, and 76.9%
to be made available for payment of other Allowed Claims in the following
order of priority: first, to holders of Allowed Administrative Expense
Claims and Allowed Priority Tax Claims on a Pro Rata basis, until such
Claims are paid in full; second, to holders of Allowed Priority Non-Tax
Claims on a Pro Rata basis, until such Claims are paid in full; third, to
holders of Allowed Convenience Claims on a Pro Rata basis, until such
Claims are paid in full; fourth, to holders of Allowed Settled Claims
(with the exception of Mason Tenders) on a Pro Rata basis until the total
of payments received by each Settling Creditor equals twenty percent
(20%) of such Settling Creditor's Allowed Settled Claim; fifth, to
holders of Allowed Class 4 (with the exception of Mason Tenders), 5 and
6 Claims on a Pro Rata basis, until such Claims are paid in full; and
sixth, to the Reorganized Debtors.
16.8 Revesting of Assets. The property and assets set forth and
specifically identified in Exhibit A shall revest in the Debtors or the
Reorganized Debtors on the Effective Date. Commencing on the Effective Date,
the Reorganized Debtors may conduct their 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 Cases, except as provided to the contrary in the Plan.
From and after the Effective Date, the Reorganized Debtors may use, operate
and deal with the assets and property identified in Exhibit A, and any other
assets or property subsequently acquired by them, without any such supervision
and free of any such restriction.
ARTICLE XVII
CONDITIONS PRECEDENT TO CONFIRMATION
AND EFFECTIVENESS OF THE PLAN
17.1 Conditions to Confirmation. The following are conditions
precedent to the confirmation of the Plan:
(a) entry of the Confirmation Order in form and substance
acceptable to the Proponents and National Western; including specifically, but
without limitation, the findings and holdings required as part of the National
Western Settlement in Section 16.3(j) and (k) of the Plan;
(b) approval of the compromise of the City Colleges' Claim;
(c) approval of the compromise of each Settled Claim;
(d) approval of the Mason Tenders' Settlement Agreement;
(e) approval of the National Western Settlement;
(f) approval (without objection by the Debtors or National Western)
of City Colleges' application for an Administrative Expense Claim for fees and
expenses for making a substantial contribution to the Chapter 11 Cases in an
amount equal to $500,000; and
(g) a Bankruptcy Court determination that the aggregate of Claims
(both Allowed and Disputed) in Classes 4, 5 and 6 amount to no more than
$95 million.
17.2 Conditions to Effectiveness. The following are conditions
precedent to the Plan's becoming effective:
(a) execution and delivery in the forms approved prior to the
Confirmation Date by National Western of the following: (i) the Debtors
Release of National Western; (ii) the National Western Release of Debtors;
(iii) the National Western Release of Creditors, and (iv) a Creditor Release
of National Western from each Settling Creditor;
(b) payment of the National Western Settlement Debtor Payment;
(c) payment of the National Western Settlement Creditor Payment;
(d) establishment of the Disbursing Trust;
(e) the execution and delivery of all necessary documents to
evidence transfer of all assets (with the exception of those assets set forth
and specifically identified in Exhibit A) from the Debtors to the Disbursing
Trust and liabilities (with the exception of the National Western Claim and
Intercompany Claims) of the Debtors and their bankruptcy estates to the
Disbursing Trust; and
(f) all Securities-related Claims (other than Settled Claims and
the City Colleges' Claim) have been disallowed by Final Order or otherwise
resolved to the satisfaction of National Western and the Debtors.
17.3 Waiver of Conditions. The foregoing conditions to
confirmation and conditions to effectiveness may be waived by the unanimous
consent of the Proponents and National Western (and City Colleges with respect
to those conditions set forth in Sections 17.1(b) and (f) above and Settling
Creditors with respect to the condition set forth in Section 17.1(c) above and
Mason Tenders with respect to the condition set forth in Section 17.1(d)
above), without notice, at any time, without an order of the Bankruptcy Court,
and without any formal action other than proceeding to consummate this Plan.
ARTICLE XVIII
OPERATION OF DEBTORS FOLLOWING THE EFFECTIVE DATE
18.1 Commencement of Operations Following the Effective Date.
(a) The articles of incorporation and bylaws of the Debtors shall
be amended to the extent required by the Plan and the Bankruptcy Code,
including, without limitation, section 1126(a)(6) of the Bankruptcy Code;
(b) The directors and officers of the Debtors as of the Effective
Date shall be the initial directors and officers of the Reorganized Debtors,
and they shall continue to serve until replaced pursuant to the terms of the
articles of incorporation and bylaws, as the same may be amended pursuant to
Section 18.1(a) of the Plan.
(c) The Reorganized Debtors shall receive and retain those assets
from the bankruptcy estates of the Debtors that are set forth and specifically
identified in Exhibit A. On the Effective Date, all other assets of the
bankruptcy estates of the Debtors (except those set forth and specifically
identified in Exhibit A) shall be transferred to the Disbursing Trust. To the
extent that the Debtors (as opposed to the bankruptcy estates of the Debtors)
can be construed to own any assets, any such assets are hereby transferred to
the Disbursing Trust pursuant to the Plan.
(d) Subsequent to the Effective Date, the Debtors and Reorganized
Debtors are authorized to prosecute the City Colleges' Appeal at the sole cost
and expense of National Western, but subject to the rights of National Western
under Section 16.3(f) of the Plan.
18.2 Future Operations of Reorganized Debtors. The directors of the
Reorganized Debtors may provide for the operation of the Reorganized Debtors
in their discretion in any fashion not inconsistent with applicable state and
federal law. The Reorganized Debtors may acquire new assets (including by way
of transfer from National Western, at the discretion of National Western) and
may conduct one or more new businesses.
ARTICLE XIX
EXECUTORY CONTRACTS AND UNEXPIRED LEASES
19.1 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, (c) are the subject of a motion to assume that is pending before the
Bankruptcy Court on the Confirmation Date, or (d) are identified in Exhibit D
to the Disclosure Statement. Notwithstanding the foregoing, any agreements of
the Debtors to indemnify or reimburse any Person are, unless previously
rejected or otherwise treated in this Plan, deemed rejected upon the entry of
the Confirmation Order. The Confirmation Order shall represent and reflect an
order of the Bankruptcy Court approving such rejections as of the Effective
Date, unless otherwise provided in this Section 19.1.
19.2 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 (i) each of the Reorganized Debtors; and (ii)
the Creditors' Committee, if the Effective Date has not occurred, or the
Disbursing Trust Committee, if the Effective Date has occurred, by the later
of thirty (30) 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 XX
EFFECT OF REJECTION BY ONE OR MORE CLASSES OF CLAIMS
20.1 Impaired Classes Entitled to Vote. Each impaired Class or Sub-
Class of Claims listed in Section 3.4 of the Plan shall be entitled to vote
separately to accept or reject the Plan. A holder of a Disputed Claim may not
vote such Claim unless it has been temporarily Allowed under Bankruptcy Rule
3018(a) for purposes of voting on the Plan.
20.2 Acceptance by Classes of Creditors. A Class shall have
accepted the Plan if the 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 the Plan.
20.3 Cramdown. The Proponents reserve the right to request the
Bankruptcy Court to confirm the Plan in accordance with the provisions of
section 1129(b) of the Bankruptcy Code with respect to any Class that
receives nothing under the Plan and is deemed to reject it and with respect
to any impaired Class that fails to accept the Plan. Such request must be
made unanimously by the Proponents.
20.4 Ballots.
(a) A ballot to be used for voting to accept or reject the Plan
accompanies the Disclosure Statement for those Creditors and Equity Interest
holders entitled to vote on the Plan. A Creditor or Equity Interest holder
must (i) carefully review the ballot and the instructions thereon, (ii)
execute the ballot, and (iii) return the ballot to the address indicated
thereon by the voting deadline to enable the ballot to be considered for
voting purposes. Any ballot received by the Debtors that does not reflect an
affirmative vote for either the acceptance or rejection of the Plan will be
deemed a vote for acceptance of the Plan.
(b) Acceptance of the Plan by the holder of a Claim or an Equity
Interest shall constitute acceptance of all of the terms of all of the
releases provided for in the Plan which affect such Claim or Equity Interest
and the holder thereof.
ARTICLE XXI
PROVISIONS FOR RETENTION, PROSECUTION, AND SETTLEMENT OF
CLAIMS AND OTHER RIGHTS WHICH ARE PROPERTY OF THE ESTATE
21.1 Causes of Action Arising Under Chapter 5 of the Bankruptcy
Code. With the exception of any defenses that the Debtors may be entitled to
assert in the City Colleges' Appeal, all Chapter 5 Actions not settled
pursuant to the Plan shall become the sole property of the Disbursing Trust
on the Effective Date. Following the Effective Date, the Disbursing Trust
Committee may prosecute to Final Order, settle, transfer, assign, convey or
not prosecute any Chapter 5 Action vested in the Disbursing Trust pursuant to
the Plan as it may decide in its sole discretion.
21.2 Causes of Action and other Rights Not Arising Under Chapter 5
of the Bankruptcy Code. With the exception of any defenses that the Debtors
may be entitled to assert in the City Colleges' Appeal, all claims or causes
of action not settled pursuant to the Plan shall become the sole property of
the Disbursing Trust on the Effective Date. Following the Effective Date, the
Disbursing Trust Committee may prosecute to Final Order, settle, transfer,
assign, convey or not prosecute any claim, cause of action or other right not
arising under Chapter 5 of the Bankruptcy Code vested in the Disbursing Trust
pursuant to the Plan as it may decide in its discretion.
21.3 Limitation on Prosecution of Claims. Notwithstanding anything
in the Plan to the contrary, the Disbursing Trust and Disbursing Trust
Committee, and their respective successors and assigns, are prohibited by the
Plan from pursuing the City Colleges' Appeal, any Chapter 5 Actions or any
other claims or rights, if any, compromised and settled in the National
Western Settlement, any of the Creditor Settlements, the Kay Turner Settlement
or the SEC Settlement.
ARTICLE XXII
EFFECTS OF CONFIRMATION AND DISCHARGE
22.1 Binding Effect of Plan and Confirmation Order. The provisions
of the Plan shall bind the Proponents, National Western, any entity acquiring
property under the Plan, and holders of all Claims and Equity Interests,
whether or not they accept the Plan, whether or not the Claim or Equity
Interest of the holder thereof is impaired under the Plan, and whether or not
the holder of a Claim or Equity Interest is entitled to a distribution
pursuant to the Plan.
22.2 Property of the Estate. Upon the Effective Date, all property
of the bankruptcy estates of the Debtors and any assets of the Debtors shall
become the property of the Disbursing Trust, except those assets set forth and
specifically identified in Exhibit A.
22.3 Liens, Claims and Encumbrances. Except as otherwise
specifically provided in the Plan, the Confirmation Order or the Related
Documents, on the Effective Date, the property dealt with by the Plan shall be
free and clear of all Claims, Liens and Equity Interests of holders thereof.
22.4 Discharge. On and after the Effective Date, all holders of
Claims and Equity Interests shall be precluded from asserting any claim, right
or cause of action against the Reorganized Debtors, the Disbursing Trust or
the Disbursing Trust Committee, or their respective 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 the Plan. Upon
confirmation and subject to the occurrence of the Effective Date, the Debtors
are discharged from --
(a) any debt that arose before the date of entry of the
Confirmation Order; and,
(b) any debt of a kind specified in section 502(g), section
502(h), or section 502(i) of the Bankruptcy Code.
22.5 Effectiveness of Discharge against Holders of Claims. The
discharge granted pursuant to Section 22.4 is effective as to all Claims
whether or not --
(a) a proof of Claim based thereon is filed or deemed filed under
section 501 of the Bankruptcy Code;
(b) the Claim is allowed under section 502 of the Bankruptcy Code; or
(c) the holder of the Claim has accepted the Plan.
22.6 Breadth of Discharge. Upon the Effective Date, the provisions
of the Plan shall bind all persons and governmental units wherever and however
situated to the maximum extent allowed by law.
ARTICLE XXIII
RELEASES, INJUNCTIONS AND LIMITS OF LIABILITY
23.1 No Action Against Distributable Assets. To the fullest extent
permitted by applicable law (including, without limitation, section 105 of the
Bankruptcy Code), from and after the Effective Date, all holders of Claims or
Equity Interests shall be barred and enjoined from asserting against the
Debtors, the Reorganized Debtors, the Disbursing Trust, the Disbursing Trust
Committee, or any property that is to be distributed under this Plan, any such
Claim, debt, Lien, security interest, encumbrance or Equity Interest, except
as provided for in the Plan. The rights of holders of Claims and Equity
Interests are limited to those rights set forth in the Plan, the Confirmation
Order and the Related Documents.
23.2 Releases. On the Effective Date, except as otherwise expressly
provided in the Plan, each holder (as well as the trustees and agents on
behalf of each holder) of a Claim or Equity Interest and each Person who has
filed a proof of Claim in these Chapter 11 Cases, and any Affiliate of any
such holder or Person, in consideration of the obligations of the Debtors
under the Plan, shall be deemed to have forever waived, released and
discharged the Debtors, the Reorganized Debtors and each of their former,
current and future officers, employees, directors, attorneys, advisors and
professionals, in their individual capacity and solely in their capacity as
such officer, employee, attorney, advisor or professional of the Debtors (but
not in such capacity for Persons other than the Debtors), from any and all
rights, Claims and liabilities arising prior to the Effective Date out of or
relating to such Claim, proof of Claim, Equity Interest or any other Claim
otherwise relating to the business or activities of the Debtors; provided,
however, that this waiver, release and discharge shall not inure to the
benefit of Craig L. Leibold, Jeffrey D. Oetting or David Dellinger; and
provided further, but subject to the provisions of Section 10.1(e) of this
Plan, that this waiver and release shall not apply, and shall be of no force
and effect, with respect to any claims brought by City Colleges against any
Persons other than the Debtors. Subject to the foregoing provisions, any such
holder of a Claim or Equity Interest shall be forever precluded from asserting
any such claim against any of the released Persons as described above.
23.3 Injunction Against Interference With Plan. Upon the entry of
a Confirmation Order with respect to the Plan, all holders of Claims and other
parties in interest, along with their respective present or former employees,
agents, officers, directors or principals, shall be enjoined from taking any
actions to interfere with the implementation or consummation of the Plan.
23.4 Rights of Holders of Unimpaired Claims. Nothing contained in
the Plan shall alter the legal, equitable and contractual rights of the holder
of a Claim that is specifically designated as unimpaired in the Plan.
23.5 Injunction to Prohibit Certain Suits or Actions. Except to
enforce the rights provided for in the Plan, each Person bound by the Plan is
enjoined from the following --
(a) commencing or continuing in any manner any action or other
proceeding of any kind with respect to a Claim or Equity Interest that arose
prior to the Effective Date against the Proponents, the Reorganized Debtors,
the Disbursing Trust, the Disbursing Trust Committee, or their property;
(b) the enforcement, attachment, collection or recovery by any
manner or means of any judgment, award, decree or order with respect to any
Claim or Equity Interest that arose prior to the Effective Date against the
Proponents, the Reorganized Debtors, the Disbursing Trust, the Disbursing
Trust Committee, or their property;
(c) creating, perfecting, or enforcing any encumbrance of any kind
with respect to a Claim or Equity Interest that arose prior to the Effective
Date against the Proponents, the Reorganized Debtors, the Disbursing Trust,
the Disbursing Trust Committee, or their property; or
(d) asserting any right of subrogation of any kind with respect to
any Claim or Equity Interest that arose prior to the Effective Date against
any obligation owed to the Proponents, the Reorganized Debtors, the Disbursing
Trust, the Disbursing Trust Committee, or their property.
23.6 Releases and Limits on Liability Relating to Chapter 11 Cases.
If the respective Affiliates, officers, directors, shareholders, members,
representatives, attorneys, financial advisors and agents of the Debtors, the
Creditors' Committee, National Western, the Disbursing Trust, or the
Disbursing Trust Committee act in good faith, they shall not be liable to any
holder of a Claim or Equity Interest, or other party, with respect to any
action, forbearance from action, decision, or exercise of discretion taken
from the Petition Date to the Effective Date in connection with (i) the
operation of the Debtors; (ii) the proposal or implementation of any of the
transactions provided for, in, or contemplated by, the Plan, the Confirmation
Order or the Related Documents; or (iii) the administration of the Plan and
the property to be distributed pursuant to the Plan, the Confirmation Order or
the Related Documents. The Debtors, the Creditors' Committee, National
Western, and their respective Affiliates, officers, directors, shareholders,
members, representatives, attorneys, financial advisors and agents may rely
upon the opinions of counsel, certified public accountants, and other experts
or professionals employed by them, respectively, and such reliance will
conclusively establish good faith. In any action, suit or proceeding by any
holder of a Claim or Equity Interest or other party in interest contesting any
action by, or non-action of, the Debtors, the Creditors' Committee, National
Western, or their respective Affiliates, officers, directors, shareholders,
members, representatives, attorneys, financial advisors, and agents as not
being in good faith, the reasonable attorneys' fees and costs of the
prevailing party will be paid by the losing party and as a condition to going
forward with such action, suit, or proceeding at the outset thereof, all
parties thereto will be required to provide appropriate proof and assurances
of their capacity to make such payments of reasonable attorneys' fees and
costs in the event they fail to prevail. Nothing contained herein shall
authorize the filing or commencement of any suit or limit the res judicata or
other final effect of the Confirmation Order.
23.7 Release in Favor of National Western. On the Effective Date,
in consideration for the National Western Settlement Payment Amount and the
participation of National Western in the resolution of these Chapter 11 Cases
through the terms of the National Western Settlement, any claim, demand or
cause of action that is or may be assertable against National Western based
upon or relating to a Claim against the Debtors that becomes a Disallowed
Claim shall be deemed waived, released and discharged as to National Western;
and the holder of such claim shall be forever barred and enjoined from
asserting such claim, demand or cause of action against National Western in
any court or other forum or otherwise seeking to enforce, collect or recover
on such claim, demand or cause of action by any manner or means.
ARTICLE XXIV
CREDITORS' COMMITTEE
24.1 Dissolution of Creditors' Committee. The Creditors' Committee
will continue in existence until the Effective Date, at which time the
Disbursing Trust Committee will be created and the Creditors' Committee will
be dissolved. The Disbursing Trust Committee will perform the duties as set
forth in the Disbursing Trust Agreement.
ARTICLE XXV
MISCELLANEOUS PROVISIONS
25.1 Settlements Deemed Approved. At the Confirmation Hearing, the
Bankruptcy Court shall determine the reasonableness of all settlements
contemplated in the Plan under the standards of Rule 9019 of the Bankruptcy
Rules 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 the Plan.
25.2 Modification of Plan. At any time before the Effective Date,
modifications of the Plan may be proposed in a writing jointly signed by each
of the Proponents and National Western, provided that the Plan, as modified,
meets the requirements of sections 1122 and 1123 of the Bankruptcy Code, and
the Proponents shall have complied with section 1125 of the Bankruptcy Code.
At any time after the Effective Date and before substantial consummation of
the Plan, the Plan may be modified by a writing jointly signed by the
Reorganized Debtors, the Disbursing Trust and National Western, 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 the 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.
25.3 Revocation and Withdrawal. The Proponents (or any one of them)
reserve the right to revoke or withdraw the Plan prior to the commencement of
the hearing on the Disclosure Statement. If the Proponents revoke or withdraw
the Plan, or if either the Confirmation Date or the Effective Date does not
occur, then the Plan shall be deemed null and void and nothing contained
herein shall be deemed to constitute a waiver, release or admission of any
fact or any claims or rights by or against the Proponents or any other Person
or to prejudice in any manner the rights of the Proponents or any Person in
any further proceedings involving the Debtors or Claims against the Debtors.
25.4 Successors and Assigns. The Plan and all of the provisions
hereof shall be binding upon and inure to the benefit of the parties hereto
and all Persons party to, or asserting Claims or Equity Interests in, the
Chapter 11 Cases, and their respective successors and assigns.
25.5 No Interest Allowed. Except as expressly stated in the Plan,
the Confirmation Order or any other Final Order, no interest, penalty or late
charge is to be Allowed on any Claim or Equity Interest subsequent to the
Petition Date.
25.6 No Attorneys' Fees. No attorneys' fees will be paid by the
Debtors with respect to any Claim or Equity Interest, except as specified
herein or as provided by the Confirmation Order or any other Final Order.
25.7 Due Authorization by Creditors. Each and every Creditor who
elects to participate in the distributions provided for herein warrants that
it is authorized to accept in consideration of its Claim against the Debtors
the distributions provided for in the 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 it under the Plan.
25.8 Filing of Additional Documentation. On or before the Effective
Date, the Proponents shall execute such agreements and other documents, in
addition to the Related Documents, as may be necessary or appropriate to
effectuate, implement and further evidence the terms and conditions of the
Plan. The Proponents reserve the right to file any such documents with the
Bankruptcy Court.
25.9 Implementation. Each Debtor and the Creditors' Committee shall
be authorized to take all necessary steps, and perform all necessary acts, to
consummate the terms and conditions of the Plan.
25.10 Extension of Payment Dates. If any payment date falls due on
any day that is not a Business Day, then such due date will be extended to the
next Business Day.
25.11 Construction. The rules of construction set forth in section
102 of the Bankruptcy Code shall apply to the construction of the Plan.
25.12 Time. In computing any period of time prescribed or allowed by
the Plan, unless otherwise set forth herein or determined by the Bankruptcy
Court, the provisions of Rule 9006 of the Bankruptcy Rules shall apply.
25.13 Headings. The headings of the Articles, paragraphs, and
sections of the Plan are inserted for convenience only and shall not affect
interpretation or construction of the Plan.
ARTICLE XXVI
NOTICES
26.1 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:
Proponents:
Attorneys for The Westcap Corporation:
Zack A. Clement
Fulbright & Jaworski, L.L.P.
1301 McKinney, Suite 5100
Houston, Texas 77010-3095
(713) 651-5151
(713) 651-5246 (FAX)
- and -
Attorneys for Westcap Enterprises, Inc.:
Myron M. Sheinfeld
Edward L. Morris
Sheinfeld, Maley & Kay, P.C.
1001 Fannin, Suite 3700
Houston, Texas 77002
(713) 658-8881
(713) 658-9756 (FAX)
- and -
Attorneys for The Official Committee of Unsecured Creditors:
Jeffrey E. Spiers
Andrews & Kurth L.L.P.
600 Travis Street, Suite 4200
Houston, Texas 77002
- and -
Attorneys for National Western Life Insurance Company:
D.J. Baker
Weil, Gotshal & Manges, L.L.P.
700 Louisiana, Suite 1600
Houston, Texas 77002
- and -
Board of Trustees of Community College District No. 508, County of
Cook, State of Illinois:
Thomas K. McQueen
Jenner & Block
One IBM Plaza
330 North Wabash
Chicago, Illinois 60611
ARTICLE XXVII
RETENTION OF JURISDICTION
27.1 Jurisdiction. Notwithstanding entry of the Confirmation Order
or the occurrence of the Effective Date, the Bankruptcy Court will retain
jurisdiction of the Chapter 11 Cases for the following purposes:
(a) To hear and determine any and all pending applications for the
rejection, assumption or assignment of any executory contract, any objection
to any Claim resulting therefrom, and the allowance, reduction, expungement or
compromise of any Claim resulting therefrom;
(b) To hear and determine any motion, application, adversary
proceeding, contested matter and other litigated matter pending on the
Confirmation Date;
(c) To ensure that the distributions to holders of Allowed Claims
are accomplished as provided in the Plan;
(d) To hear and determine any objection to any Claim filed either
before or after the Confirmation Date; to allow or disallow, in whole or in
part, any Disputed Claim; and to hear and determine any other issue presented
hereby or arising hereunder, including any contested matter or adversary
proceeding commenced either before or after the Confirmation Date;
(e) To enter, implement or enforce such orders as may be
appropriate in the event confirmation is for any reason stayed, reversed,
revoked, modified or vacated;
(f) To hear and determine all applications for compensation of
professional persons and reimbursement of expenses under sections 330 or
331 of the Bankruptcy Code;
(g) To hear and determine any application to modify the Plan in
accordance with section 1127 of the Bankruptcy Code, and remedy any defect or
omission or reconcile any inconsistency in the Plan, the Disclosure Statement
or the Confirmation Order in such manner as may be necessary to carry out the
purposes and effects thereof;
(h) To hear and determine disputes arising in connection with the
Plan or the implementation of the Plan;
(i) To construe, to take any action and to issue such orders, prior
to and following the Confirmation Date, as may be necessary for the
enforcement, implementation, execution and consummation of the Plan or for the
maintenance of the integrity of the Plan;
(j) To hear and determine such other matters and for such other
purposes as may be provided in the Confirmation Order;
(k) To hear and determine any motions or contested matters or
adversary proceedings involving taxes, tax refunds, tax attributes, tax
benefits and similar or related matters, with respect to the Debtors or their
estates arising prior to or relating to periods or events prior to the
Effective Date or relating to the period of administration of the Chapter 11
Cases;
(l) To hear and determine any other matters related hereto and not
inconsistent with Chapter 11 of the Bankruptcy Code; and
(m) To enter final decrees closing the Chapter 11 Cases.
THE WESTCAP CORPORATION WESTCAP ENTERPRISES, INC.
By:/s/Linda Sterett Hannan By:/s/Linda Sterett Hannan
Linda Sterett Hannan, President Linda Sterett Hannan, President
OFFICIAL COMMITTEE OF UNSECURED CREDITORS
By:/s/Jay Geller
with permission by
Douglas G. Walter
City Colleges, Chair
