SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report (Date of earliest event
reported): November 14, 1996
GANDER MOUNTAIN, INC.
(Exact name of registrant as specified in its charter)
Wisconsin 0-14579 39-1742710
(State or other (Commission (IRS Employer
jurisdiction of File Number) Identification
incorporation) No.)
P.O. Box 128, Highway W
Wilmot, Wisconsin 53192
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code:
(414) 862-2331
<PAGE>
Item 5. Other Events.
Gander Mountain, Inc. (the "Company") together
with two of its wholly owned subsidiaries, the Official
Committee of Unsecured Creditors and Holiday
Stationstores, Inc. filed a Joint Plan of
Reorganization (the "Plan") and Disclosure Statement
in the United States Bankruptcy Court for the Eastern
District of Wisconsin on November 14, 1996. A hearing
has been scheduled for December 13, 1996 to determine
if the Disclosure Statement contains enough information
for interested parties to make an informed decision
about the Plan. Both the Plan and the Disclosure
Statement are attached hereto as exhibits.
Item 7. Financial Statements and Exhibits
(c) Exhibits
99.1 Press Release issued by the Company on
November 14, 1996
99.2 Joint Plan of Reorganization of Gander
Mountain, Inc., GRS, Inc., GMO, Inc., the
Official Committee of Unsecured Creditors of
Gander Mountain, Inc., and Holiday Stationstores,
Inc., dated November 13, 1996
99.3 Disclosure Statement Relating to Joint Plan
of Reorganization, dated November 13, 1996
<PAGE>
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.
Dated: November 18, 1996 GANDER MOUNTAIN, INC.
By: /s/ Kenneth J. Guerrini
-----------------------
Kenneth J. Guerrini,
General Controler
<PAGE>
EXHIBIT INDEX
Exhibit No. Description
99.1 Press Release
99.2 Joint Plan of Reorganization
of Gander Mountain, Inc., GRS,
Inc., GMO, Inc., The Official
Committee of Unsecured Creditors
of Gander Mountain, Inc., and
Holiday Stationstores, Inc., dated
November 13, 1996
99.3 Disclosure Statement Relating to
Joint Plan of Reorganization, dated
November 13, 1996
Gander Mountain, Inc.
P.O. box 128, Hwy. W
Wilmot, Wisconsin 53192
Phone: (414) 862-2331
AT THE COMPANY: AT THE FINANCIAL
RELATIONS BOARD:
Kenneth C. Bloom Michael Rosenbaum
Executive VP/Chief Financial Officer 875 N. Michigan
Ave., Chicago, IL 60611
(414) 862-3302 (312) 266-7800
FOR IMMEDIATE RELEASE
GANDER MOUNTAIN SUBMITS REORGANIZATION PLAN
Wilmot, Wisconsin, November 14, 1996 -- Gander
Mountain, Inc. (Nasdaq Bulletin Board: GNDR), today
announced that it has filed a Joint Plan of
Reorganization together with its wholly owned
subsidiaries GMO, Inc. and GRS, Inc., the Official
Committee of Unsecured Creditors of Gander Mountain,
Inc., and Holiday Stationstores, Inc. The Company has
also filed a proposed Disclosure Statement relating to
the Plan. A hearing has been scheduled before the
Honorable Russell A. Eisenberg at 9:00 a.m. on December
13, 1996 to consider whether the Disclosure Statement
contains adequate information so that interested
parties can make an informed decision about the Plan.,
Once a Disclosure Statement is approved, it, together
with the Plan, will be distributed to parties-in-
interest so that they can vote on the Plan.
Under the terms of the Joint Plan, the company's
12 retail stores and substantially all related assets
of the business will be transferred to Holiday
Companies which will pay a purchase price equal to all
secured debt, administrative expenses of the bankruptcy
(including post-petition liabilities), priority claims,
reasonable post-confirmation expenses, plus
$19,500,000. $18.5 million will be distributed among
unsecured creditors, $500,000 paid pro rata to Gander
Mountain preferred shareholders, and $500,000 paid pro
rata to holders of Gander Mountain common stock. If,
however, the holders of preferred stock oppose the Plan
and it cannot be confirmed by the Court because of this
opposition, there will be no distribution to preferred
and common shareholders and the amount available to
unsecured creditors will increase to $19 million.
Unsecured claims of $1,000 or less, and claims that
creditors reduce voluntarily to $1,000, will receive a
one-time payment of 80% of their claims out of the
funds available to unsecured creditors. After this
payment, the balance will be distributed pro rata to
other unsecured creditors with allowed claims. Amounts
payable to unsecured creditors and shareholders will be
deposited into a Trust which will be administered by a
Trustee to be appointed pursuant to the Plan who will
make distributions.
The Plan, to become effective, must be approved by
the Court, after a vote by the creditors, preferred
shareholders and common shareholders.
Holiday Companies is a privately-held Bloomington,
Minnesota based retailer and wholesaler of outdoor and
other sporting goods as well as gasoline and food
products. With the acquisition of the twelve Gander
Mountain stores, Holiday's outdoor sporting goods group
will consist of twenty-seven (27) retail stores in four
states. In July, 1996, Holiday acquired five stores
from Gander Mountain which included three stores in
Minnesota (Duluth, Maple Grove and St. Cloud) and two
stores in Wisconsin (Eau Claire and LaCrosse). Holiday
will continue to operate these stores under the Gander
Mountain name.
Gander Mountain, Inc., is a customer-oriented
specialty merchandiser serving the outdoor recreation
market. The company is recognized as a leader in
providing functional outerwear, footwear and equipment
for the hunting, fishing and camping enthusiast.
For further information on Gander Mountain free of
charge via fax,
dial 1-800-PRO-INFO and enter the number 001.
UNITED STATES BANKRUPTCY COURT
EASTERN DISTRICT OF WISCONSIN
_______________________________________________________
In the Matters of
GANDER MOUNTAIN, INC., Case No. 96-26478-RAE
a Wisconsin corporation, Chapter 11
GRS, INC., Case No. 96-26479-RAE
a Wisconsin corporation, Chapter 11
GMO, INC., Case No. 96-26480-RAE
a Wisconsin Corporation, Chapter 11
(Jointly Administered)
Debtors in Possession.
_______________________________________________________
JOINT PLAN OF REORGANIZATION OF GANDER MOUNTAIN, INC.,
GRS, INC., GMO, INC., THE OFFICIAL COMMITTEE OF
UNSECURED CREDITORS OF GANDER MOUNTAIN, INC.,
AND HOLIDAY STATIONSTORES, INC.
_______________________________________________________
COUNSEL TO GANDER MOUNTAIN, INC. COUNSEL TO GMO, INC.
Howard A. Schoenfeld, Esq. Michael S. Polsky, Esq.
Godfrey & Kahn, S.C. McNally, Maloney & Peterson, S.C.
780 North Water Street 2600 North Mayfair Road, Suite 1080
Milwaukee, Wisconsin 53202 Milwaukee, Wisconsin 53226
(414) 273-3500 (414) 257-3399
COUNSEL TO HOLIDAY
COUNSEL TO GRS, INC. STATIONSTORES, INC.
Andrew M. Barnes Dennis M. Ryan, Esq.
Quarles & Brady Faegre & Benson
411 East Wisconsin Avenue 220 Norwest Center
Milwaukee, Wisconsin 53202 90 South Seventh Street
(414) 277-500 Minneapolis, Minnesota 55402-3901
(612) 336-3314
COUNSEL TO THE
OFFICIAL COMMITTEE OF UNSECURED
CREDITORS OF GANDER MOUNTAIN, INC.
Bruce Dopke, Esq.
Holleb & Coff
55 East Monroe Street, Suite 4100
Chicago, Illinois 60603-5896
(312) 807-4600
Randall D. Crocker, Esq.
von Briesen, Purtell & Roper, S.C.
411 East Wisconsin Avenue, Suite 700
Milwaukee, Wisconsin 53202
(414) 276-1122
GANDER MOUNTAIN, INC. ("Gander Mountain"), GRS,
INC. ("GRS"), GMO, INC. ("GMO"), THE OFFICIAL COMMITTEE
OF UNSECURED CREDITORS OF GANDER MOUNTAIN, INC. (the
"Committee") and HOLIDAY STATIONSTORES, INC.
("Holiday") jointly propose the following Joint Plan of
Reorganization pursuant to 1121(a) of the Code.
SUMMARY OF THIS PLAN
The following Summary of the Plan describes
several features of the Plan. It is merely a summary
and does not constitute part of the Plan. The summary
is qualified in its entirety by the terms of the Plan.
In the event of an inconsistency between this summary
and the terms of the Plan, the terms of the Plan shall
govern.
Sale of the Debtors' Assets and Distributions to
Creditors and Shareholders
The Debtors have agreed to a sale of most of
their assets to Holiday Stationstores, Inc. (the
"Buyer"). The sale and distribution of the
proceeds of the sale to creditors and shareholders
will be effectuated pursuant to this Plan. This
Plan has been proposed by the Debtors, the
Committee, and the Buyer. Should this Plan be
confirmed:
The Debtors' business and almost all of their
assets will be transferred to the Buyer;
A trust will be established to receive and
distribute the sale proceeds. $18.5 million (less
amounts paid to Unsecured Convenience Claims) will be
distributed, pro rata, to all unsecured creditors with
Allowed Claims against Gander Mountain and its two
wholly-owned subsidiaries, GMO and GRS.
$500,000.00 will be paid, pro rata, to the holders
of Gander Mountain's preferred stock, provided that
this plan is not objected to by the holders of Gander
Mountain's preferred stock;
$500,000.00 will be distributed, pro rata, to the
holders of Gander Mountain's common stock, provided
that this plan is not objected to by the holders of
Gander Mountain's preferred stock;
If the Plan is objected to by the holders of
Gander Mountain's preferred stock, no distribution will
be made to the holders of preferred stock or common
stock; and, instead, an additional $500,000 will be
distributed to unsecured creditors.
Small (Unsecured Convenience) Claims. Those
Unsecured Claims which are in the amount of $1,000 or
less, and larger claims whose holders choose,
voluntarily, to reduce their claims to the amount of
$1,000.00 will receive a one-time payment equal to
eighty percent of their claims, in full and complete
satisfaction of such claims.
The Trustee of the Trust will be a person
designated prior to the Confirmation Hearing on this
Plan. The Trustee will be selected from the following
names: Alejandro D. Moglia, William H. Grabscheid,
Scott Peltz. The Trustee will be selected by majority
vote. The Committee shall have two votes. The Buyer
shall have two votes. The Debtors shall have one vote.
The Trust shall be established on the Effective Date of
this Plan.
The Trustee shall:
(i) review proofs of claims and
interests against the Debtors with
the assistance of an Advisory
Committee which will be composed of
two creditor representatives
(selected by the committee), two
representatives of the Buyer, and
one representative of the Debtors.
The Advisory Committee by majority
vote shall set the general
parameters under which claims and
interests which exceed the amounts
reflected in the Debtors' books and
records may be objected to or
settled; provided, however, the
Debtors' representative shall have
no vote with respect to any issue
affecting the litigation,
settlement or determination of the
Claims of Unsecured Creditors.
(ii) make disbursements to the holders
of claims and interests from the
available funds in accordance with
the Plan. The first distribution
shall be made as soon as possible
after the Plan becomes effective,
but no later than 45 days after the
Plan becomes effective;
(iii) prosecute, subject to the
advice and consent of the Advisory
Committee, and in the Debtors'
name and stead, all Avoidance
Claims of the Debtors; provided,
however, that all Avoidance Claims
shall be waived and released by
this Plan, with the exception being
that the Trustee shall prosecute
and/or settle, subject to the
advice and consent of the Advisory
Committee, any right of the Debtors
to avoid, under 11 U.S.C. 547 or
otherwise, judgment or consensual
liens which first came into being
during the applicable time periods
prior to the Filing Date and any
Avoidance Claim based upon a
failure to comply with the
provisions of Chapter 406 of the
Wisconsin Statutes (the "Uniform
Commercial Code - Bulk Transfers);
and
(iv) wind up the Debtors and take all
steps necessary to distribute the
assets in the Trust and close these
cases.
ARTICLE I
DEFINITIONS
I.
A. Defined Terms. For purposes of this Plan,
capitalized terms shall have the meanings set forth in
Appendix I to this Plan, unless the context clearly
indicates otherwise. All other terms not defined
herein shall have the definitions assigned by the Code,
or, if not defined therein, in common usage. Accounting
terms not otherwise defined herein or partly defined
herein to the extent not so defined shall have the
respective meanings given to them under GAAP.
B. Rules of Interpretation. For purposes of
this Plan: (a) whenever from the context it is
appropriate, each term, whether stated in the singular
or the plural, will include both the singular and the
plural; (b) unless otherwise provided in the Plan, any
reference in the Plan to a contract, instrument,
release or other agreement or document being in a
particular form or on particular terms and conditions
means that such document will be substantially in such
form or substantially on such terms and conditions; (c)
unless otherwise provided in the Plan, any reference in
the Plan to an existing document or exhibit means such
document or exhibit, as it may have been or may be
amended, modified or supplemented pursuant to the Plan;
(d) unless otherwise specified in the Plan, any
reference to an entity as a holder of a Claim or
Interest includes that entity's successors and assigns;
(e) the words "hereof," "herein," and "hereunder" and
words of similar import when used in this Plan shall
refer to this Plan as a whole and not to any particular
provision of this Plan; (f) unless otherwise specified
in the Plan, the words "Article," "Section," "Clause,"
and "Exhibit" refer to articles, sections, clauses and
exhibits of or to this Plan; and (g) the rules of
construction set forth in 102 of the Code shall apply.
ARTICLE II
CORPORATE AND TRANSACTIONAL MATTERS
II.
A. Merger of Debtors and Other Corporate
Changes. To effectuate the provisions of the Plan, on
the Effective Date, without the need of any further
action by the directors and shareholders of any of the
Debtors;
1. Upon the filing by Gander Mountain of
certificates of merger with the Secretary of State of
the State of Wisconsin, GRS and GMO shall merge into
Gander Mountain and their separate corporate existence
shall cease (the "Merger").
2. Gander Mountain's Articles of Incorporation
and Bylaws shall be restated in the forms of Exhibits
2.1(b)(i) and 2.1(b)(ii) hereto, respectively,
consistent with the requirements of 1123(a)(6) of the
Code (the "Restated Articles and Bylaws").
3. The Board of Directors of Gander Mountain
shall consist of David Lubar and the then current
members of the Board of Directors shall be deemed to
have resigned. The officers of Gander Mountain shall
consist of David Lubar, President.
4. Effect of Merger. As of the Effective Date,
and pursuant to the Merger: (i) Gander Mountain shall
contribute all of its Intercompany Claims against GRS
and GMO to GRS and GMO, respectively, as capital
contributions, (ii) the Intercompany Claims, if any, of
GRS and GMO shall be eliminated, (iii) all liabilities
of Gander Mountain, GRS and GMO shall be and are hereby
deemed the liabilities of Gander Mountain, (iv) each
and every Claim filed or to be filed in the Chapter 11
Case of any of the Debtors shall be and hereby is
deemed filed against Gander Mountain, and (v) all
guarantees of any Debtor of the obligations of another
Debtor or any other form of joint and several liability
amongst the Debtors shall be eliminated and discharged
so that any Claim against any Debtor and any guarantee
thereof executed by another Debtor and any joint and
several liability of any of the Debtors shall be and
hereby is deemed to be one obligation of the merged
Debtors.
B. Trust Agreement. Without any further action
of the directors or shareholders of any of the Debtors,
on the Effective Date, the Trust Agreement in the form
of Exhibit 2.2 to this Plan shall become effective.
The Trustee shall accept the Trust, and sign the Trust
Agreement on that date. The Trustee shall have full
authority to take all steps necessary to administer
such agreement, including without limitations the duty
and obligation to make distributions to Creditors and
holders of Interests hereunder, to review and, if
appropriate, and if authorized by a majority of members
of the Advisory Committee authorized to vote, object to
or compromise such Claims and Interests and, if
authorized by the Plan and by a majority vote of those
members of the Advisory Committee authorized to vote,
pursue Avoidance Claims. The Trustee may retain third
parties, including, without limitations lawyers and
accountants to assist him with the performance of his
duties and obligations under the Trust Agreement.
Specifically, the Trustee may engage one or more of the
professionals who are currently engaged in these cases,
including, without limitation, counsel to the
Committee:
Keith J. Shapiro Randall D.
Crocker, Esq.
Bruce Dopke von Briesen,
Purtell & Roper, S.C.
Holleb & Coff 411 East
Wisconsin Avenue
55 East Monroe Street Suite 700
Suite 4000 Milwaukee, WI
53202
Chicago, IL 60603 (414) 276-1122
(312) 807-4600
C. Sale of Assets. On the Effective Date,
without the need for any further action of the
shareholders or directors of any of the Debtors,
subsequent to the Merger, Gander Mountain and the Buyer
shall consummate the Holiday Agreement and Gander
Mountain shall sell those assets described in, and on
the terms contained in, the Holiday Agreement. The
Buyer shall pay the Cash portion of the purchase price
by depositing good funds in the Trust.
D. Trust Assets. On the Effective Date, the
Debtors transfer to the Trust, for and on behalf of,
and at the request of the beneficiaries of the Trust,
the following assets: (a) by assignment, all Avoidance
Claims; (b) all of the Debtors' claims and defenses,
including without limitation set off rights, arising
out of or directly related to any executory contract
rejected by the Debtors or by the terms of this Plan,
against the other party to such contract; (c) any
defenses and counterclaims of the Debtors to any Claim
filed or asserted against the Debtors' estates, except
to the extent related to, or affecting, an executory
contract, liability or obligation assumed by the
Debtors and transferred to the Buyer; and (d) all right
to receive the Cash portion of the price for the assets
sold to the Buyer pursuant to the Holiday Agreement
which cash portion shall be either $19,000,000 or
$19,500,000 depending upon the occurrence of the
Trigger Event..
E. Trustee. The Trustee shall have and perform
all of the duties, responsibilities, rights and
obligations set forth in the Trust Agreement.
F. Advisory Committee. On or before the first
day set for hearing on confirmation of the Plan, an
Advisory Committee consisting of five members will have
been established. The identity of such members shall
be disclosed to the Court at the Confirmation Hearing.
Two members shall be designated by the Committee. Two
members shall be designated by the Buyer. One member
shall be designated by the Debtors. The members of the
Advisory Committee shall serve without compensation,
other than reimbursement of reasonable out-of-pocket
expenses for attendance at meetings of the Advisory
Committee, which expenses shall be paid by the Buyer.
1. Resignation and Replacement of Advisory
Committee Members. In the case of an inability or
unwillingness of any member of the Advisory Committee
to serve, such member shall be replaced by designation
of the remaining members of the Advisory Committee
using the following procedure. A member originally
designated by the Committee shall be replaced by the
other remaining members of the Advisory Committee who
was originally designated for membership thereon by the
Committee. A member originally designated for
membership on the Advisory Committee by the Buyer shall
be replaced by the other remaining member of the
Advisory Committee who was originally designated for
membership thereon by the Buyer. The member originally
designated by the Debtors shall be replaced by an
individual designated for membership thereon by David
Lubar. However, if any position on the Advisory
Committee remains vacant for more than thirty days,
such vacancy shall be filled by the majority vote of
all of the remaining members of the Advisory Committee.
Notwithstanding any other provision of the Plan, upon
certification of the Trustee to the Advisory Committee
that all of the following events have occurred, but
without any further action by any entity, the
representative to the Advisory Committee designated by
the Debtors shall be deemed to resign its seat on the
Advisory Committee and the members of the Advisory
Committee designated for membership thereon by the
Committee shall designate the replacement.
a) articles of dissolution of Gander Mountain
have been filed;
b) all Unclassified Claims and all Class One,
Two, Three, Six, Seven, Eight, Nine, Ten and Eleven
Claims have been either disallowed or have received the
treatment required by the Plan; and
c) all Avoidance Claims have been finally
resolved by waiver, litigation, settlement, or
otherwise.
2. Termination of the Advisory Committee. The
members of the Advisory Committee shall resign their
positions, whereupon they shall be discharged from
further duties and responsibilities, upon the
certification by the Trustee that all assets
transferred into Trust have been distributed, abandoned
or otherwise disposed of and that the Claims Date shall
have occurred.
G. Duties of the Advisory Committee. The
Advisory Committee shall have the following duties and
responsibilities:
1. The Advisory Committee shall advise the
Trustee regarding the sale or other disposition of
assets contained in the Trust and such other matters as
may be requested by the Trustee or may be provided for
herein or in the Trust Agreement.
2. The Advisory Committee shall, by majority
vote, direct the Trustee as to the dates and amounts of
any distributions which may be made pursuant to the
Trust Agreement consistent with the provisions of the
Plan. In no event, may the Advisory Committee require
the Trustee to disburse funds if such disbursement
would leave the Trustee with insufficient funds to pay
the required dividends to the holders of disputed
Claims or Interests or deplete reasonable reserves for
the Trust's fees and expenses. Further, the Advisory
Committee shall, by majority vote, set the general
parameters under which Claims and Interests which
exceed the amounts reflected in the Debtors' books and
records may be objected to or settled. Notwithstanding
the foregoing, the Debtors' representative to the
Advisory Committee shall have no vote with respect to
any issue affecting the litigation, settlement, or
determination of the allowance of Class Four and Class
Five Claims.
3. The Trustee, with the consent of a majority
vote of the members of the Advisory Committee entitled
to vote, in the name and stead of the Debtors and as
designees (as permitted by 11 U.S.C. 1123), may
waive, settle or prosecute any Avoidance Claims held by
the Trust which are not otherwise waived and released
by this Plan. Members of the Advisory Committee shall
abstain from voting on any proposal to prosecute,
compromise or withdraw Avoidance Claims and/or claim
objections against such members or related entities.
The Debtors' representative to the Advisory Committee
shall not be entitled to vote with respect to Avoidance
Claims against Insiders.
4. The Advisory Committee may, by majority vote,
authorize the Trustee to invest the corpus of the Trust
in prudent investments other than those described in
345 of the Code.
5. The Advisory Committee may remove the Trustee
for cause, and in the event of the resignation or
removal of the Trustee may, by majority vote, designate
a person to serve as successor Trustee.
6. The Advisory Committee shall require a
fidelity bond from the Trustee in such reasonable
amount as may be agreed to by majority vote of the
Advisory Committee.
7. The Advisory Committee shall govern its
proceedings through the adoption of the by-laws, which
the Advisory Committee may adopt by majority vote. No
provision of such by-laws shall supersede any express
provision of the Plan.
8. The Trustee may, at the expense of the Buyer,
retain professionals to take all actions reasonable and
necessary to implement and operate the Trust, settle or
litigate claims against the Trust and liquidate assets
contained in the Trust.
H. Investment of Funds. All Cash held by the
Trust shall be invested in the manner in which
individuals of ordinary prudence, discretion and
judgment would act in the management of their own
affairs, subject to the following limitation. Unless
otherwise approved by the Advisory Committee, all such
monies shall be invested only in debt securities or
other instruments issued or fully guaranteed as to
principal and interest by the United States of America
or any agency or instrumentality thereof, certificates
of deposit or deposit accounts of national banks with
assets in excess of One Hundred Million Dollars
($100,000,000.00), or overnight repurchase agreements.
I. Withholding and Reporting Requirements. In
connection with his or her duties and acts pursuant to
the terms of the Trust Agreement, and all instruments
issued in connection therewith, and distributions
thereunder, the Trustee shall comply with all
withholding and reporting requirements imposed by any
federal, state, local, or foreign taxing authority and
all distributions hereunder shall be subject to any
such withholding and reporting requirements.
J. Records. The Buyer shall make its and the
Debtors' records and the Buyer's personnel available at
reasonable times to the extent reasonable and necessary
to assist the Advisory Committee and/or the Trustee in
connection with the analysis and litigation (including
discovery) of disputes concerning Claims, objections to
Claims, and Avoidance Claims at the Buyer's expense.
K. Objection to Claims and Interests.
1. By the Trustee. The Trustee, in the name and
stead of the Debtors, shall have leave, within ninety
(90) days of the Effective Date, to object to any Claim
and Interest which is asserted against the Debtors'
estates.
2. By parties in interest. Any party in
interest, with standing to do so, shall have leave
within thirty (30) days of the Effective Date, to
object to any Claim and Interest which is asserted
against the Debtors' estates. However, the Debtors
shall not file any objection against a Class Four or
Class Five Claim without the express written consent of
the Trustee.
3. Time Limits. Any objection to any Claim
which is not initiated within the time periods set
forth in subparagraph (a) or (b) shall be forever
barred.
L. Reserves for Disputed Claims and Interests.
In calculating any distributions from the Trust, any
payment or distribution that would otherwise be payable
on account of a Disputed Claim or Interest shall be
fully reserved for by the Trustee. Such amounts will
be paid in accordance with the Plan. In the event, and
to the extent, that any Disputed Claim or Interest does
not become Allowed, the amount held in reserve
therefore shall be distributed with other funds of the
Trust in the manner provided in the Plan.
ARTICLE III
DESIGNATION OF CLAIMS AND INTERESTS
The holders of all Claims against or
Interests in any or all of the Debtors, of whatever
nature, whether or not scheduled or liquidated,
absolute or contingent, including all Claims arising
from the rejection of Executory Contracts, and the
holders of all interests arising from the Debtors'
ownership of Property of the Estates, or otherwise,
whether or not resulting in an Allowed Claim or
Interest, shall be bound by the provisions of the Plan;
and all such Claims and Interests are hereby either
designated as unclassified or classified as follows:
(A) Unclassified Claims
III.
A. Administrative Expense Claims against the
Debtors. The Administrative Expense Claims against any
of the Debtors are unclassified.
B. Priority Claims against the Debtors arising
under 507(a)(8) of the Code. The Priority Claims
against any of the Debtors arising under 507(a)(8) of
the Code are unclassified.
(B) Classified Claims and Interests
C. Class One. Class One shall consist of all
Priority Claims against the Debtors other than those
arising under 507(a)(1), (a)(2) or (a)(8) of the Code.
Claims against Gander Mountain, GRS, and GMO shall be
in a separate subclass.
D. Class Two. Class Two shall consist of all
Secured Claims against any or all Debtors other than a
Class Three Claim and any Claim arising under the DIP
Financing Documents or the DIP Financing Orders, each
such Claim to be treated as a separate subclass.
E. Class Three. Class Three shall consist of
all Claims of the Old Lenders except for Claims of
Harris arising out of the Harris Merchant Agreement.
F. Class Four. Class Four shall consist of all
Unsecured Convenience Claims against any of the
Debtors. Claims against Gander Mountain, GRS, and GMO
shall be in a separate subclass.
G. Class Five. Class Five shall consist of all
Unsecured Claims against any of the Debtors. Claims
against Gander Mountain, GRS, and GMO shall be in a
separate subclass.
H. Class Six. Class Six shall consist of the
Preferred Stock Interests.
I. Class Seven. Class Seven shall consist of
the Common Stock Interests.
J. Class Eight. Class Eight shall consist of
the GMO Equity Interests.
K. Class Nine. Class Nine shall consist of the
GRS Equity Interests.
L. Class Ten. Class Ten shall consist of the
Intercompany Claims of Gander Mountain against GRS and
GMO.
M. Class Eleven. Class Eleven shall consist of
the Claims and Interests of holders of Pre-Petition
Warrants and Pre-Petition Stock Options other than as a
holder of Common Stock Interests.
ARTICLE IV
TREATMENT OF UNCLASSIFIED CLAIMS UNDER THE PLAN
IV.
A. Administrative Expense Claims. The holder of
an Allowed Administrative Expense Claim shall receive
on account of such Claim, (a) if such Claim arose other
than in the ordinary course of the Debtors' business,
on the later to occur of either the Effective Date or
within fifteen (15) calendar days following the date
such Claim becomes Allowed pursuant to a Final Order,
or (b) if such Claim arose in the ordinary course of
the Debtors' business, on the date such Claim becomes
due in accordance with ordinary business terms, Cash
from the Buyer equal to the Allowed amount of such
Claim, provided, however, that if a holder of an
Allowed Administrative Expense Claim consents, or if
its agreement with any or all of the Debtors or the
Buyer so provides, it will receive payments on terms
satisfactory to such holder or as provided in said
agreement.
B. Priority Claims Arising Under 507(a)(8) of
the Code. The holder of an Allowed Priority Claim
arising under 507(a)(8) of the Code shall receive on
account of such Claim, Cash from the Buyer equal to the
Allowed amount of such Claim, on the later to occur of
the Effective Date or fifteen (15) calendar days
following the date such Claim becomes an Allowed Claim.
ARTICLE V
TREATMENT OF CLASSIFIED CLAIMS AND INTERESTS UNDER
THE PLAN
All classified Claims and Interests, except
the Claims of Classes One, and Three, are impaired
under the Plan and shall be treated according to the
terms herein.
V.
A. Class One. The holder of each Allowed
Priority Claim, other than one arising under
507(a)(1), (a)(2) or (a)(8) of the Code, shall
receive on account of such Allowed Priority Claim, on
or before the Effective Date or within fifteen (15)
calendar days following the date such Claim becomes an
Allowed Priority Claim, whichever is later, Cash from
the Buyer equal to the amount of such Allowed Priority
Claim, provided, however, that if a holder of such an
Allowed Priority Claim consents, it shall receive
deferred Cash payments on terms satisfactory to such
holder.
B. Class Two. Each of the Allowed Secured
Claims in Class Two shall be treated as follows at the
Buyer's option:
1. such Claim shall be given the treatment
specified in 1124 of the Code;
2. on the Effective Date, or promptly after such
Claim becomes an Allowed Secured Claim, whichever is
later, or on such other date thereafter as may be
agreed to by the Debtors and/or the Buyers and the
holder of such Allowed Secured Claim, the Debtors
and/or the Buyers shall abandon the property securing
such Allowed Secured Claim to the holder thereof; or
3. on the Effective Date, or promptly after such
Claim becomes an Allowed Secured Claim, whichever is
later, the holder of such Allowed Secured Claim shall
receive, on account of such Allowed Secured Claim, Cash
from the Buyer equal to its Allowed Secured Claim, or
such lesser amount to which the holder of such Allowed
Secured Claim shall agree, subject to, and otherwise in
accordance with, Article VI hereof; or
4. the holder of such Allowed Secured Claim
shall retain the Lien securing such Claim (except to
the extent the holder of the Allowed Secured Claim
agrees in writing) to the extent of the Allowed amount
of such Claim and receive, on account of such Allowed
Secured Claim, deferred Cash payments over a period the
term of which either has been agreed to by the Debtors
and/or the Buyers and the holder of such Allowed
Secured Claim prior to the Confirmation Hearing or
fixed by the Court at the Confirmation Hearing,
pursuant to 1129(b)(2)(A)(i)(II) of the Code, totaling
at least the amount of such Allowed Secured Claim
which, calculated as of the Effective Date, equals at
the least the value of the lesser of such holder's
interest or the applicable Debtor's interest in such
property.
C. Class Three. The Old Lenders have been paid
in full and shall receive no further distributions or
retain any interest in property on account of their
Class Three Claims.
D. Class Four. The holder of each Allowed
Unsecured Convenience Claim shall be entitled to
receive from the Trust on the later to occur of the
Initial Distribution Date or within thirty (30)
calendar days after the date the Claim becomes an
Allowed Claim, on account of such Claim, Cash in the
amount of eighty percent (80%) of such Allowed
Unsecured Convenience Claim, subject to, and otherwise
in accordance with, Article VI hereof.
E. Class Five. Each of the Allowed Unsecured
Claims in Class Five shall be treated as follows:
1. on the Initial Distribution Date, each holder
of an Allowed Unsecured Claim as of the Effective Date
shall be entitled to receive, on account of such
Allowed Unsecured Claim, Cash equal to its Pro Rata
share of the Unsecured Creditors' Cash Distribution
Amount, subject to, and otherwise in accordance with,
Article VI hereof;
2. within the time periods provided in Section
6.5(a), each holder of an Allowed Unsecured Claim as of
a date subsequent to the Effective Date shall receive,
on account of such Allowed Unsecured Claims, Cash equal
to the Pro Rata share of the Unsecured Creditors Cash
Distribution Amount, subject to, and otherwise in
accordance with, Article VI, hereof;
3. within the time periods provided in Section
6.5(b) hereof, each holder of an Allowed Unsecured
Claim in this Class as of the Claim Date shall receive,
on account of such Allowed Unsecured Claim, the
distributions to which it is entitled under Section
6.5(b) hereof.
F. Class Six. On the Initial Distribution Date,
each holder of a Preferred Stock Interest as of the
Equity Record Date shall receive a distribution of its
Pro Rata share of $500,000.00. Under this Plan, none
of the creditors or shareholders will be paid in full.
Under a strict reading of section 1129 of the Code,
unless all classes of creditors and shareholders accept
(i.e., vote to approve) this Plan, the Court may be
unable to confirm this plan as currently drawn.
Likewise, the Court may be unable to confirm this Plan,
as currently drawn, because the holders of Gander
Mountain's Common Stock may receive their Pro Rata
$500,000.00 distribution, although the holders of
Gander Mountain's Preferred Stock will receive less
than a one hundred percent distribution. Therefore, if
the holders of in excess of one-third in amount of the
Allowed Interests in Class Six vote to reject this
Plan, and such vote is not withdrawn or otherwise
deemed to be an affirmative vote, or if a member of
Class Six objects to confirmation (and said objection
is not withdrawn) based, in part, on the proposed
distribution to any shareholder and the Court concludes
that the Plan cannot be confirmed as a result thereof
(the "Trigger Event"), then, without the need for
further action by any party or entry of Court Order,
the proposed distributions to Class Six and Class Seven
shall be rescinded and cancelled.
G. Class Seven. On the Initial Distribution
Date, each holder of a Common Stock Interest as of the
Equity Record Date shall receive its Pro Rata share of
$500,000.00. Under this Plan, none of the creditors or
shareholders will be paid in full. Under a strict
reading of Section 1129 of the Code, unless all classes
of creditors and shareholders accept (i.e., vote to
approve) this Plan, the Court may be unable to confirm
this plan as currently drawn. The Court may be unable
to confirm this Plan, as currently drawn, because the
holders of Gander Mountain's Common Stock may receive
their Pro Rata share of a $500,000.00 distribution,
although the holders of Gander Mountain's Preferred
Stock will receive less than a one hundred percent
distribution. Therefore, if the Trigger Event occurs,
then, without the need for further action by any party
or entry of Court Order, the proposed distributions to
Class Six and Class Seven shall be rescinded and
cancelled.
H. Classes Eight and Nine. Gander Mountain, the
only holder of the Interests in these Classes, will not
receive or retain any property on account of such
Interests by virtue of the Merger.
I. Class Ten. Gander Mountain, the holder of
the only Claims in this Class shall receive the
benefits of the Merger and this Claim shall be
contributed to capital
J. Class Eleven. Holders of Interests in this
Class shall not receive any distribution whatsoever on
account of such Interests. In addition, all agreements
relating to the Pre-Petition Warrants, or Pre-Petition
Stock Options shall be deemed terminated, provided
that, any and all Claims arising therefrom which are
Allowed shall be deemed to be subordinated pursuant to
the provisions of 510(b) of the Code, and such holders
shall receive no distribution on account of any such
Allowed Claims.
ARTICLE VI
PROVISIONS GOVERNING DISTRIBUTIONS
The following shall constitute the means of
distribution to the holders of Allowed Claims and
interests in their respective Classes:
VI.
A. Authority to Make Distributions. On each
Distribution Date as is specified in this Plan, the
Trustee shall make all distributions to persons holding
Claims or Interests classified in Classes Four, Five,
Six and Seven. The Buyer shall make all other
distributions required by this Plan. The Trustee may
employ or contract with other entities to assist in or
make the distributions required by this Plan.
B. Distributions of Cash. Any entity required
to make distributions hereunder may withhold such
distributions until such time as the entity entitled to
receive such distributions complies with the provisions
of Section 11.6 hereof.
C. Convenience Claims Estimate. The Debtor and
Committee shall determine the aggregate dollar amount
of Convenience Claims which have not been Allowed as of
the Effective Date and multiply that amount by 80% (the
"Convenience Claims Estimate").
D. Initial Distributions. On the Initial
Distribution Date, or with respect to any holder of an
Allowed Claim or Interest such later date as such
holder complies with the provisions of Section 11.6
hereof, the Trustee, in accordance with Section 6.8
hereof and with the Trust Agreement shall distribute
from the Cash received from Buyer the Cash to which the
holders of Allowed Claims and Interests as of the
Effective Date in Classes Four through Seven are
entitled to such holders of Allowed Claims and
Interests.
E. Secondary and Final Distributions.
1. Within thirty (30) calendar days after any
Unsecured Convenience Claim or Unsecured Claim that was
Disputed on the Effective Date becomes an Allowed
Claim, or such later date as such holder complies with
the provisions of Section 11.6 hereof, the Trustee, in
accordance with Section 6.8 hereof and with the Trust
Agreement, shall distribute from the amounts reserved
for such purpose the Cash to which the holder of such
Allowed Claim is entitled.
2. On the date which is thirty (30) calendar
days after the Claim Date, or with respect to any
holder of an Allowed Unsecured Claim such later date as
such holder complies with the provisions of Section
11.6 hereof, the Trustee, in accordance with Section
6.8 hereof and with the Trust Agreement, shall allocate
and distribute any remaining Cash held in reserve to
holders of Allowed Unsecured Claims.
F. Timing of Distributions. Except as otherwise
provided in this Article VI, or as may be ordered by
the Court, all distributions shall be made on the
respective Distribution Dates as specified in this
Plan, or as soon as practical thereafter but no later
than fifteen (15) calendar days after the respective
Distribution Dates, and all distributions shall be
deemed timely made if made on such respective
Distribution Dates or within fifteen (15) calendar days
after such respective Distribution Dates.
G. Disputed Payments. In the event of any
dispute between and among the holders of Claims or
Interests as to the right of any Person to receive or
retain any payment or distribution to be made to such
Person under this Plan, the party required to make the
distribution may, in lieu of making such payment or
distribution to such Person, instead hold such payment
or distribution until the disposition thereof shall be
determined by the Court.
H. Delivery of Distributions in General. Except
as hereinafter provided, distributions to holders of
Allowed Claims, Preferred Stock Interests or Common
Stock Interests shall be made: (a) at the addresses
set forth in the proofs of claim filed by such holders;
(b) at the addresses set forth in any written notices
of address change delivered to the Debtors (or, after
the Effective Date, the Trustee); or (c) if the
information described in clauses (a) or (b) is not
available, at the addresses reflected in the Debtors'
schedules of liabilities or the stock register as
maintained by or on behalf of Gander Mountain on the
Equity Record Date.
I. Distributions Held by Trustee. If the
distribution to any holder of an Allowed Claim,
Preferred Stock Interest or Common Stock Interest is
returned to the Buyer, the Trustee or any of the
Debtors as undeliverable, no further distributions
shall be made to such holder, but shall be retained by
the Buyer or Trustee, as applicable, subject to Section
6.10 hereof, unless and until the Trustee or Buyer is
notified in writing of such holder's then-current
address, at which time all previously missed
distributions shall be mailed to such holder.
Undeliverable distributions shall remain in the
possession of the Trustee or Buyer, as applicable,
subject to Section 6.10 hereof, until such time as a
distribution becomes deliverable. Undeliverable Cash
shall be held in trust in an interest-bearing bank
account in the name of the Trustee or Buyer, as
applicable, for the benefit of the potential Claimants
of such funds.
J. Undeliverable Distributions. Any holder of
an Allowed Claim, (other than a Claim arising under
507(a)(8) of the Code), a Preferred Stock Interest or
a Common Stock Interest that does not assert a right to
receive a distribution of Cash pursuant to this Plan
with respect to an undeliverable distribution within
one (1) year after the applicable Distribution Date
shall have its right to receive such undeliverable
distribution discharged and shall be forever barred
from asserting any such right for an undeliverable
distribution against the Trustee, the Buyer, or the
Debtors, or the property of the Debtors or the Buyer,
or the Trust. To the extent that following all
distributions required by the Plan any undeliverable
Cash is held by the Trust, the Trustee shall distribute
such Cash Pro Rata to the holders of Allowed Class Five
Claims. Checks issued by the Trustee or Buyer in
respect of distributions to the holders of Allowed
Claims shall be null and void if not cashed within
sixty (60) calendar days of the date of issuance
thereof. Requests for the reissuance of any check
shall be made directly to the Trustee or Buyer, as
applicable, by the holder of the Allowed Claim with
respect to which such check was originally issued. Any
Claim or Interest in respect of such a check voided
pursuant to this Section shall be made on or before the
first anniversary of the applicable Distribution Date.
After such date, all Claims in respect of a check
voided pursuant to this Section shall be discharged and
forever barred. Nothing contained in this Plan shall
require any of the Debtors, the Buyers or the Trustee
to attempt to locate any holder of an Allowed Claim, a
Preferred Stock Interest or a Common Stock Interest.
K. Distributions of Fractional Cents. Whenever
any payment of a fraction of a cent would otherwise be
called for, the actual payment shall reflect a rounding
down of such fraction to be nearest, lowest whole cent.
No consideration shall be provided in lieu of the
fractional cents that are rounded down.
L. Full and Final Satisfaction. Except as
otherwise expressly provided herein, full and complete
performance by the Debtors hereunder shall be in full
and final satisfaction, settlement, release and
discharge of all Claims and Interests.
ARTICLE VII
MEANS FOR IMPLEMENTING THE PLAN
In addition to the provisions set forth
elsewhere in this Plan regarding the means of
implementation, the following shall constitute the
means of implementing this Plan.
VII.
A. Discharge of Liens on Property. As of the
Effective Date, all Liens on or interests in the
Debtors' property, or Property of the Estates, except
to the extent granted pursuant to express agreement by
the Buyer, upon the holder of the Lien receiving the
distribution to which it is entitled pursuant to the
Plan, are discharged pursuant to this Plan. Any Liens
preserved pursuant to this Section, shall be preserved
in the order of priority as said Liens have by
operation of law.
B. Corporate Action. On the Effective Date, the
provisions contained in Article II hereof shall be
implemented and the Restated Articles and Bylaws shall
be effective. The following shall be deemed to have
occurred and be effective as provided herein, and shall
be authorized and approved in all respects, without any
requirement of further action by either the
shareholders or directors of the Debtors, and with like
effect as if such actions had been taken by unanimous
action of the shareholders and directors of the Debtors
as applicable, and the entry of the Confirmation Order
shall constitute approval of: (a) the Merger of GRS
and GMO, into Gander Mountain, (b) adoption of the
Restated Articles and Bylaws, (c) the election of the
board of directors and officers of Gander Mountain
delineated in Section 2.1(c), (d) the distribution of
Cash; (e) the Holiday Agreement and all transactions
necessary to implement the Holiday Agreement, (f) the
creation of the Trust, and (g) the implementation of
the other matters provided for under this Plan,
including corporate action to be taken by or required
of the Debtors, and all agreements and transactions
provided for, or contemplated, in this Plan.
C. Wind up. The Trustee is authorized to take
all reasonable and necessary actions to wind up the
affairs and corporate existence of the Debtors,
including the filing of all documents required to be
filed with state and federal officials in order to
effectuate such wind up.
D. Funding of Post Confirmation Expenses, Costs
and Fees. As a part of its obligations under the
Holiday Agreement, the Buyer has agreed to pay the
reasonable fees, costs and expenses incurred by the
Trustee in connection with the performance of the
Trustee's duties, obligations and rights under the Plan
and the Trust Agreement, including without limitation
the fees, costs and expenses of professionals retained
by the Trustee, expenses and costs incurred by the
Advisory Committee, and the fees, expenses, costs,
premiums and other expenses (other than overhead
charges) incurred by the Trustee and the Trust. Said
payment shall be by way of reimbursement, in that the
Trust may advance its own expenses (including the fees,
costs and expenses of the Trustee and the Trust's
professionals) and the Trust shall periodically send
requests for reimbursement of such fees, costs and
expenses to the Buyer. The Court retains jurisdiction
to determine any dispute as to the reasonableness of
any such reimbursement request, and the Trustee may, by
motion filed with the Court compel Buyer to pay any
request for reimbursement of reasonable fees, costs and
expenses of the Trust. This retention of jurisdiction
is in addition to, and does not limit the provisions
of, Article X of this Plan. Nothing herein shall
create or be deemed to create an attorney-client or a
fiduciary relationship by or among the Trustee, any
employee, agent or professional retained by the
Trustee, on the one hand, and the Buyer, on the other
hand. The Trustee shall maintain reasonable reserves
to pay fees, expenses and costs of the Trust and its
professionals, pending the conclusion of the case and
the entry of a final decree.
E. Resolution of Disputed Claims and Interests.
1. The Court shall have exclusive jurisdiction
to hear and determine disputes concerning Claims and
Interests, and any motions to compromise or settle such
disputes.
2. Notice of any hearing or a dispute,
compromise or settlement of a disputed Claim or
Interest need only be given to the party making
objection, the holder of such Disputed Claim or
Interest, the Buyer and to the Trustee.
F. Distributions Provisions Relating to Disputed
Claims and Interests.
1. Any Cash to which a holder of a Disputed
Claim or Interest otherwise would be entitled if it
were an Allowed Claim or Interest, shall not be
distributed to the holder of such Claim or Interest
unless and until it shall become an Allowed Claim or
Interests.
2. No holder of a Disputed Claim or Interest
shall have any right to Cash reserved with respect to
such Claim or Interest until such Disputed Claim or
Interest shall become an Allowed Claim or Interest. In
no event shall the Debtors, the Buyer, the Trust, or
Trustee have any responsibility or liability for any
loss or diminution in the value of any reserved
distribution or for any amount deposited in the
reserve.
3. If, and to the extent, a Disputed Claim or
Interest becomes an Allowed Claim or Interest, or with
respect to any holder of such an Allowed Claim or
Interest such later date as such holder complies with
the provisions of Section 11.6 hereof, the Buyer or the
Trustee, as the case may be, shall make distributions
to such holder in accordance with this Plan.
4. Notwithstanding any other provision of this
Plan or the documents referred to by this Plan, the
Advisory Committee may direct the Trustee to make one
or more distributions to the holders of Disputed
Claims, based on the distributions which such holders
would otherwise be entitled to receive based on the
undisputed portions of such Claims if their Claims had
not been objected to, if any. This power of direction
may not be used to select individual Disputed Claims
for payment; the Advisory Committee may only direct the
Trustee to make distributions on the undisputed
portions of all Disputed Claims, or none at all.
G. Retention of Claims; Waiver of Certain
Avoidance Claims. Except as expressly provided to the
contrary in this Plan, or any other contract,
instrument, release, indenture or other agreement
entered into in connection with this Plan, in
accordance with 1123(b) of the Code, all Claims and
causes of action of the Debtors or either of them,
including, but not limited to, Avoidance Claims,
together with the proceeds thereof, are reserved for,
assigned to, and shall be and remain property of the
Trust provided, however, that upon the Effective Date
of this Plan, all Avoidance Claims other than Avoidance
Claims based upon a failure to comply with the
provisions of Chapter 406 of the Wisconsin Statutes
(The Uniform Commercial Code - Bulk Transfers) or for
the avoidance of judgment or consensual liens against
the Debtors or their property and receivers obtained
thereon shall be waived, relinquished and released
without further action by the Debtors, the Trust or any
other Person. Except as provided in the previous
sentence, all Claimants shall be deemed to have
assigned to the Debtors and to have waived,
relinquished and released any and all of their rights
and Claims, if any, in or to any Claims or causes of
action of the Debtors or either of them and Avoidance
Claims.
H. Claims Following Avoidance. Any person that
is adversely affected by virtue of the recovery of
property by any of the Debtors or the Trust on account
of an Avoidance Claim and that wishes to make a Claim
against any of the Debtors or the Trust arising
therefrom, shall do so by filing with the Court and
serving on the Trustee proof thereof within thirty (30)
calendar days of either (i) the date of a Final Order
of the Court directing the repayment to the Trust the
amount the Court has determined is recoverable on
account of such Avoidance Claim or (ii) the effective
date of any agreement between such party in interest
and either the applicable Debtor or the Trust which
finally resolves such Avoidance Claim. Any such Claim
not filed within such thirty (30) calendar day period
shall be forever barred. The Trustee shall have until
the Resulting Claim Date to object to such Claim. If
the Trustee fails to object within the time provided
herein, the Claim shall be an Allowed Unsecured Claim.
I. Post-Confirmation Exercise of Trustee's
Powers. After the Effective Date, the Trust as a
representative of the Debtors' Estates, shall have and
retain the powers of a trustee as prescribed by the
Code for all purposes, including to seek recovery of
property on account of Avoidance Claims which have not
been released pursuant to Section 7.7 hereof. The
Trustee, subject to the control of the Advisory
Committee, is authorized to pursue or not to pursue and
resolve any adversary proceeding or Avoidance Claim
held by any Debtor prior to the Effective Date in any
manner that the Trustee, in the exercise of its sound
business judgment, deems advisable but subject to the
control of the Advisory Committee. No party shall have
any right whatsoever to compel the Trustee to pursue
any Avoidance Claim or to make any Claim against the
Trustee, its agents, employees or attorneys with
respect to any action taken or not taken in connection
with Avoidance Claims.
J. Employment of Professionals. The Trustee is
authorized without further Order of the Court to employ
and compensate counsel and other professionals
following the Effective Date on terms the Trustee deems
appropriate for any purpose, including, without
limitation, liquidation and collection of Avoidance
Claims, pursuit of any adversary proceeding filed prior
to or subsequent to the Confirmation Date, and
resolution of the Disputed Claims.
K. Releases. The following releases are
provided in addition to certain releases provided
elsewhere in this Plan.
1. The Debtors and any successor thereto or any
assign thereof, the Advisory Committee, the Trust, the
Trustee, and the Buyer hereby release and are
permanently enjoined from any prosecution or attempted
prosecution of any and all actions, causes of action,
Claims, liabilities, demands and obligations of any
kind or nature whatsoever either in law or in equity
which any or all of them have, may have or claim to
have against any present or former director, officer,
agent, attorney, member or employee of any of the
Debtors, provided however, that the foregoing will not
operate as a waiver of or release from any action,
cause of action, Claim, liability, demand or obligation
arising out of any express contractual obligation owing
by any such director, officer, agent, attorney or
employee to any of the Debtors or any reimbursement
obligations of any such director, officer or employee
with respect to a loan or advance made by either of the
Debtors to such director, officer, agent or employee.
2. All parties in interest hereby release and
are permanently enjoined from any prosecution or
attempted prosecution of any and all actions, causes of
action, Claims, liabilities, demands and obligations of
any kind or nature whatsoever, either in law or in
equity, to the extent derivative from or through the
Debtors, which any party in interest either
individually or collectively with other Persons has,
may have or claim to have against any present or former
director, officer, agent, attorney or employee of any
of the Debtors.
L. Payment of U.S. Trustee's Fees. All fees
payable under 28 U.S.C. 1930 shall be paid by the
Buyer on the Effective Date and thereafter as they
accrue and become due.
M. The Committee. The Committee shall dissolve
on the Effective Date, whereupon its members,
professionals and agents shall be released from further
duties and responsibilities under the Bankruptcy Code
in these cases. As provided for in Section 10.2 of
this Plan, the Trustee shall be deemed to have
substituted its appearance for the Committee with
respect to any contested matter or adversary proceeding
which is pending on the Effective Date. With the
consent of the Trustee and the professionals,
professionals employed by the Committee as of the
Effective Date may represent the Trustee in such
contested matters and proceedings and other matters,
upon and after the Effective Date.
N. Closing of the Holiday Agreement. The
Holiday Agreement shall be closed by the parties
thereto as soon as possible after the Confirmation
Date, unless a party obtains a stay of the Confirmation
Order and posts a cash bond in an amount no less then
$25,000,000 secured by good funds or negotiable
securities acceptable to the clerk of the Court, or
such other bond as the Court may approve after notice
and a hearing.
ARTICLE VIII
CONDITIONS PRECEDENT TO EFFECTIVENESS OF PLAN
VIII.
A. Conditions to the Effective Date. The
occurrence of the Confirmation Date is a condition for
this Plan to be effective and for the Effective Date to
occur.
ARTICLE IX
EXECUTORY CONTRACTS AND UNEXPIRED LEASES
IX.
A. Rejection of Contracts Not Listed on Exhibit.
To the extent that Executory Contracts have not
previously been rejected, assumed, or assumed and
assigned by Final Order of the Court entered prior to
the Confirmation Date, all remaining Executory
Contracts other than those listed on Exhibit 9.2
hereto, or those assumed or rejected by virtue of other
provisions of the Plan, shall be and are hereby
rejected. Any party in interests that wishes to make a
Claim arising out of the rejection of an Executory
Contract pursuant to this Plan shall do so by filing
with the Court and serving on the Trustee proof thereof
within thirty (30) calendar days of the Confirmation
Date or be forever barred. The Trustee shall have
until the Rejection Claim Date to object to such Claim.
If there shall be no objection filed within the time
provided herein, the Claim shall be an Allowed
Unsecured Claim. Any personal property that is the
subject of a rejected Executory Contract may be
recovered by the party to such Executory Contract upon
reasonable notice to the Buyer and the Trustee during
normal business hours after the Confirmation Date at
such party's sole cost unless the Buyer and the Trustee
and such party agree upon an agreement allowing the
Trustee and/or the Buyer to retain such property.
B. Contracts Assumed without Modification. Any
Executory Contracts identified on Exhibit 9.2 are
hereby assumed and assigned to Buyer as described on
Exhibit 9.2 attached hereto. To the extent that it is
necessary to make a payment to cure any default in
order to assume any Executory Contract identified on
Exhibit 9.2 pursuant to 365 of the Code, said payment
shall be made by the Buyer on the Effective Date.
ARTICLE X
RETENTION OF JURISDICTION
Until the Chapter 11 Cases are closed, the
Court may retain jurisdiction to insure that the
purpose and intent of this Plan are carried out, and to
hear and determine all Claims against the Debtors and
the Trust and to enforce all causes of action which may
exist on behalf of the Debtors. In addition, the Court
may retain jurisdiction to amend or modify the Plan to
the extent and under the circumstances that the Court
deems appropriate, as permitted by the Bankruptcy Code
and Rules.
Notwithstanding confirmation of the Plan or
occurrence of the Effective Date, the Court may also
retain jurisdiction for the following purposes:
X.
A. Disputes Concerning Plan. To hear and
determine any dispute arising under this Plan, any
disputes with respect to distributions made pursuant to
this Plan, the Holiday Agreement, or the Trust
Agreement.
B. Adjudication. To adjudicate any adversary
proceedings or contested matter which may be commenced
or maintained pursuant to this Plan, including, without
limitation, any adversary proceeding or contested
matter with respect to an Avoidance Claim, proceedings
to adjudicate the allowance of Disputed Claims and all
controversies and issues arising from or relating to
any of the foregoing; provided, however, that the Trust
shall be deemed to have substituted itself for the
Debtor(s) and/or the Committee in any such proceeding,
without the need of further action by any party or
entry of Court order.
C. Effectuate Plan. To make such orders as are
necessary or appropriate to carry out the provisions of
this Plan;
D. Plan Implementation Power. To make such
other orders or give such direction as may be
appropriate under 1142 of the Code;
E. Claim and Interest Allowance. To adjudicate
all Claim objections or estimations filed by the
Trustee or other parties in interest in the Chapter 11
Cases and to determine the allowability of Claims and
Interests;
F. Plan Amendment. To consider and order any
amendments to the Plan as may be requested pursuant to
Section 11.1 of this Plan.
G. Executory Contracts. To hear and determine
all requests to assume or assume and assign, and all
Claims arising from the rejection of, Executory
Contracts;
H. Administrative Expenses. To hear and
determine all applications or requests for payment of
Claims entitled to priority under 507(a)(1) of the
Code, including fee applications or fee disputes
involving the fee applications of professionals
employed during the Chapter 11 Cases for services
rendered prior to confirmation of the Plan;
I. Enforce Orders. To enforce all orders
previously entered by the Court;
J. Consummation. To implement the provisions of
this Plan and enter orders in aid of confirmation and
consummation of the Plan including such orders as may
be requested by the Trustee and/or the Buyer under this
Plan; and
K. Final Decree. To enter a final decree
closing the Chapter 11 Cases.
ARTICLE XI
MISCELLANEOUS PROVISIONS
XI.
A. Amendment or Modification of Plan. Prior to
the entry of the Confirmation Order, the Proponents of
this Plan may jointly propose amendments or
modifications to this Plan in accordance with the Code
upon notice to those Creditors and parties in interest
as required. After confirmation of the Plan, with the
approval of the Court, and without the necessity of
approval of a Disclosure Statement, the Trustee at the
direction of the Advisory Committee may propose
amendments or modifications to the Plan to remedy any
defect, omission or inconsistency in the Plan or in the
Confirmation Order in such manner as may be necessary
to carry out the purposes and effect of the Plan.
B. Discharge. Entry of the Confirmation Order
acts as a discharge of any and all liabilities of the
Debtors that are dischargeable under 1141 of the Code
to the extent provided by the Code.
C. Effective Date. The Plan shall become
effective upon the Effective Date.
D. Revesting of Property of the Estate. Except
as otherwise expressly provided in the Plan, or the
Holiday Agreement, on the Effective Date, the Buyers
shall be vested with the property of the Debtors and
the property of the Estates transferred to the Buyer
pursuant to the Holiday Agreement free and clear of all
Claims, Liens, encumbrances, charges and other
interests of Creditors and holders of Interests. After
the Effective Date, the Trust may operate free of any
restrictions imposed by the Code or the Court except as
specifically authorized by the Plan.
E. Equity Record Date. As of the Equity Record
Date, with respect to Common Stock Interests and
Preferred Stock Interests, the transfer ledgers or
registers and any other records determining record
ownership of Gander Mountain Stock and Gander Mountain
Preferred Stock shall be closed and there shall be no
further changes in the record holders of Common Stock
Interests and Preferred Stock Interests. For purposes
of the treatment provided to the holders of Common
Stock Interests and Preferred Stock Interests pursuant
to Section 5.6 and Section 5.7 hereof, Gander Mountain
shall have no obligation to recognize any thereafter
occurring transfers of Preferred Stock Interests and
Common Stock Interests, but shall be entitled instead
to recognize only those Persons who were holders of
Preferred Stock Interests and Common Stock Interests as
of the close of business on the Equity Record Date.
F. Surrender of Pre-Petition Securities and
Evidences of Indebtedness.
1. As a condition to participation under the
Plan, (i) a holder of a security that desires to
receive the property to be distributed on account of an
Interest evidenced by such security, and (ii) the
holder of a note, debenture or other evidence of
indebtedness of any or all of the Debtors that desires
to receive the property to be distributed on account of
an Allowed Claim based on such note, debenture or other
evidence of indebtedness shall surrender such security
note, debenture or other evidence of indebtedness to
the Trustee or Buyers, as applicable, and shall execute
and deliver such other documents as are necessary to
effectuate the Plan (including, without limitation,
releases of Liens and security interests securing such
note, debenture or other evidence of indebtedness for
public recordation). If no surrender of such a
security, note, debenture or other evidence of
indebtedness occurs, and an Interest holder or a
Claimant, as applicable, does not provide an affidavit
in form and substance reasonably satisfactory to the
Trustee or Buyer, as applicable, that such security,
note, debenture or other evidence of indebtedness was
lost, stolen or destroyed, then no distribution may be
made to any Interest holder or Claimant whose Claim is
based on such security, note, debenture or other
evidence of indebtedness thereof.
2. Holders of securities, notes, debentures or
other evidences of indebtedness who fail, promptly, but
within the time prescribed by 1143 of the Code, to
surrender such securities, notes, debentures, or other
evidences of indebtedness or to provide an acceptable
affidavit that such security, note, debenture or other
evidence of indebtedness is lost, stolen or destroyed,
shall not participate in the distributions under the
Plan. In such an event, the distributions otherwise
distributable to such holders, together with accrued
interest, dividends or distributions thereon, will
become the property of and shall be released to the
Trust to be distributed Pro Rata to holders of Allowed
Class Five Claims.
G. Withdrawal of Plan. The Proponents reserve
the right, at any time prior to entry of the
Confirmation Order, to revoke and withdraw the Plan;
provided, however, the Debtors may unilaterally
withdraw the Plan if they are required by their
fiduciary duties to do so. If the Debtors or the
Proponents revoke or withdraw the Plan prior to entry
of the Confirmation Order, or if entry of the
Confirmation Order does not occur, then the Plan shall
be deemed null and void. In such event, nothing
contained in the Plan shall be deemed to constitute a
waiver or release of any Claims by or against the
Debtors or any other Person or to prejudice in any
manner the rights of the Debtors or any Person in any
further proceedings involving the Debtors.
H. Distributions Made On Business Days.
Whenever any distribution to be made under the Plan is
due on a day other than a Business Day, such
distribution will instead be made, without interest, on
the next Business Day.
I. Headings. The headings used in the Plan are
inserted for convenience only and neither constitute a
portion of the Plan nor in any manner affect the
provisions of the Plan.
J. Successors and Assigns. The rights, benefits
and obligations of any Person named or referred to in
the Plan will be binding upon, and will inure to the
benefit of, the heir, executor, administrator,
successor or assign of such Person.
K. Release Relating to Plan and Disclosure
Statement. Neither the Debtors, the Buyers, the
Committee, nor any of the Persons which have been
appointed pursuant to 1102 of the Code to serve as a
member of the Committee, nor any of the respective
attorneys, agents, advisors or representatives of or
for any or all of the Debtors, Buyers, or the
Committee, shall have or incur any liability or
obligation of any kind to any Creditor, any Debtor, the
Committee or any other Person or entity for any act,
omission or other occurrence taking place on or prior
to the Effective Date in connection with or arising out
of the formulation, preparation, approval or
dissemination of the Disclosure Statement or the
formulation, preparation, dissemination,
implementation, confirmation, consummation or
administration of the Plan or the property to be
distributed under the Plan, or any other matter
relating to these Chapter 11 Cases except to the extent
any such liability or obligation arises out of such
Person's or entity's failure to act in good faith,
provided, however, that nothing in this Section 11.11
shall in any way affect the rights of any party to
enforce the Plan and the contracts, instruments,
releases and other agreements or documents delivered
thereunder.
L. Applicable Law. Unless a rule of law or
procedure is supplied by (a) federal law (including the
Code and the Rules of Bankruptcy Procedure) or (b) an
express choice of law provision in any agreement,
document or instrument, the laws of the State of
Wisconsin shall govern the construction of the Plan and
any agreements, documents, and instruments executed in
connection with the Plan.
M. Severability. If prior to the Confirmation
Hearing, any term or provision of the Plan which does
not govern the treatment of Claims or Interests is held
by the Court to be invalid, void or unenforceable, the
Court shall have the power to alter and interpret such
term or provision to make it valid or enforceable to
the maximum extent practical, consistent with the
original purpose of the terms or provision held to be
invalid, void or unenforceable, and such term or
provision shall then be applicable as altered or
interpreted. Notwithstanding any such holding,
alteration or interpretation, the remainder of the
terms and provisions of the Plan will remain in full
force and effect and will in no way be affected,
impaired or invalidated by such holding, alteration or
interpretation. The Confirmation Order shall
constitute a judicial determination and shall provide
that each term and provision of the Plan, as it may
have been altered or interpreted in accordance with the
foregoing, is valid and enforceable pursuant to its
terms.
N. Computation of Time. In computing any period
of time prescribed or allowed by the Plan, the
provisions of Rule of Bankruptcy Procedure 9006(a) will
apply.
O. Plan Provisions Not Admissions.
Notwithstanding anything herein to the contrary,
nothing contained in the Plan shall be deemed an
admission by any Debtor or the Committee with respect
to any matter set forth herein including, without
limitation, liability on any Claim or the propriety of
any Claim's classification.
P. Counterparts. This Plan may be executed in
any number of counterparts, each of which shall
constitute an original, all of which, together, shall
constitute one and the same instrument.
ARTICLE XII
CONFIRMATION REQUEST
The Debtors request confirmation of this Plan
under 1129(b) of the Code if any impaired Class does
not accept this Plan.
Dated this 13TH day of November, 1996.
GANDER MOUNTAIN, INC., Debtor
By: /s/ Ralph L. Freitag, CEO
--------------------------
GMO, INC., Debtor
By: /s/ Ralph L. Freitag, Ex. V.P.
------------------------------
GRS, INC., Debtor
By: /s/ David J. Lubar, Chairman
------------------------------
HOLIDAY STATIONSTORES, INC.,
Buyer
By: /s/ Gerald Erickson
----------------------------
OFFICIAL COMMITTEE OF
UNSECURED CREDITORS
By: /s/ Gary Chapman, Chair
-----------------------------
GODFREY & KAHN, S.C.
Attorneys for GANDER MOUNTAIN, INC.
By: /s/ Howard A. Schoenfeld
------------------------------
Howard A. Schoenfeld
780 North Water Street
Milwaukee, WI 53202-3590
(414) 273-3500
QUARLES & BRADY
Attorneys for GRS, INC.
By: /s/ Andrew M. Barnes
-------------------------------
Andrew M. Barnes
411 East Wisconsin Avenue
Milwaukee, WI 53202
(414) 277-5000
MCNALLY, MALONEY & PETERSON, S.C.
Attorneys for GMO, INC.
By: /s/ Michael S. Polsky
--------------------------------
Michael S. Polsky, Esq.
2600 North Mayfair Road, Suite 1080
Milwaukee, WI 53226
(414) 257-3399
FAEGRE & BENSON
Attorneys for HOLIDAY STATIONSTORES, INC.
By: /s/ Dennis M. Ryan, Esq.
--------------------------------
Dennis M. Ryan, Esq.
2200 Norwest Center
90 South Seventh Street
Minneapolis, MN 55402-3901
(612) 336-3000
HOLLEB & COFF, Attorney for
Official Committee
By: /s/ Bruce Dopke
--------------------------------
Bruce Dopke, Esq.
55 East Monroe Street, Suite 4100
Chicago, IL 60603-5896
(312) 807-4600
VON BRIESEN, PURTELL & ROPER, S.C.,
Local Attorney for Committee
By: /s/ Randall D. Crocker
----------------------------------
Randall D. Crocker, Esq.
411 East Wisconsin Avenue, Suite 700
Milwaukee, WI 53202
(414) 276-1122
APPENDIX
DEFINED TERMS
A. "Administrative Expense Claim" shall mean any
Claim or request for payment made or arising pursuant
to 503 of the Code.
B. "Advisory Committee" shall have the meaning
assigned to such term in Section 2.6.
C. "Allowed" shall mean:
1. with respect to a Claim, other than an
Administrative Expense Claim:
a) that proof of such Claim has been filed with
the Court on or before the Bar Date, or within the time
frame fixed by this Plan if such Claim is either (A) a
Claim arising out of the recovery of property by either
of the Debtors on account of an Avoidance Claim or (B)
a Claim arising from the rejection of an Executory
Contract pursuant to this Plan, to the extent that any
of the foregoing is not otherwise a Disputed Claim,
b) that such Claim is scheduled in the Debtors
list of Creditors prepared and filed with the Court and
not listed as disputed, contingent or unliquidated as
to amount, to the extent that it is not otherwise a
Disputed Claim, or
c) that such Claim is otherwise allowed pursuant
to a Final Order of the Court; and
2. with respect to an Administrative Expense
Claim:
a) that an application for payment of such
Administrative Expense Claim, if required under the
Code, hereunder, or by order of the Court, has been
filed with the Court on or before any applicable
deadlines set by the Court, and such application has
been approved and allowed by Final Order of the Court;
b) that such Administrative Expense Claim is not
subject to dispute and has become due and owing in the
ordinary course of the Debtors' business;
c) that such Administrative Expense Claim arises
by virtue of the assumption of an Executory Contract
pursuant to 365 of the Code, which assumption has been
approved by Final Order of the Court; or
d) that such Administrative Expense Claim of CIT
arises from the DIP Financing Documents and the DIP
Financing Orders (subject to the Debtors' right to
dispute any components of such Claim in accordance with
the terms of the DIP Financing Documents and the DIP
Financing Orders).
D. Allowed Administrative Expense Claim" shall
mean an Administrative Expense Claim which is Allowed.
E. "Allowed Claim" shall mean a Claim which is
Allowed.
F. "Allowed Interest" shall mean an Interest
which is Allowed.
G. "Allowed Priority Claim" shall mean a
Priority Claim which is Allowed.
H. "Allowed Secured Claim" shall mean a Secured
Claim which is Allowed.
I. "Allowed Unsecured Convenience Claim" shall
mean an Unsecured Convenience Claim which is Allowed.
J. "Allowed Unsecured Claim" shall mean an
Unsecured Claim which is Allowed minus any Insured
Portion.
K. "Avoidance Claim" shall mean a claim or cause
of action made under or pursuant to 544, 545, 546,
547, 548, 549 or 550 of the Code.
L. "Ballot" shall mean the ballot distributed
soliciting votes to accept or reject the Plan.
M. "Bar Date" shall mean the date established by
Final Order as the last date for filing proofs of claim
against the Debtors, except (a) as extended by Final
Order of the Court, and (b) with respect to Claims
arising from the rejection of an Executory Contract
(other than Executory Contracts rejected pursuant to
this Plan), the date established by the Court's order
authorizing such rejection, but in no event prior to
the date otherwise generally established by Final
Order.
N. "Business Day" shall mean any day except
Saturday, Sunday or any other day on which commercial
banks are authorized by law to close in the State of
Wisconsin.
O. "Buyer" shall mean Holiday.
P. "Cash" shall mean cash, cash equivalents
(including personal checks drawn on a bank insured by
the Federal Deposit Insurance Corporation, certified
check and money orders) and other readily marketable
direct obligations of the United States of America and
certificates of deposit issued by banks.
Q. "Chapter 11 Cases" or "Cases" shall mean the
Chapter 11 bankruptcy reorganization cases, In re
Gander Mountain, Inc., Case No. 96-26478-RAE, In re
GMO, Inc., Case No. 96-26480-RAE, and In re GRS, Inc.,
Case No. 96-26479-RAE, in the United States Bankruptcy
Court for the Eastern District of Wisconsin.
R. "CIT" shall mean the CIT Group/Business
Credit, Inc.
S. "Claims" shall have the meaning assigned to
such term in 101 of the Code.
T. "Claim Date" shall mean the date which is ten
(10) calendar days following the date on which (a) all
Disputed Claims that are Class Four or Class Five
Claims are either resolved pursuant to a Final Order of
the Court or the objection to the allowance thereof or
application to limit the recovery thereon has been
withdrawn and (b) all Avoidance Claims which are not
released or waived by the Plan are either resolved
pursuant to a Final Order of the Court or released or
waived.
U. "Claimant" shall mean the holder of a Claim.
V. "Class" shall mean a category of holders of
Claims or Interests defined in Article III hereof.
W. "Class One" shall have the meaning assigned
to such term in Section 3.3 hereof.
X. "Class Two" shall have the meaning assigned
to such term in Section 3.4 hereof.
Y. "Class Three" shall have the meaning assigned
to such term in Section 3.5 hereof.
Z. "Class Four" shall have the meaning assigned
to such term in Section 3.6 hereof.
AA. "Class Five" shall have the meaning assigned
to such term in Section 3.7 hereof.
BB. "Class Six" shall have the meaning assigned
to such term in Section 3.8 hereof.
CC. "Class Seven" shall have the meaning assigned
to such term in Section 3.9 hereof.
DD. "Class Eight" shall have the meaning assigned
to such term in Section 3.10 hereof.
EE. "Class Nine" shall have the meaning assigned
to such term in Section 3.11.
FF. "Class Ten" shall have the meaning assigned
to such term in Section 3.12.
GG. "Class Eleven" shall have the meaning
assigned to such term in Section 3.13.
HH. "Code" shall mean Title 11 of the United
States Code, as in effect as of the Filing Date.
II. "Committee" shall mean the Official Committee
of Unsecured Creditors of Gander Mountain, Inc.
appointed by the Office of the United States Trustee
for the Eastern District of Wisconsin to serve in Case
No. 96-26478-RAE.
JJ. "Common Stock Interest" shall mean any and
all interest in the Gander Mountain Stock, other than
any Pre-Petition Stock Options, Pre-Petition Warrants,
or any conversion rights granted to the holders of
Preferred Stock and any treasury stock.
KK. "Confirmation Date" shall mean the date the
Confirmation Order becomes entered on the docket of the
Court.
LL. "Confirmation Hearing" shall mean the hearing
held by the Court, after notice, on confirmation of the
Plan.
MM. "Confirmation Order" shall mean the order of
the Court confirming the Plan pursuant to 1129 of the
Code.
NN. "Contingent Claim" shall mean any Claim or
any portion thereof for which a proof of Claim has
been, or can be reasonably anticipated to be, timely
filed with the Court, to the extent that the amount
thereof is either contingent or not liquidated and
which has not been disallowed or Allowed in a sum
certain by a Final Order of the Court and any Claim
against either of the Debtors which may result from the
recovery of property by either of the Debtors on
account of an Avoidance Claim.
OO. "Convenience Claims Estimate" shall have the
meaning assigned to such term in Section 6.3.
PP. "Court" shall mean, as appropriate, either
the United Stated Bankruptcy Court for the Eastern
District of Wisconsin, including the United States
Bankruptcy Judge presiding in the Chapter 11 Cases or
the United States District Court for the Eastern
District of Wisconsin, including the United States
District Judge presiding over any matter in the Chapter
11 Cases.
QQ. "Creditor" shall mean any creditor of any or
all of the Debtors as defined in 101 of the Code.
RR. "Debtors" shall mean Gander Mountain, GMO and
GRS, collectively.
SS. "DIP Financing Documents" shall mean that
certain "Revolving Credit Agreement," dated August 12,
1996, entered into by the Debtors and CIT, together
with all agreements, documents and amendments executed
in connection therewith.
TT. "DIP Financing Orders" shall mean the Final
Order authorizing the Debtors to incur post-petition
secured indebtedness and each of the interim orders
which are referenced in such orders, as such orders
have been, and may be, amended and modified from time
to time during the Chapter 11 Cases by further orders
of the Court.
UU. "Disclosure Statement" shall mean that
certain Disclosure Statement Relating to Joint Plan of
Reorganization filed by the Debtors in the Chapter 11
Cases and approved by order of the Court as containing
adequate information in accordance with the Code.
VV. "Disputed Claim" shall mean (a) that portion
of any Claim as to which an objection to the allowance
thereof has been interposed, or an application to
equitably subordinate or otherwise limit recovery has
been made, as of the Effective Date or any other date
fixed by order of the Court and which objection or
application has not been either withdrawn or determined
by a Final Order of the Court, or (b) a Contingent
Claim.
WW. "Distribution Date" shall mean any date on
which a distribution is required to be made under this
Plan.
XX. "Effective Date" shall mean the later to
occur of (a) the date that all conditions precedent to
the effectiveness of the Plan, as provided in Article
VIII, have been satisfied or waived, or (b) eleven (11)
calendar days after the Confirmation Date.
YY. "Employee Stock Options" shall mean any
shares of restricted stock, options, warrants, or other
rights to acquire shares of Gander Mountain Stock
issued or granted to employees, officers or directors,
both present and former, of any of the Debtors.
ZZ. "Equity Record Date" shall mean the
Confirmation Date.
AAA. "Estates" shall mean the estates of the
Debtors created in the Chapter 11 Cases by operation of
541 of the Code.
BBB. "Executory Contract" shall mean an executory
contract or unexpired lease within the meaning of 365
of the Code.
CCC. "Filing Date" shall mean August 9, 1996.
DDD. "Final Order" shall mean an order or a
judgment which has not been reversed, stayed, modified
or amended and as to which (a) the time to appeal or
seek review, reargument or rehearing has expired and
has not been extended and as to which no appeal or
petition for certiorari, review or rehearing is
pending, or (b) if an appeal, review, reargument,
rehearing or certiorari of the order or judgment has
been sought, the order or judgment has been affirmed or
the request for review, reargument, rehearing or
certiorari has been denied and the time to seek a
further appeal, review, reargument, rehearing or
certiorari has expired, as a result of which such order
or judgment shall have become final and nonappealable
in accordance with applicable law.
EEE. "GAAP" shall mean generally accepted
accounting principles in the United States of America
in effect from time to time.
FFF. "Gander Mountain" shall mean Gander Mountain,
Inc., a Wisconsin corporation.
GGG. "Gander Mountain Preferred Stock" or
"Preferred Stock" shall mean the Series A Redeemable
Cumulative Convertible Exchangeable Preferred Stock,
$0.10 par value, of Gander Mountain.
HHH. "Gander Mountain Stock" shall mean the Voting
Common Stock, $0.01 par value, of Gander Mountain,
authorized under the articles of incorporation of
Gander Mountain in effect as of the Filing Date,
registered in such stock register as may be maintained
by or on behalf of Gander Mountain.
III. "GMO" shall mean GMO, Inc., a Wisconsin
corporation.
JJJ. "GMO Equity Interests" shall mean any and all
interests in the common stock of GMO as of the Filing
Date.
KKK. "GRS" shall mean GRS, Inc., a Wisconsin
corporation.
LLL. "GRS Equity Interests" shall mean any and all
interests in the common stock of GRS as of the Filing
Date.
MMM. "Holiday" shall mean Holiday Stationstores,
Inc., a Minnesota corporation.
NNN. "Holiday Agreement" shall mean the Purchase
Agreement by and among Gander Mountain, GRS, GMO, and
Holiday which is attached to the Plan as Exhibit 2.3.
OOO. "Harris" shall mean Harris Trust and Savings
Bank.
PPP. "Harris Merchant Agreement" shall mean the
Merchant Agreement dated as of March 2, 1992 between
Harris and Gander Mountain as the same may be amended
from time to time.
QQQ. "Insured Portion" shall mean that portion of
any Unsecured Claim which is Allowed by the Court which
is payable from the proceeds of any insurance
maintained by any or all of the Debtors, to the extent
such payment is not reimbursable by either Debtor to
the payor.
RRR. "Initial Distribution Date" shall mean a date
selected by the Trustee which shall not be more than
forty-five (45) days after the Effective Date.
SSS. "Insiders" shall have the meaning ascribed to
such term in 101 of the Code.
TTT. "Intercompany Claims" shall mean,
collectively, any and all (a) accounts on the books of
the Debtors reflecting intercompany book entries by one
Debtor with respect to another Debtor, and (b) Claims
otherwise held by one Debtor against another Debtor.
UUU. "Interest" shall mean any interest in any of
the Debtors including all Common Stock Interests,
Preferred Stock Interests, all GMO Equity Interests,
all GRS Equity Interests, Pre-Petition Warrants, and
all Pre-Petition Stock Options.
VVV. "Merger" shall have the meaning assigned to
such term in Section 2.1.
WWW. "Lien" shall have the meaning assigned to
such term in the Code.
XXX. "Month(ly)" shall mean (of or relating to)
any calendar month.
YYY. "Old Lenders" shall mean Bank One, Milwaukee,
National Association, Firstar Bank Milwaukee, N.A.,
LaSalle National Bank, NBD Bank, and Harris.
ZZZ. "Person" shall have the meaning assigned to
such term in 101 of the Code.
AAAA. "Plan" shall mean this Joint Plan of
Reorganization, including any modifications,
attachments, exhibits, amendments or corrections
hereto.
BBBB. "Preferred Stock Interest" shall mean
any and all interest in the Gander Mountain Preferred
Stock.
CCCC. "Pre-Petition Stock Option" shall mean
any option or other security issued prior to the Filing
Date which entitles the holder thereof to acquire an
equity interest in Gander Mountain, including, without
limitation, Employee Stock Options, and any Claims
arising thereunder.
DDDD. "Pre-Petition Warrant" shall mean any
warrant issued prior to the Filing Date to purchase an
equity interest in Gander Mountain and any Claims
arising thereunder.
EEEE. "Priority Claim" shall mean a Claim
having priority by virtue of 507(a) of the Code,
including, without limitation, an Administrative
Expense Claim.
FFFF. "Proponents" shall mean Gander Mountain,
GRS, GMO, the Committee and Holiday.
GGGG. "Pro Rata" shall mean:
1. for purposes of the distributions to be made
to the holders of Allowed Unsecured Claims pursuant to
Sections 5.5(a) and (b) hereof, with respect to each
holder of such a Claim, that proportion which its
Allowed Unsecured Claim bears to the sum of the
aggregate amount of all Allowed Unsecured Claims as of
the Effective Date plus the amount of all Disputed
Claims as of the Effective Date;
2. for purposes of the distributions of Cash to
be made to the holders of Allowed Unsecured Claims
pursuant to Sections 5.5(c) and 6.5(b) hereof, with
respect to each holder of such a Claim, that proportion
which its Allowed Unsecured Claim bears to the sum of
the aggregate amount of all Allowed Unsecured Claims;
3. with respect to each holder of a Preferred
Stock Interest or a Common Stock Interest, that
proportion which the number of shares of Gander
Mountain Stock or Gander Mountain Preferred Stock, as
applicable held of record by such holder as of the
Equity Record Date bears to the aggregate number of
issued and outstanding shares of Gander Mountain Stock
or Gander Mountain Preferred Stock, as applicable, as
of the Equity Record Date.
HHHH. "Property of the Estate" shall have the
meaning assigned to such term in 541 of the Code.
IIII. "Rejection Claim Date" shall mean the
date which is fifteen (15) calendar days after the
later to occur of the date of the filing and actual
receipt by the applicable Debtor or Trustee of the
applicable proof of Claim pursuant to Section 9.1
hereof.
JJJJ. "Restated Articles and Bylaws" shall
have the meaning assigned to such term in Section
[2.1(b)].
KKKK. "Resulting Claim Date" shall mean the
date which is fifteen (15) calendar days after the
later to occur of the date of the filing and actual
receipt by the Trustee or Debtor as applicable of the
applicable proof of Claim pursuant to Section 7.8
hereof.
LLLL. "Secured Claim" shall mean a Claim
arising on or before the Filing Date (or thereafter
with approval of the Court) that is secured by a valid
Lien on property in which either of the Estates has an
interest which is not void or voidable under any state
or federal law including any provision of the Code, or
a Claim that is subject to set off under 553 of the
Code, but only to the extent of the value (which is
either agreed to by the Debtors pursuant to this Plan,
or in the absence of agreement, has been determined
under 506 of the Code by a Final Order) of the
interest of the holder of such Claim in the interest of
either of the Estates in such property or to the extent
of an amount subject to setoff. That portion of a
Claim which is not a Secured Claim shall be a Priority
Claim or an Unsecured Claim as appropriate.
MMMM. "Transfer" shall have the meaning
assigned to such term in 101 of the Code.
NNNN. "Trigger Event" shall have the meaning
assigned to such term in Section 5.6.
OOOO. "Trust Agreement" shall mean the Trust
Agreement to be executed by and among the Debtors and
the Trustee on the Confirmation Date substantially in
the form of Exhibit 2.2.
PPPP. "Trust" shall mean the Trust established
pursuant to the Trust Agreement.
QQQQ. "Trustee" shall be either Alejandro D.
Moglia, William H. Grabscheid or Scott Peltz and shall
be selected by a majority vote of the following: the
Committee (which shall have two votes), the Buyer
(which shall have two votes), and the Debtors (which
shall have one vote). The Trustee shall be selected
prior to the Confirmation Hearing and shall be
designated in the Confirmation Order.
RRRR. "Unsecured Claim" shall mean a Claim
which is not an Administrative Expense Claim, a Secured
Claim, a Priority Claim, or an Unsecured Convenience
Claim.
SSSS. "Unsecured Convenience Claim" shall mean
a Claim in the amount of not more than $1,000
(including any Claim exceeding $1,000 which the holder
thereof irrevocably elects on the Ballot to reduce to
the amount of $1,000 for all purposes relating to the
Plan) which is not an Administrative Expense Claim, a
Secured Claim or a Priority Claim.
TTTT. Unsecured Creditors Cash Distribution
Amount" shall mean $18,500,000, plus $500,000 in the
event that the Trigger Event occurs and is continuing
as of the Effective Date, less the sum of (a) the
amount of Cash distributed to holders of Class Four
Claims that are Allowed as of the Effective Date, plus
(b) the Convenience Claims Estimate.
EXHIBITS
Exhibit 2.1(b)(i) Gander Mountain, Inc. Articles
of Incorporation (to be provided)
Exhibit 2.1(b)(ii) Gander Mountain, Inc. Bylaws
(to be provided)
Exhibit 2.2 Trust Agreement
Exhibit 2.3 Purchase Agreement
Exhibit 9.2 Executory Contracts Assumed
and Assigned to the Buyer (to be provided)
TRUST AGREEMENT
This Trust Agreement (this "Agreement") is by and
between Remington Arms Co., not individually but solely
in its capacity as Chair of the Official Committee of
Unsecured Creditors (the "Committee") of Gander
Mountain, Inc. ("GMI"), GMI a Wisconsin corporation and
debtor in possession, GRS, Inc., a Wisconsin
corporation and debtor in possession ("GRS") and GMO,
Inc., a Wisconsin corporation and debtor in possession
("GMO") (GMI, GRS and GMO are sometimes collectively
referred to herein as the "Debtors"), and Holiday
Stationstores, Inc. ("Holiday"), as settlors and
___________________ (the "Trustee"), pursuant to the
Joint Plan of Reorganization of the Committee, Holiday,
GMI, GRS and GMO dated November ___, 1996.
WHEREAS on August 9, 1996, the Debtors filed
bankruptcy cases seeking to reorganize under the
provisions of Chapter 11 of the United States
Bankruptcy Code (the "Code");
WHEREAS on November ___, 1996, the Committee,
Holiday and the Debtors filed a Joint Plan of
Reorganization (the "Plan") with the United States
Bankruptcy Court for the Eastern District of Wisconsin
(the "Court") which Plan contemplates the sale by the
Debtors of substantially all of their assets and
business to Holiday, pursuant to the provisions of a
purchase agreement (the "Purchase Agreement") annexed
to the Plan;
WHEREAS the Court has entered a confirmation order
(the "Confirmation Order") approving the Plan, which
Plan provides, among other things, for a means of
holding, managing and distributing certain payments and
causes of action to be received directly or by
assignment from the Debtors and/or Holiday in an
expeditious but orderly and commercially reasonable
manner and dealing with liability the Debtors may have
to persons holding Allowed Claims and Interests, as
defined in the Plan; and
WHEREAS the Plan contemplates the creation of a
trust, the assets of which will be held, managed and
liquidated as and to the extent provided in the
Confirmation Order, to pay Allowed Claims and
Interests.
NOW THEREFORE, it is hereby agreed as follows:
ARTICLE I
GENERAL
I.
A. Definitions. Unless the context requires
otherwise, all capitalized terms used herein and not
otherwise defined shall have the meanings assigned to
them by the Plan or the Code, which are incorporated by
reference herein.
B. Preamble. The statements and provisions of
the foregoing recitals are, by this reference,
incorporated into and made a part of this Agreement.
ARTICLE II
AGREEMENT OF TRUST
II.
A. Creation and Name. There is hereby created a
trust which shall be known as the Trust (the "Trust"),
which is the trust contemplated by the Plan.
B. Purpose and Transfer of Assets. The purpose
of the Trust is to hold the assets to be distributed to
creditors and shareholders pursuant to the Plan and
liquidate and distribute those assets to the holders of
Allowed Unsecured Claims, Allowed Unsecured Convenience
Claims and Allowed Interests. In furtherance of this
purpose, the Trustee shall be responsible for
supervising and administering the claims resolution
process, resolving all Disputed Claims and Interests,
liquidating, settling, waiving or prosecuting all
Avoidance Claims of the Debtors which are not waived by
the Plan and performing all obligations specified for
the Trust under the Plan. In the event of any
inconsistency between the recitation of the duties and
powers of the Trustee as set forth in this Indenture
and the Plan, the provisions of the Plan shall govern.
In conjunction with the Plan, the Debtors transfer to
the Trust for and on behalf of and at the request of
the beneficiaries of the Trust the assets described in
Section 2.4 of the Plan which Section 2.4 is
incorporated by reference herein as if fully set forth.
C. Acceptance of Assets and Assumption of
Liabilities; No Indemnification. In connection with
and in furtherance of the purposes of the Trust, the
Trustee hereby expressly accepts the transfer and
assignment to the Trust of the Assets described in
Section 2.2 hereof and subject to the provisions of the
Confirmation Order, the Trustee hereby further
expressly assumes, undertakes and shall control the
dispute, resolution and liquidation of Allowed Claims
and Interests, subject to direction from the Advisory
Committee as set forth herein. None of the Debtors
shall be entitled to any indemnification from the Trust
for any expenses, costs or fees (including attorneys'
fees and costs), judgments, settlements, claims,
demands, actions, causes of action or other liabilities
or obligations.
D. Division of Assets Among Allowed Claims and
Interests. Holders of Allowed Claims and Interests
will receive distributions from the Trust in accordance
with and reflecting the priorities set forth in the
Plan.
ARTICLE III
POWERS; TRUST ADMINISTRATION
III.
A. Powers and Directions to the Trustee.
1. Except as otherwise provided in this
Agreement, the Trustee shall have the power to take any
and all such actions as, in the judgment of the
Trustee, are necessary or convenient to effectuate the
purposes of the Trust, including, without limitation,
each power expressly granted in Subsection 3.1(c)
hereof, any power reasonably incidental thereto and any
trust power now or hereafter permitted under the laws
of the State of Wisconsin (including the Wisconsin
Trust Law or any successor statute or statutes), or of
any other state which becomes the domicile of the
Trust, that is not inconsistent with the provisions of
this Agreement or the Plan.
2. Except as provided in the Plan or otherwise
specified herein, the Trustee need not obtain the order
or approval of any court, including the Court, in the
exercise of any power or discretion conferred
hereunder, or account to any court, including the
Court, in the absence of a breach of trust.
3. Without limiting the generality of
Subsections 3.1(a) above, the Trustee shall have the
power to:
a) receive and hold the Assets and invest or
reinvest proceeds in cash, bonds, stocks, securities,
certificates of deposit and other cash equivalents,
from time to time, subject to the limitations set forth
in Section 4.2 hereof;
b) pay Allowed Claims and Interests in
accordance with the procedures set forth herein, in the
Plan or as otherwise allowed;
c) borrow money and issue notes and other
evidence of indebtedness (which notes or other evidence
of indebtedness may exonerate the Trustee from personal
liability with respect thereto) in the ordinary course
of operations for payment of bona fide Allowed Claims
or Interests and other expenses and liabilities of the
Trust;
d) change the state of domicile of the Trust;
e) establish such funds, reserves and accounts
within the Trust estate as deemed by the Trustee in its
discretion to be useful in carrying out the purposes of
the Trust, subject to the express provisions of the
Plan relative to reserves;
f) sue and be sued and participate, as a party
or otherwise, in any judicial, administrative,
arbitrative or other proceedings;
g) appoint such officers, hire such employees
and engage such legal, financial, accounting,
investment and other advisors and agents as the
business of the Trust requires and delegate to such
persons such powers, authorities and discretion as the
Trustee, in its discretion, deems advisable or
necessary in order to carry out the terms of the Trust
and, subject to the provisions of Section 3.3 hereof,
pay the reasonable compensation, fees and expenses of
all such persons. Specifically, the Trustee may engage
the following professionals who are currently engaged
in these cases as co-counsel to the Committee to assist
in the administration of the Trust and the review and
objection (if appropriate) to Disputed Claims and
Interests:
Keith J. Shapiro Randall D. Crocker, Esq.
Bruce Dopke von Briesen, Purtell & Roper, S.C.
Holleb & Coff 411 East Wisconsin Avenue
55 East Monroe Suite 700
Suite 4000 Milwaukee, WI 53202
Chicago, IL 60603 (414) 276-1122
(312) 807-4600
h) in accordance with Section 5.6 hereof,
indemnify (and purchase insurance indemnifying) the
Trustee and the employees, agents and representatives
of the Trust, to the fullest extent that a corporation
organized under the laws of the Trust's domicile is
from time to time entitled to indemnify its directors,
officers, employees, agents and representatives;
i) delegate any or all of the discretionary
power and authority herein conferred at any time with
respect to all or any portion of the Trust estate to
any one or more reputable individuals or recognized
institutional advisers or investment managers without
liability for any action taken or omission made because
of any such delegation, except for such liability as is
provided in Section 5.4 hereof;
j) consult with GMI, GRS and GMO, or with the
Advisory Committee, at such times and with respect to
such issues relating to the conduct of the Trust as the
Trustee considers desirable; and
k) make, pursue (by litigation or otherwise),
collect, compromise or settle any claim, right, action
or cause of action included in the Assets.
4. As authorized by the Plan, the Trustee shall
take all reasonable and necessary actions to wind up
the affairs and corporate existence of the Debtors,
including the filing of all documents required to be
filed with state and federal officials in order to
effectuate such wind up.
5. The Trustee shall not have the power to
guarantee any debt of other Persons.
6. The Trustee shall not have the power to enter
into any contract or otherwise engage in any
transaction with any Person affiliated with the
Trustee.
7. The Trustee is directed, consistent with the
purposes of the Trust and this Agreement, to administer
and manage the Assets within its discretion and in the
exercise of its business judgment.
B. Administration and Distributions.
1. Pursuant to the Plan and the Purchase
Agreement, and as a part of its obligations under the
Purchase Agreement, Holiday has agreed to and shall pay
the reasonable fees, costs and expenses incurred by the
Trustee in connection with the performance of the
Trustee's duties, obligations and rights under the Plan
and this Agreement, including without limitation the
fees, costs and expenses of professionals retained by
the Trustee, expenses and costs incurred by the
Advisory Committee and the fees, expenses, costs,
premiums and other expenses (other than overhead
charges) incurred by the Trustee and the Trust. Said
payment shall be by way of reimbursement, in that the
Trust shall be primarily responsible for its own
expenses (including the fees, costs and expenses of the
Trustee and the Trust's professionals) and the Trust
shall periodically send requests for reimbursement of
such fees, costs and expenses to Holiday. Nothing
herein shall create or be deemed to create an attorney-
client or a fiduciary relationship by or among the
Trustee, any employee, agent or professional retained
by the Trustee, on the one hand, and Holiday, on the
other hand. The Trustee shall maintain reasonable
reserves to pay fees, expenses and costs of the Trust
and its professionals, pending the conclusion of the
case and the entry of a final decree.
2. Any Cash to which a holder of a Disputed
Claim or Interest otherwise would be entitled on the
disputed portion of such claim or interest if it were
an Allowed Claim or Interest, shall not be distributed
to the holder of such Claim or Interest unless and
until it shall become an Allowed Claim or Interest.
3. No holder of a Disputed Claim or Interest
shall have any right to Cash reserved with respect to
the disputed portion of such Claim or Interest until
such Disputed Claim or Interest shall become an Allowed
Claim or Interest. In no event shall the Trustee, any
agent or employee thereof or the Advisory Committee or
its members have any responsibility or liability for
any loss or diminution in the value of any reserved
distribution.
4. If and to the extent the disputed portion of
a Disputed Claim or Interest becomes an Allowed Claim
or Interest, or with respect to any holder of such an
Allowed Claim or Interest such later date as such
holder complies with the provisions of Section 11.6 of
the Plan, the Trustee shall make distributions to such
holder in accordance with the Plan.
5. The taxable year for the Trust shall be the
calendar year (the "Fiscal Year"). The Trust may use
either the accrual or cash method of accounting within
the meaning of Section 446(c) of the Internal Revenue
Code.
6. In connection with the performance of his or
her duties pursuant to the terms of this Agreement and
all instruments issued in connection herewith and
distributions hereunder, the Trustee shall timely file
such income tax and other returns and statements and
shall comply with all withholding and reporting
requirements, imposed by any applicable federal, state,
local, or foreign taxing authority, or required under
any applicable federal, state, local, or foreign tax
law or regulation and all distributions hereunder shall
be subject to any such withholding and reporting
requirements.
C. Advisory Committee. Sections 2.6 and 2.7 of
the Plan are incorporated by reference herein as if
fully set forth.
ARTICLE IV
ACCOUNTS, PAYMENTS AND INVESTMENTS
IV.
A. Accounts; Reserves. In calculating any
distributions from the Trust, any payment or
distribution that would otherwise be payable on account
of the disputed portion of a Disputed Claim or Interest
shall be fully reserved for by the Trustee. Such
amounts will be paid at such time and to such extent as
such Disputed Claims or Interests may become Allowed
Claims or Interests. In the event and to the extent
that disputed portion of any such Disputed Claim or
Interest becomes a disallowed Claim or Interest, the
amount held in reserve therefor shall be distributed
with other funds of the Trust in the manner provided
generally in the Plan. Notwithstanding any other
provision of this Agreement, the Trustee shall make one
or more distributions to the holders of Disputed Claims
and Interests, on the pro rata distributions which such
holders would otherwise be entitled to receive based on
the undisputed portions of such Claims or Interests if
such Claims and Interests had not been objected to, if
any.
B. Investments. All Cash held by the Trust
shall be invested in the manner in which individuals of
ordinary prudence, discretion and judgment would act in
the management of their own affairs, subject to the
following limitation. Unless otherwise approved by the
Advisory Committee, all such monies shall be invested
only in debt securities or other instruments issued or
fully guaranteed as to principal and interest by the
United States of America or any agency or
instrumentality thereof, certificates of deposit or
deposit accounts of national banks with assets in
excess of One Hundred Million Dollars
($100,000,000.00), or overnight repurchase agreements.
C. Source of Payments. All Trust expenses and
payments in respect of Allowed Claims and Interests
shall be payable solely out of the Assets. Neither the
Trustee nor any director, officer, agent,
representative or employee of the Trust, GMI, GRS, GMO,
or any of their respective subsidiaries, shall be
liable for the payment of any Trust expense, Allowed
Claim or Interest or other liability of the Trust and
no Person shall look to any of the foregoing Persons
for payment of any such expense or liability.
ARTICLE V
TRUSTEE
V.
A. Number. There shall be one (1) Trustee at
all times. The initial Trustee shall be that person
named on the signature page hereof.
B. Term of Service.
1. The Trustee shall serve for the duration of
the Trust or, if the Trustee is a natural person, until
his or her earlier death or resignation pursuant to
Subsection 5.2(b) below, removal pursuant to Subsection
5.2(c) below or attaining seventy-five (75) years of
age, at which time his or her term shall terminate
automatically.
2. The Trustee may resign at any time by written
notice to the Advisory Committee. Such notice shall
specify a date when such resignation shall take effect,
which shall not be less than ninety (90) calendar days
after the date such notice is given, where practicable.
3. The Trustee or any successor Trustee may be
removed in the event that such Trustee becomes unable
to discharge his or her duties hereunder due to
accident or physical or mental deterioration, or for
other good cause, upon the majority vote of the
Advisory Committee.
C. Successor Trustee. Immediately upon the
appointment of any successor Trustee, all rights,
titles, duties, power and authorities of the
predecessor Trustee hereunder shall be vested in and
undertaken by the successor Trustee without any further
act. No successor Trustee shall be liable personally
for any act or omission of his or her predecessor
Trustees.
D. Liability of the Trustee. No Trustee, nor
any officer, agent, representative or employee of the
Trust, shall be liable to the Trust, any person holding
an Allowed Claim or Interest, or an other Person,
except for his breach of trust committed in bad faith
or for willful misappropriation. No Trustee shall be
liable for any act or omission of any other agent,
representative or employee of the Trust, unless the
Trustee acted with bad faith or willful misconduct in
the selection or retention of such agent,
representative or employee. In addition, no Trustee
shall be in any way liable for any act taken, or
omission made, in good faith and at the direction of
the Advisory Committee pursuant to this Agreement.
E. Compensation and Expenses of the Trustee.
1. The Trustee shall receive compensation for
his or her services as Trustee hereunder at the rate of
$________, payable as determined by the Trustee but not
less frequently than quarterly. The amounts payable to
the Trustee hereunder may be increased or decreased
annually by the Trustee proportionately with any
increase or decrease in the "Consumer Price Index --
All Cities" (or an successor index) for the
corresponding annual period. Any increase or decrease
in excess of that amount may be made only with the
approval of the Advisory Committee. The Advisory
Committee, by majority vote, may permit the Trustee to
be compensated on an hourly basis, or on the basis of a
percentage of funds distributed, or any combination of
the above.
2. All reasonable out-of-pocket costs and
expenses incurred by the Trustee in connection with the
performance of his or her duties hereunder will be
promptly reimbursed to the Trustee by the Trust upon
presentation of appropriate documentation therefor.
F. Indemnification of the Trustee.
1. The Trustee shall be indemnified by the
Trust, to the fullest extent that a corporation
organized under the law of its domicile is, from time
to time, entitled to indemnify its directors, against
any and all liabilities, expenses, claims, damages or
losses incurred by him or her in the performance of his
or her duties hereunder, except any such liability,
expense, claim, damage or loss as to which he or she is
liable under Section 5.4 hereof.
2. The rights of the Trustee to indemnification
under Section 5.6(a) hereof shall be absolute, subject
only to the conditions provided in Section 5.4 hereof.
Any dispute regarding such indemnification of the
Trustee shall be resolved only by the Court.
3. Reasonable expenses, costs and fees
(including attorneys' fees and costs) incurred by or on
behalf of the Trustee in connection with any action,
suit or proceeding, whether civil, administrative or
arbitrative, relating to the Trust or the performance
by the Trustee of his or her duties hereunder, may be
paid by the Trust in advance of the final disposition
thereof upon receipt of an undertaking by or on behalf
of the Trustee to repay such amount unless it shall be
determined ultimately that the Trustee is entitled to
be indemnified by the Trust.
4. The Trustee shall have the power, generally
or in specific cases, to cause the Trust to indemnity
the agents, representatives and employees of the Trust
to the same extent as provided in this Section 5.6 with
respect to the Trustee.
5. The Trustee may purchase and maintain
reasonable amounts and types of insurance on behalf of
any individual who is or was a Trustee, or an agent,
representative or employee of the Trust, against
liability asserted against or incurred by such
individual in that capacity or arising from his or her
status as a Trustee, agent, representative or employee.
G. Trustee's Lien. The Trustee shall have a
prior lien upon the Assets to secure the payment of any
amounts payable to him or her pursuant to Section 5.5
or Section 5.6 hereof.
H. Trustee's Employment of Experts. The Trustee
may, but shall not be required to, consult with
counsel, accountants, appraisers and other parties
deemed by the Trustee to be qualified as experts on the
matters submitted to them and the opinion of any such
parties on any matters submitted to them by the Trustee
shall be full and complete authorization and protection
in respect of any action taken or not taken by the
Trustee hereunder in good faith and in accordance with
the written opinion of any party.
I. Additional Qualifications.
1. No Trustee, including any successor Trustee,
shall have any financial interest, direct or indirect,
in GMI, GRS or GMO, or hold any Allowed Claim or
Interest against the Trust.
2. If there has been a violation of Subsection
5.9(a) above, the Trustee involved shall be subject to
removal pursuant to Section 3.3 above.
ARTICLE VI
OBJECTION TO ALLOWED CLAIMS AND INTERESTS AND
RELATED MATTERS
VI.
A. Objection to Allowed Claims and Interests.
Section 2.11 of the Plan is incorporated by reference
herein as if fully set forth.
B. Records. Holiday shall make its records and
personnel available at reasonable times to the extent
reasonable and necessary to assist the Advisory
Committee and/or the Trustee in connection with the
analysis and litigation (including discovery) of
disputes concerning Claims, objections to Claims and
Avoidance Claims at Holiday's expense.
ARTICLE VII
GENERAL PROVISIONS
VII.
A. Irrevocability. The Trust is irrevocable,
but is subject to amendment as provided in Section 7.3
hereof.
B. Termination.
1. The Trust shall automatically terminate on
the earlier to occur of (i) the date all Assets have
been liquidated and their proceeds distributed and (ii)
when all Allowed Claims and Interests have been paid in
full.
2. On the effective date of termination of the
Trust, after payment of all of the Trust's liabilities
has been provided for, all monies remaining in the
Trust, if any, shall be applied to such charitable
purposes as the Trustee in its reasonable discretion
shall determine.
C. Amendments. The Trustee may, with majority
approval of the Advisory Committee, modify, supplement
or amend this Agreement in any respect, such
modification, supplement or amendment to be evidenced
in writing. No modification, supplement or amendment
shall be violative or inconsistent with the terms of
the Plan.
D. Severability. Should any provision in this
Agreement be determined to be unenforceable, such
determination shall in no way limit or affect the
enforceability or operative effect of any and all other
provisions of this Agreement.
E. Notices. Notices to a Person asserting an
Allowed Claim or Interest shall be given at the address
of such Person, or, where applicable, such Person's
legal representative, in each case as provided on the
Debtors' Schedules or the proof of claim submitted by
such Person with respect to his, her or its Allowed
Claim or Interest. Any notices or other communications
required or permitted hereunder shall be in writing and
delivered at the addresses designated below, or sent by
telex or telecopy pursuant to the instructions listed
below, or mailed by registered or certified mail,
return receipt requested, postage prepaid, addressed as
follows, or to such other address or addresses as may
hereafter be furnished by GMI, GRS, GMO or the Trustee
to the others in compliance with the terms hereof.
To GMI, GRS or GMO:
________________________________________
________________________________________
________________________________________
Facsimile No.:__________________________
To the Trust or the Trustee:
________________________________________
________________________________________
________________________________________
Facsimile No.:____________________________
All such notices and communications shall be
effective when delivered at the designated addresses or
when the telex or telecopy communication is received at
the designated addresses and confirmed by the recipient
by return telex or telecopy receipt in conformity with
the provisions hereof.
F. Counterparts. This Agreement may be executed
in any number of counterparts, each of which shall
constitute an original, all of which, together, shall
constitute one and the same instrument.
G. Successors and Assigns. The provisions of
this Agreement shall be binding upon and inure to the
benefit of the Debtors, the Trust, the Trustee, the
holders of Allowed Claims and Interests and their
respective successors and assigns, except that neither
GMI, GRS, GMO, the Trust nor the Trustee may assign or
otherwise transfer any of its, his or her rights or
obligations under this Agreement except, in case of the
Trust and the Trustee, as contemplated by Section 5.2
hereof.
H. Entire Agreement; No Waiver. The entire
agreement of the parties relating to the subject matter
of this Agreement is contained herein, the Plan, and in
the documents referred to herein and this Agreement and
such documents supersede any prior oral or written
agreements concerning the subject matter hereof. No
failure to exercise or delay in exercising any right,
power or privilege hereunder shall operate as a waiver
thereof, nor shall any single or partial exercise of
any right, power or privilege hereunder preclude any
further exercise thereof or of any other right, power
or privilege. The rights and remedies herein provided
are cumulative and are not exclusive of rights
available at law or in equity.
I. Headings. The heading used in this Agreement
are inserted for convenience only and neither
constitute a portion of this Agreement nor in any
manner affect the construction of the provisions of
this Agreement.
J. Governing Law. This Agreement shall be
governed by and construed in accordance with the laws
of the State of Wisconsin.
K. Dispute. Any disputes which arise under this
Agreement shall be resolved by the Court as set forth
in the Plan. Notwithstanding anything contained herein
to the contrary, to the extent any provision of this
Agreement is inconsistent with any provision of the
Plan or the Confirmation Order, the Plan or the
Confirmation Order, as applicable, shall control.
L. Enforcement and Administration. The
provisions of this Agreement shall be enforced and
administered by the Court as set forth in the Plan.
IN WITNESS WHEREOF, the parties have
executed, or caused to be executed by their respective
duly authorized representatives, this Trust Agreement
as of the _____ day of ______________, 1996.
OFFICIAL COMMITTEE OF UNSECURED
CREDITORS
By:_____________________________________
Gary Chapman, authorized person for
Remington Arms Co., Chair
DEBTORS:
GANDER MOUNTAIN, INC.
By:_____________________________________
Name:________________________________
Title:_______________________________
GRS, INC.
By:_____________________________________
Name:________________________________
Title:_______________________________
GMO, INC.
By:_____________________________________
Name:________________________________
Title:_______________________________
HOLIDAY STATIONSTORES, INC.
By:_____________________________________
Name:________________________________
Title:_______________________________
TRUSTEE
By:_____________________________________
Name:________________________________
Title:_______________________________
PURCHASE AGREEMENT
THIS AGREEMENT, dated November 13, 1996, is
between GANDER MOUNTAIN, INC., a Wisconsin corporation,
P.O. Box 128, Highway W, Wilmot, Wisconsin 53192
("GMI") and GRS, Inc., a Wisconsin corporation, and a
wholly owned subsidiary of GMI, P. O. Box 128, Highway
W, Wilmot, Wisconsin 53192 ("GRS"), and GMO, Inc., a
Wisconsin corporation, and a wholly owned subsidiary of
GMI, P. O. Box 128, Highway W, Wilmot, Wisconsin 53192
("GMO") (collectively referred to as "Gander Mountain";
each reference herein to Gander Mountain shall be
deemed a reference to each and any of GMI, GRS, and
GMO) and HOLIDAY STATIONSTORES, INC., a Minnesota
corporation, 4567 West 80th Street, Minneapolis,
Minnesota 55437 ("Holiday").
RECITALS:
A. GMO and GRS are wholly owned subsidiaries of GMI.
Prior to the Closing Date (as hereinafter defined), GMI
proposes to merge GMO and GRS with and into GMI (the
"Merger"). Any references herein to "Gander Mountain"
shall be deemed a reference to each and any of GMI, GRS
and GMO prior to the Merger and to GMI, as the
surviving corporation in the Merger, following the
Merger.
B. Gander Mountain owns and operates retail sporting
goods stores doing business as "Gander Mountain."
Gander Mountain presently is operating as debtor in
possession in its Chapter 11 bankruptcy cases, 96-26478-
RAE, 96-26479-RAE and 96-26480-RAE, in the Eastern
District of Wisconsin (the "Bankruptcy Cases").
C. Gander Mountain desires to sell to Holiday the
Assets (as hereinafter defined), including all of the
tangible property located at its retail sporting goods
stores, its distribution center and its corporate
offices.
D. Gander Mountain owns the inventories in the stores
and its distribution center which includes, but is not
limited to, hunting, fishing and camping equipment and
clothing. Gander Mountain also owns supplies in the
stores, its distribution center and corporate offices.
Gander Mountain owns or holds under valid leases the
furniture, equipment and fixtures used in the operation
of the stores, its distribution center and corporate
offices. Gander Mountain leases the land and
improvements upon which the stores, its distribution
center and corporate offices are located.
E. Holiday desires to purchase the Assets (as
hereinafter defined) from Gander Mountain.
The parties are willing to do so upon the
satisfaction of certain conditions precedent, including
without limitation, the agreement of the parties to
execute and perform this Agreement and every other
agreement referred to in this Agreement which is to be
executed by any party (together with this Agreement,
"Operative Documents").
In consideration of the mutual covenants set forth
in this Agreement and other good and valuable
consideration, the receipt and sufficiency of which are
hereby acknowledged, the parties hereto, intending to
be legally bound, agree as follows:
1. SALE AND PURCHASE OF ASSETS
1.1 Sale and Purchase of Assets. Subject to the terms
and conditions of this Agreement, on the Closing Date,
Gander Mountain shall sell, convey, assign, transfer
and deliver to Holiday, and Holiday shall purchase,
accept and assume possession of all of the assets of
Gander Mountain, except for the Excluded Assets (as
defined in Section 2) and except as otherwise indicated
herein, including, but not limited to the following
(collectively referred to as "Assets"):
1.1.1 All of Gander Mountain's rights and title to
and interest in the leases of real property, which
leases are listed on Exhibit A attached hereto (the
"Leased Properties").
1.1.2 All appurtenances or fixtures owned by Gander
Mountain and located at the Leased Properties provided,
however, that the foregoing shall be subject to all
terms and conditions of the lease agreements (except
those excused under 11 U.S.C. 365) pursuant to which
Gander Mountain leases its interest therein
(collectively referred to as "Improvements").
1.1.3 All items held by Gander Mountain as
inventory for resale to customers as of the Closing
Date (the "Merchandise Inventory"). The Merchandise
Inventory shall be transferred to Holiday free and
clear of any liens or encumbrances.
1.1.4 All supplies used in connection with Gander
Mountain's business operations ("Supplies Inventory").
The Supplies Inventory shall be transferred to Holiday
free and clear of any liens or encumbrances.
1.1.5 All Gander Mountain's rights, title and
interest in all equipment, machines, materials,
furniture and other personal property used in
connection with its business, excluding the Merchandise
Inventory and Supplies Inventory; provided, however,
that with respect to Gander Mountain's interests in
unexpired leases of personal property or other
executory contracts, only Gander Mountain's interests
in those leases described in paragraph 1.1.8 herein are
included in the Assets.
1.1.6 All of Gander Mountain's intangible assets
including, but not limited to, goodwill, trademarks,
and trade names, subject to the Trademark License
Agreement and the Non-Competition Agreement among GMI,
GMO and Cabela's Incorporated (the "License
Agreements"), and not including the Excluded Assets as
defined in Section 2.1 hereof.
1.1.7 All of Gander Mountain's cash, accounts
receivable, refundable income taxes and stock
subscription receivables.
1.1.8 All of Gander Mountain's interests in the
executory contracts and unexpired leases listed on
Exhibit B attached hereto and accompanied by the letter
A for "Assume" or the letter C for "Considering" (the
"Included Contracts and Leases"). Prior to the date on
which the hearing is held regarding approval of Gander
Mountain's disclosure statement in the Bankruptcy
Cases, Holiday may inform Gander in writing that it
will not assume one or more of the agreements
designated with the letter "C" and, upon such notice,
the designated agreement shall be excluded from the
Assets.
1.2 Permits and Licenses. At Closing, Gander Mountain
agrees to assign, convey and transfer to Holiday all
permits and licenses to which Gander Mountain is a
party and which are transferable.
1.2.1 Holiday hereby acknowledges that
notwithstanding anything herein to the contrary:
(a) Gander Mountain shall not assign, convey or
otherwise transfer to Holiday any permits and licenses
which are not transferable, whether by their own terms
or pursuant to applicable legal requirements; and
(b) Holiday shall be solely responsible for obtaining,
and paying all costs, in obtaining replacements for
such permits and licenses in Holiday's name; provided
that Gander Mountain shall cooperate with Holiday at
Holiday's expense in Holiday's efforts to obtain such
permits and licenses.
1.3 Assignment of the Included Contracts and Leases.
Subject to all the terms and conditions of this
Agreement, Gander Mountain shall assume and assign to
Holiday all of its rights and interests in the Included
Contracts and Leases pursuant to 11 U.S.C. 363 and
365; provided, however, that with respect to the
executory contracts and unexpired leases listed on
Exhibit B attached hereto and accompanied by the letter
C for "Considering" (the Considering Contracts and
Leases"), Holiday, in its sole discretion, reserves the
right to not have any or all of the Considering
Contracts and Leases assigned to Holiday, as provided
in, and subject to the provisions of, Section 1.1.8.
1.4 Assumption of Obligations. In addition to those
liabilities which will be directly paid by Holiday
pursuant to Section 3.1.1 hereof, Holiday shall assume
and accept the following obligations of Gander Mountain
(collectively referred to as the "Assumed
Obligations").
1.4.1 All of Gander Mountain's obligations under
the permits and licenses assigned to Holiday pursuant
to paragraph 1.2 herein, and all of Gander Mountain's
obligations under the Included Contracts and Leases
which are assigned to Holiday pursuant to paragraph 1.3
herein (including without limitation cure payments
which Holiday shall assume and directly pay).
1.4.2 All of Gander Mountain's obligations under
all of its Retention Agreements, Severance Agreements
and its Employment Agreements, which are currently in
force, a true and correct listing of which is set forth
on Exhibit B attached hereto. With respect to any of
the foregoing agreements which may expire prior to the
Closing Date, if Gander Mountain chooses to extend its
obligations under these agreements, or to offer the
consideration to employees in some other form such as a
"stay put bonus," provided that the amount of the
consideration is substantially similar to the current
agreements, Holiday also will assume these obligations.
1.5 Employee Benefit Plans. Gander Mountain has
certain benefit plans for its Employees ("Benefit
Plans"). Holiday does not assume any of the Benefits
Plans or any obligations under these Benefit Plans but
will pay any allowed priority claims of retirees and
employees related thereto.
2. EXCLUDED ASSETS
2.1 Assets Excluded from Sale. Notwithstanding other
contrary provisions of this Agreement, the following
property and assets of Gander Mountain are excluded
from the Assets being sold to Holiday :
2.1.1 All avoidance actions under 11 U.S.C. 544,
545, 546, 547, 548, 549 and 550 which are the property
of the Gander Mountain bankruptcy estates and all of
Gander Mountain's counterclaims and defenses to claims,
including without limitation set off rights, arising
out of or directly related to any executory contract
rejected by Gander Mountain or the terms of its Chapter
11 bankruptcy plan, against the other party to such
Contract.
2.1.2 All executory contracts and unexpired leases
listed on Exhibit B attached hereto and accompanied by
the letter R for "Reject" and any of the Considering
Contracts and Leases which Holiday elects not to have
included in the Included Contracts and Leases under
Section 1.1.8.
3. PURCHASE PRICE
3.1 Purchase Price. The purchase price for the Assets
shall be as follows (the "Purchase Price"):
3.1.1 Holiday will pay all allowed priority claims
against Gander Mountain, as provided in 11 U.S.C.
507, all allowed administrative expense claims
against Gander Mountain, as provided in 11 U.S.C.
503, (including The CIT Group/Business Credit, Inc.
Debtor-in-Possession Loan Facility), and all reasonable
post-petition liabilities or obligations of Gander
Mountain, and/or the trust to be established to pay
claims and interests of the Debtors including
reasonable post-confirmation expenses (including
reasonable professional and paraprofessional fees and
expenses incurred by the Trust to be established to
hold and distribute the proceeds of this Agreement).
3.1.2 At the Closing, Holiday will pay cash to the
Gander Mountain bankruptcy estates in the amount of
$19,500,000.00, to be allocated as follows:
(a) $18,500,000.00 to the class or classes of
unsecured claims;
(b) $500,000.00 to the class of preferred stock
interests; and
(c) $500,000.00 to the class of common stock
interests;
provided, however, that if the class or classes of
preferred stock interests does not accept the plan of
reorganization proposed by GMI, GRS and GMO, Holiday
will pay in cash $19,000,000.00, all of which shall be
allocated to the class or classes of unsecured claims.
3.1.3 Prior to the Closing, and upon entry of an
appropriate Court Order, Holiday will lend Gander
Mountain up to $5,000,000.00 for working capital
purposes, on account of which Holiday will be entitled
to an administrative expense claim as provided in 11
U.S.C. 364. The loan will be secured by a lien on
all assets at Gander Mountain, junior only to the lien
of The CIT Group/Business Credit, Inc. The loan shall
be evidenced by such documents as shall be acceptable
to Holiday, Gander Mountain and CIT. Should this loan
be made prior to the Closing, such loan shall be
included among the liabilities assumed or paid by
Holiday pursuant to Section 3.1.1 hereof.
3.2 Hart-Scott-Rodino Filing Fee. Holiday shall pay
the filing fee for the Hart-Scott-Rodino filing and
other fees associated with compliance with Sections 7.3
and 8.
3.3 Payment For Title Commitments; Surveys. Holiday
shall be responsible for the cost of title insurance
commitments and surveys ordered by Holiday.
3.4 Recording Fees. Holiday shall pay all recording
fees payable as a result of the public recordation of
real estate documents executed and delivered to Holiday
pursuant to the terms of this Agreement to the extent
such fees are not voided by 11 U.S.C. 1146(c).
3.5 Tail Policy for Insurance. Holiday shall pay the
premium associated with the tail policy on Gander
Mountain directors' and officers' liability insurance
which Gander Mountain will order prior to the Closing
Date.
4. REPRESENTATIONS AND WARRANTIES OF GANDER MOUNTAIN
Gander Mountain makes the following
representations and warranties to Holiday through and
as of the Closing:
4.1 Corporate Status and Authority. GMI, GRS, and
GMO, are corporations duly incorporated and validly
existing under the laws of the State of Wisconsin and
each has filed its most current required annual report.
GMI, GRS, and GMO have all requisite corporate power
and authority to lease the Leased Properties and to
carry on their business as presently conducted, except
to the extent limited by the provisions of the United
States Bankruptcy Code. GMI, GRS, and GMO are
operating as debtors in possession pursuant to 11
U.S.C. 1107 and 1108. The execution, delivery and
performance of this Agreement and the Operative
Documents to which Gander Mountain is a party have been
duly authorized by all necessary corporate action on
the part of GMI, GRS, and GMO but remains subject to,
and is contingent upon, Bankruptcy Court approval.
This Agreement shall be implemented by, and only become
effective upon, confirmation of a Chapter 11 plan which
incorporates its terms and is acceptable to Holiday and
Gander Mountain. Upon entry of the appropriate
Bankruptcy Court order this Agreement shall become
effective without need for further action by the
parties.
4.2 Qualification. GRS and GMO are and on the Closing
Date will be, duly qualified to do business and in good
standing in the State of Wisconsin, the State of
Michigan and the State of Indiana.
4.3 Governmental Consents. Except as contemplated in
Section 6.2.1 and 6.2.4, no consent, waiver, approval
or authorization of, or designation, declaration or
filing with, any governmental authority is or has been
required on the part of Gander Mountain in connection
with the execution and delivery of this Agreement or
with the consummation of the transaction contemplated
hereby.
4.4 Transfer Free and Clear. The Assets will be
transferred by Gander Mountain on the Closing Date free
and clear of any liens, security interests and
encumbrances, except for the provisions of the Included
Contracts and Leases and subject to the terms of the
License Agreements.
4.5 No Breach, Etc. Except for defaults arising from
or as a result of bankruptcy filing, the execution,
delivery and performance of this Agreement by Gander
Mountain and the other Operative Documents to which
Gander Mountain is a party and the consummation by
Gander Mountain of the transactions contemplated hereby
and thereby shall not result in:
4.5.1 Any conflict with or breach or violation of
or default under the articles of incorporation or
bylaws of GMI, GRS, or GMO; and
4.5.2 Giving effect to 11 U.S.C. 363(l) and
365, any conflict with or breach or violation of or
default under any obligation under any agreement to
which Gander Mountain is a party or any legal
requirement which will result in the acceleration of,
or entitle any person to accelerate (whether after the
giving of notice or lapse of time or both), any
obligation under any contract or applicable legal
requirements.
4.6 Compliance; Permits; Utilities; Taxes; Pending
Condemnations. Except for defaults arising from or as
a result of bankruptcy filing, each Leased Property and
Gander Mountain's business is in compliance in all
material respects with all applicable legal
requirements and no written notice of any violation of
applicable legal requirements has been received from
any governmental agency and Gander Mountain believes it
has all rights of ingress and egress necessary to each
Leased Property. Before Closing, Gander Mountain shall
provide Holiday with written notice of any such
noncompliance with the legal requirements or other
applicable legal restrictions set forth in this
Section:
4.6.1 Except for defaults arising from or as a
result of bankruptcy filing, no written notice of any
default under, or violation of, any permit, restrictive
covenant, easement or utility agreement has been
received by Gander Mountain. Before Closing, Gander
Mountain shall provide Holiday with a copy of all
written notices of any default under, or violation of,
any operating agreement, Assumed Obligation, permit,
restrictive easement, easement or utility agreement.
4.6.2 Gander Mountain is not in default in payment
of gas, electric and telephones for any of its business
premises except where the Bankruptcy Code prohibits
such payments.
4.6.3 To Gander Mountain's knowledge, no
condemnation action is pending or threatened against
any Leased Property.
4.6.4 To Gander Mountain's knowledge, no hazardous
materials (other than inventory) are present on, in or
under the Leased Properties or other real property
under Gander Mountain's control and, to Gander
Mountain's knowledge, no hazardous materials (other
than inventory) have been present on, in or under the
Leased Properties or other real property under Gander
Mountain's control; provided, however, that Gander
Mountain maintains in inventory in the ordinary course
of business certain materials deemed to be "hazardous,"
including black powder and certain substances used in
gunsmithing. To Gander Mountain's knowledge there are
no underground or aboveground storage tanks on the
Leased Properties.
4.7 Litigation. All lawsuits and notices of
governmental investigations with respect to any of the
Assets or the Stores' business or Gander Mountain's
business, other than claims filed in the Bankruptcy
Cases, are listed on Exhibit C attached hereto. Except
as set forth in Exhibit C and for claims asserted in
the Bankruptcy Cases, there is no claim, action, suit,
proceeding or governmental investigation pending or, to
the knowledge of Gander Mountain, threatened by any
person before any court, governmental department,
commission, board, agency or authority against Gander
Mountain that:
4.7.1 Has or would have, if adversely determined,
an effect on a Leased Property; or
4.7.2 Challenges or may challenge the validity of
this Agreement or any of the Operative Documents or
seeks to enjoin or otherwise restrain the transaction
contemplated herein or materially and adversely affects
Gander Mountain's ability to perform its obligations
hereunder and under the Operative Documents.
4.8 Default Under Assumed Obligations. Gander
Mountain has delivered to Holiday true, complete and
correct copies of the Assumed Obligations and there are
no material oral agreements or amendments with respect
thereto and Gander Mountain has no knowledge of default
by any other parties. Except for defaults arising from
or as a result of bankruptcy filing, Gander Mountain is
not in default under any Assumed Obligation which is
material to its operations, nor has any event occurred
which, with notice or lapse of time or both, would
constitute a default by Gander Mountain under any such
Assumed Obligation, except for any default which may be
cured or excused under 11 U.S.C. 363(l) or 365.
4.9 Collective Bargaining Agreements. There are no
collective bargaining agreements applicable to Gander
Mountain's employees. Gander Mountain has no knowledge
of union organizing efforts at the Stores.
4.10 Corporate Operation. All of the retail stores are
operated by GRS.
4.11 Brokers. No broker, finder or agent will be
entitled to a fee or commission with respect to this
Agreement.
4.12 Environmental Laws. To Gander Mountain's
knowledge, the Leased Properties are in compliance with
all environmental laws at each Leased Property.
4.13 No Agreements. Gander Mountain represents that no
contract for sale, option or right of first refusal
with respect to any of the Assets exists at the date of
this Agreement. Except for the representations and
warranties set forth in this Section 4, which expire at
Closing, Gander Mountain makes no other warranty or
representation with respect to the Assets, it being the
understanding of the parties that the Assets shall be
leased or transferred to Holiday by Gander Mountain on
an "AS IS, WHERE IS" basis.
4.14 Financial Information Accuracy. Gander Mountain
represents that all financial and related information
provided to Holiday prior to execution of this
Agreement was prepared in accordance with the books and
records of Gander Mountain; presents fairly the
financial condition of Gander Mountain at the balance
sheet dates and the sales and results of its operations
and cash flows for the periods therein specified in all
material respects; and has, in all material respects,
been prepared in accordance with generally accepted
accounting principles applied on a basis consistent
with prior accounting periods.
4.15 Tax Returns and Audits. All required federal,
state and local tax returns or appropriate extension
requests of Gander Mountain have been filed, and all
federal, state and local taxes required to be paid with
respect to such returns have been paid or due provision
for the payment thereof has been made either through
this Agreement or the Plan, except where the filing of
the Bankruptcy cases have precluded the payment.
Gander Mountain is not delinquent in the payment of any
such tax or in the payment of any assessment or
governmental charge except where the filing of the
Bankruptcy cases have precluded the payment. Except
for matters which have been closed prior to the date of
this Agreement or as to which all claimed deficiencies
have been paid in full:
4.15.1 Gander Mountain has not received notice of
any tax deficiency proposed or assessed against it
except where the filing of the Bankruptcy cases have
precluded the payment;
4.15.2 Gander Mountain has not executed any waiver
of any statute of limitations on the assessment or
collection of any tax, except for federal returns for
1987-1992 and State of Wisconsin returns for 1986-1990;
and
4.15.3 None of Gander Mountain's tax returns have
been audited by governmental authorities in a manner to
bring such audits to Gander Mountain's attention.
Gander Mountain does not have any tax liabilities
except those incurred in the ordinary course of
business since June 15, 1996.
4.16 Employees. Gander Mountain currently operates the
Stores and employs employees ("Employees") in the
ordinary course of its business operations. Gander
Mountain is not in default in any payment to any
Employee, specifically including but not limited to
salary and bonuses, if any.
5. REPRESENTATIONS AND WARRANTIES OF HOLIDAY
Holiday makes the following representations and
warranties to Gander Mountain:
5.1 Corporate Status and Authority. Holiday is a
corporation duly incorporated, validly existing and in
good standing under the laws of the State of Minnesota.
Holiday has all requisite power and authority to own
and operate its properties and assets and to carry on
its business as presently conducted and as proposed to
be conducted. Holiday has all requisite power and
authority to execute and deliver this Agreement and the
other Operative Documents to which it is a party and to
perform its obligations hereunder and thereunder, and
the execution, delivery and performance of this
Agreement and the Operative Documents have been duly
authorized by all necessary action on the part of
Holiday.
5.2 Enforceability. This Agreement does, and each of
the other Operative Documents when executed and
delivered shall, constitute a legal, valid and binding
obligation of Holiday enforceable in accordance with
its terms subject, as to enforcement, to bankruptcy,
insolvency, reorganization and other similar laws and
judicial decisions of general applicability relating to
or affecting creditors' rights and to general
principles of equity.
5.3 Qualification. Holiday and/or a wholly-owned
subsidiary or related entity, will on the Closing Date
be, duly qualified to do business and authorized to do
business in the State of Wisconsin, the State of
Michigan and the State of Indiana.
5.4 Governmental Consents. Except as contemplated in
Sections 6.2.1 and 6.2.4, no consent, waiver, approval
or authorization of, or designation, declaration or
filing with, any governmental authority is or has been
required on the part of Holiday in connection with the
execution and delivery of this Agreement or by Holiday
in connection with the consummation of the transaction
contemplated hereby.
5.5 No Breach, Etc. The execution, delivery and
performance of this Agreement and the other Operative
Documents by Holiday and the consummation by Holiday of
the transactions contemplated hereby and thereby will
not result in:
5.5.1 Any conflict with or breach or violation of
or default under the articles of incorporation or
bylaws of Holiday; and
5.5.2 To Holiday's knowledge, any conflict with or
breach or violation of or default under any obligation
under any agreement to which Holiday is a party or any
applicable legal requirement, which conflict, breach,
violation, default or acceleration would limit
Holiday's ability to perform its obligations hereunder
and under the other Operative Documents to which
Holiday is a party.
5.6 Litigation. There is no claim, action, suit,
proceeding or governmental investigation pending or, to
the knowledge of Holiday, threatened by any person
before any court, governmental department, commission,
board, agency or authority against Holiday that
challenges or may challenge the validity of this
Agreement or any of the Operative Documents or seeks to
enjoin or otherwise restrain the transaction
contemplated herein or materially and adversely affects
Holiday's ability to perform its obligations hereunder
and under the Operative Documents.
5.7 Brokers. All negotiations relating to this
Agreement and the transaction contemplated hereby have
been conducted without the intervention of any person
acting on behalf of Holiday in such a manner as to give
rise to any claim against Gander Mountain or Holiday
for any brokers' or finders' commission, fee or similar
compensation.
5.8 Funding. Holiday has access to the cash necessary
to complete the transaction contemplated by this
Agreement and is otherwise able to perform its
financial obligations under this Agreement and the
Operative Documents to which it is a party.
5.9 Authority to Perform Assumed Obligations. As
required by 365 of the Code, Holiday has the ability
to perform all of the Assumed Obligations, including
all obligations to be performed pursuant to the
Included Contracts and Leases. Holiday and its
contemplated use of the real estate complies in all
respects with 365(3).
6. CONDITIONS PRECEDENT
6.1 Preamble. The respective obligations of Gander
Mountain and Holiday set forth herein regarding the
consummation of the transaction contemplated by this
Agreement shall be subject to the fulfillment, on or
before the Closing Date, in the case of Gander
Mountain, of the conditions set forth in Sections 6.2
and 6.3, and in the case of Holiday of the conditions
set forth in Sections 6.2 and 6.4. Except for the
conditions in paragraph 6.2.1 and 6.2.4 which may not
be waived, any of the following conditions may be
waived in whole or in part by the party whose
obligation to perform at the Closing is subject to such
condition. Such waiver of the breach of a
representation or warranty (but not a covenant) shall
be deemed to constitute a waiver of any liability the
breaching party hereto may have hereunder with respect
to such breach, provided that the breaching party shall
have disclosed the inaccuracy of the representation or
warranty to the other party prior to the Closing.
6.2 Mutual Conditions to Obligations of Gander
Mountain and Holiday. The following are conditions
precedent to obligations of both Gander Mountain and
Holiday under this Agreement:
6.2.1 Hart-Scott-Rodino Compliance. On the Closing
Date, to the extent required by law, all premerger
notification filings required under the Hart-Scott-
Rodino Act will have been made, and the thirty (30) day
waiting period required thereby (or any shorter period
made applicable by 11 U.S.C. 363(b)(2)) shall have
been the subject of early termination or shall have
expired without a request from any appropriate
governmental agency for additional information or, if
additional information has been requested, the extended
waiting period shall have expired and no party shall
have received any notice from the Federal Trade
Commission ("FTC") or the Department of Justice ("DOJ")
that the transaction contemplated by this Agreement
violates Section 5 of the Federal Trade Commission Act
or Section 7 of the Clayton Act.
6.2.2 Absence of Litigation. No order, stay,
judgment or decree (excluding any of the same relating
to any action, suit or proceeding instituted by Gander
Mountain or Holiday against another party hereto) shall
have been issued and be in effect by any court
restraining or prohibiting the Closing provided that
before any determination is made to the effect that
this condition has not been satisfied, Gander Mountain
and Holiday shall use reasonable efforts and take such
other actions as may be reasonably necessary, each at
its own expense, to have such order, stay, judgment or
decree lifted or dismissed and any such action, suit or
proceeding dismissed or terminated.
6.2.3 Assets. On the Closing Date, all of the
Assets (except for inventory sold in the ordinary
course of business) material to operate Gander
Mountain's business shall be available for sale and
none of such material Assets have not been destroyed by
casualty, taken by condemnation or materially
diminished or impaired.
6.2.4 Bankruptcy Court Approval. This Agreement is
subject to and contingent upon confirmation by the
Bankruptcy Court for the Eastern District of Wisconsin
of a Chapter 11 plan which incorporates the terms of
this Agreement and is acceptable to Holiday and Gander
Mountain.
6.3 Conditions to Obligations of Gander Mountain. The
following are conditions precedent to the obligations
of Gander Mountain under this Agreement:
6.3.1 The representations and warranties of Holiday
in Section 5 shall be true and correct in all material
respects at and as of the Closing with the same effect
as though made at and as of the Closing. Holiday shall
have duly performed and complied in all material
respects with all agreements contained herein required
to be performed or complied with by Holiday at or
before the Closing.
6.3.2 Holiday shall have taken all of the actions
required by this Agreement to be taken by it at or
prior to the Closing.
6.4 Conditions to Obligations of Holiday. The
following are conditions precedent to the obligations
of Holiday under this Agreement:
6.4.1 The representations and warranties of Gander
Mountain in Section 4 shall be true and correct in all
material respects when made and shall be true and
correct in all material respects at and as of the
Closing with the same effect as though made at and as
of the Closing. Gander Mountain shall have duly
performed and complied in all material respect with all
agreements contained herein required to be performed or
complied with by Gander Mountain at or before the
Closing.
6.4.2 Gander Mountain shall have taken all of the
actions required by this Agreement to be taken by
Gander Mountain at or prior to the Closing.
6.4.3 Gander Mountain shall continue its business
operations as debtor-in-possession under 11 U.S.C.
1107 and 1108, in the ordinary course until the
Closing Date.
6.4.4 The persons responsible for the management of
Gander Mountain, as of the date of this Agreement,
shall remain in place through the Closing Date, unless
a change is approved by Holiday or they resign
voluntarily.
7. OBLIGATIONS OF GANDER MOUNTAIN
7.1 Conduct of Business. During the time from the
date of this Agreement until Closing ("Interim
Period"), Gander Mountain shall, except to the extent
Holiday shall have given its prior written consent to
do otherwise:
7.1.1 Carry on its business substantially in the
same manner in which it is presently being conducted
subject to the restrictions, of the Bankruptcy Code and
orders of the Bankruptcy Court;
7.1.2 Not sell, lease or otherwise transfer or
encumber title to any of the Assets other than the sale
of inventory in the ordinary course of business without
the consent of Holiday, which consent shall not be
unreasonably withheld;
7.1.3 Use reasonable efforts to obtain the transfer
of all transferable Permits; and
7.1.4 Maintain the Assets in substantially the same
condition as on the date hereof, ordinary wear and tear
and normal seasonable inventory fluctuations excepted.
7.2 Access and Information. During the Interim
Period, Holiday may reasonably request and Gander
Mountain shall give, or cause to be given to Holiday
and its employees, agents and representatives,
reasonable access, during normal business hours and at
Holiday's cost and expense, to building plans, surveys,
as-built drawings, diagrams, wiring diagrams,
warranties and environmental site assessments, and any
other business or financial information requested by
Holiday. Gander Mountain shall permit Holiday, at
Holiday's cost and expense, to make copies of such
records (except as prohibited by any agreement)
contained in the records of Gander Mountain to the
extent access thereto is permitted above. During the
Interim Period, after giving Gander Mountain reasonable
prior written notice, Holiday shall have the right, at
its expense, to enter the Leased Premises at any
reasonable time during normal business hours to inspect
the Assets. Holiday shall conduct such activities so
as to minimize any interference with Gander Mountain's
business.
7.3 Hart-Scott-Rodino. If required by law, Gander
Mountain shall submit to the FTC and the DOJ, all of
its filings required to commence the "waiting period"
under the Hart-Scott-Rodino Anti-Trust Improvements Act
of 1976 (the "Hart-Scott-Rodino Act") in connection
with the transaction contemplated by this Agreement.
If a request for additional information is made of
Gander Mountain pursuant to the Hart-Scott-Rodino Act,
Gander Mountain shall use reasonable efforts to cause
compliance with such request as soon as practicable
after receipt of such request. Holiday shall pay the
filing fee and other costs associated with actions
required to comply with the Hart-Scott-Rodino Act.
7.4 Sales and Use Taxes Due Prior to the Effective
Time. Gander Mountain agrees to timely prepare and
timely file all sales and use tax returns with respect
to transactions occurring on or before the Closing in
connection with its retail business and timely pay all
sales and use taxes applicable to the sales reported on
such tax returns. Nothing herein shall prevent Gander
Mountain from contesting in good faith any such
assessments of such sales or use taxes.
7.5 Termination of Employees. On or before the
Closing Date, Gander Mountain agrees it will notify all
of its Employees that their employment is terminated,
to be effective as of the Closing Date. Holiday shall
have the right to interview and hire all of the
Employees as of the Closing Date. Holiday may
interview prior to the Closing Date any existing
Employee of the Stores for purposes of employment by
Holiday. Excepting the persons employed under the
terms of the Assumed Obligations, any person employed
by Holiday shall be an "employee-at-will" and nothing
herein is intended to obligate Holiday to employ any
Employee for any length of time. Holiday acknowledges
and agrees that Gander Mountain may not be delivering
to any of its employees any notices which may be
required under any federal or state statutes with
respect to the termination of employment of any such
employees, including without limitation, any notices
required under any federal or state plant closing
statutes. Accordingly, Holiday shall pay and remain
liable for any obligations which arise out of any
failure to provide any such notices to employees
terminated as a result of the transactions described in
this Agreement.
8. OBLIGATIONS OF HOLIDAY
8.1 Hart-Scott-Rodino. If required by law, Holiday
shall submit to the FTC and the DOJ, all filings for
Holiday required to commence the "waiting period" under
the Hart-Scott-Rodino Act in connection with the
transaction contemplated by this Agreement. If a
request for additional information is made to Holiday
pursuant to the Hart-Scott-Rodino Act, Holiday shall
use reasonable efforts to comply with such request as
soon as practicable after receipt of such request.
Holiday shall pay the filing fee and other costs
associated with actions required to comply with the
Hart-Scott-Rodino Act.
9. CLOSING
9.1 Closing Date. The closing ("Closing") shall take
place at a location to be designated by Holiday on or
before January 31, 1997 ("Closing Date"); provided,
however, that the Closing Date may be postponed to a
later business day by Gander Mountain or Holiday as is
reasonably necessary in order for such party to comply
with the provisions of Sections 6.2.1 and 6.2.4, which
postponement is subject to the provisions of Section
10.1.2. Time is of the essence for the Closing Date.
All documents shall be dated to be effective and the
Closing should for all purposes be deemed to be
effected as of 12:01 a.m. CST on the Closing Date. Any
amounts to be paid by either party shall be transferred
via wire transfer before 3:00 p.m. CST on the Closing
Date.
9.2 Closing. Among other terms and conditions, the
obligations of Gander Mountain and Holiday to
consummate the transaction contemplated by this
Agreement shall be conditioned upon the mutual
agreement of all parties as to the form of each of the
Operative Documents referenced in this Section 9.2. At
the Closing, Gander Mountain and/or Holiday shall
execute and deliver mutually acceptable and agreed upon
documents, including but not limited to, Bills of Sale,
assignments, Resale Exemption Certificates, ATF license
transfer documents and an order of the United States
Bankruptcy Court for the Eastern District of Wisconsin
confirming a Chapter 11 plan for Gander Mountain which
incorporates this agreement and, in form and substance
mutually satisfactory, authorizes the action to be
taken by each party pursuant to this Agreement and the
Operative Documents.
9.3 Stay of Closing. The parties contemplate that
this Agreement shall be presented for Court, creditor
and shareholder approval through a Chapter 11 plan of
reorganization ("Plan") which shall be filed as soon as
possible after the execution of this Agreement.
Notwithstanding any other provision of this Agreement,
if the closing conditions other than those set forth in
this Section 4.7 have been satisfied, the Debtors and
Holiday shall close the Agreement as soon as possible
after the date a confirmation order concerning such
Plan is entered on the docket of the Clerk of Court,
unless a Court with appropriate jurisdiction has
entered a stay of the implementation of the Plan or any
transaction described in this Agreement and the party
who sought such stay has posted a bond, if required to
do so, in the amount set by the Court.
9.4 Reasonable Efforts. The parties shall exercise
all reasonable efforts and diligence to satisfy all
conditions to Closing as expeditiously as possible.
10. TERMINATION
10.1 Termination. This Agreement and the transaction
contemplated hereby may be terminated and abandoned:
10.1.1 At any time prior to the Closing Date by
mutual written consents of Holiday and Gander Mountain
and Committee;
10.1.2 By written notice from Holiday, in its sole
discretion, to Gander Mountain if the Closing shall not
have occurred on or before January 31, 1997, for any
reason whatsoever other than the mutual written
agreement of the parties hereto to extend the Closing
Date past such deadline or Holiday's delay;
10.1.3 By either party if a final non-appealable
judgment has been entered against such party
restraining, prohibiting, declaring illegal or awarding
substantial damages in connection with the transaction
contemplated hereby.
10.2 Effect of Termination. If this Agreement is
terminated as permitted under Section 10.1 hereof, such
termination shall be without liability of or to any
party to this Agreement or any shareholder, director,
officer, trustee, employee, attorneys, agent, servant,
consultant, representative of such party; provided, if,
with the intent to avoid consummating the transaction
contemplated in this Agreement, any party (or a person
associated therewith) deliberately fails to fulfill a
condition to the performance of any other party or to
perform a covenant of this Agreement or deliberately
breaches this Agreement, then such party shall be
liable to the other party in damages. Notwithstanding
any of the foregoing to the contrary, there shall be no
liability to Gander Mountain, its shareholders,
directors, officers, trustees, attorneys, agents,
employees, servants, consultants or representatives if
Gander Mountain withdraws the Plan pursuant to Section
11.7 of the Plan; provided, however, that Holiday may
assert a claim for its contributions to the case and
preservation of the estate.
10.3 Extension of Retail License. In the event this
Agreement terminates, or if the sale of the Assets to
Holiday contemplated by this Agreement does not occur
on or before January 31, 1997, the retail license
granted to Holiday by Gander Mountain in Section 9 of
the Purchase Agreement dated as of July 10, 1996 shall
be extended in time through July 31, 1997. All other
terms and conditions of the retail license shall remain
the same.
11. ADDITIONAL COVENANTS
11.1 Duty to Insure. The duty to insure the Assets and
all risk, liability and responsibility for all loss or
damage to the Assets, and for all claims by third
parties arising out of the use or ownership of the
Assets, and the duty to defend, indemnify and hold the
other party harmless against any such claims (except
for claims based on the other party's active
negligence, wrongdoing or misconduct) shall be Gander
Mountain's with respect to events occurring before the
Closing Date and shall be Holiday's with respect to
events occurring from and after the Closing Date.
11.2 Sales Tax. The parties shall take all necessary
steps to ensure that the purchase and sale of the
Assets hereunder shall be exempt from all sales and use
taxes. Without limiting the generality of the
foregoing, Holiday shall provide to Gander Mountain
such resale certificates as Gander Mountain may
request.
12. MISCELLANEOUS
12.1 Severability. All of the provisions of this
Agreement are distinct and severable, and if any
provision shall be determined to be illegal, void or
unenforceable, such determination shall not affect the
validity, legality or enforceability of any other
provisions of this Agreement.
12.2 Governing Law. The provisions of this Agreement
shall be governed by and construed in accordance with
the laws of the State of Wisconsin.
12.3 Binding Agreement. This Agreement shall be
binding upon and inure to the benefit of the parties
and their heirs, representatives, successors and
assigns.
12.4 Assignment. This Agreement may be assigned by
Holiday; provided, however, that Holiday may assign its
rights under this Agreement only (i) to a subsidiary or
related entity which entity shall comply with all
representations and warranties of Holiday contained in
this Agreement and (ii) with recourse against Holiday.
12.5 Amendment. This Agreement may only be amended in
a writing signed by all parties.
12.6 Survival. This Agreement shall remain in full
force and effect until all obligations of each party to
this Agreement between Gander Mountain and Holiday have
been fully satisfied in accordance with the terms of
each such agreement. The terms and conditions of this
Agreement shall survive, continue in full force and
effect, and shall be enforceable after the closing of
the transaction contemplated by this Agreement;
provided, however, that Holiday shall have no claim for
any reason against the trust established under Gander
Mountain's Plan; provided that the representations and
warranties of Gander Mountain in Section 4 shall expire
upon the Closing.
12.7 No Third Party Beneficiaries. This Agreement is
only for the benefit of the parties to this Agreement
and not for the benefit of any third party
beneficiaries.
12.8 Notice. Any notice to be given by one party
hereto shall be personally delivered, sent by
registered or certified mail or sent by a nationally
recognized courier service that issues a receipt to the
other parties hereto at the addresses in this Section
(or to such other address as may be designated by
notice to the other parties), and shall be deemed given
upon the earlier of personal delivery, the date
postmarked, delivery to such courier or the refusal to
accept such service:
If to Holiday:
Holiday Stationstores, Inc.
4567 West 80th Street
Minneapolis, Minnesota 55437
Attention: President
with a copy to:
Holiday Stationstores, Inc.
4567 West 80th Street
Minneapolis, Minnesota 55437
Attention: Legal Department
If to Gander Mountain:
Gander Mountain, Inc.
P.O. Box 128
Highway W
Wilmot, Wisconsin 53192
Attention: President
with a copy to:
Godfrey & Kahn, S.C.
780 North Water Street
Milwaukee, WI 53202
Attention: Howard A. Schoenfeld
and with a copy to:
Holleb & Coff
55 East Monroe Street
Suite 4000
Chicago, IL 60603
Attention: Bruce Dopke
12.9 Authority. Each party has caused this Agreement
and the Operative Documents to which it is a party to
be executed and represents and warrants that their
signatory has been and is on the date of this Agreement
and the Operative Documents duly authorized by all
necessary and appropriate corporate action to execute
this Agreement and the Operative Documents except the
execution, delivery and performance by Gander Mountain
is subject to approval by the Bankruptcy Court in the
Bankruptcy Cases.
12.10 Counterparts. This Agreement may be executed
in one or more counterparts, each of which shall be
deemed to be an original, but all of which shall
constitute one and the same instrument.
12.11 Time of Essence. Time is of the essence of
this Agreement.
12.12 Joint and Several Liability. GMI, GRS, and
GMO are jointly and severally liable for any and all
obligations of any such party hereunder. Subsequent to
the merger to be effectuated under the Plan, GMI shall
be liable for all obligations of GRS and GMO hereunder.
12.13 No Merger. This Agreement does not
constitute a merger, consolidation or any other
relationship other than seller and buyer. This
Agreement is not intended to cause or create a joint
venture.
IN AGREEMENT, the parties have executed this
Agreement as of the date first above written.
GANDER MOUNTAIN, INC. HOLIDAY STATIONSTORES, INC.
By /s/ Ralph L. Freitag By /s/ Gerald Erickson
Title CEO Title Vice President
GRS, INC.
By /s/ David J. Lubar
Title Chairman
GMO, INC.
By /s/ Ralph L. Freitag
Title Executive V.P.
UNITED STATES BANKRUPTCY COURT
EASTERN DISTRICT OF WISCONSIN
In the Matters of
GANDER MOUNTAIN, INC., Case No. 96-26478-RAE
a Wisconsin corporation, Chapter 11
GRS, INC., Case No. 96-26479-RAE
a Wisconsin corporation, Chapter 11
GMO, INC., Case No. 96-26480-RAE
a Wisconsin corporation, Chapter 11
(Jointly Administered)
Debtors in Possession.
DISCLOSURE STATEMENT RELATING TO
JOINT PLAN OF REORGANIZATION
COUNSEL TO GANDER MOUNTAIN, INC. COUNSEL TO GMO, INC.
Howard A. Schoenfeld, Esq. Michael S. Polsky, Esq.
Godfrey & Kahn, S.C. McNally, Maloney & Peterson, S.C.
780 North Water Street 2600 North Mayfair Road, Suite 1080
Milwaukee, Wisconsin 53202 Milwaukee, Wisconsin 53226
(414) 273-3500 (414) 257-3399
COUNSEL TO GRS, INC.
Andrew M. Barnes, Esq.
Quarles & Brady
411 East Wisconsin Avenue
Milwaukee, Wisconsin 53202
(414) 277-5000
Introduction
On August 9, 1996 (the "Filing Date"), Gander
Mountain, Inc., a Wisconsin corporation ("Gander
Mountain"), and its wholly-owned subsidiaries, GRS,
Inc., a Wisconsin corporation ("GRS"), and GMO, Inc., a
Wisconsin corporation ("GMO"), filed their voluntary
petitions for reorganization pursuant to Chapter 11 of
the United States Bankruptcy Code, Title 11 of the
United States Code (as in effect on the Filing Date,
the "Code"). Gander Mountain, GRS and GMO are
hereinafter sometimes referred to collectively as the
"Debtors" and individually as a "Debtor."
The reorganization process led to the November 13,
1996 filing of the Joint Plan of Reorganization (the
"Plan") by the Debtors, the Official Committee of
Unsecured Creditors of Gander Mountain, Inc. (the
"Committee") and Holiday Stationstores, Inc., a
Minnesota corporation ("Holiday" or the "Buyer"). A
complete copy of the Plan is attached hereto as Exhibit
A. Capitalized terms used but not defined in this
Disclosure Statement shall have the meaning ascribed to
such terms in the Plan. Generally, the definitions of
capitalized terms in the Plan are set forth in Appendix
I of the Plan.
The Debtors submitted this Disclosure Statement to
the United States Bankruptcy Court for the Eastern
District of Wisconsin (the "Court") for a determination
of whether it contains "adequate information" as
required by 1125 of the Code. On _________________,
the Court issued its Order approving this Disclosure
Statement (the "Disclosure Statement Order") as
containing "adequate information" to enable a
reasonable investor, typical of the holders of Claims
and Interests of the Debtors, to make an informed
judgment in voting to accept or reject the Plan.
THIS DISCLOSURE STATEMENT HAS BEEN DETERMINED BY
THE COURT TO CONTAIN ADEQUATE INFORMATION AS REQUIRED
BY SECTION 1125 OF THE CODE. THIS DETERMINATION DOES
NOT CONSTITUTE RECOMMENDATION OR APPROVAL OF THE PLAN
BY THE COURT. MOREOVER, APPROVAL OF THIS DISCLOSURE
STATEMENT DOES NOT CONSTITUTE A DETERMINATION BY THE
COURT AS TO THE FAIRNESS OR MERITS OF THE PLAN, AND YOU
SHOULD REACH YOUR OWN CONCLUSION ABOUT HOW TO VOTE ON
THE PLAN AND WHETHER TO OBJECT TO CONFIRMATION OF THE
PLAN. IN ARRIVING AT YOUR DECISION, YOU SHOULD NOT
RELY ON ANY REPRESENTATION OR INDUCEMENT MADE TO SECURE
YOUR ACCEPTANCE OR REJECTION WHICH IS OTHER THAN AS
CONTAINED IN THIS DISCLOSURE STATEMENT.
The Plan (as more fully described in Section
I_Treatment of Claims and Interests Under the Plan),
provides, in part, for a sale of substantially all of
the assets of the Debtors to Holiday, with the cash
proceeds of the sale to be contributed to and
distributed under the terms of a Trust, to the holders
of Allowed Unsecured Claims, Allowed Unsecured
Convenience Claims and Allowed Interests. Allowed
Administrative Expense Claims and Allowed Priority
Claims will be paid by Holiday in accordance with the
Plan. Allowed Secured Claims will be treated as
provided in the Plan.
The Board of Directors of each of the Debtors has
concluded that the Plan is in the best interest of the
Debtors, the Creditors and the holders of Interests and
has, therefore, authorized filing of the Plan. The
Board of Directors of each of the Debtors recommends
that Creditors and holders of Interest vote to accept
the Plan.
The Committee recommends that all Creditors
entitled to vote on the Plan cast their ballots to
accept the Plan. The Committee believes that the Plan
is in the best interests of the Creditors and that
failure to approve this Plan would likely result in a
liquidation of the Debtors and ultimately a
substantially smaller distribution to Creditors at a
later date than is provided in this Plan.
HOLDERS OF CLAIMS AND INTERESTS SHOULD READ THIS
DISCLOSURE STATEMENT, THE EXHIBITS HERETO, THE PLAN,
AND THE EXHIBITS THERETO, CAREFULLY, IN THEIR ENTIRETY.
FOR THE CONVENIENCE OF HOLDERS OF CLAIMS AND INTERESTS,
THIS DISCLOSURE STATEMENT SUMMARIZES THE TERMS OF THE
PLAN, BUT THE PLAN ITSELF QUALIFIES ALL SUMMARIES, AND,
IF ANY INCONSISTENCIES EXIST BETWEEN THE PLAN AND THIS
DISCLOSURE STATEMENT, THE TERMS OF THE PLAN ARE
CONTROLLING. THE TERMS, CONDITIONS AND PROVISIONS OF
THE PLAN ARE INCORPORATED HEREIN BY THIS REFERENCE.
THIS DISCLOSURE STATEMENT MAY NOT BE RELIED ON FOR
ANY PURPOSE OTHER THAN TO DETERMINE WHETHER TO VOTE TO
ACCEPT OR REJECT THE PLAN. NOTHING CONTAINED HEREIN
SHALL CONSTITUTE AN ADMISSION OF ANY FACT OR LIABILITY
BY ANY PARTY, OR BE ADMISSIBLE IN ANY PROCEEDING
INVOLVING ANY DEBTOR OR ANY OTHER PARTY, OR BE DEEMED
CONCLUSIVE EVIDENCE OF THE TAX OR OTHER LEGAL EFFECTS
OF THE REORGANIZATION ON ANY DEBTOR OR HOLDERS OF
CLAIMS OR INTERESTS. THE STATEMENTS CONTAINED IN THIS
DISCLOSURE STATEMENT ARE MADE AS OF THE DATE HEREOF
UNLESS ANOTHER TIME IS SPECIFIED HEREIN, AND THE
DELIVERY OF THIS DISCLOSURE STATEMENT SHALL NOT CREATE
AN IMPLICATION THAT THERE HAS BEEN NO CHANGE IN THE
INFORMATION SET FORTH HEREIN SINCE THE DATE HEREOF.
DUE TO THE COMPLEXITY OF THE DEBTORS' FINANCIAL
AFFAIRS, THE DEBTORS CANNOT REPRESENT THAT THE
INFORMATION CONTAINED HEREIN IS WITHOUT ANY INACCURACY,
ALTHOUGH GREAT EFFORT HAS BEEN MADE TO BE ACCURATE.
CERTAIN OF THE STATEMENTS CONTAINED IN THIS
DISCLOSURE STATEMENT, BY THEIR NATURE, ARE FORWARD
LOOKING AND CONTAIN ESTIMATES AND ASSUMPTIONS. THERE
CAN BE NO ASSURANCE THAT SUCH STATEMENTS WILL REFLECT
ACTUAL OUTCOMES.
YOU SHOULD NOT CONSTRUE THE CONTENTS OF THIS
DISCLOSURE STATEMENT AS PROVIDING ANY LEGAL, BUSINESS,
FINANCIAL OR TAX ADVICE. YOU SHOULD CONSULT WITH YOUR
OWN LEGAL, BUSINESS, FINANCIAL AND TAX ADVISORS AS TO
ANY LEGAL, BUSINESS, FINANCIAL, TAX AND RELATED MATTERS
CONCERNING THE PLAN.
DEFINED TERMS USED IN THE PLAN DO NOT NECESSARILY
HAVE THE SAME MEANING SUCH TERMS HAVE IN THE CODE. IN
READING THE PLAN, YOU SHOULD PAY PARTICULAR ATTENTION
TO THE DEFINITION OF TERMS. ONLY WHERE THE PLAN'S
DEFINITION OF A PARTICULAR TERM EXPLICITLY INCORPORATES
THE CODE DEFINITION SHOULD CREDITORS OR HOLDERS OF
INTERESTS ASSUME THAT SUCH TERM HAS THE SAME MEANING IN
THE PLAN AND DISCLOSURE STATEMENT AS IT HAS IN THE
CODE. CAPITALIZED TERMS USED IN THE DISCLOSURE
STATEMENT AND NOT OTHERWISE DEFINED HEREIN SHALL HAVE
THE MEANING ASCRIBED THERETO IN THE PLAN.
The Solicitation of Acceptances of the Plan
The purpose of this Disclosure Statement is to
provide Creditors and holders of Interests with
adequate information about the Debtors and the Plan to
enable Creditors and holders of Interests to make an
informed judgment in voting whether to accept or reject
the Plan. This Disclosure Statement describes, among
other matters, each Debtor's Chapter 11 reorganization
process, including a description of the Debtors'
businesses, the events precipitating the Chapter 11
filings, significant events during the Chapter 11
Cases, and the treatment of Claims and Interests under
the Plan. This Disclosure Statement also contains
financial and tax information which may assist you in
reaching your own conclusion regarding the Plan.
Your acceptance of the Plan is important. Whether
the Plan is confirmed depends both upon the number of
Creditors and holders of Interests voting to accept the
Plan and upon the aggregate amount of their Claims or
Interests. Votes cast by holders of Claims or
Interests in each Class (or subclass, as appropriate)
will be tabulated separately by Class or subclass. You
are urged to vote by filling out the enclosed ballot
and promptly returning it in the enclosed, postage paid
envelope. Your vote will be counted in each Class or
subclass in which you have, for voting purposes, an
Allowed Claim or an Allowed Interest.
The Debtors have transmitted copies of this
Disclosure Statement and the exhibits hereto (including
Exhibit A, the Plan), the Disclosure Statement Order, a
ballot and other related documents to the Creditors of
and the record holders of Interests in the Debtors.
Each Creditor and holder of an Interest entitled to
vote is requested to complete the ballot and mail it to
the attorneys for the Gander Mountain, Godfrey & Kahn,
S.C., in the enclosed addressed envelope, or if you
misplace the envelope, at the address indicated below.
Kathleen J. Barnes
GODFREY & KAHN, S.C.
780 North Water Street
Milwaukee, WI 53202
Ballots must be received prior to _____ P.M. (C.S.T.)
on _______________, 1997.
If you are a holder of an Interest entitled to
vote and you received this Disclosure Statement and the
accompanying materials from a brokerage house, bank or
other intermediary, you should vote by completing the
enclosed ballot and mailing it in accordance with the
enclosed instructions from the brokerage house, bank or
other intermediary.
IF YOU HAVE ANY QUESTIONS CONCERNING THIS
DISCLOSURE STATEMENT OR THE PLAN, THE PROCEDURE FOR
VOTING YOUR CLAIM OR INTEREST, OR THE PACKET OF
MATERIALS THAT YOU RECEIVED, OR IF YOU WISH TO OBTAIN
AN ADDITIONAL COPY OF THE PLAN, THIS DISCLOSURE
STATEMENT, OR ANY OF THE EXHIBITS TO THOSE DOCUMENTS,
AT YOUR OWN EXPENSE, PLEASE CONTACT: GANDER MOUNTAIN,
INC., P.O. BOX 128, WILMOT, WISCONSIN 53192, TELEPHONE
(414) 862-3525.
I. TREATMENT OF CLAIMS AND INTERESTS UNDER THE PLAN
THE FOLLOWING IS A BRIEF SUMMARY OF HOW DIFFERENT
CLAIMS AND INTERESTS WILL BE TREATED UNDER THE PLAN.
IT IS QUALIFIED BY REFERENCE TO THE PLAN ITSELF, A
COMPLETE COPY OF WHICH IS ATTACHED HERETO AS EXHIBIT A.
A. Matters Preceding Distributions under the Plan
1. Corporate Restructuring and Sale of Assets. The
Plan is a joint Plan of Reorganization for all three of
the Debtors. Pursuant to the Plan, on the Effective
Date, GRS and GMO will merge into Gander Mountain (the
"Merger") and thereafter all liabilities of Gander
Mountain, GRS and GMO will be deemed to be the
liabilities of Gander Mountain and all Claims filed or
to be filed in the Chapter 11 Cases will be deemed
filed against Gander Mountain. All guarantees of any
of the Debtors of the obligations of another Debtor
will be eliminated so that any claim against any Debtor
and any guarantee thereof executed by another Debtor
will be treated as one obligation of Gander Mountain.
Any other joint and several liability of the Debtors
will also be treated as one obligation of Gander
Mountain.
On the Effective Date, and subsequent to the
Merger, Gander Mountain will sell substantially
all of the assets of the Debtors to the Buyer in
accordance with an asset purchase agreement
hereinafter referred to as the Holiday Agreement,
a copy of which is attached as Exhibit 2.3 to the
Plan. The purchase price to be paid by the Buyer
will consist of a cash payment made at closing in
the amount of $19,500,000 (or $19,000,000 if the
Trigger Event occurs (See Section
I.B.6._Distributions Under the Plan to Holders of
Unsecured Claims)) and an assumption by the Buyer
of all Priority Claims, Administrative Expense
Claims (including the claims of the CIT
Group/Business Credit, Inc. ("CIT") under the DIP
Financing Documents) and any other post-petition
liabilities or obligations of the Debtors and the
Trust, including post-confirmation expenses.
2. Formation of the Trust. On the Confirmation Date,
the Debtor and the individual who will be designated in
the Confirmation Order as the "Trustee," will enter
into a Trust Agreement in the form attached to the Plan
as Exhibit 2.2. On the Effective Date, the Debtors
will transfer to the Trust various claims, defenses and
counterclaims of the Debtors. (See Section
V.B._Creation of the Trust and Duties of the Trustee
and the Advisory Committee.) The cash portion of the
purchase price to be paid by the Buyer for the Debtors'
assets will be deposited in the Trust. The Trustee
will make disbursements to the holders of Allowed
Claims and Interests from the available funds in the
Trust in accordance with the Plan.
B. Distributions to Holders of Allowed Claims and
Interests
1. Distributions under the Plan to Holders of
Administrative and Priority Tax Claims. The Plan
provides that Allowed Administrative Expense Claims
will either be paid in full on the later to occur of
the Effective Date or 15 days following the date such
Claim is Allowed, or if such Claim arose in the
ordinary course of the debtor's business, on the date
such Claim becomes due in accordance with ordinary
business terms, unless other payment terms are agreed
to by the holder of such a Claim. Holders of Allowed
Priority Claims of governmental units for taxes will
receive from the Buyer cash equal to the Allowed amount
of such Claim on the later to occur of the Effective
Date or 15 days following the date such Claim is
Allowed.
2. Distributions Under the Plan to Holders of Non-Tax
Priority Claims. Class One contains non-tax Priority
Claims, such as claims of the Debtors' present or
former employees for certain pre-Filing Date wages,
salaries and benefits. The Plan provides that to the
extent these claims are Allowed Priority Claims, the
holders of such Claims will receive payment in full on
the later of the Effective Date or 15 days following
the date such Claim is Allowed, unless other payment
terms are agreed to by the holder of such a Claim.
3. Distributions Under the Plan to Holders of Secured
Claims. The Secured Claims against the Debtors are
classified in Class Two, each of which Claims
constitutes a separate subclass. Each holder of an
Allowed Secured Claim, at the Buyer's option, will
either (i) be treated as provided in 1124 of the Code
such that the holders of such Claim shall maintain the
legal, equitable and contractual rights to which such
holder is entitled as if there had been no bankruptcy
filing, (ii) receive the property securing its Allowed
Secured Claim in full satisfaction and release of such
Allowed Secured Claim on one of the dates provided in
the Plan or otherwise agreed to by the Debtors and/or
the Buyers and the holder of such Claim, (iii) be paid
by the Buyer the full amount of its Allowed Secured
Claim or such lesser amount to which the holder of such
claim agrees, on the later of the Effective Date or
promptly after such Claim is Allowed, or (iv) retain
its liens and receive deferred payments, including
interest, at a rate sufficient to give such deferred
payments a present value equal to the amount of its
Allowed Secured Claim.
4. Treatment of the Old Lenders. Class Three
contains the Claims of the Old Lenders except for the
Claims of Harris arising out of the Harris Merchant
Agreement. The Old Lenders were paid in full out of
the proceeds of the Debtors' post-petition working
capital facility and will not receive any distribution
under the Plan.
5. Distributions Under the Plan to Holders of
Unsecured Convenience Claims. Class Four contains
unsecured Claims in the amount of not more than $1,000
(including any Claim exceeding $1,000 which the holder
thereof elects to reduce to the amount of $1,000 for
all purposes relating to the Plan). Holders of
Unsecured Claims in excess of $1,000 may elect to be
included in the Class of Unsecured Convenience Claims,
which election will be made on their ballots for voting
to accept or reject the Plan. These claims are known
as Unsecured Convenience Claims. Class Four includes
three subclasses for Unsecured Convenience Claims, one
subclass for Claims asserted against each of the
Debtors. Under the Plan, holders of Allowed Unsecured
Convenience Claims will receive from the Trust on the
later of the Initial Distribution Date (generally
defined as a date not more than 45 days after the
Effective Date) or within 30 days after the date such
Claim is Allowed cash equal to eighty percent (80%) of
the amount of such Allowed Unsecured Convenience Claim.
6. Distributions Under the Plan to Holders of
Unsecured Claims. Class Five contains all Unsecured
Claims against the Debtors, with a separate subclass
for the Unsecured Claims against each of the Debtors.
(The term Unsecured Claim, as used herein and in the
Plan, excludes Unsecured Convenience Claims). Each
holder of an Allowed Unsecured Claim will receive its
Pro-Rata share of $18,500,000 less amounts distributed
or to be distributed to the holders of Allowed
Unsecured Convenience Claims. The aggregate amount
available for distribution to holders of Allowed
Unsecured Claims is referred to as the "Unsecured
Creditors' Cash Distribution Amount." The amount
available for distribution to Unsecured Creditors could
be reduced in the event assets of the Trust are charged
for the Trustee's expenses and any indemnification
Claims under the Trust Agreement and such amounts are
not reimbursed to the Trust by Holiday (See Section
V.B._Creation of the Trust and Duties of the Trustee
and the Advisory Committee.). Until all Disputed
Claims are resolved and all Avoidance Claims are either
resolved, released or waived, a reserve for payment of
Disputed Claims will be withheld from the Unsecured
Creditors' Cash Distribution Amount. Holders of
Allowed Unsecured Claims as of the Effective Date will
receive on the Initial Distribution Date a Pro-Rata
portion of the Unsecured Creditors' Cash Distribution
Amount. Holders of Unsecured Claims whose Claims are
Allowed after the Effective Date will receive a Pro-
Rata portion of the amounts reserved for payment of
Disputed Claims 30 days after such Disputed Claim has
been Allowed. Once all Disputed Claims have been
resolved and all Avoidance Claims have been resolved,
waived or released, each holder of an Allowed Unsecured
Claim will receive an additional distribution equal to
its Pro-Rata share of the remaining amounts held in
reserve, if any.
In the event either the holders of in excess
of one-third in amount of Allowed Preferred Stock
Interests vote to reject the Plan (and such vote
is not withdrawn or otherwise deemed to be a vote
to accept) or a holder of a Preferred Stock
Interest objects to confirmation (and said
objection is not withdrawn) based, in part, on the
proposed distributions to the holders of Gander
Mountain's Common Stock, and the Court concludes
that the Plan cannot therefore be confirmed, then
the Trigger Event will occur, and in such event,
the holders of Allowed Unsecured Claims will also
receive their Pro-Rata shares of an additional
$500,000.
7. Distributions Under the Plan to Holders of Gander
Mountain Preferred Stock and Gander Mountain Common
Stock. Class Six consists of the Preferred Stock
Interests. Class Seven consists of the Common Stock
Interests. The Plan provides for each holder of
record, as of the Confirmation Date, of a Preferred
Stock Interest to receive its Pro-Rata share of
$500,000. The Plan further provides for each holder of
record, as of the Confirmation Date, of a Common Stock
Interest to also receive its Pro-Rata share of an
additional $500,000. Notwithstanding the foregoing, in
the event the Trigger Event occurs, there shall be no
distribution to the holders of Preferred Stock
Interests and Common Stock Interests.
8. Treatment Under the Plan of Gander Mountain's
Interests in GMO and GRS, Intercompany Claims and the
Claims and Interests of Holders of Pre-Petition
Warrants and Pre-Petition Stock Options. Class Eight
and Class Nine consist of Gander Mountain's equity
interests in GMO and GRS, respectively. By virtue of
the Merger, Gander Mountain will not receive or retain
any property on account of such Interests. Class Ten
consists of the Intercompany Claims held by Gander
Mountain against GRS and GMO. In connection with the
Merger, such Claims shall be contributed to GRS and
GMO, respectively, as capital contributions. Class
Eleven consists of the Claims and Interests of holders
of Pre-Petition Warrants and Pre-Petition Stock
Options. Holders of Interests and Claims in Class 11
will not receive any distribution on account of any
such Interests or Claims.
C. Analysis of Unsecured Claims
Because the Plan provides for the Pro-Rata
distribution to Unsecured Creditors of a fixed amount,
Unsecured Creditors will want to consider what the
aggregate amount of Allowed Unsecured Claims may be in
order to analyze the value of the distributions they
are to receive for their Claims under the Plan. A
brief analysis of Unsecured Claims is set forth on
Exhibit C hereto and is further described below.
Pursuant to an Order of the Court, the last day
for filing Proofs of Claim in these Chapter 11 Cases
(other than proofs which may be filed after the
Effective Date in accordance with the Plan) was October
25, 1996. Based on the Claims filed with the Court by
that date, the Debtors have determined the aggregate
amount of Unsecured Claims which have either been
scheduled by the Debtors as liquidated, non-contingent
and undisputed or which have been evidenced by a timely-
filed proof of Claim, net of duplicative proofs of
Claim, Claims which will be paid from the proceeds of
insurance maintained by the Debtors, other Claims of
parties involved in litigation with the Debtors or of
manufacturers of specialty goods for which the Debtors
have disclaimed certain liability and Claims of the non-
debtor parties to unexpired leases and other Executory
Contracts. That amount is set forth on line 1 of
Exhibit C.
There are a number of possible deductions from the
total on line 1. There may be objections to Unsecured
Claims to the extent the amount claimed exceeds the
amount shown due and owing according to the Debtors'
books and records or because of a defense based on the
provisions of the Code. The holder of a Claim to which
an objection has been interposed may have a meritorious
defense to the objection. The Debtors believe that
there are meritorious objections to Claims in the
aggregate in the approximate amount set forth on line 2
of Exhibit C. Again, it is possible that Creditors
holding these Claims will be able to prove that their
Claims are valid and that the objections should be
denied.
In addition to these possible deductions, certain
additions may be made. As provided in the Holiday
Agreement, certain Executory Contracts and unexpired
Leases of the Debtors will be assumed by the Debtors
and assigned to Holiday and all remaining Executory
Contracts and unexpired Leases will be rejected. (See
Section V.H._Executory Contracts and Unexpired Leases.)
Unsecured Claims arising from the rejection of
Executory Contracts under the Plan have not been
included on line 1. The Debtors' estimate of the
aggregate amount of Unsecured Claims which may arise on
account of the rejection of Executory Contracts and
unexpired leases is set forth on line 4 of Exhibit C.
Such Claims must be filed within 30 days of the
Confirmation Date in order for the Creditor holding
such Claim to be eligible for a distribution under the
Plan. Claims arising from Executory Contracts rejected
pursuant to the Plan may become time barred if a proof
of Claim is not timely filed. In addition, Claims of
certain parties pursuing litigation against the Debtors
or of certain parties who have produced specialty goods
for the Debtors, where the Debtors have disclaimed
liability on certain bases, may ultimately result in an
increase in the total amount of outstanding Claims.
The Debtors' estimate of the amount of Claims which may
ultimately be Allowed in favor of these claimants is
set forth on line 5 of Exhibit C.
The Debtors believe it is likely that the
aggregate total of Allowed Unsecured Claims in these
Chapter 11 Cases following the resolution of all
Disputed Claims will approximate the amount set forth
on line 6 of Exhibit C. As mentioned above, Unsecured
Creditors collectively will receive a total of either
$18,500,000 or, if the Trigger Event has occurred and
is continuing on the Effective Date, $19,000,000, less
the amount distributed to the holders of Allowed
Unsecured Convenience Claims in accordance with the
Plan; provided the distribution amount is not reduced
by expenses of the Trust or indemnification of the
Trustee and such amounts are not reimbursed by Holiday.
The Debtors estimate that the amount to be paid to the
holders of Allowed Unsecured Convenience Claims will
not exceed the amount set forth on line 8 of Exhibit C.
Accordingly, the Debtors estimate that the amount set
forth on line 9 of Exhibit C will be available for
distribution to the holders of Allowed Unsecured
Claims, assuming that the Trigger Event has not
occurred. Therefore, based on this analysis, shown on
line 10 of Exhibit C is the approximate amount of
distribution per dollar of Claim which the Debtors
believe holders of Allowed Unsecured Claims would
receive under the Plan.
II. VOTING PROCEDURES AND PLAN CONFIRMATION
A. Voting Procedures for Confirmation of the Plan
Enclosed with this Disclosure Statement
are the Plan (as Exhibit A to this Disclosure
Statement), the Disclosure Statement Order, a ballot
which may be cast by Creditors and holders of Interests
entitled to vote to accept or reject the Plan and on
which holders of Unsecured Claims may elect to have
their Claims treated as Unsecured Convenience Claims
and a pre-addressed envelope in which to return a
completed ballot. In order to vote on the Plan, you
must fill out the enclosed ballot completely, sign it
and return it in the postage paid envelope by the
deadline given below. IN ORDER TO BE COUNTED AS VOTES
TO ACCEPT OR REJECT THE PLAN AND/OR TO ELECT TREATMENT
AS AN UNSECURED CONVENIENCE CLAIM, BALLOTS MUST BE
COMPLETED, SIGNED AND RECEIVED BY __________ P.M.
(C.S.T.) ON ______________, 1997, BY GODFREY & KAHN,
S.C. AT THE ADDRESS SET FORTH ON THE BALLOT.
B. Acceptance of Plan by Classes of Claims or
Interests
Pursuant to 1129(a) of the Code, the
Plan can be confirmed if all impaired Classes of Claims
and Interests vote to accept the Plan. Votes cast by
holders of Claims or Interests in each Class under the
Plan will be tabulated separately by Class. According
to 1126(c) of the Code, a Class of Claims entitled to
vote on the Plan accepts the Plan if Creditors holding
at least two-thirds in dollar amount and more than one-
half in number of the voting Claims of that Class vote
to accept the Plan. As to holders of Interests of
Classes entitled to vote on the Plan, 1126(d) of the
Code provides that such Classes accept the Plan if
holders of at least two-thirds in amount of voting
Interests vote to accept the Plan. A vote may be
disregarded if the Court determines, after notice and a
hearing, that such vote was not cast, solicited or
procured in good faith or in accordance with the
provisions of the Code. If the Plan fails to receive
the requisite votes for acceptance by a Class,
according to the Code, that Class rejects the Plan.
C. Who is Entitled to Vote to Accept or Reject the
Plan
Only the holders of Claims or Interests
in Classes Two and Four through Eleven are entitled to
vote to accept or reject the Plan. Claims belonging to
Classes One and Three are not impaired under the Plan
and holders of such Claims are not entitled to vote.
Creditors who hold Claims of an impaired Class and
whose Claims have either been listed by the Debtors in
the schedules filed with the Court (provided that such
Claims have not been scheduled as disputed, contingent
or unliquidated) or who filed proof of such Claims on
or before the date required for the filing of proofs of
Claim, which Claims are not the subject of an
objection, are entitled to vote to accept or reject the
Plan.
Holders of all Common Stock Interests and
Preferred Stock Interests, who are holders of record as
of _______________, 1996, are entitled to vote to
accept or reject the Plan. Such records are maintained
by Gander Mountain's stock transfer agent with respect
to the holders of Common Stock Interests and by Gander
Mountain with respect to the holders of Preferred Stock
Interests.
In addition, holders of Claims currently
classified as Class Five Unsecured Claims may elect, at
the same time they vote to accept or reject the Plan,
to be treated as Class Four Unsecured Convenience
Claims.
D. Treatment of Disputed Claims for Voting Purposes
Objections have been filed to a number of Claims
filed by Creditors or previously scheduled by the
Debtors as undisputed, liquidated and non-contingent.
Some of such objections are objections as to allowance
of such Claims for all purposes and some are only
objections as to allowance of such Claims for voting
purposes. Creditors holding Claims to which there has
been an objection have received notice of that
objection. TO THE EXTENT YOUR CLAIM HAS BEEN OBJECTED
TO (subject to the following explanation) YOUR CLAIM IS
NOT ALLOWED FOR VOTING PURPOSES. Certain Claims have
been objected to in their entirety. IN THOSE CASES,
NONE OF THE CLAIM IS ALLOWED FOR VOTING PURPOSES.
However, some of the objections are objections only to
a portion of a given Claim. IF THE OBJECTION IS ONLY
TO THE ALLOWANCE OF A PORTION OF YOUR CLAIM, THEN YOU
ARE ENTITLED TO VOTE THAT PORTION OF YOUR CLAIM TO
WHICH NO OBJECTION HAS BEEN FILED.
Rule 3018(a) of the Federal Rules of Bankruptcy
Procedure provides that, notwithstanding an objection
to a Claim or Interest, the Court may, after notice and
a hearing, temporarily allow a Claim or Interest for
voting purposes in an amount which the Court deems
proper for such purposes. IF YOUR CLAIM HAS BEEN
OBJECTED TO IN ITS ENTIRETY OR IN PART AND YOU WISH TO
HAVE YOUR CLAIM ALLOWED FOR VOTING PURPOSES IN AN
AMOUNT GREATER THAN THE PORTION OF YOUR CLAIM TO WHICH
THERE HAS BEEN NO OBJECTION, YOU MUST FILE A MOTION
WITH THE COURT FOR TEMPORARY ALLOWANCE OF YOUR CLAIM
FOR VOTING PURPOSES. All holders of Claims which have
been temporarily Allowed for voting purposes will be
entitled to vote, notwithstanding the fact that an
objection to such Claim has been filed.
E. Confirmation Hearing and Objections to
Confirmation
The Code requires that the Court hold a
Confirmation Hearing upon notice to all parties in
interest. The Confirmation Hearing in respect to the
Plan has been scheduled for _______________, 1997,
before the Honorable Russell A. Eisenberg, United
States Bankruptcy Judge, in his courtroom, Room 149,
517 East Wisconsin Avenue, Milwaukee, Wisconsin 53202.
The Confirmation Hearing may be adjourned from time to
time by the Court without further notice, except for an
announcement of the adjourned date made at the
Confirmation Hearing. If you desire to object to
Confirmation of the Plan, you may do so, in writing,
specifying with particularity the grounds therefore.
You must file and serve any such objections in
accordance with the Disclosure Statement Order.
III. DESCRIPTION OF THE DEBTORS AND EVENTS
PRECIPITATING THE CHAPTER 11 FILINGS
A. History of Debtors
Prior to the Filing Date, the Debtors
operated as a leading specialty merchandiser of
hunting, fishing, camping and hiking equipment sold
through their retail stores, and prior to May 1996, a
catalog. Gander Mountain was initially incorporated
under the laws of the State of Delaware in 1984. In
November 1992, Gander Mountain changed its state of
incorporation to Wisconsin. In January 1993, Gander
Mountain created two wholly-owned subsidiaries, GRS and
GMO, and in March 1994, Gander Mountain assigned the
assets and liabilities relating to its retail business
to GRS and the assets and liabilities relating to its
catalog business to GMO.
Gander Mountain has provided
merchandising, fulfillment and general and
administrative services to GRS and GMO. GRS has
managed the retail store operation and GMO managed the
catalog business prior to its sale in May 1996.
The Debtors operate their corporate
offices and distribution center on leased premises in
Wilmot, Wisconsin which premises, prior to August 1,
1996, were owned by Gander Mountain. Prior to the
Filing Date, the Debtors operated as many as 17 leased
retail stores in Wisconsin, Indiana, Michigan and
Minnesota. Five stores were sold in July 1996.
The Debtors have located their stores in
towns and cities within 300 miles of their
headquarters and distribution center in Wilmot,
Wisconsin where there is a concentration of hunting,
fishing and camping enthusiasts. Customers are offered
a choice of name-brand products or equivalents at
competitive prices. In addition, the Debtors offer
proprietary "private label" products not available from
their competitors. The Debtors have used their "Gander
Mountain" registered trademark for a number of years
and believe it is of significant value. The Debtors
have historically competed with a variety of retail and
mail order companies, including smaller locally or
regionally owned sporting goods stores, national mass
merchants and discounters such as Wal-mart and Kmart,
national specialty retailers such as The Sports
Authority and Sportmart with respect to certain
products, and mail order catalog businesses such as
Cabela's, Inc. (the purchaser of the Debtors' catalog
business), Bass Pro Shops and others.
Gander Mountain Stock is traded on the
Over The Counter Bulletin Board under the symbol GNDR.
Prior to July 1996, the Gander Mountain Stock was
listed on the NASDAQ National Market.
B. Pre-Bankruptcy Financing
In December 1992, Gander Mountain entered into a
Revolving Credit and Term Loan Agreement with three
lenders which provided for various credit facilities
aggregating Fifty Million Dollars ($50,000,000). That
initial loan agreement was amended and restated as of
November 30, 1993, with one additional lender added to
the bank group and providing for credit facilities in
the aggregate amount of Fifty Five Million Dollars
($55,000,000). On April 3, 1994, the same bank group
entered into a Second Amended and Restated Revolving
Credit and Term Loan Agreement in connection with the
reorganization of the Debtor's business among Gander
Mountain, GRS and GMO. At that time, GRS and GMO
provided corporate guarantees to the bank group as well
as a security interest in all of the assets of each of
GRS and GMO. On November 22, 1994, this credit
agreement was again amended and restated. An
additional bank joined the bank group (collectively,
the "Old Lenders") and the total credit facilities were
increased to One Hundred Million Dollars
($100,000,000).
Borrowings under the pre-petition credit facility
were secured by substantially all personal property of
the Debtors, including inventory, accounts receivable,
equipment, general intangibles and the outstanding
shares of common stock of GMO and GRS. The pre-
petition facility provided for a revolving line of
credit of up to Eighty Million Dollars ($80,000,000)
and terms loans of Twenty Million Dollars
($20,000,000).
C. Events Precipitation the Chapter 11 Filings
In the summer of 1995, the Debtors were in breach
of several financial covenants in their pre-petition
credit facility. These defaults were cured on August
18, 1995 with the signing of an additional amended
credit facility containing more restrictive monthly
financial covenants. The Debtors at that time were
leveraged due primarily to an aggressive growth plan
which resulted in significant capital expenditures for
expanding their corporate headquarters and warehouse,
opening new retail stores, internally developed
computer systems, as well as significant increases in
their working capital (inventory and accounts
receivable) over the previous three fiscal years. Due
to lower than planned operating profits and a higher
net loss for the first quarter of fiscal 1996, the
Debtors did not meet the new monthly financial
covenants related to profitability and net worth.
Subsequently, the Debtors negotiated successive waiver
agreements with the Old Lenders subject to generally
declining borrowing limits and financial flexibility,
the last of which agreement extended the waiver of
defaults until August 16, 1996. Substantially all
cash, as was collected and available, was applied
directly each day against the outstanding revolving
line of credit balance. All cash outflows were
advanced against the revolving line of credit and
subject to prior approval by the Old Lenders.
In September 1995, the Debtors retained an outside
financial advisor and began actively to pursue
strategic and financial alternatives for securing
additional sources of debt or equity financing or
selling all or part of the Debtors' assets. This
process resulted in three significant transactions,
including the sale to (i) Cabela's, Inc. of selected
catalog business assets on May 17, 1996 for $35,000,000
in cash; (ii) Holiday of five retail stores on July 25,
1996 for $16,200,000 in cash plus a $500,000; and (iii)
Pleasant Company of the corporate facility in Wilmot,
Wisconsin on August 1, 1996 for $6,600,000 in cash.
Substantially all of the proceeds of these sales were
used to pay down the pre-petition credit facility. As
a result of the catalog assets sale, the Debtors exited
from the catalog business which had accounted for 53%
of total fiscal 1996 sales.
During most of the second half of fiscal 1996, the
Debtors were unable to purchase inventory on open
account, being generally limited to payment on delivery
terms with selected vendors, which resulted in
increasing out of stock conditions and deteriorating
comparable store sales. With very limited availability
under the pre-petition credit facility despite the
completion of the assets sales noted above, and needing
additional financing to purchase inventory and meet
ongoing operating expenses, the Debtors filed their
voluntary petitions for reorganization under Chapter 11
of the Code on August 9, 1996.
D. Financial Statements
The consolidated financial statements of the
Debtors as of and for the years ended June 30, 1995 and
June 30, 1996 are included as Exhibit B to this
Disclosure Statement.
IV. SIGNIFICANT EVENTS DURING CHAPTER 11 CASES
A. Commencement
The Chapter 11 Cases were commenced on the Filing
Date, August 9, 1996, when the Debtors filed their
voluntary petitions for relief in the United States
Bankruptcy Court for the Eastern District of Wisconsin.
The petitions were filed simultaneously, and the
Chapter 11 Cases were assigned to the Honorable Russell
A. Eisenberg, United States Bankruptcy Judge.
Immediately upon the filing of the petitions, the
Debtors became Debtors-in-Possession pursuant to
1107(a) and 1108 of the Code. Accordingly, the
Debtors have remained in possession of their assets and
are continuing to administer their business operations
in the ordinary course.
B. Administrative Consolidation
The Court has issued several orders related to the
administration of the Chapter 11 Cases since the Filing
Date. On August 14, 1996, with retroactive effect to
August 12, 1996, the Court ordered that the Chapter 11
Cases be jointly administered. On August 21, 1996,
with retroactive effect to August 9, 1996, the Court
entered a Case Management Order to clarify certain
notice procedures, facilitate docket control and
otherwise enhance the efficient administration of the
Chapter 11 Cases.
C. Gander Mountain Creditors Committee
Prior to the Filing Date, an unofficial committee
of unsecured creditors of the Debtors was formed (the
"Unofficial Committee"). At the beginning of Gander
Mountain's Chapter 11 Case, the United States Trustee
appointed members of such unofficial committee as
members of the Official Committee of Unsecured
Creditors representing the unsecured creditor body of
Gander Mountain (the "Committee"). The members of the
Committee are as follows:
Remington Arms
Tasco Sales Inc.
Blount, Inc.
Ssanyong Inc./Jinwoong Inc.
Mitsubishi International Corp.
Irwin B. Schwabe Co.
Eagle/Lowrance Electronics, Inc.
No creditors committee has been formed to represent the
unsecured creditor bodies of GMO or GRS. The Committee
will continue to serve until the Effective Date.
D. Employment of Professionals
On the Petition Date, the Debtors each filed an
application to employ Godfrey & Kahn, S.C. ("G&K") as
bankruptcy counsel (the "Original Applications").
Gander Mountain's Original Application was granted on
October 21, 1996, with retroactive effect to the
Petition Date. The Original Applications of GRS and
GMO were amended on the October 23, 1996 to provide
that the GMO and GRS would employ G&K as special,
rather than general bankruptcy, counsel. An order
authorizing GRS and GMO each to employ G&K as their
special counsel was entered by the Court on November
__, 1996, with retroactive effect to the Petition Date.
On October 15, 1996 GRS filed an application to
employ Quarles & Brady as its counsel, which
application was amended on October 29, 1996. The
amended application was granted by Court order dated
November __, 1996, with retroactive effect to October
15, 1996.
On October 16, 1996 GMO filed an application to
employ McNally, Maloney & Peterson, S.C. as its
counsel, which application was amended on October 30,
1996. The amended application was granted by Court
order dated November __, 1996, with retroactive effect
to October 16, 1996.
On October 21, 1996, the Court granted the
Committee's August 29, 1996 applications to employ
Holleb & Coff ("Holleb") as counsel to the Committee
and von Breisen, Purtell & Roper, S.C. as local counsel
to the Committee. On the same date, the Court also
granted the Debtors' August 12, 1996 applications to
employ The Dratt-Campbell Company as their financial
turnaround consultants and the Debtors' August 15, 1996
applications to employ Price Waterhouse LLP as their
accountants.
Finally, on November __, 1996, the Court also
granted Gander Mountain's October 2, 1996 application
to employ Foley & Lardner as special tax counsel.
E. DIP Working Capital Facility
Prior to the Filing Date, the Debtors began
negotiating with CIT to provide a post-petition working
capital facility. Agreement as to the terms of the
post-petition working capital facility was reached
prior to the August 12, 1996 hearing on the Debtors'
motion for interim approval of the facility. On August
12, 1996, the Court approved the post-petition working
capital facility on an interim basis and authorized the
Debtors to borrow approximately $15,000,000 in the
aggregate in accordance with a budget submitted to the
Court, pending a final hearing to consider approval of
the facility on a permanent basis. The initial
proceeds of the post-petition working capital facility
were used to satisfy the Debtors' Obligations to the
Old Lenders. On September 5, 1996, the Court entered
an order (together with the interim orders referenced
therein, the "DIP Financing Orders") approving the post-
petition working capital facility. The DIP Financing
Orders authorized Gander Mountain to borrow up to
$25,000,000 at any time outstanding subject to the
provisions of the DIP Financing Documents. The DIP
Financing Documents and the DIP Financing Orders
provide that, upon the earliest of the following
events, CIT will not lend any additional amounts under
the DIP Financing Documents, and all amounts owing
under the DIP Financing Documents shall become
immediately due and payable: (i) August 12, 1999, (ii)
the effective date of plan of reorganization in Gander
Mountain's Chapter 11 Case, and (iii) the occurrence of
certain events of default described in the DIP
Financing Documents including, without limitation, the
date of conversion of Gander Mountain's Chapter 11 Case
to a case under Chapter 7 of the Code, the date of
appointment of a trustee in Gander Mountain's Chapter
11 Case or the date of dismissal of Gander Mountain's
Chapter 11 Case.
The DIP Financing Documents provide for revolving
loans to Gander Mountain and the issuance of letters of
credit for the account of Gander Mountain in a
principal amount not to exceed Twenty Five Million
Dollars ($25,000,000) at any time outstanding, with an
aggregate Three Million Dollars ($3,000,000) limit for
letters of credit. Notwithstanding the foregoing
credit limits, the amount actually available for
borrowing by Gander Mountain at any time is determined
in accordance with certain borrowing formulas based in
a large part on "Eligible Accounts" and "Eligible
Inventory" of the Debtors, as such terms are defined in
the DIP Financing Documents. GMO and GRS have
guaranteed Gander Mountain's obligations under the DIP
Financing Documents. The obligations of the Debtors
under the DIP Financing Documents, including GMO's and
GRS's obligations under their guarantees, are secured
by a first priority lien on and security interest in
substantially all of the assets of the Debtors.
Further, the Debtors' obligations to CIT under the DIP
Financing Documents constitute superpriority Allowed
Administrative Expense Claims, giving such obligations
priority over any other Claims against the Debtors,
whether such Claims are pre-petition or post-petition.
The liens and security interests of CIT are subject to
certain pre-petition permitted liens (as defined in the
DIP Financing Orders) and the liens and the
superpriority Administrative Expense Claims of CIT are
further subject and subordinate to a "Carve Out" (as
defined in the DIP Financing Orders) for amounts
payable to the United States Trustee, certain unpaid
wage claims and the payment of certain professional
fees.
F. Employee Related Matters
The Debtors filed their petitions immediately
prior to the busiest and most important period of their
annual business cycles. Therefore, it was imperative
that the Debtors continue to pay their employees in the
normal course to ensure their operations could continue
uninterrupted. On the Filing Date, the Debtors filed
emergency motions seeking authority to pay certain pre-
petition wages and benefits. By Order dated August 14,
1996, the Debtors were authorized to pay pre-petition
wages, salaries and related expenses, as well as
reimbursement of employee expenses, up to the $4,000
per employee limits on Priority Claims imposed by 507
of the Code.
G. Gift Certificates and Merchandise Returns
The Debtors have historically placed a great deal
of emphasis on customer service and customer
satisfaction. In order to maintain goodwill among the
Debtors' customers, the Debtors believed it was
imperative that they be authorized to accept returns of
merchandise sold prior to the Filing Date and that they
be permitted to honor gift certificates purchased prior
to the Filing Date. Accordingly, on the Filing Date,
the Debtors filed a motion for an order authorizing the
Debtors to honor pre-petition gift certificates and
accept returns of customer merchandise. By Order dated
August 21, 1996, the Debtors were authorized to honor
pre-petition gift certificates and accept returns of
customer merchandise.
H. Selection of a Buyer of the Debtors' Business
Prior to the Filing Date, the Debtors actively
pursued potential investors in or buyers for the
Debtors. The Unofficial Committee was kept advised as
that process progressed. Shortly before the Filing
Date, the Debtors received a proposal for a potential
new investment in the Debtors which would result in an
approximately $13,500,000 distribution to the Unsecured
Creditors. Since the Filing Date, the Debtors, with
the knowledge of the Committee, have continued to
actively pursue alternatives for securing additional
equity investments in the Debtors or selling the
Debtors' business. This process ultimately resulted in
three parties submitting bids. Two were for the
purchase of the Debtors' business and the third
involved an additional equity investment. Both the
members of the Committee and the members of the Board
of Directors of Gander Mountain were provided with
copies of the proposals from each of the three bidders.
The Committee also met with each of the parties
submitting proposals and counsel for the Committee was
permitted to address the Board of Directors of Gander
Mountain to express the Committee's preference among
the proposals. In evaluating the various proposals,
the Board of Directors of Gander Mountain was mindful
of the goal of producing the highest value in a form
that could be efficiently and speedily effectuated.
Following a careful review and analysis of the three
proposals, the Gander Mountain Board of Directors
rejected the one proposal to which the Committee
expressed its clear opposition. The Board then
authorized management of the Debtors to further
negotiate with the proponents of the two remaining
proposals. Each of those two bidders thereafter
modified its proposal. Again, the Board evaluated the
two remaining proposals in light of which proposal
yielded the highest value and which appeared to be most
likely to lead to a confirmed plan of reorganization,
preferably on a consensual basis. Based, in part, on
the fact that one of those proposals contained a
"material adverse change" clause and presented a
significant risk of a substantial price adjustment
based on the profitability of the Debtors' business
prior to confirmation of the Plan, the Board accepted
the proposal of Holiday, the terms of which are further
described in this Disclosure Statement. During all
phases of this bidding process, the Committee was kept
informed and involved. Indeed, Holiday's proposal was
the proposal preferred by the Committee. Clearly,
these efforts during the Chapter 11 Cases have resulted
in a much higher distribution for the Unsecured
Creditors than the proposal submitted prior to the
Filing Date. The distributions to the holders of
Interests is intended to facilitate consensus and avoid
delay in the Plan confirmation process which would
prevent the timely closing of the Holiday transaction,
resulting possibly in Holiday withdrawing its offer.
V. IMPLEMENTATION OF THE PLAN
A. Merger of Debtors and other Corporate Changes
On the Effective Date, GRS and GMO shall merge
into Gander Mountain and their separate corporate
existences shall cease. In connection with the Merger,
Gander Mountain's Articles of Incorporation and By-Laws
shall be restated in the forms of Exhibits 2.1(b)(i)
and 2.1(b)(ii) to the Plan, respectively. Thereafter,
the sole member of the Board of Directors of Gander
Mountain shall be David Lubar, who is currently the
Chairman of the Board of Gander Mountain, and Mr. Lubar
will also be the President and sole officer of Gander
Mountain. All of the Intercompany Claims of Gander
Mountain against GRS and GMO shall be contributed to
such entities as capital contributions, the
Intercompany Claims, if any, of GRS and GMO would be
eliminated and all liabilities of each of the Debtors
will be deemed to be liabilities of Gander Mountain.
Accordingly, all Claims filed in the Chapter 11 Cases
of the Debtors will be deemed to have been filed
against Gander Mountain. Guarantees of any Debtor of
the obligations of another Debtor will be eliminated
and all such guaranteed obligations and any other joint
and several liabilities among the Debtors will be
treated as one Claim against Gander Mountain.
B. Creation of the Trust and Duties of the Trustee
and the Advisory Committee
On the Confirmation Date, the Debtors and the
Trustee will enter into a Trust Agreement substantially
in the form attached to the Plan as Exhibit 2.2 .
Under the Trust Agreement, the Trustee will have the
obligation to make distributions to Creditors and
holders of Interests in accordance with the Plan, to
review and, if appropriate and authorized by the
Advisory Committee, object to or compromise Claims and
Interests and, if authorized under the Plan and by the
Advisory Committee, pursue Avoidance Claims of the
Debtors which are not waived or released in the Plan.
To assist in the performance of its duties under the
Trust Agreement, the Trustee may retain third parties,
including professionals such as lawyers and
accountants, to assist in its performance of such
duties.
On the Effective Date, the Debtors will transfer
to the Trust the following assets: (i) all Avoidance
Claims of the Debtors, (ii) all of the Debtors' Claims
and defenses arising out of or directly related to any
Executory Contract rejected either by the Debtors or
pursuant to the Plan, (iii) any defenses and
counterclaims of the Debtors to any Claim filed or
asserted against the Debtors' Estates, except to the
extent any such defenses or counterclaims relate to any
Executory Contract, liability or obligation assumed by
the Debtors and assigned to the Buyer, and (iv) all
rights to receive the cash portion of the purchase
price for the Debtors' assets sold to Holiday.
In furtherance of its obligations under the Trust
Agreement, the Trustee will (i) review proofs of Claims
and Interests against the Debtors and, with the
approval of the Advisory Committee, object to and
compromise or settle objections to Claims and
Interests, (ii) make disbursements to the holders of
Allowed Claims and Interests from the available funds
in the Trust in accordance with the Plan, (iii)
prosecute, subject to the advice and consent of the
Advisory Committee, Avoidance Claims of the Debtors not
otherwise waived or released by the Plan, and (iv) wind
up the affairs of the Debtors and take all steps
necessary to distribute the assets in the Trust and
close the Chapter 11 Cases.
Pursuant to the Trust Agreement, the Trustee will
be entitled to receive compensation from the Trust, and
all reasonable out-of-pocket costs and expenses
incurred by the Trustee will be paid from the Trust.
The Trust Agreement further provides that the Trustee
will be indemnified by the Trust for any liabilities,
expenses, claims, damages or losses incurred by the
Trustee in the performance of its duties under the
Trust Agreement, except to the extent any such
liabilities, expenses, claims, damages or losses arise
out of acts taken in bad faith or willful
misappropriation. Pursuant to the Holiday Agreement,
Holiday has agreed to pay all reasonable post-petition
liabilities and obligations of the Trust, including
reasonable post confirmation expenses (including
professional and paraprofessional fees and expenses
incurred by the Trust). If the Holiday Agreement is
construed such that Holiday will not be required to
reimburse the Trust for any portion of the expenses
incurred and paid by the Trust or any indemnification
claims of the Trustee paid out of the Trust, then the
aggregate amount available for distribution to
Unsecured Creditors will be reduced by the amounts paid
to or on behalf of the Trustee out of the Trust and not
reimbursed by Holiday. Under the Trust Agreement, the
Trustee has a senior lien on the assets of the Trust to
secure payment of amounts due to the Trustee from the
Trust, including compensation, reimbursement of fees
and expenses and any permissible indemnification
claims.
To assist the Trustee in the performance of its
duties, a committee consisting of five members, whose
identity will be disclosed at the Confirmation Hearing
(the "Advisory Committee") will be established. The
manner by which members of the Advisory Committee are
selected is described in Section 2.6 of the Plan. The
Advisory Committee will (i) advise the Trustee
regarding the disposition of assets contained in the
Trust, (ii) direct the Trustee as to the dates and
amounts of distributions out of the Trust, consistent
with the provisions of the Plan, (iii) set the general
parameters under which Claims and Interests which
exceed the amounts shown on the Debtors' books and
records may be objected to or compromised and approve,
within its discretion, any objections or compromises of
Claims and Interests, and (iv) approve, within its
discretion, any waiver, settlement or prosecution of
any Avoidance Claims by the Trustee which are not
otherwise waived or released by the Plan. The Debtors'
representative on the Advisory Committee will not be
authorized to vote with respect to matters relating to
the Claims of the holders of both Unsecured Convenience
Claims and Unsecured Claims as well as matters relating
to Avoidance Claims against insiders or former insiders
of the Debtors. The Advisory Committee will also have
authority to remove the Trustee and appoint a successor
Trustee.
C. Sale of the Debtors' Assets.
As previously stated herein, substantially all of
the assets of the Debtors are to be sold to Holiday.
Holiday is a subsidiary of Holiday Companies, a
privately-held Minneapolis, Minnesota based company
which has been in business more than 65 years. Holiday
Companies owns and operates over 275 retail
gasoline/convenience stores, 13 retail food stores and
15 retail outdoor and sporting goods stores. Holiday
Companies is also engaged in the wholesale distribution
of food products from 5 distribution centers. Holiday
Companies does business in 11 midwestern and western
states and has approximately 6,000 employees.
On the Effective Date and subsequent to the
Merger, Gander Mountain will sell to Holiday those
assets described in the Holiday Agreement, attached as
Exhibit 2.3 to the Plan. The assets to be sold to
Holiday include, but are not limited to, (i) all leases
and interests in the real property of the Debtors'
twelve (12) retail stores and all fixtures and
leasehold improvements at such stores, (ii) all
merchandise and supplies inventory, (iii) all
equipment, (iv) all permits and licenses for operation
of the Debtors' business, (v) all intangibles
including, but not limited to, goodwill, trademarks and
tradenames, (vi) all accounts receivable, (vii) all
cash on hand, (viii) all refundable income taxes, and
(ix) all Executory Contracts and all leases assumed by
the Debtors and shown on both Exhibit B to the Holiday
Agreement and Exhibit 9.2 to the Plan. All assets are
to be transferred to Holiday free and clear of liens
and encumbrances except those liens and encumbrances to
which Holiday has agreed.
In consideration of the sale of the Debtors'
assets to Holiday, Holiday will pay into the Trust, on
the Effective Date, either $19,500,000 or, if the
Trigger Event occurs, $19,000,000. In addition,
Holiday will pay all Allowed Priority Claims, all
Allowed Administrative Expense Claims, including the
obligations of the Debtors to CIT, and the reasonable
post-petition liabilities and obligations of the
Debtors and of the Trust. The Holiday Agreement also
provides that, during the Chapter 11 Cases, if CIT
consents and subject to approval by the Court, Holiday
will make available to the Debtors a loan of up to
$5,000,000 to be used for working capital purposes.
Holiday will have an Administrative Expense Claim on
account of such loan. Holiday's loan will be secured
by a lien on all assets of the Debtors, which lien will
be junior to the lien of CIT.
The success of the Plan depends entirely upon
completion of the proposed sale to Holiday. The
Debtors and Holiday believe the sale to Holiday can be
completed in a timely fashion and both intend to work
toward confirmation of the Plan and completion of the
sale. The Debtors believe that Holiday has the
necessary resources to complete the purchase, and
Holiday has represented in the Holiday Agreement that
it has access to the cash necessary to complete the
transaction, including both payment of the cash
purchase price and payment of the obligations of the
Debtors to be assumed by Holiday.
D. Plan Provisions Governing Distributions
Article VI of the Plan contains the provisions
governing the method and means of making distributions
under the Plan. Distributions pursuant to the Plan to
be made to the holders of Claims and Interests in
Classes Four, Five, Six and Seven will be made by the
Trustee. All other distributions will be made by the
Buyer. On the Effective Date, Holiday will pay the
cash portion of the purchase price for the Debtors'
assets by depositing such funds in the Trust and such
funds shall be held and administered by the Trustee for
and on behalf of the beneficiaries of the Trust, such
beneficiaries being the holders of Claims and Interests
in Classes Four, Five, Six and Seven. Within 45 days
of the date the Plan becomes effective, the Trustee
will distribute to the holders of Allowed Claims and
Interests as of the Effective Date in Classes Four,
Five, Six and Seven, the cash to which such holders are
entitled. Distributions to the holders of Allowed
Administrative Expense Claims, Allowed Priority Claims
arising under 507(a)(8) of the Code and the holders of
Allowed Claims in Classes One through Three shall be
made by the Buyer on the dates provided in Articles IV
and V of the Plan.
All distributions under the Plan are subject to
the requirement that (i) the Trustee or the Buyer, as
appropriate, be supplied with the correct name and
address to which distribution is to be made and (ii)
that any holder of a note, debenture or other evidence
of indebtedness and any holder of a security evidencing
an Interest that desires to receive the property to be
distributed on account an Allowed Claim or Interest
based on such note, debenture or other evidence of
indebtedness or security surrender such instruments and
stock to the distributing party.
The Plan contains additional provisions governing
where distributions will be made and the procedures for
dealing with undeliverable distributions. Any
undeliverable cash held in the Trust will ultimately be
distributed Pro-Rata to the holders of Allowed
Unsecured Claims.
E. Procedures for Resolution of Disputed Claims and
Distribution on Account of Disputed Claims
The Plan provides that any holder of any Claim
which is wholly or partially disputed will not receive
any distribution with respect to the disputed portion
of such Claim unless and until it becomes an Allowed
Claim. The Trustee will deposit into a reserve a
sufficient amount of cash to pay to holders of Disputed
Unsecured Convenience Claims and Disputed Unsecured
Claims the amount to which they would be entitled
should their Claims become Allowed. On the Initial
Distribution Date, the Trustee will make distributions
in accordance with the Plan to all Unsecured
Convenience Claims and Unsecured Claims which are
Allowed as of the Effective Date. Thereafter, within
30 days after any Unsecured Convenience Claims or any
Unsecured Claims that were Disputed on the Effective
Date become Allowed Claims, the holders of such Allowed
Claims will receive distributions in accordance with
the Plan. Finally, within 30 days after the date on
which all Disputed Claims have been resolved, the
Trustee will distribute to the holders of Allowed
Unsecured Claims their pro-rata shares of any remaining
cash in the reserve.
The Plan provides that objection to Claims and
Interests may be filed for voting purposes or for
purposes of receiving distributions under the Plan. The
Plan further provides that the Trustee, in the name and
stead of the Debtors, may object to any Claim or
Interest in accordance with the Plan, provided that
such objections must be made by no later than 90 days
after the Effective Date. Other parties in interest,
with the appropriate standing to do so, may also object
to Claims and Interests within 30 days after the
Effective Date. Notice of any hearing on a dispute,
compromise or settlement of a Disputed Claim or
Interest need only be given to the objecting party, the
holder of such Disputed Claim or Interest, the Buyer
and the Trustee.
F. Post Confirmation Dissolution of the Creditors
Committee
On the Effective Date, the Committee shall
dissolve. Thereafter, the Trustee will be deemed to
have substituted its appearance for the Committee with
respect to any contested matter or adversary proceeding
which is pending on the Effective Date.
G. Conditions Precedent to Effective Date
The Plan provides that the Effective Date will
occur and the Plan will be effective on the
Confirmation Date.
H. Executory Contracts and Unexpired Leases
Section 365 of the Code provides that a debtor in
possession may reject an Executory Contract where the
debtor determined that continued performance under such
contract would be burdensome to its bankruptcy estate.
Rejection relieves a debtor in possession of the
obligation to perform further under the contract and
causes the non-debtor party's claim for damages arising
from rejection to be deemed a pre-petition Claim.
Section 365 of the Code also provides that a debtor in
possession may assume an Executory Contract. In order
to assume an Executory Contract, absent agreement with
the non-debtor party to the contrary, a debtor in
possession is required to cure existing defaults,
compensate the non-debtor party for any monetary
damages sustained as a result of the debtor's default,
and provide adequate assurance of future performance of
the subject contract. Upon assumption of an Executory
Contract, the debtor's obligations under the contract
acquire the status of Administrative Expense Claims.
Finally, Section 365 authorizes a debtor in possession
in many instances to assign to a third party an assumed
Executory Contract, notwithstanding a contractual
provision prohibiting such an assignment.
In connection with the sale to Holiday, certain
Executory Contracts identified on Exhibit 9.2 to the
Plan will be assumed and assigned to Holiday, and to
the extent any payments to cure defaults in order to
assume such Executory Contracts are necessary, such
payments will be made by the Buyer on the Effective
Date. Section 9.1 of the Plan provides that all of the
Debtors' Executory Contracts not previously rejected,
assumed or assumed and assigned prior to the
Confirmation Date, other than the Executory Contracts
listed on Exhibit 9.2 to the Plan (which Executory
Contracts will be assumed and assigned to the Buyer)
will be rejected. Any non-Debtor party who wishes to
make a Claim arising out the rejection of its Executory
Contract pursuant to the Plan must file a proof of such
Claim with the Court, with a copy served on the
Trustee, within 30 days of the Confirmation Date. Any
personal property that is the subject of a rejected
Executory Contract may be recovered by the non-Debtor
party to such Executory Contract upon reasonable notice
to the Buyer and Trustee, at such party's cost, unless
the Buyer and the Trustee and such third party agree to
allow the Trustee or Buyer to retain such property.
I. Avoidance Claims
Preferences. Prior to preparation of this
Disclosure Statement and the Plan, the Debtors
conducted an investigation of potential preference
Claims against Creditors of the Debtors which may be
recoverable for the benefit of the Estates under 547
and 550 of the Code. For the reasons described herein,
the Debtors believe that little, if any, preference
liability exists on the part of unsecured creditors.
In conducting their investigation, the Debtors
first examined all payments to non-insider creditors
made during the 90-day period prior to the Filing Date.
Excluding wages and salaries paid on a regular basis to
their non-insider employees, the Debtors made a total
of $76,977,111 in payments during that period. Of that
amount, $50,257,658 was paid to secured creditors,
including Bank One, Milwaukee, as agent for the Old
Lenders. Notwithstanding payment of the Debtors'
remaining obligations to the Old Lenders out of the
proceeds of the Debtors' post-petition working capital
facility, the Court's orders approving such financing
specifically provided parties in interest with an
opportunity, prior to November 12, 1996, to contest the
extent, amount, validity or enforceability of the Old
Lenders Secured Claims. No party commenced such a
proceeding.
Of the remaining balance of $26,719,453,
approximately $18,568,000 constituted prepayments to
various vendors or service providers. Accordingly,
since none of those payments were transfers on account
of an antecedent debt, none of those transfers
constituted a preference.
The Debtors believe that all or virtually all of
the remaining transfers, aggregating approximately
$8,151,450, were made (i) contemporaneously with the
receipt by the Debtors of goods or services or (ii)
according to ordinary and customary business terms.
Those funds were paid primarily for items such as
monthly taxes, utilities, regular lease payments,
employee garnishments, replenishments of petty cash
funds within the Debtors' organization and the like.
Where the Debtors were granted credit for the purchase
of goods or services, they made all payments within the
time required by the applicable credit terms.
Accordingly, the Debtors believe that the transferees
of these payments would have valid defenses to any
preference claims made by or on behalf of the Debtors.
For this reason, the Committee and the Debtors have
released these Avoidance Claims in the Plan so that
Creditors need not have concerns that they will be
asked to return any amounts which were received from
the Debtors prior to the Filing Date if the Plan is
confirmed.
Insider Transfers. In addition to the amounts
described above, approximately $2.3 million was paid to
"insiders" (as that term is defined in the Code) of the
Debtors during the one year period prior to the Filing
Date. Approximately $1.6 million of this amount was
comprised of payments of salaries and other standard
compensation and expense reimbursements. Approximately
$285,000 were severance payments. Approximately
$298,000 were stay-put bonuses. Approximately $180,000
were performance or transaction bonuses. In light of
the low likelihood of any recovery, the fact that the
net recovery, if any, may be insignificant, the cost
necessary to pursue such Claims and the disruption
caused by such actions, the Debtors, Holiday and the
Committee have agreed to waive any Avoidance Claims
which might arise out of such payments.
Bulk Sales Act Avoidance Claim. In early April,
1996, Gander Mountain canceled a $4.5 million purchase
order for paper in anticipation of the closing of the
sale of its catalog business to Cabela's.
Consequently, Gander Mountain was served by Perkins-
Goodwin Co., Inc. ("Perkins") with a summons and
complaint alleging breach of contract relating to the
purchase order. Prior to the filing of such action, a
notice of the sale of the Debtors' catalog business to
Cabela's was given to Gander Mountain's creditors, but
no bulk sale notice was given to Perkins. Perkins has
also filed an action against both Gander Mountain and
Cabela's alleging violations of the Bulk Sales Act in
effect in Wisconsin (the "Act"). Under the Act,
subject to certain defenses, transfers not made in
compliance with the Act are "ineffective" or voidable
as against the creditors of the transferor.
In a bankruptcy proceeding, a bankruptcy trustee
(or a debtor in possession) may be able to avoid a
transfer in total if, under the Act, the transfer is
ineffective as against a single creditor. Accordingly,
the Debtors could potentially seek avoidance under
544 and 550 of the Code of the transfers to Cabela's
in May, 1996 and if successful, Cabela's could be
required to pay in excess of $30,000,000 to the Debtors
which would be available for distribution to parties in
interest. Cabela's would then have an Unsecured Claim
against the Debtors for the same amount. The Debtors
have provided the Committee with materials relating to
this Claim. The Committee intends to further
investigate the matter, and the Trustee, at the
direction of the Advisory Committee, will consider
whether to pursue such Avoidance Claim.
Neither the Debtors nor the Committee has
identified any potential Avoidance Claims other than
those described above. Accordingly, the Debtors, the
Committee and Holiday have agreed, and the Plan
provides, that all potential Avoidance Claims of the
Debtor, other than the Avoidance Claim against Cabela's
described above and any Avoidance Claims for the
avoidance of liens against the Debtors or their
property, are waived and released.
J. Releases
The Plan provides that the Debtors, the Advisory
Committee, the Trust, the Trustee and the Buyer release
all Claims against the Debtors' directors, officers,
agents, attorneys and employees ("Released Parties")
except for the Claims of the Debtors arising out of an
express contractual obligation or reimbursement
obligation owing by any Released Party with respect to
a loan or advance made by any of the Debtors to such
Released Party. The Plan also releases Claims of third
parties against the Released Parties to the extent such
Claims are derivative from or through the Debtors.
K. Court's Retention of Jurisdiction
The Plan provides that the Court will retain
jurisdiction following confirmation of the Plan to
ensure that the purposes and intent of the Plan are
carried out, to hear and determine all disputes
concerning distribution provisions of the Plan or
related matters, claims against the Debtors and causes
of action belonging to the Debtors, and to amend or
modify the Plan as may be appropriate under the
circumstances.
VI. BEST INTERESTS OF CREDITOR TEST
In order to confirm the Plan pursuant to Section
1129(a)(7)(A)(ii) of the Code, the Court must
independently determine that the Plan is in the best
interests of Creditors and holders of Interests of all
Classes of Claims or Interests impaired by the Plan.
The best interests test requires that the Court find
that the Plan provides to each Creditor or holder of
Interests of each Class of impaired Claims or
Interests, value that is not less than the amount that
such Creditor or holder would receive or retain if the
Debtors were liquidated under Chapter 7 of the Code.
To demonstrate that the Plan meets this requirement,
the Debtors submit the liquidation analysis attached
hereto as Exhibit D (the "Liquidation Analysis").
The Liquidation Analysis reflects the Debtors'
estimates of the proceeds that would be realized if the
Debtors were to be liquidated in accordance with
Chapter 7 of the Code. The Liquidation Analysis
assumes that the Debtors are merged prior to
liquidation and that a single Chapter 7 trustee would
be appointed.
The Liquidation Analysis is based on projections
as of December 31, 1996 and does not reflect the actual
operating results of the Debtors, except where
specifically indicated in the notes accompanying the
Liquidation Analysis. The Claim amounts reflected in
the Liquidation Analysis are based upon estimates or,
where possible, upon Claims actually filed and are
subject to ongoing review by the Debtors and are
subject to change.
The Liquidation Analysis includes estimates and
assumptions that, although developed and considered
reasonable by the Debtors' management, are inherently
subject to significant economic and competitive
uncertainties and contingencies beyond the control of
the Debtors and their management. Further, the
Liquidation Analysis includes assumptions with respect
to liquidation decisions which could be subject to
change. Accordingly, there can be no assurance that
the values reflected in the Liquidation Analysis would
be realized if the Debtors were in fact to undergo such
a liquidation and the actual results could vary
materially from those shown here.
According to the Liquidation Analysis, a Chapter 7
trustee would receive approximately $19,667,000 from
the liquidation of the Debtors' assets. After payment
of Secured Claims, both Chapter 7 and Chapter 11
Administrative Expense Claims and Priority Claims of
approximately $13,643,000 in the aggregate,
approximately $6,024,000 would be available for
distribution to Unsecured Creditors. Comparing the
$18,500,000 available for distribution to Unsecured
Creditors pursuant to the Plan (subject to possible
reduction on account of indemnification Claims of the
Trustee) to the amount the Debtors believe would be
available upon liquidation of the Debtors,
approximately $6,024,000, the Debtors believe the Plan
is in the best interests of Creditors.
VII. CERTAIN FEDERAL INCOME TAX CONSEQUENCES OF THE
PLAN
The following discussion summarizes certain
federal income tax consequences of the implementation
of the Plan to the holders of Allowed Unsecured Claims,
Allowed Unsecured Convenience Claims and Interests.
The summary does not purport to set forth all aspects
of federal income taxation that may be relevant to
particular persons in light of individual circumstances
or to certain types of Creditors or stockholders, such
as life insurance companies, tax exempt organizations
and foreign persons. The summary also does not discuss
any aspects of state, local or foreign tax laws. The
following summary is based upon the Internal Revenue
Code of 1986, as amended (the "Tax Code"), treasury
regulations promulgated thereunder, judicial decisions
and rules and pronouncements of the Internal Revenue
Service ("IRS") as in effect on the date hereof.
Changes in such rules or new interpretations thereof
may have retroactive effect and significantly affect
the tax consequences described below.
This discussion of federal income tax consequences
is not binding on the IRS. Therefore, there can be no
assurance that the IRS will not take a different
position regarding the consequences of the Plan or that
any such position would not be sustained. The Debtors
have not obtained and do not intend to seek any advance
rulings from the IRS with respect to any federal income
tax matter and have neither requested nor obtained any
opinion of counsel with respect to any federal income
tax matter.
EACH PARTY IN INTEREST IS URGED TO CONSULT ITS OWN
TAX ADVISOR AS TO THE CONSEQUENCES OF THE PLAN TO IT
AND THE DEBTORS UNDER FEDERAL AND APPLICABLE STATE,
LOCAL AND TAX LAWS.
A. Consequences to Holders of Allowed Unsecured
Claims and Allowed Unsecured Convenience Claims
Pursuant to the Plan, holders of Allowed Unsecured
Claims and Allowed Unsecured Convenience Claims will
receive cash in satisfaction of their Claims. Each
holder of an Allowed Unsecured Claim and an Allowed
Unsecured Convenience Claim will recognize gain or loss
equal to the difference, if any, between (i) the cash
received in respect of its Claim (other than any Claim
for accrued interest), and (ii) its adjusted tax basis
in its Claim (other than any Claim for accrued
interest). The character of such gain or loss as long-
term or short-term capital gain or loss or as ordinary
income or loss will be determined by a number of
factors, including the tax status of the holder,
whether the Claim constitutes a capital asset in the
hands of the holder, whether the Claim has been held
for more than one year or was purchased at a discount,
and whether and to what extent the holder has
previously claimed a bad debt deduction.
To the extent any amount received by a holder is
received in satisfaction of a Claim for accrued
interest, such amount will be taxable to the holder as
interest income to the extent not previously included
in the holder's gross income. Conversely, a holder
will recognize a deductible loss to the extent any
accrued interest claimed was previously included in its
gross income and is not paid in full.
B. Consequences to Holders of Gander Mountain Stock
Pursuant to the Plan, holders of Preferred Stock
Interests and Common Stock Interests may receive cash
in exchange for their stock. Each stockholder will
recognize gain or loss equal to the difference, if any,
between (i) the cash, if any, received in respect of
its stock, and (ii) its adjusted tax basis in its
stock. The character of such gain or loss as long-term
or short-term capital gain or loss or as ordinary
income or loss will be determined by a number of
factors, including the tax status of the holder,
whether the stock constitutes a capital asset in the
hands of the holder of such Interest, and whether the
Preferred Stock Interest or Common Stock Interest has
been held for more than one year.
IX. CONFIRMATION OF PLAN
Section 1128(a) of the Code provides that the
Court shall hold a hearing on confirmation of a Plan
after notice to Creditors and other parties in
Interest. Pursuant to 1128(b) of the Code, Creditors
and other parties in Interest may object to
confirmation. The Court has scheduled a hearing on
confirmation of the Plan for _______________ at _____
a.m., C.S.T. in the courtroom of the Honorable Russell
A. Eisenberg, United States Bankruptcy Judge, at the
Federal Courthouse, Room 149, 517 East Wisconsin
Avenue, Milwaukee, Wisconsin. The Confirmation Hearing
may be adjourned from time to time by the Court without
further notice except for an announcement made at the
Confirmation Hearing or any adjournment thereof.
Any Creditor or other party in interest wishing to
object to confirmation of the Plan must do so by filing
an objection in compliance with the provisions of the
Disclosure Statement Order.
At the Confirmation Hearing, the Court will
confirm the Plan only if it meets the requirements of
51129 of the Code. Among the requirements for
confirmation of a plan are (i) that such plan is
feasible, (ii) that it is in the "best interests" of
Creditors and holders of Interests whose Claims and
Interests are impaired under the Plan and (iii) that it
is either accepted by all impaired Classes of Claims
and Interests or, if it is rejected by any impaired
Class, that the Plan is accepted by at least one
impaired Class, that it "does not discriminate
unfairly" and that it "is fair and equitable" as to any
rejecting Class.
The Debtors, the Committee and the Buyer believe
that the Plan is fair and equitable with respect with
certain impaired Classes and does not discriminate
unfairly against them. The Debtors, the Committee and
the Buyer further believe that the Plan may satisfy the
requirements of 1129(b) of the Bankruptcy Code and can
be confirmed on a nonconsensual basis. The Debtors,
the Committee and the Buyer may seek confirmation of
the Plan on a nonconsensual basis if less than the
requisite majorities of holders of certain Claims and
Interests vote to accept the Plan. However, the Plan
in its present form, cannot be confirmed if it is not
accepted by each of the subclasses of Unsecured
Convenience Claims and Unsecured Claims in each
Debtor's Chapter 11 Case. THE DEBTORS, THE COMMITTEE
AND THE BUYER, THEREFORE, URGE UNSECURED CREDITORS TO
VOTE TO ACCEPT THE PLAN. FAILURE OF THE UNSECURED
CREDITORS TO APPROVE THE PLAN WILL LIKELY RESULT IN THE
WITHDRAWAL OF HOLIDAY'S OFFER AND THE LIQUIDATION OF
THE DEBTORS.
In conclusion, the Debtors, the Committee and the
Buyer believe the Plan is in the best interest of all
holders of Claims and Interests and urge holders of
impaired Claims and Interests to vote to accept the
Plan by returning their ballots so that they will be
received on or before __________ p.m., C.S.T. on
________________.
Dated at Milwaukee, Wisconsin, this 13th day of
November, 1996.
GANDER MOUNTAIN, INC.
as debtor and debtor-in-possession
By: /s/ Ralph L. Freitag
Its: CEO
GRS, INC.
as debtor and debtor-in-possession
By: /s/ David J. Lubar
Its: Chairman
GMO, INC.
as debtor and debtor-in-possession
By: /s/ Ralph L. Freitag
Its: Executive V.P.
