SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report (Date of earliest event
reported): January 22, 1997
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 3. Bankruptcy or Receivership
On January 23, 1997 Gander Mountain, Inc. (the
"Company"), reported that the U.S. Bankruptcy Court in
Milwaukee (the "Court") confirmed the plan of
reorganization jointly proposed by the Company, Holiday
Stationstores, Inc. ("Holiday") and the Official Gander
Mountain Creditors Committee. On January 21, a ballot
report was filed with the Court in which the Company's
shareholders and creditors gave overwhelming support to
the Plan.
In accordance with the terms of the Plan, the
Company has agreed to a sale of most of its assets to
Holiday for a purchase price equal to all secured debt,
administrative expenses of the bankruptcy, priority
claims, reasonable post-confirmation expenses, plus
$19,500,000. The proceeds of the sale will be
deposited into a Trust and distributed to creditors and
shareholders as follows: (i) 18.5 million will be
distributed to unsecured creditors; (ii) $500,000 will
be paid pro rata to preferred stock holders; (iii)
$500,000 will be distributed pro rata to common stock
holders; (iv) those unsecured claims which are $1,000
or less, and larger claims whose holders voluntarily
reduce their claims to $1,000 will receive a one-time
payment equal to eighty percent (80%) of their claims;
and (v) the balance will be distributed pro rata to
other unsecured creditors with allowed claims. Upon
consummation of the Plan, all outstanding shares of the
Company's preferred and common stock will be cancelled.
Item 7. Financial Statements and Exhibits
(c) Exhibits
99.1 Joint Plan of Reorganization (incorporated by
reference to Exhibit 99.1 on Form
8-K filed on November 19, 1996)
99.2 Disclosure Statement (incorporated by
reference to Exhibit 99.2 on Form 8-K
filed on November 19, 1996)
99.3 Press Release dated January 22, 1997
99.4 Press Release dated January 23, 1997
99.5 Form of Second Amended Joint Plan of Reorganization
99.6 Form of Disclosure Statement Relating to the Second
Amended Joint Plan of Reorganization
99.7 Form of Modification to Second Amended Joint Plan of
Reorganization
99.8 Order Confirming Debtor's Second Amended
Joint Plan of Reorganization
<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: February 6, 1997 GMI OF WISCONSIN, INC. f/k/a
GANDER MOUNTAIN, INC.
By: /s/ David Lubar
----------------------
David Lubar, President
<PAGE>
EXHIBITS INDEX
Exhibit No. Description
99.3 Press Release dated January 22, 1997
99.4 Press Release dated January 23, 1997
99.5 Second Amended Joint Plan of Reorganization
99.6 Form of Disclosure Statement Relating to the
Second Amended Joint Plan of Reorganization
99.7 Form of Modification to Second Amended Joint Plan
of Reorganization
99.8 Order Confirming Debtor's Second Amended Joint
Plan of Reorganization
WILMOT, Wis., Jan 22/PRNewswire/ -- Gander Mountain,
Inc. (Nasdaq: GNDR), today reported it has filed a
ballot report with the U.S. Bankruptcy Court in
Milwaukee which shows that its shareholders and
creditors gave overwhelming support to the company's
plan of reorganization. The court will be asked to
give final approval to the Plan on Thursday.
Approximately 99% of the creditors voted to approve the
Plan. Approximately 89% of the common shares voting
voted to approve the Plan. All of the preferred shares
voting voted to approve the Plan. This vote is
sufficient to satisfy the requirements of the
Bankruptcy Code. The Court must now determine on
Thursday whether the Plan meets the other requirements
of the Bankruptcy Code.
"We are pleased to have received such a strongly
favorable response to our reorganization plan and look
forward to completing this difficult and protracted
process," said Ralph Freitag, the Company's Chief
Executive Officer.
Under the terms of the Joint Plan, the company's twelve
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.
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.
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-six 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.
SOURCE Gander Mountain, Inc.
CO: Gander Mountain, Inc.
ST: Wisconsin
IN: REA
SU: TNM
WILMOT, Wis., Jan. 23/PRNewswire/ -- Gander Mountain,
Inc. (Nasdaq Bulletin Board: GNDR), today reported that
the U.S. Bankruptcy Court has confirmed the company's
reorganization plan. On Wednesday, January 21,
creditors and shareholders of the company voted in
favor of the plan's approval.
"We are pleased to have completed this long and
difficult process. Creditors and shareholders will
receive a return on their investment according to the
priority order described in the plan," said Ralph
Freitag, CEO of Gander Mountain.
The reorganization plan was jointly proposed by
Holiday, Gander Mountain and the Official Creditors'
Committee. The Chair of the Committee, Gary Chapman of
the Remington Arms Company, said that "the Creditors'
Committee, on behalf of all Gander Mountain vendors, is
pleased that the court approved the plan, and looks
forward to working with the new Gander Mountain."
Holiday Companies is a privately-held Bloomington,
Minnesota based retailer and wholesaler of outdoor
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-six (26) 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
retailer 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.
SOURCE: Gander Mountain, Inc.
CO: Gander Mountain, Inc.
ST: Wisconsin
IN: REA
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.
_______________________________________________________
SECOND AMENDED 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 Second
Amended Joint Plan of Reorganization pursuant to
1121(a) of the Code.
SUMMARY OF THIS PLAN
The following Summary 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.
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 (Unsecured Convenience Claims) 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 comprised
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, except for Avoidance
Claims based upon the 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 amended as provided in Exhibits
2.1(b)(i) and 2.1(b)(ii) hereto, respectively,
consistent with the requirements of 1123(a)(6) of the
Code (the Articles of Incorporation and Bylaws as
amended by Exhibits 2.1(b)(i) and 2.1(b)(ii) the
"Restated Articles and Bylaws"). The corporation's
name shall be changed to GMI of Wisconsin, Inc.
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. 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, any other
form of joint and several liability amongst the
Debtors, and any duplicate Claims filed in the case of
more than one Debtor shall be eliminated and discharged
so that any Claim against any Debtor or against more
than one 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, maintain
objections 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 which are not waived
by the Plan. 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 shall 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 member of the Advisory Committee who
was originally designated for membership thereon by the
Committee or their successor(s). 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 or their
successor(s) shall designate a 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 Claim 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 objections to Claims and
Interests may be maintained 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 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. The
Trustee, in the name and stead of the Debtors, shall
maintain objections to any Claim and Interest which is
asserted against the Debtors' estates. Any party with
standing to do so, and which has not been barred by
Order of the Court, 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. Moreover, any party may, with leave of Court,
within thirty (30) days of the Effective Date, object
to any Claim and Interest which is asserted against the
Debtors' estates.
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 and
the Claim of Bank
One, Wisconsin relating to a $60,000 Letter of
Credit issued by Bank One for the account of the
Debtors.
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 from the Trust, 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
from the Trust, 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
from the Trust, 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 from the Trust 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 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 Stock may receive their Pro
Rata share of a $500,000.00 distribution, although the
holders of Gander Mountain 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 from the Trust 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 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 Stock may
receive their Pro Rata share of a $500,000.00
distribution, although the holders of Gander Mountain
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 these Claims 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 11.5 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 11.5
hereof, the Trustee, in accordance with Section 6.8
hereof and with the Trust Agreement shall distribute
from the Cash received from the 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
a Disputed Claim on the Effective Date becomes an
Allowed Claim, or such later date as such holder
complies with the provisions of Section 11.5 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
11.5 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 these Cases
and the entry of a final decree in each Case.
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
Interest.
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 11.5 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, (to the extent that the Advisory Committee,
the Trust, or the Trustee is a successor or assignee of
the Debtors) 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 than
$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 interest 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. Effective Date. The Plan shall become
effective upon the Effective Date.
C. 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.
D. 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.
E. Surrender of Pre-Petition Securities and Evidences
of Indebtedness and Cancellation of Securities.
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.
3. All Common Stock Interests, Preferred Stock,
Pre-Petition Warrants and Pre-Petition Stock Options
shall be cancelled as of the Effective Date; provided,
however, that the right to receive distributions
pursuant to this Plan shall survive such cancellation.
F. 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.
G. 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.
H. 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.
I. 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.
J. 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 11.10
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.
K. 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.
L. 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.
M. 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.
N. 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.
O. 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 16th day of December, 1996.
GANDER MOUNTAIN, INC., Debtor
By:
GMO, INC., Debtor
By:
GRS, INC., Debtor
By:
HOLIDAY STATIONSTORES, INC.,
Buyer
By:
OFFICIAL COMMITTEE OF
UNSECURED CREDITORS
By:
GODFREY & KAHN, S.C.
Attorneys for GANDER MOUNTAIN, INC.
By:
Howard A.Schoenfeld
780 North Water Street
Milwaukee, WI 53202-3590
(414) 273-3500
QUARLES & BRADY
Attorneys for GRS, INC.
By:
Andrew M. Barnes
411 East Wisconsin Avenue
Milwaukee, WI 53202
(414) 277-5000
MCNALLY, MALONEY & PETERSON, S.C.
Attorneys for GMO, INC.
By:
Michael S. Polsky, Esq.
2600 North Mayfair Road, Suite 1080
Milwaukee, WI 53226
(414) 257-3399
FAEGRE & BENSON
Attorneys for HOLIDAY
STATIONSTORES, INC.
By:
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:
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:
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 including, but not limited to, all
amounts due under the DIP Financing Documents and the
DIP Financing Orders.
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 Second Amended
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 date that all
conditions precedent to the effectiveness of the Plan,
as provided in Article VIII, have been satisfied.
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, Wisconsin
(f/k/a 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 Second Amended
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) Amendment to Gander
Mountain, Inc. Articles of Incorporation
Exhibit 2.1(b)(ii) Amendment to Gander
Mountain, Inc. Bylaws
Exhibit 2.2 Trust Agreement
Exhibit 2.3 Purchase Agreement
Exhibit 9.2 Executory Contracts Assumed
and Assigned to the Buyer
MW1-51300-1
MW1-63157-1
AMENDMENT TO ARTICLES OF INCORPORATION
OF GANDER MOUNTAIN, INC.
THIS AMENDMENT TO ARTICLES OF INCORPORATION of
GANDER MOUNTAIN, INC., has been approved pursuant to
the Order Confirming Plan dated [Confirmation Date]
entered in IN RE GANDER MOUNTAIN, INC., Case No. 96-
26478-RAE (U. S. Bankruptcy Court for the Eastern
District of Wisconsin). The United States Bankruptcy
Court for the Eastern District of Wisconsin had
jurisdiction in such proceeding pursuant to 11 U.S.C.
101 et. seq. and 28 U.S.C. 157. This Amendment to
Articles of Incorporation shall amend the existing
Articles of Incorporation of Gander Mountain, Inc., a
Wisconsin corporation, as follows:
1. Article II of the Articles of Incorporation shall
be amended and restated in its entirety to read as
follows:
ARTICLE II
The name of the Corporation is GMI of Wisconsin,
Inc.
2. A new Section C shall be added to the end of
Article III of the Articles of Incorporation to read in
its entirety as follows:
C. Limitation on Issuance of Certain Equity
Securities. Notwithstanding any other provision of
these Articles of Incorporation, so long as the
Corporation shall remain subject to the limitations on
issuance of non-voting equity securities contained in
1123(a)(6) of the United States Bankruptcy Code, or
any successor statute thereto, the Corporation shall
not issue any such securities in contravention of such
limitations.
Executed in duplicate as of the _____ day of
__________, 1997.
GANDER MOUNTAIN, INC.
By:
Name:
Title:
This instrument was drafted by:
Kristin A. Roeper
GODFREY & KAHN, S.C.
780 North Water Street
Milwaukee, WI 53202
AMENDMENT TO BY-LAWS
OF GANDER MOUNTAIN, INC.
THIS AMENDMENT TO BY-LAWS of GANDER MOUNTAIN,
INC., has been approved pursuant to the Order
Confirming Plan dated [Confirmation Date] entered in IN
RE GANDER MOUNTAIN, INC., Case No. 96-26478-RAE (U. S.
Bankruptcy Court for the Eastern District of
Wisconsin). The United States Bankruptcy Court for the
Eastern District of Wisconsin had jurisdiction in such
proceeding pursuant to 11 U.S.C. 101 et. seq. and 28
U.S.C. 157. This Amendment to By-Laws shall amend the
existing By-Laws of Gander Mountain, Inc., a Wisconsin
corporation, as follows:
1. Section 3.01. of Article III of the By-Laws shall
be amended and restated in its entirety to read as
follows:
Section 3.01. General Powers and
Number. The business and affairs of the
Corporation shall be managed under the direction
of its Board of Directors. From and after
[Effective Date], the number of directors of the
Corporation shall be one.
2. Article VI of the By-Laws shall be amended and
restated in its entirety to read as follows:
ARTICLE IV
OFFICERS
Section 4.01. Appointment. From and after
[Effective Date], the sole principal officer of
the Corporation shall be a President. The
President shall be appointed by the Board of
Directors.
Section 4.02. Resignation and Removal. The
President shall hold office until he or she
resigns, dies, is removed hereunder, or a
different person is appointed to the office. The
President may resign at any time by delivering an
appropriate written notice to the Corporation.
The resignation is effective when the notice is
delivered, unless the notice specifies a later
effective date, and the Corporation accepts the
later effective date. The President may be
removed by the Board of Directors with or without
cause and notwithstanding the contract rights, if
any, of the person removed. Except as provided in
the preceding sentence, the resignation or removal
is subject to any remedies provided by any
contract between the President and the Corporation
or otherwise provided by law. Appointment shall
not of itself create contract rights.
Section 4.03. Vacancy. In the event of a
vacancy in the office of President because of
death, resignation, removal or otherwise, the
vacancy may be filled by the Board of Directors.
If a resignation is effective at a later date, the
Board of Directors may fill the vacancy before the
effective date if the Board of Directors provides
that the successor may not take office until the
effective date.
Section 4.04. Duties of the President. The
President shall be the chief executive officer and
chief operating officer of the Corporation,
subject to the control of the Board of Directors.
The President shall, in general, supervise and
control all of the business and affairs of the
Corporation. He or she shall preside at all
meetings of the shareholders and of the Board of
Directors. He or she shall have authority,
subject to such rules as may be prescribed by the
Board of Directors, to appoint such agents and
employees of the Corporation as he or she shall
deem necessary, to prescribe their powers, duties
and compensation, and to delegate authority to
them. Such agents and employees shall hold
offices at the discretion of the President. In
general, he or she shall perform all duties
incident to the office of the President and such
other duties as may be prescribed by the Board of
Directors from time to time.
Section 4.05. Salary. The salary of the
President shall be fixed from time to time by the
Board of Directors, and the President shall not be
prevented from receiving such salary by reason of
the fact that the President is also a director the
Corporation.
MW2-59201-1
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 Scott
Peltz (the "Trustee"), pursuant to the Second Amended
Joint Plan of Reorganization of the Committee, Holiday,
GMI, GRS and GMO dated December 16, 1996 as modified by
the Modification to Second Amended Joint Plan of
Reorganization of GMI, GRS, GMO, the Committee, and
Holiday filed on January 21, 1997.
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 December 16, 1996, the Committee,
Holiday and the Debtors filed a Second Amended Joint
Plan of Reorganization, and on January 21, 1997, a
Modification to Second Amended Joint Plan of
Reorganization (collectively, 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
1.
1.1. 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.
1.2. 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
2.
2.1. 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.
2.2. 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.
2.3. 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.
2.4. 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
3.
3.1. Powers and Directions to the Trustee.
(a) 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.
(b) 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.
(c) Without limiting the generality of
Subsections 3.1(a) above, the Trustee shall have the
power to:
(i) 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;
(ii) pay Allowed Claims and Interests in
accordance with the procedures set forth herein, in the
Plan or as otherwise allowed;
(iii) 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;
(iv) change the state of domicile of the Trust;
(v) 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;
(vi) sue and be sued and participate, as a party
or otherwise, in any judicial, administrative,
arbitrative or other proceedings;
(vii) 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
(viii) 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;
(ix) 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;
(x) 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
(xi) make, pursue (by litigation or otherwise),
collect, compromise or settle any claim, right, action
or cause of action included in the Assets.
(d) 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.
(e) The Trustee shall not have the power to
guarantee any debt of other Persons.
(f) 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.
(g) 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.
3.2. Administration and Distributions.
(a) 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.
(b) 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.
(c) 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.
(d) 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.
(e) 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.
(f) 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.
3.3. 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
4.
4.1. 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.
4.2. 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.
4.3. Source of Payments. All Trust expenses and
payments in respect of Allowed Claims and Interests
shall be payable solely out of the Assets or by
reimbursement from Holiday. 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
5.
5.1. Number. There shall be one (1) Trustee at
all times. The initial Trustee shall be that person
named on the signature page hereof.
5.2. Term of Service.
(a) 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.
(b) 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.
(c) 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.
5.3. 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.
5.4. 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.
5.5. Compensation and Expenses of the Trustee.
(a) The Trustee shall receive compensation for
his or her services as Trustee hereunder at the rate of
$225.00 per hour for Mr. Peltz, at the rate of $150.00
per hour for Mr. Loebbaka, and at the rate of between
$50.00 and $125.00 per hour for members of Mr. Peltz's
staff, 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.
(b) 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.
5.6. Indemnification of the Trustee.
(a) 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.
(b) 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.
(c) 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.
(d) 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.
(e) 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.
5.7. 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.
5.8. 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.
5.9. Additional Qualifications.
(a) 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.
(b) 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
6.
6.1. Objection to Allowed Claims and Interests.
Section 2.11 of the Plan is incorporated by reference
herein as if fully set forth.
6.2. 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
7.
7.1. Irrevocability. The Trust is irrevocable,
but is subject to amendment as provided in Section 7.3
hereof.
7.2. Termination.
(a) 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.
(b) 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.
7.3. 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.
7.4. 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.
7.5. 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: David J. Lubar
Lubar & Company, Inc.
777 East Wisconsin Avenue, Suite 3380
Milwaukee, WI 53202
Facsimile No.: (414) 291-9061
To the Trust or the Trustee: Scott Peltz, CPA
Philip, Rootberg & Company
250 South Wacker Drive, Suite 800
Chicago, IL 60606-5891
Facsimile No. (312) 930-0176
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.
7.6. 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.
7.7. 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.
7.8. 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.
7.9. 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.
7.10. Governing Law. This Agreement shall be
governed by and construed in accordance with the laws
of the State of Wisconsin.
7.11. 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.
7.12. 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 3rd day of February, 1997.
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
________________________________________
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 __________, 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 By
Title Title
GRS, INC.
By
Title
GMO, INC.
By
Title
M1:0193676.09
MW1-63157-1
EXHIBIT 9.2 TO
JOINT PLAN OF REORGANIZATION
(Leases and Contracts to be Assumed
and Assigned to Holiday)
GANDER MOUNTAIN, INC.
AMOUNT OF
NAME AND ADDRESS NOTES OF CONTRACT DEFAULT TO
OF OTHER PARTIES OR LEASE AND BE
TO INSTRUMENTS DEBTOR'S INTEREST LOCATION CURED ON
EFFECTIVE
DATE
3M National Contract type: Madison $224.40
6405 Hix Road Billboard lease West Side of
North Date: 05/20/96 I-90 at Jct.
Westland, MI Debtor's interest: D/M and I-90
48185 Lessee Facing North
Description: 3M
Media Special
Outdoor Display
Advertising
Agreement
ABC Outdoor Contract type: Brookfield -0-
Advertising, Inc. Billboard Highway 45,
24600 Silvernail Debtor's interest: 1300" N/O
Road Lessee Silver
Pewaukee, WI Date: 09/01/96 Spring
53072 Description:
Standard Outdoor
Advertising Rental
Contract
ABC Outdoor Contract type: Brookfield -0-
Advertising, Inc. Billboard Lease I94, 1500'
24600 Silvernail Date: 09/01/96 E/O Hwy 16
Road Debtor's interest:
Pewaukee, WI Lessee
53072 Description:
Standard Outdoor
Advertising Rental
Contract
ABC Outdoor Contract type: Brookfield -0-
Advertising, Inc. Billboard lease I-94, 2
24600 Silvernail Date: 09/01/96 miles E/O
Road Debtor's interest: Hwy F
Pewaukee, WI Lessee
53072 Description:
Standard Outdoor
Advertising Rental
Contract
ABC Outdoor Contract type: Brookfield -0-
Advertising, Inc. Billboard lease I-894, 650
24600 Silvernail Date: 12/01/96 E/O Loomis
Road Debtor's interest: Road
Pewaukee, WI Lessee
53072 Description:
Standard Outdoor
Advertising Rental
Contract
American Displays Contract type: Grand Rapids -0-
3420 Broadmoor, Billboard lease I-96 at Hwy
SE #3 Date: 05/29/96 M-50
Grand Rapids, MI Debtor's interest:
49512 Lessee
Description:
Bulletin Order
Ancevic, Milton Contract type: N/A -0-
A. Severance
12400 Fox River Agreement
Road Date: 12/06/95*
Wilomt, WI 53192
Ann Arbor Sign Contract type: Shared among 711.09
P.O. Box 604 Billboard lease all Michigan
Ann Arbor, MI Date: 10/01/96 stores I94
48168 Debtor's interest: and I-275,
Lessee Romulus
Description:
Advertising
Display
Contract
Ann Arbor Sign Contract type: Utica -0-
P.O. Box 604 Billboard lease Hall Road
Manchester, MI Date: 10/01/96 and I-94
48158 Debtor's interest:
Lessee
Description:
Advertising
Display Contract
Ann Arbor Sign Contract type: Taylor -0-
P.O. Box 604 Billboard lease I-94 and
Manchester, MI Date: 10/01/96 Pennsylvania
48158 Debtor's interest:
Lessee
Description:
Advertising
Display Contract
Bloom, Kenneth C. Contract type: N/A -0-
12400 Fox River Severance
Road Agreement
Wilmot, WI 53192 Date: 12/13/95*
Bussard, Mark Contract type: N/A -0-
12400 Fox River Retention
Road Agreement
Wilmot, WI 53192 Date: 03/06/96*
Bussard, Mark Contract type: N/A -0-
12400 Fox River Severance
Road agreement
Wilmot, WI 53192 Date: 12/06/95*
Cabelas, Inc. Contract type: N/A -0-
812 13th Avenue Trademark license
Sidney, NE agreement
Date: 05/17/96
Cabelas, Inc. Contract type: N/A -0-
812 13th Avenue Noncompetition
Sidney, NE agreement
Date: 05/17/96
Cabelas, Inc. Contract type: N/A -0-
812 13th Avenue Nonresidential
Sidney, NE lease
Beginning date:
05/17/96
Debtor's interest:
Lessor
Description:
Wilmot, WI
Cappel, Peggy Contract type: N/A -0-
12400 Fox River Retention
Road agreement
Wilmot, WI 53192 Date: 03/06/96*
E3 Associates, Contract type: N/A -0-
Ltd. Software licensing
1700 Parkway agreement
Place, Suite 600 Date: 8/18/94
Marietta, GA Debtor's interest:
30067-8288 Lessee
E3 Associates, Contract type: N/A $1,073.51
Ltd. Service contract
1800 Parkway Beginning date:
Place 05/31/95
Suite 600 Debtor's interest:
Marietta, GA Lessee
30067
First Federal Contract type: N/A -0-
Financial Serv. Vehicle lease
W176 N9830 Beginning date:
Rivercrest Drive 09/19/94
Germantown, WI Debtor's interest:
53022 Lessee
First Federal Contract type: N/A -0-
Financial Service Tractor lease
Inc. Date: 06/16/96
P.O. Box 654 Debtor/s interest:
Menomonee Falls Lessee
WI 53052-0054
First United Contract type: N/A -0-
Leasing Corp. Copiers
100 Corporate Beginning date:
North 07/12/95
Bannockburn, IL Debtor's interest:
60015 Lessee
Description:
Master Operating
Lease
Agreement No. 1655
Franklin Outdoor Contract type: St. Cloud $3,120.00
Advertising Billboard lease
Company Debtor's interest:
Box 218 Lessee
Albertville, MN
55301
Freitag, Ralph Contract type: N/A -0-
12400 Fox River Retention
Road agreement
Wilmot, WI 53192 Date: 08/08/96
Freitag, Ralph Contract type: N/A -0-
12400 Fox River Employment
Road agreement
Wilmot, WI 53192 Date: 03/19/96
Gannett (f/k/a Contract type: Flint $3,147.97
Outdoor Systems) Billboard lease
6083 Taylor Drive Date: 09/08/96
Flint, MI 48507 Debtor's interest:
Lessee
Description:
Gannett Outdoor
Network USA
Outdoor Display
Agreement
Gannett (f/k/a Contract type: Grand Rapids -0-
Outdoor Systems) Billboard lease
6083 Taylor Drive Date: 06/12/96
Flint, MI 48507 Debtor's interest:
Lessee
Description:
Gannett Outdoor
Network USA
Outdoor Display
Agreement
Garlow, Jim Contract type: N/A -0-
12400 Fox River Retention
Road agreement
Wilmot, WI 53192 Date: 03/06/96*
Garlow, Jim Contract type: N/A -0-
12400 Fox River Severance
Road agreement
Wilmot, WI 53192 Date: 12/06/95*
Giesen, Cindy Contract type: N/A -0-
12400 Fox River Severance
Road agreement
Wilmot, WI 53192 Date: 12/06/95*
Glyzewski, David Contract type: N/A -0-
A. Severance
12400 Fox River Agreement
Road Date: 12/06/95*
Wilmot, WI 53192
Guerrini, Kenneth Contract type: N/A -0-
J. Severance
12400 Fox River agreement
Road Date: 12/06/95*
Wilmot, WI 53192
Hans G. Stute Contract type: 19500 W. -0-
5131 South 60th Non-residential Bluemound
Street lease Road
Greendale, WI Beginning date: Brookfield,
53192 04/15/87 WI 53045
Debtor's interest:
Lessee
Hansen, Todd Contract type: N/A -0-
12400 Fox River Retention
Road agreement
Wilmot, WI 53192 Date: 03/06/96*
Hansen, Todd Contract type: N/A -0-
12400 Fox River Severance
Road agreement
Wilmot, WI 53192 Date: 12/06/95*
Hauger, Gary Contract type: N/A -0-
12400 Fox River Retention
Road agreement
Wilmot, WI 53192 Date: 03/06/96
Hauger, Gary Contract type: N/A -0-
12400 Fox River Retention
Road agreement
Wilmot, WI 53192 Date: 08/08/96
Horizon Contract type: 2002 Zeier -0-
Investment & Nonresidential Road
Development Corp. lease Madison, WI
37 Kassel Court, Beginning date: 53704
Suite 211 04/27/92
Madison, WI 53711 Debtor's interest:
Lessee
Ithaca Contract type: N/A $311.92
Peripherals Maintenance
Incorporated agreement
20 Bomax Drive Date: undated
Ithaca, NY 14650 Debtor's interest:
lessee
JDA Software Contract type: N/A -0-
Services, Inc. Software lease
5011 N. Granite Beginning date:
Reef Road 08/20/90
Scottsdale, AZ Debtor's interest:
85253 Lessee
Description:
Software Support
Agreement
Kunz, Jeffrey Contract type: N/A -0-
12400 Fox River Retention
Road agreement
Wilmot, WI 53192 Date: 03/06/96*
Kunz, Jeffrey Contract type: N/A -0-
12400 Fox River Severance
Road agreement
Wilmot, WI 53192 Date: 12/06/95*
Lakehead Outdoor Contract type: Hwy. 2 and -0-
Advertising Billboard lease Hwy. 53
910 Hammond Debtor's interest:
Avenue Lessee
Superior, WI
54880
Lakeview Contract type: N/A -0-
Technology Inc. Software USA
2301 West 22nd Agreement No.
Street, Suite 206 920730
Oak Brook, IL Date: 08/18/92
60521 Debtor's interest:
Lessee
Lucent Contract type: Grand Rapids $3,228.79
Technologies Maintenance
Minneapolis CSC agreement
00793 Debtor's interest:
420 Third Avenue Lessee
South, Room 1210
Minneapolis, MN
55415-1384
Lucent Contract type: Taylor, -0-
Technologies Maintenance Pontiac and
Minneapolis CSC agreement Utica
00793 Debtor's interest:
420 Third Avenue Lessee
South, Room 1210
Minneapolis, MN
55415-1384
Lucent Contract type: Saginaw -0-
Technologies Maintenance
Minneapolis CSC agreement
00793 Debtor's interest:
420 Third Avenue Lessee
South, Room 1210
Minneapolis, MN
55415-1384
Lucent Contract type: Brookfield, -0-
Technologies Maintenance Wausau,
Minneapolis CSC agreement Appleton,
00793 Debtor's interest: and Madison
420 Third Avenue Lessee
South, Room 1210
Minneapolis, MN
55415-1384
Manhattan Contract type: N/A -0-
Associates, Inc. PkMS
225 S. Sepulveda training/installat
Blvd., Suite 301 ion consulting
Manhattan Beach, agreement
CA 90266 Date: 12/22/93
Debtor's interest:
Lessee
Matheson, Scott Contract type: N/A -0-
12400 Fox River Retention
Road agreement
Wilmot, WI 53192 Date: 03/06/96*
Matheson, Scott Contract type: N/A -0-
12400 Fox River Severance
Road agreement
Wilmot, WI 53192 Date: 12/06/95*
Norwest Equipment Contract type: N/A -0-
Finance Stockpicker lease
733 Marquette Beginning date:
Ave., Suite 300 06/12/95
Minneapolis, MN Debtor's interest:
55402 Insured
Description:
Master Lease No.
21292
Supplemental
Number 21292-100-m
Ohm, Susan Contract type: N/A -0-
12400 Fox River Severance
Road Agreement
Wilmot, WI 53192 Date: 04/16/96
Ohm, Susan Contract type: N/A -0-
12400 Fox River Retention
Road Agreement
Wilmot, WI 53192 Date: 04/16/96*
Pleasant Company Contract type: Wilmot, WI -0-
Incorporated Nonresidential
8400 Fairway leases
Place Beginning date:
P.O. Box 998 08/01/96
Middleton, WI Debtor's interest:
53562 Lessee
Description:
Wilmot
Rymer, Todd Contract type: N/A -0-
12400 Fox River Retention
Road agreement
Wilmot, WI 53192 Date: 03/06/96*
Rymer, Todd Contract type: N/A -0-
12400 Fox River Severance
Road agreement
Wilmot, WI 53192 Date: 12/06/95*
Security Contract type: N/A -0-
Financial and Equipment lease
Leasing Services, Debtor's interest:
Inc. Lessee
7600 W. Layton Description:
Avenue, Suite 200 Equipment lease
Milwaukee, WI 94GMI and 94GMI-2
53220
Silvon Software, Contract type: N/A -0-
Inc. Software license
P.O. Box 88465 agreement
Chicago, IL 60680- Debtor's interest:
1465 Lessee
Silvon Software, Contract type: N/A -0-
Inc. Software
P.O. Box 88466 Maintenance
Chicago, IL 60680- Agreement No.
1466 4072515
Date: 07/18/94
Debtor's interest:
Lessee
Silvon Software, Contract type: N/A -0-
Inc. Software
P.O. Box 88466 Maintenance
Chicago, IL 60680- Agreement No.
1466 M6670
Date: 07/18/94
Debtor's interest:
Lessee
Silvon Software, Contract type: N/A -0-
Inc. Software
P.O. Box 88466 Maintenance
Chicago, IL 60680- Agreement
1466 Date: 10/11/93
Debtor's interest:
Lessee
Silvon Software, Contract type: N/A -0-
Inc. Software
P.O. Box 88466 Maintenance
Chicago, IL 60680- Agreement No.
1488 081324
Date: 05/31/95
Debtor's interest:
Lessee
Skoglund Contract type: Hwy. 53, $5,378.86
Communications Billboard lease West Lie
Inc. Debtor's interest:
9331 Westgate Lessee
Blvd.
Duluth, MN 55818
Skoglund Contract type: Hwy. 10 -0-
Communications, Billboard lease North
Inc. Debtor's interest:
9331 Westgate Lessee
Blvd.
Duluth, MN 55818
Softpoint Inc. Contract type: N/A $2,640.46
850A South Rock System Purchase
Boulevard Agreement
Sparks, NV 89431 Date: 11/22/93
Debtor's interest:
Lessee
Softpoint, Inc. Contract type: N/A -0-
5450 Riggins Maintenance
Court, Suite 4 agreement
Reno, NV 89502 Date: 10/30/96
Debtor's interest:
Lessee
Softpoint, Inc. Contract type: N/A -0-
850A South Rock POS software
Boulevard license
Sparks, NV 89431 Debtor's interest:
Lessee
Software 2000, Contract type: N/A -0-
Inc. Master Software
One Park Center Agreement No. 88-
Independence Park 313
Hyannis, MA 02601 Date: 03/15/88
Debtor's interest:
Lessee
Strouse, David Contract type: N/A -0-
12400 Fox River Retention
Road agreement
Wilmot, WI 53192 Date: 03/06/96*
Strouse, David Contract type: N/A -0-
12400 Fox River Severance
Road agreement
Wilmot, WI 53192 Date: 12/06/95*
Synon, Inc. Contract type: N/A -0-
1100 Larkspur Software license
Landing Circle agreement
Larkspur, CA Date: 06/24/91
94939 Debtor's interest:
Lessee
Thelen Sand and Contract type: NW corner of 275.00
Gravel, Inc. Billboard lease Illinois
Hwy 173 Debtor's interest: Route 173
Antioch, IL 60002 lessee and
Description: Land Johnsburg-
Lease Wilmot Road
Westhill Partners Contract type: 535 N. -0-
I Nonresidential Westhill
c/o Horizon lease Blvd.
Investment Beginning date: Grand Chute,
37 Kessel Court, 03/18/91 WI 54911
Suite 211 Debtor's interest:
Madison, WI Lessee
53711
Westhill Partners Contract type: 2002 Zeier -0-
III Madison Nonresidential Road
(f/k/a Horizon lease Madison, WI
Investment & Beginning date: 53704
Development 04/27/92
Corp.) Debtor's interest:
37 Kassel Court, Lessee
Suite 211
Madison, WI
53711
Whiteco Outdoor Contract type: Merrillville -0-
Advertising Billboard lease N/L I-94,
1770 West 41st Date: 11/1/96 1/4 mi E/O
Avenue Debtor's interest: Burr, F/W
Gary, IN 46408 Lessee
Description:
Bulletin Display
Agreement
Whiteco Outdoor Contract type: Merrillville -0-
Advertising Billboard lease W/L I-65,
1770 West 41st Date: 11/1/96 1.2 mi S/O
Avenue Debtor's interest: 231, F/S
Gary, IN 46408 Lessee
Description:
Bulletin Display
Agreement
Whiteco Outdoor Contract type: Merrillville -0-
Advertising Billboard lease Merrillville
1770 West 41st Date: 11/1/96 rotary
Avenue Debtor's interest:
Gary, IN 46408 Lessee
Description:
Bulletin Display
Agreement
Whiteco Outdoor Contract type: Merrillville -0-
Advertising Billboard lease S/L I-94,
1770 West 41st Date: 10/1/96 2.4 mi. E/O
Avenue Debtor's interest: Rt. 51 F/E
Gary, IN 46408 Lessee
Description:
Bulletin Display
Agreement
Whiteco Outdoor Contract type: Wausau 8,776.00
Advertising Billboard lease Hwy 29
9237 Highway 10 Date: 08/01/96 Approx. 4 mi
East Debtor's interest W/O Birch
P.O. Box 548 Lessee S/S F/E
Marshfield, WI Description:
54449 Bulletin Display
Agreement
Whiteco Outdoor Contract type: Wausau -0-
Advertising Billboard lease Hwy 29W W/O
9237 Highway 10 Date: 08/10/96 28th Ave.
East Debtor's interest: LH/EB
P.O. Box 548 Lessee
Marshfield, WI Description:
54448 Bulletin Display
Agreement
Whiteco Outdoor Contract type: Wausau -0-
Advertising Billboard lease US51 W/O Jct
9237 Highway 10 Date: 08/10/96 SR153 @
East Debtor's interest: Mosinee E/S
P.O. Box 548 Lessee F/S
Marshfield, WI Description:
54449 Bulletin Display
Agreement
Whiteco Outdoor Contract type: Wausau -0-
Advertising Billboard lease US51 1 mi.
9237 Highway 10 Date: 08/01/96 N/O Hwy 54
East Debtor's interest: E/S F/N
P.O. Box 548 Lessee
Marshfield, WI Description:
54449 Bulletin Display
Agreement
Wolverine Outdoor Contract type: Flint 1,488.72
Advertising Billboard lease I-69 5 miles
923 Bradley Date: 07/28/95 west of
Street Debtor's interest: Flint
Owosso, MI 48867 Lessee
*To be assumed as amended pursuant to a motion
currently pending before this Court.
MW1-56086-1
MW1-63157-1
EXHIBIT 9.2 TO
JOINT PLAN OF REORGANIZATION
(Leases and Contracts to be Assumed
and Assigned to Holiday)
GRS, INC.
NAME AND ADDRESS NOTES OF CONTRACT DEFAULT TO
OF OTHER PARTIES OR LEASE AND BE
TO INSTRUMENTS DEBTOR'S INTEREST LOCATION CURED ON
EFFECTIVE
DATE
3M National Contract type: Flint -0-
6405 Hix Road Billboard lease 1/4 Mi. E/O
North Effective date: Miller Rd
Westland, MI 12/4/95 Exit N/S I-
48185 Debtor's interest: 69 F/E
Lessee
Description: 3M
Media Outdoor
Display
Advertising
Agreement
3M National Contract type: Utica -0-
6405 Hix Road Billboard lease East side I-
North Date: 07/16/96 94, 300'
Westland, MI Debtor's interest: N/O 14 mi.
48185 Lessee facing
Description 3M south
Media Outdoor
Display
Advertising
Agreement
3M National Contract type: Shared -0-
6405 Hix Road Billboard lease among
North Date: 08/12/96 Detroit
Westland, MI Debtor's interest: stores
48185 Lessee (Utica,
Description: 3M Pontiac,
Media Outdoor Taylor) E/S
Display I-75, 1.2
Advertising miles W/O
Agreement Holly Rd.
facing
north
3M National Contract type: Taylor -0-
6405 Hix Road Billboard lease West side I-
North Date: 07/24/96 75, .5 mile
Westland, MI Debtor's interest: north of
48185 Lessee Outer
Description: 3M Drive,
Media Outdoor facing
Display north
Advertising
Agreement
3M National Contract type: Taylor -0-
6405 Hix Road Billboard lease E/S I-75 at
North Date: 06/04/96 Vernor Hwy
Westland, MI 48185 Debtor's interest: F/N
Lessee
Description: 3M
Media Outdoor
Display
Advertising
Agreement
Apple Mountain LLC Contract type: 72270 -0-
1460 Walton Blvd., Nonresidential Habawa
Suite 105 lease Street
Rochester Hill, MI Beginning date: Saginaw, MI
48309 05/19/94 48805
Debtor's interest:
Lessee
Collins Outdoor Contract type: LaCrosse $4,040.00
Advertising Billboard lease I-90 East
325 N. 3rd Street Debtor's interest: of Bangor
P.O. Box 968 Lessee exit
LaCrosse, WI 54602-
0968
Collins Outdoor Contract type: LaCrosse -0-
Advertising Billboard lease I-90 West
325 N. 3rd Street Debtor's interest: Fact I-90
P.O. Box 968 Lessee Exits 3 & 4
LaCrosse, WI 54602-
0968
Cook 28th, Inc. Contract type: 2875 -0-
Oxford Partners Nonresidential Acquest
126 Ottawa Avenue lease Avenue
NW Beginning date: Grand
Grand Rapids, MI 10-19-94 Rapids, MI
49503 Debtor's interest: 49512
Lessee
Gary Joint Venture Contract type: 1630 South -0-
25425 Center Ridge Nonresidential Lake Mall
Road lease Merriville,
Cleveland, OH Beginning date: IN 46410
44145 08/01/94
Debtor's interest:
Lessee
Giesen, Cindy Contract type: N/A -0-
12400 Fox River Retention
Road agreement
Wilmot, WI 53192 Date: 04/16/96*
L.D. Clark Contract type: 6353 Gander -0-
Building Co. Nonresidential Drive
6851 Millett lease Swartz
Highway Beginning date: Creek, MI
Lansing, MI 48917 02/02/94 48473
Debtor's interest:
Lessee
National Contract type: Saginaw -0-
Advertising Billboard lease .1 mi. N/W
Company Date: 07/12/95 Busch Rd.,
Bedford Park, IL Debtor's interest: W/S I-75
60501 Lessee F/S
New Plan Realty Contract type: 13975 Hall -0-
Trust (f/k/a Dean Nonresidential Road
Witter Realty lease Utica, MI
Income Partnership Beginning date: 48315
III, L.P.) 08/19/94
Two World Trade Debtor's interest:
Center Lessee
New York, NY 10048
Ohm, Susan Contract type: N/A -0-
12400 Fox River Retention
Road agreement
Wilmot, WI 53192 Date: 04/16/96*
Pardee Associates Contract type: 14100 -0-
22725 Greater Mack Nonresidential Pardee Road
Avenue lease Taylor, MI
St. Clair Shores, Beginning date: 48180
MI 48080 02/09/95
Debtor's interest:
Lessee
Russ Darrow Contract type: N/A $411.39
Leasing Corp. Car lease
P.O. Box 515 Debtor's interest:
West Bend, WI Lessee
53095 Contract No. 2669
Russ Darrow Contract type: N/A -0-
Leasing Corp. Car lease
P.O. Box 515 Debtor's interest:
West Bend, WI Lessee
53095 Contract No. 2627
Skoglund Contract type: I-94 -0-
Communications, Billboard lease Eau Claire
Inc. Debtor's interest:
2209 Birsch Street Lessee
Eau Claire, WI
54700
Summit North LP Contract type: Waterford, 5,133.49
and Wineman Nonresidential MI
Investment Company lease
27600 Northwestern Beginning date:
Hwy Suite 200 02/02/95
Southfield, MI Debtor's interest:
48034 Lessee
Westhall Partners Contract type: Imperial -0-
V Nonresidential Avenue
c/o Horizon lease Rothschild,
Investment Beginning date: WI
37 Kessel Court, 04/06/93
Suite 211 Debtor's interest:
Madison, WI 53711 Lessee
*To be assumed as amended pursuant to a motion
currently pending before this Court.
MW1-56088-1
MW1-63157-1
EXHIBIT 9.2 TO
JOINT PLAN OF REORGANIZATION
(Leases and Contracts to be Assumed
and Assigned to Holiday)
GMO, INC.
NAME AND ADDRESS NOTES OF CONTRACT DEFAULT TO
OF OTHER PARTIES OR LEASE AND BE
TO INSTRUMENTS DEBTOR'S INTEREST LOCATION CURED ON
EFFECTIVE
DATE
Cabelas, Inc. Trademark License N/A -0-
812 13th Avenue Agreement
Sidney, NE Date: 05/17/96
Cabelas, Inc. Trademark License N/A -0-
812 13th Avenue Agreement
Sidney, NE Date: 05/17/96
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
SECOND AMENDED 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
TABLE OF CONTENTS
INTRODUCTION 1
I. TREATMENT OF CLAIMS AND INTERESTS UNDER THE PLAN 4
A. Matters Preceding Distributions under the plan 4
B. Classification of Claims and Interests Under the Plan 5
C. Distributions to Holders of Allowed Claims
and Interests 6
D. Analysis of Unsecured Claims 11
II. VOTING PROCEDURES AND PLAN CONFIRMATION 13
A. Voting Procedures for Confirmation of the Plan 13
B. Acceptance of Plan by Classes of Claims or Interests 13
C. Who is Entitled to Vote to Accept or Reject the Plan 14
D. Treatment of Disputed Claims for Voting Purposes 14
E. Confirmation Hearing and Objections to
Confirmation 15
III. DESCRIPTION OF THE DEBTORS AND EVENTS
PRECIPITATING THE
CHAPTER 11 FILINGS 15
A. History of Debtors 15
B. Pre-Bankruptcy Financing 16
C. Directors and Executive Officer of Debtors 16
D. Events Precipitating the Chapter 11 Filings 20
E. Financial Statements 23
IV. SIGNIFICANT EVENTS DURING CHAPTER 11 CASES 23
A. Commencement 23
B. Administrative Consolidation 23
C. Gander Mountain Creditors Committee 24
D. Employment of Professionals 24
E. DIP Working Capital Facility 25
F. Employee Related Matters 26
G. Gift Certificates and Merchandise Returns 27
H. Selection of a Buyer of the Debtors' Business 28
V. IMPLEMENTATION OF THE PLAN 30
A. Merger of Debtors and other Corporate Changes 30
B. Creation of the Trust and Duties of the
Trustee and the Advisory Committee 31
C. Sale of the Debtors' Assets 32
D. Plan Provisions Governing Distributions 34
E. Procedures for Resolution of Disputed Claims
and Distribution on Account of Disputed Claims 34
F. Post Confirmation Dissolution of the
Creditors Committee 35
G. Conditions Precedent to Effective Date 36
H. Executory Contracts and Unexpired Leases 36
I. Avoidance Claims 37
J. Releases 38
K. Court's Retention of Jurisdiction 39
L. Discharge 40
VI. BEST INTERESTS OF CREDITOR TEST 40
VII. CERTAIN FEDERAL INCOME TAX CONSEQUENCES OF THE PLAN 41
A. Consequences to Holders of Allowed Unsecured
Claims and Allowed Unsecured Convenience Claims 41
B. Consequences to Holders of Gander Mountain Stock 42
VIII. CONFIRMATION OF PLAN 42
EXHIBITS TO DISCLOSURE STATEMENT
Exhibit A Second Amended Joint Plan of Reorganization
Exhibit B Financial Statements
Exhibit C Analysis of Unsecured Claims
Exhibit D Prepetition Insider Payments
Exhibit E Liquidation Analysis
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 14,
1996 filing of the Joint Plan of Reorganization 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"), the filing of a First Amended Joint
Plan of Reorganization on December 12, 1996, and the
filing of a Second Amended Joint Plan of Reorganization
by the Debtors, the Committee, and Holiday (the "Plan")
on December 13, 1996. 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 December _____, 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.
THIS DISCLOSURE STATEMENT HAS NOT BEEN APPROVED OR
DISAPPROVED BY THE SECURITIES AND EXCHANGE COMMISSION
NOR HAS THE COMMISSION PASSED UPON THE ACCURACY OR
ADEQUACY OF THE STATEMENTS CONTAINED HEREIN.
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 INTERESTS VOTE TO ACCEPT
THE PLAN.
FOR THE REASONS STATED IN THE COMMITTEE'S LETTER
WHICH ACCOMPANIES THIS DISCLOSURE STATEMENT, 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 YOU 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, the Debtors' 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.
The letter from the Committee (which recommends
acceptance of the Plan) is also enclosed. Each
Creditor and holder of an Interest entitled to vote is
requested to complete the ballot and mail it to the
attorneys for 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 4:00 P.M. (C.S.T.) on
January 16, 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 and
any duplicate Claims filed in the case of more than one
Debtor will be eliminated so that any Claim against any
Debtor and any guarantee thereof executed by another
Debtor or duplicate Claim filed against 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.C.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.Classification of Claims and Interests Under
the Plan
The following chart provides a summary of the
classes of Claims and Interests in the Plan as well as
references to where in this Disclosure Statement
(identified in the third column below as DS) you can
find more detailed or related information and on what
pages of the Plan you can find provisions describing
the treatment of your Class of Claim or Interest.
Class Type of Claim or Interest For More
Information
Unclassifie Administrative Expense Claims DS p.
Plan p.
Unclassifie Priority Claims of DS p.
governmental units arising Plan p.
under Section 507(a)(8) of
the Code
One Priority Claims (other than DS p.
Claims arising under Sections Plan p.
507(a)(1), (a)(2) or (a)(8)
of the Code)
Two Secured Claims (other than DS p.
Claims of the Old Lenders or Plan p.
CIT)
Three Secured Claims of the Old DS p.
Lenders Plan p.
Four Unsecured Convenience Claims DS p.
(claims of $1,000 or less or Plan p.
Claims of holders of Unsecured
Claims in excess of $1,000 who
elect to reduce their Claim to
$1,000 and accept treatment
under Class Four)
Five Unsecured Claims DS p.
Plan p.
Six Gander Mountain Preferred DS p.
Stock Interests Plan p.
Seven Gander Mountain Common Stock DS p.
Interests Plan p.
Eight GMO Equity Interests DS p.
Plan p.
Nine GRS Equity Interests DS p.
Plan p.
Ten Intercompany Claims of Gander DS p.
Mountain against GMO and GRS Plan p.
Eleven Prepetition Stock Options and DS p.
Prepetition Warrants Plan p.
C.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 Debtors' 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.
At this time it is difficult to
ascertain the exact amount of Administrative
Claims which ultimately may be allowed because the
overwhelming majority of such Claims are
professional fees subject to accrual throughout
the Case, and, ultimately, to Court approval.
Approximately $400,000 in such Claims has been
allowed on an interim basis, subject to further
review and recoupment, to those professionals
listed below. However, substantial additional
fees will be incurred prior to the Effective Date.
Professional Fees & Fees &
Disbursements Disbursements
Requested Allowed on
Interim Basis
Godfrey & Kahn, $147,779.57 $118,223.66
S.C.
Holleb & Coff $110,303.14 $88,242.51
von Briesen, $18,752.49 $15,001.99
Purtell & Roper,
s.c.
The Dratt-Campbell $11,810.00 $9,448.00
Company
Price Waterhouse $60,198.96 $48,159.18
LLP
Committee Members $3,794.56 $3,794.56
Goldberg, Kohn $39,449.39 $39,449.39
Reinhart, Boerner $7,835.34 $7,835.34
$399,923.45 $330,154.63
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. Taxes have been paid by the Debtors when
due and thus the Debtors do not anticipate that
there will be any such Allowed Priority Claims as
of the Effective Date.
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. At
this time, it appears that approximately $15,000 in
filed proofs of claim fall within this Class. However,
it is possible that, based upon continuing obligations,
the Debtors may have to their employees under such laws
as COBRA that number may increase somewhat.
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. The Debtors believe there will
only be two Secured Claims in this Class, a Claim of
Harris Bank for credit card chargebacks, and a Claim of
Bank One, Wisconsin for the Debtors' liability on
account of a Letter of Credit issued by Bank One. The
amount of the Harris Claim cannot be determined at this
time. It is secured by a deposit held by Harris of
approximately $1,000,000. The Debtors believe the
amount of the Harris Claim will be substantially less
than the amount of that deposit. The Debtors believe
the Bank One Claim will be approximately $60,000. That
is the amount of the deposit Bank One holds to secure
the Letter of Credit. The Debtors believe the Letter
of Credit will be drawn because it was issued in favor
of a party whose executory contract with the Debtors
will likely be rejected, thereby, in turn, causing Bank
One to incur a $60,000 Claim against the deposit.
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.
Approximately $160,000 in Claims under $1,000 were
filed or scheduled. Based upon that figure, and based
upon a distribution to Unsecured Creditors projected at
approximately sixty percent of Allowed Unsecured
Claims, the Debtors estimate Creditors holding an
additional $90,000 of Unsecured Claims may voluntarily
reduce their Claims to $1,000, thereby falling into
Class Four. Accordingly, the Debtors estimate that
approximately $250,000 in Claims will ultimately
inhabit Class Four.
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" and the Debtors
have estimated that this amount will be approximately
$18,300,000. This amount available for distribution to
Unsecured Creditors could be further 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. For an analysis of the amount of
Unsecured Claims the Debtors believe may be allowed,
together with projected dividends, please see Section
I.D._ Analysis of Unsecured Claims.
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. There are 200,000 shares of Gander
Mountain's $ .10 par value Series A Redeemable,
Cumulative, Convertible, Exchangeable Preferred Stock
outstanding, all of which are owned by affiliates of
Goldman Sachs Group, L.P. Class Seven consists of the
Common Stock Interests. There are 3,220,347 shares of
Gander Mountain's $ .01 par value Common Stock
outstanding, which stock is held by over 800 record
holders, however a significant number of the
outstanding shares are held beneficially for other
parties. 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, or
$2.50 per each share of Preferred Stock. 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,
or slightly in excess of $.15 per share.
Notwithstanding the foregoing, in the event the Trigger
Event occurs (as described in Section I.C.6,
immediately above), 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. Gander
Mountain is the sole owner of equity interests in GMO
and GRS. 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.
As discussed above, the Plan provides that if the
Trigger Event does not occur, Holders of Preferred
Stock and Common Stock will receive some distribution
under the Plan even though Unsecured Creditors are not
receiving 100% of their Claims. Consequently, unless
the Class of Unsecured Creditors votes to accept the
Plan, the Plan cannot be confirmed since the Unsecured
Creditors cannot be forced to accept the Plan if
Holders of Equity Interests are receiving something of
value. (See Section VIII._Confirmation of Plan).
Thus, if the Unsecured Creditor's Class rejects the
Plan, the Debtors and the Committee cannot go forward
with this Plan because they have agreed to a payment to
shareholders. Such a payment would be contrary to law
if the Unsecured Creditors rejected the Plan. In that
event, the Debtors would try to renegotiate the Plan.
A new Plan might include switching the payment
designated for the shareholders under the Plan to the
Unsecured Creditors. Even if that were to occur it is
highly unlikely that any dividend under such a Plan
would be paid to any Unsecured Creditor for several
months. The Code does not provide that it is contrary
to law for shareholders to receive a distribution if
Creditors vote to approve the Plan. The Debtors and
the Committee urge Unsecured Creditors to vote in favor
of the Plan so that it can be confirmed.
By virtue of the Merger, all of the assets and
liabilities of the Debtors will be consolidated in
Gander Mountain. Allowed Claims against the Debtors
will be treated under the Plan without regard to the
separate assets and liabilities of the individual
Debtors. Such treatment is consistent with the way
Debtors historically conducted their business. The
treatment provided under the Plan was negotiated
specifically by the Debtors, the Committee and the
Buyer.
The Debtors do not believe that it would be
appropriate or reasonable under the circumstances to
treat Allowed Claims as if the assets and liabilities
were not consolidated pursuant to the Merger.
Nevertheless, if Allowed Claims were not treated on a
consolidated basis as set forth in the Plan, and
instead shared pro rata only in the assets of their
respective individual Debtors, the Debtors believe the
treatment of Allowed Secured Claims would not change
(holders of such Claims would receive payment in full
in any case) and the treatment of Allowed Unsecured
Claims likely would change very little, if at all.
This conclusion is based upon projected estimates the
Debtors have performed.
The projections were calculated using the assets
and liabilities set forth in the Debtors' bankruptcy
schedules. No adjustment was made for the Claims
objection process, potential Claims for rejection of
Executory Contracts or unexpired leases of non-
residential real property, or non-pro rata allocation
to the Debtors of the purchase price to be paid by the
Buyer for the assets of the Debtors. Likewise, no
adjustment has been made for subordination of
intercompany Claims held by the Debtors. Gander
Mountain holds Claims constituting 98.42% and 99.76% of
all Unsecured Claims against GRS and GMO, respectively.
If such intercompany claims were subordinated, Allowed
Unsecured Claims of non-insiders against GRS and GMO
would likely be paid in full. However, the Debtors are
unaware of any reason why Gander Mountain's Claims
against GRS and GMO should be subordinated to the
Claims of non-insiders of GRS and GMO without Gander
Mountain's consent. None of the Debtors, the Committee
or the Buyer believe that it makes sense to pursue
subordination of such intercompany Claims in light of
the apparent lack of any basis therefor and the
substantial expense and potential jeopardy to the Plan
that would accompany that course.
It is important to keep in mind that these
estimates are approximations only and are based on
assumptions and projections as to asset value
allocations, Allowed Claims amounts, and certain other
relevant factors. It would require substantial time
and expense to test and confirm such assumptions and
projections to a high level of confidence. None of the
Debtors, the Committee or the Buyer believes such time
and expense would be justified in light of the
relatively modest amounts that appear likely to be
involved, and the potential significant adverse impact
on the Plan of additional expense and delay. Further,
the Buyer has not agreed to go forward with the
proposed purchase of assets except on the basis set
forth in the Plan. The Buyer was interested in
purchasing substantially all of the assets of the
consolidated Debtors for the price described elsewhere
in the Plan. It would have been a difficult and
expensive task to attempt to allocate that purchase
price amongst the three Debtors, and such a process
could delay the transaction.
D. Analysis of Unsecured Claims
1. 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, as shown
on line 10 of Exhibit C, the Debtors believe holders of
Allowed Unsecured Claims will receive under the Plan
approximately 60 percent of their Allowed Claims..
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 letter
from the Committee in support of the Plan, a ballot
which may be cast by Creditors and holders of Interests
entitled to vote to accept or reject the Plan and,
where applicable, 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 4:00
P.M. (C.S.T.) ON JANUARY 16, 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 or subclass, where appropriate. 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, or subclass, where
appropriate, 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 [December 13, 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. 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 THAT CASE, NONE OF YOUR 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
DESIRE 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 HAVE FILED A MOTION WITH THE COURT FOR
TEMPORARY ALLOWANCE OF YOUR CLAIM FOR VOTING
PURPOSES PRIOR TO DECEMBER 12, 1996. 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 January 23, 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. Prior to August 1, 1996, these
premises 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 to
Holiday.
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, 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 their assets. 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. Directors and Executive Officers of Debtors
The following is a description of the business
experience of each Director and Executive Officer of
the Debtors as of the end of the Debtor's most recent
fiscal year, June 30, 1996. Except where indicated,
each of these individuals is continuing to serve the
Debtors.
DIRECTORS OF GANDER MOUNTAIN
DAVID J. LUBAR
Chairman of the Board of Gander Mountain since
April, 1995. Mr. Lubar has been President of Lubar &
Co., Incorporated since 1991 and Principal of Lubar &
Co., since 1982 (private investment company). He
serves on the Board of Directors of Christiana
Companies, Inc. (refrigerated warehousing and
logistics) and various other private companies. Mr.
Lubar has been a Director of Gander Mountain since 1989
and also served as a Director of Gander Mountain from
1984-1987.
RALPH L. FREITAG
Chief Executive Officer of Gander Mountain since
April, 1995. Mr. Freitag also served as Chairman and
Chief Executive Officer of Gander Mountain from 1992 to
1994, and Chairman and President of Gander Mountain
from September, 1984 to 1992. Mr. Freitag has been a
Director of Gander Mountain since 1984.
RICHARD H. JACOBSOHN
President of American Slicing Machine Company and
American Products division since 1976. Mr. Jacobsohn
has also served as President of Simply The Best Sports
companies since 1993 (direct marketing consumer
catalog). Mr. Jacobsohn has been a Director of Gander
Mountain since 1986.
JAMES F. KOBS
Chairman and Chief Executive Officer of Kobs,
Gregory and Passavant since 1991 (direct
marketing/consulting). Mr. Kobs has been a Director of
Gander Mountain since 1990.
STEPHEN R. LETT
President of Lett Direct, Inc. since 1995 (direct
marketing/consulting). Mr. Lett served as President,
Chief Executive Officer and director of The Rytex
Company, a subsidiary of the C.R. Gibson Company, from
1988 to 1994 (direct marketing/catalog). Mr. Lett has
been a Director of Gander Mountain since 1990.
SANJEEV K. MEHRA
Managing Director of Goldman, Sachs & Co. in the
Principal Investment Area. Mr. Mehra serves on the
Board of Directors of other private companies as a
nominee of Goldman, Sachs & Co. Mr. Mehra was
nominated for election as a director by the holder of
Gander Mountain's Preferred Stock pursuant to the terms
of an agreement between such holders and Gander
Mountain. Mr. Mehra has been a Director of Gander
Mountain since 1994.
ALFRED G. GOLDSTEIN
President of A.G. Associates since 1993. Mr.
Goldstein served as President of Sears Specialty
Merchandising from 1987 to 1993 and was nominated for
election as a director by Goldman, Sachs & Co. pursuant
to the terms of an agreement between Goldman, Sachs &
Co. and Gander Mountain. Mr. Goldstein has been a
Director of Gander Mountain since 1994.
WILLIAM T. END
Managing Director of International Cornerstone
Group since 1995. Mr. End served as President and
Chief Executive Officer of Land's End, Inc., from 1992
to 1995, and as Executive Vice President of Land's End,
Inc. from 1991 to 1992. Mr. End is currently a
Director of Hannaford Bros., Co., Ariel, Inc., Travel
Smith, Cinmar/Frontgate and International Cornerstone
Group. Mr. End has been a Director of Gander Mountain
since 1995.
EXECUTIVE OFFICERS OF THE DEBTORS
DAVID J. LUBAR
(See description above).
RALPH L. FREITAG
(See description above).
KENNETH C. BLOOM
Executive Vice President and Chief Financial
Officer of Gander Mountain since January, 1995. Mr.
Bloom joined Gander Mountain in May of 1994 as Vice
President and Chief Financial Officer and was appointed
Secretary and Treasurer in June of 1994. Mr. Bloom
served as Director of Business Development for the
Specialty Retail Group of K-Mart Corporation from 1993
to May, 1994. Prior to 1993, Mr. Bloom was a manager
at Deloitte & Touche (management consulting).
KENNETH J. GUERRINI
General Controller and Assistant Secretary of
Gander Mountain since August, 1995. Mr. Guerrini
served as Assistant Controller of K-Mart Corporation
from 1993 to 1995 and prior to 1993 was Director of
Internal Audit for Arbor Drugs, Inc. (retail drug store
operation).
GARY L. HAUGER
Vice President of Retail Operations since January,
1993. Mr. Hauger served as Director of Retail
Operations prior to 1993.
DAVID W. REIRDEN
President and Treasurer of GRS, Inc. until his
resignation on the Filing Date. Mr. Reirden served as
Vice President of Retail for Gander Mountain from
December, 1991 to June, 1992 and as Vice President of
Merchandising from October, 1989 to December 1991.
ROBERT D. COCKS
President of GMO, Inc. from May, 1995 through
June, 1996. Mr. Cocks resigned in June, 1996 as a
result of the sale of the Debtors' catalog business.
Prior to February, 1995 Mr. Cocks served as Senior Vice
President of Operations of Gander Mountain but was not
employed by any of the Debtors in March and April of
1995.
The following table sets forth summary information
regarding all compensation paid during each of the
Debtor's last three fiscal years to or on behalf of the
Chief Executive Officer and the four other most highly
compensated officers who were serving as executive
officers at the end of the 1996 fiscal year, including
stock options granted and accrued deferred
compensation.
Long Term
Compensation
Securi
Restr ties
Name and icted Underl All
Principal Fisca Salary Bonus Other Stock ying Other
Position l $ $ Annual Award Option Compensa
Year Compensa s s/ tion
tion $ SAR's ($)(2)
Number
of
Shares(1)
Ralph R. 1996 245,000 - 23,234(3) - - 2,250
Freitag 1995 245,000 - 18,852 - - 2,352
Chief 1994 245,000 - 17,214 - 60,000 2,916
Executive
Officer
Kenneth C.
Bloom 1996 200,000 100,000(4) 462(5) - - 4,488
Executive 1995 167,917 - - 10,000 2,095
Vice 1994 18,125 - - - 50,000 -
President
and Chief
Financial
Officer
David W. 1996 175,000 - 3,708(6) - - 177,513(7)
Reirden 1995 140,000 14,000 1,525 - - 2,108
President 1994 135,000 10,000 - - 30,000 2,013
- -GRS, Inc.
Robert D. 1996 216,547 50,000(8) 357 - - 1,588
Cocks 1995 100,625 - - - 25,000 145,151(9)
President 1994 130,000 5,000 - - 20,000 -
- - GMO, Inc.
Gary L. 1996 110,000 - 452 - - 2,973(10)
Hauger 1995 90,360 9,000 - - - 1,397
Vice 1994 85,312 7,500 - - 20,000 953
President
Retail
Operation
D. Events Precipitating the Chapter 11 Filings
In the beginning of 1995, the Debtors were heavily
leveraged and were experiencing severe working capital
constraints. This was due, in part, to the fact that
the Debtors were underperforming. By February, 1995,
the Debtors were in breach of several financial
covenants in their pre-petition credit facility. These
defaults were ultimately cured on August 18, 1995, with
the signing of an amended credit facility containing
monthly financial covenants which were more restrictive
than those which had been in place prior to the
amendment, and which shortened the maturity of the term
loan from December 1, 2000 to January 5, 1997, and
shortened the maturity of the revolving credit loan
from December 1, 1997 to January 5, 1997.
In April, 1995, the existing Chief Executive
Officer (CEO) of Gander Mountain was removed, David J.
Lubar was elected Chairman of the Board, and Ralph
Freitag, CEO. Mr. Lubar was also retained to provide
advisory services for the Debtors. His primary duties
were to negotiate amendments to the existing loan
facility, seek a new CEO, and review with senior
management monthly operating performance.
The search for a new CEO was given a high
priority. A Search Committee was formed. Mr. Lubar
was selected to be the Chairman. The other members of
the Committee were Ralph Freitag, Sanjeev Mehra and
Alfred G. Goldstein. Mr. Mehra was from Goldman, Sachs
& Co. ("Goldman") and a member of the Board. Mr.
Goldstein was a member of the Board designated by
Goldman. Herbert Mines & Associates, one of the
nation's leading recruitment firms that specializes in
recruiting senior managers to retailers, was engaged to
assist in the process. Interviews of candidates began
in June of 1995. Approximately six candidates were
interviewed, including an individual identified by
Goldman. As this process led to no consensus
selection, Herbert Mines was instructed to continue the
search.
Concurrent with this, senior management began work
on a Strategic Operating Plan on a going forward basis.
This process almost immediately led to the conclusion
that the Debtors required additional capital. Thus,
the Debtors decided to retain the services of an
investment banker to look for an equity investment in
the Debtors to alleviate the pressure from the Old
Lenders. Consequently, the Debtors began interviewing
investment bankers to provide assistance in their
evaluation of strategic alternatives. After extensive
discussions and consideration, Smith Barney Inc. was
engaged in September, 1995 by the Debtors. Smith
Barney focused on raising equity, selling the Debtors
as a whole, or selling select assets. The Old Lenders
continued to press the Debtors to reduce their debt.
During late summer and early autumn of 1995, the
Debtors' financial performance continued to falter.
Based on discussions with their investment banker, the
Debtors moved forward to find a buyer or investor for
all or parts of the business. The Debtors negotiated
successive waiver agreements with the Old Lenders
subject to generally declining borrowing limits and
financial flexibility.
The search for a new CEO continued. In November,
1995, a number of the Directors of the Debtors felt
that the Debtors could not represent sufficient
financial stability or make sufficient financial
commitments necessary to entice a quality CEO to come
to Gander. By this point in time, it appeared that
Goldman was a potential investor in the Debtors. The
presumption was that Goldman, as an investor, would be
in a better position to convince a candidate to join
Gander Mountain as it was felt that Goldman could,
perhaps, bring in new senior management in connection
with its investment of equity capital.
The search for additional equity or for a
purchaser of the business also continued. On December
27, 1995, the Debtors executed a letter of intent to
sell substantially all the assets of their catalog
business to Cabela's, Inc. ("Cabela's"). Cabela's is
not related to any of the Debtors, nor are any members
of the Debtors' management or Board of Directors
related to the principals of Cabela's. Unfortunately,
Cabela's withdrew their letter of intent on January 9,
1996.
As a result of Cabela's decision not to proceed
with the letter of intent, in early 1996, the Debtors
held discussions with Bass Pro Shops ("Bass Pro")
regarding a potential purchase of the catalog business.
Bass Pro responded with a high level of interest and
began extensive due diligence work. Nonetheless, the
parties made slow progress in reaching a definitive
purchase agreement. One of the major obstacles to
proceeding with Bass Pro was its desire to obtain
control of the Gander Mountain name. This would pose a
significant obstacle to the sale or recapitalization of
the retail business.
Thus, in late March, the Debtors reinitiated
negotiations with Cabela's. Both Cabela's and Bass Pro
made proposals which were the subject of negotiation
between the Debtors and those companies. The proposals
were compared by the Debtors. Ultimately, a definitive
agreement was executed with Cabela's which resulted in
the sale of selected catalog assets for $35,000,000 on
May 17, 1996.
In April, 1996, after about $3,000,000 of its
checks to vendors were dishonored, the Debtors met with
their vendors to explain their financial condition. An
unofficial committee of creditors (the "Unofficial
Committee") was formed. The Unofficial Committee
retained the law firm of Holleb & Coff to represent it.
Past due payables to vendors were frozen. After the
formation of the Unofficial Committee, the Debtors kept
it generally advised as matters progressed.
In conjunction with Smith Barney, their investment
banker, the Debtors' efforts were then immediately
directed towards a sale or recapitalization of the
retail store business. While a number of alternatives
were considered, the process ultimately resulted in the
sale of five stores to Holiday for $16,200,000 in cash,
plus a $500,000 loan evidenced by a note payable by the
Debtors to Holiday. This transaction closed on July
25, 1996. During this time, short extensions of the
bank agreement were obtained. Each required that the
proceeds of these sales be used to reduce the debt to
the Old Lenders. Borrowing availability was
restricted. The last extension was through August 16,
1996.
On August 1, 1996, the Debtors concluded the sale
of their headquarters and distribution center facility
to the Pleasant Company for $6,600,000 in cash. In
connection with that sale, the Debtors retained the
right to remain in the facility rent free until March
1, 1997, except for portions of the office building and
warehouse which they could continue to occupy until
June 1, 1997. The sale was significant for a number of
reasons. First, it created uncertainty regarding where
the Debtors would be located after March 1 of 1997. On
the other hand, since the proceeds were used to pay
down bank debt, if a lender could be found that would
lend the Debtors money at traditional advance rates,
the Debtors could refinance their bank debt and still
have excess availability which would provide needed
working capital for the Debtors to purchase inventory.
Because of their financial condition in the summer of
1996, the Debtors concluded that this could only be
accomplished through a bankruptcy filing, and the
procurement of a Debtor in Possession loan from a new
lender. A number of lenders were contacted. CIT was
selected.
In the summer of 1996, Goldman indicated that it
would have an interest in pursuing an investment in the
Debtors which would take the form of a prenegotiated
plan of reorganization. The Debtor arranged a meeting
between Goldman and the Unofficial Committee. The
purpose of the meeting was to provide Goldman with a
face to face forum to communicate its proposed
recapitalization of the Debtors. As a result of these
negotiations, an understanding was reached between
Goldman and the Unofficial Committee that the latter,
subject to the satisfaction of certain conditions,
would recommend a plan which called for a $13,500,000
fund to be made available for distribution to Unsecured
Creditors pro rata. This Plan would be funded through
a recapitalization which contemplated a $15,000,000
cash investment in exchange for which the new investors
would receive 60% of the equity of the Debtors on a
fully diluted basis. Holders of the Gander Mountain
Preferred Stock would retain 20% of the equity on a
fully diluted basis. Holders of the Gander Mountain
Common Stock would retain 5% of the equity on a fully
diluted basis. There also would be stock options for
management for 15% of the equity.
From January through June of 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 little availability under the pre-
petition credit facility despite the completion of the
asset sales noted above; needing the additional
financing to purchase inventory and to meet ongoing
operating expenses which the CIT loan would provide;
facing a default on the pre-petition loan as of August
16, 1996; and in excess of $20,000,000 of frozen
payables; and with insufficient cash to meet future
payrolls; the Debtors decided that they must file their
voluntary petitions for reorganization under Chapter 11
of the Code. Shortly before the Filing Date, in
connection with its pre-bankruptcy planning, the
Debtors made a series of payments including the pre-
payment of certain payroll and payroll related taxes,
the funding of certain employee benefit plans,
bankruptcy professional retainers, payments for fees to
counsel for the Old Lenders, a payment to Smith Barney
for fees relating to transactions, stay-put incentive
payments to two senior managers, and payments to three
senior managers representing compromises of their
severance Claims. These payments aggregated
approximately $2,400,000. At that time, Goldman was
urging a delay in the filing so it could complete its
"prenegotiated" plan. The Debtors felt they had run
out of time, and hoped that Goldman would be in a
position to execute its plan promptly after the filing.
Thus, this case was commenced on August 9, 1996.
E. 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.
The Committee is represented by Keith Shapiro and
Bruce Dopke of Holleb & Coff ("Holleb"), 55 East Monroe
Street, Suite 1400, Chicago, Illinois 60603, Phone
(312) 807-4600 and locally by Randall Crocker and
Michelle Andreshak of von Briesen, Purtell & Roper,
S.C., 411 East Wisconsin Avenue, Suite 700, Milwaukee,
Wisconsin 53202, Phone (414) 276-1122.
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 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 18, 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 18, 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 18, 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 as counsel to the Committee and von
Briesen, 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, 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.
Since the Filing Date, the Debtors have continued
to pay their employees, including executive officers,
in the normal course of business. In addition,
directors have received director's fees and expense
reimbursements. Following is a summary of those
payments made to executive officers and directors
during these Chapter 11 Cases through November 30,
1996.
Expense
Name and Reimbursement
Principal Salary and Auto Director's Fees
Position Allowance
David J. Lubar
Chairman of the
Board $86,667 $1,476
Ralph L.
Freitag
Chief Executive 71,458 4,920
Officer
Kenneth C.
Bloom
Executive Vice
President and 58,333 995
Chief Financial
Officer
Gary Hauger
Vice President
Retail 32,083 453
Operations
Kenneth J.
Guerrini
General
Controller and 43,750 239
Assistant
Secretary
William T. End
Director 313 $4,130
Alfred G.
Goldstein 4,130
Director
Richard H.
Jacobsohn 4,130
Director
Steven R. Lett
Director 3,630
James F. Kobs 4,130
Director
Sanjeev K. 3,130
Mehra
Director
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
As was discussed in Section III.D. in some detail,
prior to the Filing Date, the Debtors actively pursued
potential investors in, or buyers of, the Debtors. In
April of 1996, the Unofficial Committee was formed.
That group was kept advised as the sale process
progressed. As of the Filing Date, both the Debtors
and the Unofficial Committee presumed that a plan would
promptly be promulgated based upon the equity infusion
that Goldman had been discussing, and providing for the
$13,500,000 distribution to Unsecured Creditors.
Despite the pendency of that proposal, the Debtors,
consistent with their fiduciary duties, nonetheless,
began to explore other alternatives in the event that
the Goldman proposal never came to fruition. Inquiries
were made to a number of parties regarding their level
of interest. After the filing the Unofficial Committee
became the Committee.
By September, it appeared to the Debtors that
Goldman was concerned that its proposal would leave the
Company with insufficient capital upon exit from
bankruptcy, notwithstanding its contemplated
investment. The Debtors were also mindful that
reuniting the five stores previously sold to Holiday
with the remaining twelve stores would be preferable
from an operating perspective. Thus, the Debtors
arranged for meetings between Goldman and Holiday, and
between Holiday and another entity which had expressed
a high level of interest in acquiring Gander Mountain.
While these meetings did not yield a co-venture between
Holiday and either Goldman or the other potential
purchaser, Holiday decided to make a proposal on its
own. Thus, the result was that three parties were now
interested in submitting proposals.
A series of written proposals were received from
these parties. 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 three
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.
The written proposal submitted by Goldman varied
materially from what it had stated it would do prior to
the Filing Date. Instead of a cash infusion which
would provide $13,500,000 for distribution to Unsecured
Creditors, Goldman's proposal contemplated a cash
infusion of $7,500,000. This investment would be
evidenced by subordinated notes bearing interest at the
rate of 9% per annum payable in cash semi-annually.
The subordinated notes would mature in seven years. In
addition, the new investors would receive 40% of the
fully diluted equity. Holders of Unsecured Convenience
Claims would receive cash equal to 50% of their Claims.
All other Unsecured Creditors would share in
$15,000,000 in face amount of 9% redeemable preferred
stock. Dividends on the preferred stock would be
payable in kind ("PIK") at the reorganized Debtors'
option. There would be mandatory redemptions at the
end of years three through seven in the amount of
$1,000,000, $2,000,000, $3,000,000, $4,000,000 and
$5,000,000, respectively, including accrued dividends
associated with the redemption. Unsecured Creditors
would have the right to elect one member of the Board
of Directors. The stock would be redeemable at the
reorganized Debtors' option at par plus accrued
dividends at any time, and would be exchangeable into
subordinated debt. In addition, Unsecured Creditors
would share in 17% of the reorganized Debtors' common
stock. The holders of Gander Mountain Preferred Stock
(Goldman) would receive 22% of the reorganized Debtors'
common stock, and holders of Gander Mountain Common
Stock would receive 6%. This proposal was subsequently
adjusted by Goldman to increase the amount of the cash
being invested from $7,500,000 to $12,500,000. The
consideration to Unsecured Creditors was changed to
$6,500,000 in cash, $8,500,000 PIK preferred stock, and
10% of the equity in the reorganized Company. The new
investors were to receive additional equity in exchange
for the additional subordinated debt.
The Committee met with Goldman prior to Goldman's
adjustment to its offer. Following that, it advised
the Debtors that the Creditors were interested in cash
as they were looking for a return of lost working
capital which had been invested to produce the product
which had been sold to the Debtors and for which they
had not received payment. It advised the Debtors that
Goldman's proposal came from the wrong perspective, as
the Creditors were not interested in a form of
securities. The Committee told the Board that the
Committee was comprised of creditor managers, not
venture capitalists. The Committee forcefully
advocated its opposition to the Goldman proposal.
Goldman has asserted that the decision by the Board to
accept the Holiday proposal was, in part, the result of
threats made by Holleb & Coff on behalf of the
Committee to bring Claims against the members of the
Board of Directors if the Holiday proposal was not
promptly accepted. The Debtors, the Committee, and
Holleb & Coff dispute and deny this assertion. The
Committee also described in detail to Goldman what
adjustments to its proposal were required for Goldman
to be the winning bidder.
The Debtors gave consideration to the Committee's
strong opposition to the proposal. Since the Goldman
proposal did not appear to offer Creditors 100% of
their Claims, to be confirmed, a plan incorporating the
Goldman proposal had to be accepted by Unsecured
Creditors. It was clear to the Debtors that a plan
incorporating the Goldman proposal as presented would
not succeed. In addition, an attempt was made to value
the proposal. It was noted that valuation was
speculative since much of the value was in the form of
equity. A valuation of the equity turned, to a large
extent, on the validity of Goldman's projections and
upon determining an appropriate discount rate. These
projections appeared to be aggressive to management and
members of the Board, and the discount rate, it was
felt, should reflect the degree of risk inherent in the
proposal. After an extensive analysis of these factors
and others, the Debtors elected not to proceed with the
Goldman proposal.
In addition to Goldman and Holiday, a proposal was
received from a third party who was not an insider of
the Debtors. In essence, its proposal involved the
acquisition of the Company's assets for $19.25 million
dollars in cash, 4% of the common stock of the newly
formed acquiring entity, and three year warrants for 5%
of the newly formed company struck 40% above the
purchase price. In addition, the acquiring entity
would assume certain of the Debtors' executory
contracts, post-petition trade payables, the amount due
the Debtors' DIP lenders, and ordinary course post-
petition accrued liabilities as shown on an attached
schedule. The proposal also provided for a downward
adjustment to the purchase price in the event that the
Debtors did not meet certain financial projections.
Further, the buyer had a right to withdraw the proposal
in the event of a material adverse change in the
Debtors.
The Debtors compared this proposal with the
proposal received from Holiday. The Debtors' took into
consideration the Committee's strong recommendation
that the Holiday proposal be pursued. The Debtors paid
particular attention to the risks attendant to the
price adjustments contained in the proposal received
from the third party. The Debtors evaluated both
proposals to determine which yielded the highest value,
and which appeared to be the most likely to lead to a
confirmed plan of reorganization. The Debtors
ultimately concluded that the Holiday proposal was
superior. It was likely that the amount of cash to be
provided to Creditors would be higher in the Holiday
proposal. The Holiday proposal provided for the
assumption of most post-confirmation liabilities. The
Debtors had a positive past experience in dealing with
Holiday. The Holiday proposal was supported by the
Committee and was not contingent upon financing or due
diligence. And, there appeared to be certainty and
speed of closing because of the lack of a material
adverse change clause.
The Debtors and the Committee believe that the
process described above which engaged the prospective
purchasers or investors in a competitive bid procedure
yielded the highest return for parties in interest. No
formal "going concern" appraisal was obtained by the
Debtors or the Committee. Such an appraisal would have
been expensive. The Debtors and the Committee believe
that the best evidence of value is what the market is
willing to pay. The Debtors' business has been exposed
to the market for a significant period of time. The
Holiday proposal represented the highest offer in a
form that was likely to lead to a confirmed plan of
reorganization. Furthermore, as can be seen from a
review of Section VI, the Plan provides to parties in
interest significantly more than they would receive in
liquidation. Goldman disagrees with the Liquidation
Analysis.
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 amended as provided in 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, currently the Chairman
of the Board of Gander Mountain, and Mr. Lubar will
also be the President and sole officer of Gander
Mountain. Mr. Lubar will serve without compensation in
each of these capacities. 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 and any
duplicate Claims filed in the case of more than one
Debtor will be eliminated and all such guaranteed
obligations, duplicate claims 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.
It is not contemplated that the Trust will be engaged
in the operation of a business. None of the interests
of beneficiaries of the Trust will be represented by a
certificate. Because it is contemplated that Claims
will be expeditiously paid and objections to Claims
expeditiously resolved, the Debtors do not expect the
Trust to exist for any protracted period of time. It
is hoped that the work of the Trust will be concluded
within two years. Furthermore, the Debtors do not
expect any significant market to develop for the
beneficial interests in the Trust. Neither the Debtors
nor the Trustee will take any action to list the Trust
interests on any exchange or any NASD quotation system.
However, there is nothing to prevent any Claims trading
by Creditors after the Trust is established. 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, maintain,
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). Holiday has not expressly
agreed in the Holiday Agreement, or otherwise, to pay
any indemnification claims of the Trustee and there is
no assurance that Holiday will treat indemnification
claims as reasonable liabilities, obligations or
expenses of the Trust. To the extent Holiday will not
pay any such indemnification claims or any expenses it
deems to be unreasonable or 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 objections to Claims and
Interests which exceed the amounts shown on the
Debtors' books and records may be maintained 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. Holiday
has no relationship whatsoever with Cabela's, Inc., nor
does it have any relationship with Gander Mountain
other than the July, 1996 purchase of five Gander
Mountain stores and the transaction proposed to be
consummated under the Plan.
Holiday has particular expertise in retailing
sporting goods. For many years Holiday has sold
fishing, hunting and camping equipment at its
gasoline/convenience stores. In addition, Holiday has
developed five "Holiday Sports" stores which specialize
in the retail sale of fishing, hunting and camping
equipment. In 1995, Holiday acquired "Burger
Brothers," a Minnesota based competitor of Gander
Mountain in the outdoor sporting goods market. Ted and
Bud Burger are employed as consultants to Holiday,
bringing their expertise of more than 20 years each in
the industry. Holiday intends to combine the retail
operations of Holiday Sports, Burger Brothers and
Gander Mountain, including the five Gander Mountain
stores Holiday purchased in July 1996, to form a new
Gander Mountain which will become a leading retailer of
outdoor sporting goods. Holiday has not yet made any
determination which, if any, executive officers of the
Debtors may be asked to accept employment by the new
Gander Mountain formed by Holiday.
On the Effective Date, 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
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 trade names, (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. Notwithstanding
that, there exists a risk, however slight, that the
sale to Holiday might not close if Holiday becomes
unwilling or unable to complete the transaction.
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. However, any Creditor whose Claim is partially
disputed will receive, on the Initial Distribution
Date, a distribution on account of that portion of its
Claim not subject to an objection. 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 to
the extent they are Allowed as of the Effective Date.
Thereafter, within 30 days after that portion of 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.
Although the Debtors believe that all meritorious
objections to Claims have already been filed, any party
with standing to do so, and which has not been barred
by Order of the Court, 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. Moreover, any party may, with leave of Court,
within thirty (30) days of the Effective Date, object
to any Claim and Interest which is asserted against the
Debtors' estates. Accordingly, the figure on line 2 of
Exhibit C may increase somewhat.
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. The Trustee
may employ counsel for the Committee to represent it in
this capacity. The Trustee will be one of the
following three individuals. Alejandro D. Moglio,
William H. Grabscheid, or Scott Peltz.
ALEJANDRO D. MOGLIA
Alex Moglia is president of Alex D. Moglia &
Associates, Inc., an international turnaround and
crisis management firm. Mr. Moglia is a member of the
United States Bankruptcy Trustee Panel and serves as
chairman of the Finance and Banking Committee of the
American Bankruptcy Institute. He has held senior
management positions with Continental Illinois National
Bank and CNW Corporation, a former New York Stock
Exchange Company with transportation and manufacturing
operations. Initially, he was a corporate attorney
with Winston & Strawn in Chicago. Mr. Moglia writes
and speaks frequently on issues of insolvency and
bankruptcy.
WILLIAM H. GRABSCHEID
William H. Grabscheid is President of The
Grabscheid Group, Ltd., specializing in Financial
Advisory Services. He has over thirty years of line
and project management experience, and has provided
reorganization and insolvency services for firms in
various industries. He also serves as an Examiner and
Chapter 11 and 7 Panel Trustee. He was Director of the
Special Services Consulting Group, Reorganization and
Restructuring Division of Ernst & Young, a major
international accounting firm, and headed the asset
management services practice. He received his B.A.
degree in Economics from Lafayette College and his M.S.
Degree in Administrative Management from the Graduate
School of Business of Columbia University. He is a
Certified Insolvency and Reorganization Accountant, a
Certified Fraud Examiner and a Certified Turnaround
Professional. He is a Director of the Association of
Insolvency Accountants and a Director of the Bankruptcy
and Insolvency Section of the Commercial Law League of
America.
SCOTT PELTZ
Scott Peltz is a Partner with Philip Rootberg &
Company, a major CPA firm in Chicago and heads up the
firm's litigation and insolvency practice. His
experience includes turnaround, bankruptcy work and
litigation support for debtors, secured creditors,
unsecured creditors, equity holders and individuals.
Scott has performed due diligence services for
acquisitions, divestitures and lending decisions for
major corporations and financial institutions
throughout the United States. He is a director of the
American Bankruptcy Institute. He received his B.S. in
accounting from the University of Illinois and is a
CPA.
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 Holiday 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 Holiday) will
be rejected. Any non-Debtor party who wishes to make a
Claim arising out of 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. The
Debtors estimate that there will be approximately
$4,000,000 of Allowed Unsecured Claims on account of
the rejection of Executory Contracts. This amount has
already been included in the Debtors' estimate of
Allowed Unsecured Claims. 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
At the request of the Committee, most avoidance
claims will be waived or released in the Plan.
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. The chart
attached hereto as Exhibit D provides a breakdown of
the foregoing payments by individual and by type of
payments. The Debtors believe it was necessary and
prudent to make the severance and bonus payments
discussed above to evidence the Debtor's intention to
keep commitments they had made to employees and
maintain the morale and commitment of those executives
who would continue with the Debtors through the
reorganization process. 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 (to the extent that
the Advisory Committee, the Trust, or the Trustee is a
successor or assignee of the Debtors) 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
but only to the extent such Claims are derivative from
or through the Debtors. However, any direct claims of
Creditors or holders of Interests against the Released
Parties are not released. This is consistent with the
requirements of 524(e) of the Code.
The Plan represents a consensual agreement between
the Debtors and the Committee. One of the matters
about which there was negotiation was the nature and
extent of releases. The Debtors have maintained that
releases such as those contained in the Plan are
typical of those contained in many plans. The Debtors
believe that it is important to include releases in a
plan so that officers and directors can be retained
during the case. Without the knowledge that releases
such as those contained in the Plan will be provided,
competent individuals will be unwilling to serve as an
officer or a director for fear of having to defend
themselves against vexatious litigation. This fear is
especially appropriate in this case where all of the
Debtors' assets are being sold, and, as a result,
directors may not have the full benefit of a continuing
indemnification provision in the corporation's by-laws.
The Committee supported these releases as well.
It was eager to avoid the risk of lawsuits against
officers and directors which would have given rise to
indemnification claims against the Debtors. Such
Claims might have been Administrative Expense Claims.
Even if the Claims were treated as Unsecured Claims,
their existence could have the effect of delaying
distributions while appropriate reserves were
maintained until the indemnification Claims were
resolved. If the Claims were ultimately Allowed, they
would have the effect of diluting the dividend to
Creditors. Accordingly, all of the Proponents of the
Plan believe that the releases are appropriate.
The Debtors are not aware of any Claims of the
type being released having been asserted as of the date
of this Disclosure Statement. Throughout this process,
the officers and directors of the Debtors repeatedly
requested advice regarding their fiduciary duties and
acted in the face of this advice. No investigation has
been made regarding whether there are viable breach of
fiduciary duty Claims against officers and directors.
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.
L. Discharge
As previously stated herein, the Debtors will sell
substantially all of their assets to Holiday following
confirmation of the Plan and the Trust will be charged
with winding up the business of the Debtors. Pursuant
to Section 1141(d)(3), the confirmation of a plan does
not discharge a debtor if the plan provides for a
liquidation of all or substantially all of the property
of the estate, the debtor does not engage in business
after consummation of the plan, and the debtor would be
denied a discharge under 727(a) of the Code if the
case were a Chapter 7 case. 727(a) of the Code
provides in part that a debtor shall be granted a
discharge unless the debtor is not an individual.
VI. BEST INTERESTS OF CREDITOR TEST
In order to confirm the Plan pursuant to
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 E (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 amount of Unsecured Claims in
liquidation will exceed the amount of Unsecured Claims
in the event of the sale to Holiday since Holiday is
assuming real estate leases and many other executory
contracts. In liquidation, it is likely that these
contracts would be rejected. The Debtors estimate that
these rejections would result in an increase of
approximately $4,000,000 in Unsecured Claims. These
additional Claims would further dilute any distribution
to Unsecured Creditors.
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 $26,667,000 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 $14,338,260 in the aggregate,
approximately $12,300,000 would be available for
distribution to Unsecured Creditors. The Debtors have
included in the Liquidation Analysis $7,000,000 for
their name. This number may well exceed the amount
which could be obtained in liquidation. Nonetheless,
the Debtors chose a value on the high side to
demonstrate that even if they could obtain $7,000,000
for the name alone in liquidation, the Holiday sale is
preferable. This became clear from the fact that in
liquidation there would be an increase in Unsecured
Claims of at least $4,000,000, and, even assuming the
Debtors would receive $7,000,000 for their name, the
Holiday sale yields over $6,000,000 in excess proceeds
to Unsecured 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.
VIII. 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 January 23, 1997 at 9:30
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
1129 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 Holiday 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
Holiday further believe that the Plan with respect to
certain Claims may satisfy the requirements of 1129(b)
of the Bankruptcy Code and can be confirmed on a
nonconsensual basis. The Debtors, the Committee and
Holiday 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 the Unsecured Convenience Claims and Unsecured
Claims of Gander Mountain, Inc. 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 4:00 p.m., C.S.T. on January 16,
1997.
Dated at Milwaukee, Wisconsin, this 13th day of
December, 1996.
GANDER MOUNTAIN, INC.
as debtor and debtor-in-possession
By:
Its:
GRS, INC.
as debtor and debtor-in-possession
By:
Its:
GMO, INC.
as debtor and debtor-in-possession
By:
Its:
Exhibit A
TO
DISCLOSURE STATEMENT RELATING TO
SECOND AMENDED JOINT PLAN OF REORGANIZATION
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.
(See Attached)
MW1-57410-2
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.
_______________________________________________________
SECOND AMENDED 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 Second
Amended Joint Plan of Reorganization pursuant to
1121(a) of the Code.
SUMMARY OF THIS PLAN
The following Summary 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.
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 (Unsecured Convenience Claims) 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 comprised
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, except for Avoidance
Claims based upon the 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 amended as provided in Exhibits
2.1(b)(i) and 2.1(b)(ii) hereto, respectively,
consistent with the requirements of 1123(a)(6) of the
Code (the Articles of Incorporation and Bylaws as
amended by Exhibits 2.1(b)(i) and 2.1(b)(ii) the
"Restated Articles and Bylaws"). The corporation's
name shall be changed to GMI of Wisconsin, Inc.
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. 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, any other
form of joint and several liability amongst the
Debtors, and any duplicate Claims filed in the case of
more than one Debtor shall be eliminated and discharged
so that any Claim against any Debtor or against more
than one 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, maintain
objections 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 which are not waived
by the Plan. 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 shall 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 member of the Advisory Committee who
was originally designated for membership thereon by the
Committee or their successor(s). 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 or their
successor(s) shall designate a 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 Claim 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 objections to Claims and
Interests may be maintained 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 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. The
Trustee, in the name and stead of the Debtors, shall
maintain objections to any Claim and Interest which is
asserted against the Debtors' estates. Any party with
standing to do so, and which has not been barred by
Order of the Court, 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. Moreover, any party may, with leave of Court,
within thirty (30) days of the Effective Date, object
to any Claim and Interest which is asserted against the
Debtors' estates.
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 and
the Claim of Bank
One, Wisconsin relating to a $60,000 Letter of
Credit issued by Bank One for the account of the
Debtors.
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 from the Trust, 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
from the Trust, 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
from the Trust, 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 from the Trust 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 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 Stock may receive their Pro
Rata share of a $500,000.00 distribution, although the
holders of Gander Mountain 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 from the Trust 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 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 Stock may
receive their Pro Rata share of a $500,000.00
distribution, although the holders of Gander Mountain
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 these Claims 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 11.5 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 11.5
hereof, the Trustee, in accordance with Section 6.8
hereof and with the Trust Agreement shall distribute
from the Cash received from the 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
a Disputed Claim on the Effective Date becomes an
Allowed Claim, or such later date as such holder
complies with the provisions of Section 11.5 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
11.5 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 these Cases
and the entry of a final decree in each Case.
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
Interest.
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 11.5 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, (to the extent that the Advisory Committee,
the Trust, or the Trustee is a successor or assignee of
the Debtors) 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 than
$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 interest 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. Effective Date. The Plan shall become
effective upon the Effective Date.
C. 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.
D. 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.
E. Surrender of Pre-Petition Securities and Evidences
of Indebtedness and Cancellation of Securities.
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.
3. All Common Stock Interests, Preferred Stock,
Pre-Petition Warrants and Pre-Petition Stock Options
shall be cancelled as of the Effective Date; provided,
however, that the right to receive distributions
pursuant to this Plan shall survive such cancellation.
F. 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.
G. 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.
H. 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.
I. 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.
J. 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 11.10
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.
K. 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.
L. 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.
M. 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.
N. 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.
O. 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 16th day of December, 1996.
GANDER MOUNTAIN, INC., Debtor
By:
GMO, INC., Debtor
By:
GRS, INC., Debtor
By:
HOLIDAY STATIONSTORES, INC.,
Buyer
By:
OFFICIAL COMMITTEE OF
UNSECURED CREDITORS
By:
GODFREY & KAHN, S.C.
Attorneys for GANDER MOUNTAIN, INC.
By:
Howard A. Schoenfeld
780 North Water Street
Milwaukee, WI 53202-3590
(414) 273-3500
QUARLES & BRADY
Attorneys for GRS, INC.
By:
Andrew M. Barnes
411 East Wisconsin Avenue
Milwaukee, WI 53202
(414) 277-5000
MCNALLY, MALONEY & PETERSON, S.C.
Attorneys for GMO, INC.
By:
Michael S. Polsky, Esq.
2600 North Mayfair Road, Suite 1080
Milwaukee, WI 53226
(414) 257-3399
FAEGRE & BENSON
Attorneys for HOLIDAY
STATIONSTORES, INC.
By:
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:
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:
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 including, but not limited to, all
amounts due under the DIP Financing Documents and the
DIP Financing Orders.
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 Second Amended
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 date that all
conditions precedent to the effectiveness of the Plan,
as provided in Article VIII, have been satisfied.
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, Wisconsin
(f/k/a 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 Second Amended
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) Amendment to Gander
Mountain, Inc. Articles of Incorporation
Exhibit 2.1(b)(ii) Amendment to Gander
Mountain, Inc. Bylaws
Exhibit 2.2 Trust Agreement
Exhibit 2.3 Purchase Agreement
Exhibit 9.2 Executory Contracts Assumed
and Assigned to the Buyer
MW1-51300-1
MW1-63157-1
AMENDMENT TO ARTICLES OF INCORPORATION
OF GANDER MOUNTAIN, INC.
THIS AMENDMENT TO ARTICLES OF INCORPORATION of
GANDER MOUNTAIN, INC., has been approved pursuant to
the Order Confirming Plan dated [Confirmation Date]
entered in IN RE GANDER MOUNTAIN, INC., Case No. 96-
26478-RAE (U. S. Bankruptcy Court for the Eastern
District of Wisconsin). The United States Bankruptcy
Court for the Eastern District of Wisconsin had
jurisdiction in such proceeding pursuant to 11 U.S.C.
101 et. seq. and 28 U.S.C. 157. This Amendment to
Articles of Incorporation shall amend the existing
Articles of Incorporation of Gander Mountain, Inc., a
Wisconsin corporation, as follows:
1. Article II of the Articles of Incorporation shall
be amended and restated in its entirety to read as
follows:
ARTICLE II
The name of the Corporation is GMI of Wisconsin,
Inc.
2. A new Section C shall be added to the end of
Article III of the Articles of Incorporation to read in
its entirety as follows:
C. Limitation on Issuance of Certain Equity
Securities. Notwithstanding any other provision of
these Articles of Incorporation, so long as the
Corporation shall remain subject to the limitations on
issuance of non-voting equity securities contained in
1123(a)(6) of the United States Bankruptcy Code, or
any successor statute thereto, the Corporation shall
not issue any such securities in contravention of such
limitations.
Executed in duplicate as of the _____ day of
__________, 1997.
GANDER MOUNTAIN, INC.
By:
Name:
Title:
This instrument was drafted by:
Kristin A. Roeper
GODFREY & KAHN, S.C.
780 North Water Street
Milwaukee, WI 53202 MW2-59133-1
AMENDMENT TO BY-LAWS
OF GANDER MOUNTAIN, INC.
THIS AMENDMENT TO BY-LAWS of GANDER MOUNTAIN,
INC., has been approved pursuant to the Order
Confirming Plan dated [Confirmation Date] entered in IN
RE GANDER MOUNTAIN, INC., Case No. 96-26478-RAE (U. S.
Bankruptcy Court for the Eastern District of
Wisconsin). The United States Bankruptcy Court for the
Eastern District of Wisconsin had jurisdiction in such
proceeding pursuant to 11 U.S.C. 101 et. seq. and 28
U.S.C. 157. This Amendment to By-Laws shall amend the
existing By-Laws of Gander Mountain, Inc., a Wisconsin
corporation, as follows:
1. Section 3.01. of Article III of the By-Laws shall
be amended and restated in its entirety to read as
follows:
Section 3.01. General Powers and
Number. The business and affairs of the
Corporation shall be managed under the direction
of its Board of Directors. From and after
[Effective Date], the number of directors of the
Corporation shall be one.
2. Article VI of the By-Laws shall be amended and
restated in its entirety to read as follows:
ARTICLE IV
OFFICERS
Section 4.01. Appointment. From and after
[Effective Date], the sole principal officer of
the Corporation shall be a President. The
President shall be appointed by the Board of
Directors.
Section 4.02. Resignation and Removal. The
President shall hold office until he or she
resigns, dies, is removed hereunder, or a
different person is appointed to the office. The
President may resign at any time by delivering an
appropriate written notice to the Corporation.
The resignation is effective when the notice is
delivered, unless the notice specifies a later
effective date, and the Corporation accepts the
later effective date. The President may be
removed by the Board of Directors with or without
cause and notwithstanding the contract rights, if
any, of the person removed. Except as provided in
the preceding sentence, the resignation or removal
is subject to any remedies provided by any
contract between the President and the Corporation
or otherwise provided by law. Appointment shall
not of itself create contract rights.
Section 4.03. Vacancy. In the event of a
vacancy in the office of President because of
death, resignation, removal or otherwise, the
vacancy may be filled by the Board of Directors.
If a resignation is effective at a later date, the
Board of Directors may fill the vacancy before the
effective date if the Board of Directors provides
that the successor may not take office until the
effective date.
Section 4.04. Duties of the President. The
President shall be the chief executive officer and
chief operating officer of the Corporation,
subject to the control of the Board of Directors.
The President shall, in general, supervise and
control all of the business and affairs of the
Corporation. He or she shall preside at all
meetings of the shareholders and of the Board of
Directors. He or she shall have authority,
subject to such rules as may be prescribed by the
Board of Directors, to appoint such agents and
employees of the Corporation as he or she shall
deem necessary, to prescribe their powers, duties
and compensation, and to delegate authority to
them. Such agents and employees shall hold
offices at the discretion of the President. In
general, he or she shall perform all duties
incident to the office of the President and such
other duties as may be prescribed by the Board of
Directors from time to time.
Section 4.05. Salary. The salary of the
President shall be fixed from time to time by the
Board of Directors, and the President shall not be
prevented from receiving such salary by reason of
the fact that the President is also a director the
Corporation.
MW2-59201-1
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 Scott
Peltz (the "Trustee"), pursuant to the Second Amended
Joint Plan of Reorganization of the Committee, Holiday,
GMI, GRS and GMO dated December 16, 1996 as modified by
the Modification to Second Amended Joint Plan of
Reorganization of GMI, GRS, GMO, the Committee, and
Holiday filed on January 21, 1997.
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 December 16, 1996, the Committee,
Holiday and the Debtors filed a Second Amended Joint
Plan of Reorganization, and on January 21, 1997, a
Modification to Second Amended Joint Plan of
Reorganization (collectively, 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
1.
1.1. 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.
1.2. 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
2.
2.1. 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.
2.2. 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.
2.3. 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.
2.4. 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
3.
3.1. Powers and Directions to the Trustee.
(a) 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.
(b) 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.
(c) Without limiting the generality of
Subsections 3.1(a) above, the Trustee shall have the
power to:
(i) 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;
(ii) pay Allowed Claims and Interests in
accordance with the procedures set forth herein, in the
Plan or as otherwise allowed;
(iii) 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;
(iv) change the state of domicile of the Trust;
(v) 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;
(vi) sue and be sued and participate, as a party
or otherwise, in any judicial, administrative,
arbitrative or other proceedings;
(vii) 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
(viii) 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;
(ix) 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;
(x) 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
(xi) make, pursue (by litigation or otherwise),
collect, compromise or settle any claim, right, action
or cause of action included in the Assets.
(d) 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.
(e) The Trustee shall not have the power to
guarantee any debt of other Persons.
(f) 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.
(g) 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.
3.2. Administration and Distributions.
(a) 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.
(b) 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.
(c) 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.
(d) 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.
(e) 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.
(f) 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.
3.3. 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
4.
4.1. 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.
4.2. 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.
4.3. Source of Payments. All Trust expenses and
payments in respect of Allowed Claims and Interests
shall be payable solely out of the Assets or by
reimbursement from Holiday. 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
5.
5.1. Number. There shall be one (1) Trustee at
all times. The initial Trustee shall be that person
named on the signature page hereof.
5.2. Term of Service.
(a) 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.
(b) 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.
(c) 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.
5.3. 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.
5.4. 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.
5.5. Compensation and Expenses of the Trustee.
(a) The Trustee shall receive compensation for
his or her services as Trustee hereunder at the rate of
$225.00 per hour for Mr. Peltz, at the rate of $150.00
per hour for Mr. Loebbaka, and at the rate of between
$50.00 and $125.00 per hour for members of Mr. Peltz's
staff, 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.
(b) 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.
5.6. Indemnification of the Trustee.
(a) 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.
(b) 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.
(c) 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.
(d) 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.
(e) 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.
5.7. 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.
5.8. 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.
5.9. Additional Qualifications.
(a) 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.
(b) 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
6.
6.1. Objection to Allowed Claims and Interests.
Section 2.11 of the Plan is incorporated by reference
herein as if fully set forth.
6.2. 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
7.
7.1. Irrevocability. The Trust is irrevocable,
but is subject to amendment as provided in Section 7.3
hereof.
7.2. Termination.
(a) 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.
(b) 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.
7.3. 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.
7.4. 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.
7.5. 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: David J. Lubar
Lubar & Company, Inc.
777 East Wisconsin Avenue, Suite 3380
Milwaukee, WI 53202
Facsimile No.: (414) 291-9061
To the Trust or the Trustee: Scott Peltz, CPA
Philip, Rootberg & Company
250 South Wacker Drive, Suite 800
Chicago, IL 60606-5891
Facsimile No. (312) 930-0176
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.
7.6. 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.
7.7. 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.
7.8. 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.
7.9. 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.
7.10. Governing Law. This Agreement shall be
governed by and construed in accordance with the laws
of the State of Wisconsin.
7.11. 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.
7.12. 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 3rd day of February, 1997.
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 __________, 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 By
Title Title
GRS, INC.
By
Title
GMO, INC.
By
Title
EXHIBIT 9.2 TO
JOINT PLAN OF REORGANIZATION
(Leases and Contracts to be Assumed
and Assigned to Holiday)
GANDER MOUNTAIN, INC.
AMOUNT OF
NAME AND ADDRESS NOTES OF CONTRACT DEFAULT TO
OF OTHER PARTIES OR LEASE AND BE
TO INSTRUMENTS DEBTOR'S INTEREST LOCATION CURED ON
EFFECTIVE
DATE
3M National Contract type: Madison $224.40
6405 Hix Road Billboard lease West Side of
North Date: 05/20/96 I-90 at Jct.
Westland, MI Debtor's interest: D/M and I-90
48185 Lessee Facing North
Description: 3M
Media Special
Outdoor Display
Advertising
Agreement
ABC Outdoor Contract type: Brookfield -0-
Advertising, Inc. Billboard Highway 45,
24600 Silvernail Debtor's interest: 1300" N/O
Road Lessee Silver
Pewaukee, WI Date: 09/01/96 Spring
53072 Description:
Standard Outdoor
Advertising Rental
Contract
ABC Outdoor Contract type: Brookfield -0-
Advertising, Inc. Billboard Lease I94, 1500'
24600 Silvernail Date: 09/01/96 E/O Hwy 16
Road Debtor's interest:
Pewaukee, WI Lessee
53072 Description:
Standard Outdoor
Advertising Rental
Contract
ABC Outdoor Contract type: Brookfield -0-
Advertising, Inc. Billboard lease I-94, 2
24600 Silvernail Date: 09/01/96 miles E/O
Road Debtor's interest: Hwy F
Pewaukee, WI Lessee
53072 Description:
Standard Outdoor
Advertising Rental
Contract
ABC Outdoor Contract type: Brookfield -0-
Advertising, Inc. Billboard lease I-894, 650
24600 Silvernail Date: 12/01/96 E/O Loomis
Road Debtor's interest: Road
Pewaukee, WI Lessee
53072 Description:
Standard Outdoor
Advertising Rental
Contract
American Displays Contract type: Grand Rapids -0-
3420 Broadmoor, Billboard lease I-96 at Hwy
SE #3 Date: 05/29/96 M-50
Grand Rapids, MI Debtor's interest:
49512 Lessee
Description:
Bulletin Order
Ancevic, Milton Contract type: N/A -0-
A. Severance
12400 Fox River Agreement
Road Date: 12/06/95*
Wilomt, WI 53192
Ann Arbor Sign Contract type: Shared among 711.09
P.O. Box 604 Billboard lease all Michigan
Ann Arbor, MI Date: 10/01/96 stores I94
48168 Debtor's interest: and I-275,
Lessee Romulus
Description:
Advertising
Display
Contract
Ann Arbor Sign Contract type: Utica -0-
P.O. Box 604 Billboard lease Hall Road
Manchester, MI Date: 10/01/96 and I-94
48158 Debtor's interest:
Lessee
Description:
Advertising
Display Contract
Ann Arbor Sign Contract type: Taylor -0-
P.O. Box 604 Billboard lease I-94 and
Manchester, MI Date: 10/01/96 Pennsylvania
48158 Debtor's interest:
Lessee
Description:
Advertising
Display Contract
Bloom, Kenneth C. Contract type: N/A -0-
12400 Fox River Severance
Road Agreement
Wilmot, WI 53192 Date: 12/13/95*
Bussard, Mark Contract type: N/A -0-
12400 Fox River Retention
Road Agreement
Wilmot, WI 53192 Date: 03/06/96*
Bussard, Mark Contract type: N/A -0-
12400 Fox River Severance
Road agreement
Wilmot, WI 53192 Date: 12/06/95*
Cabelas, Inc. Contract type: N/A -0-
812 13th Avenue Trademark license
Sidney, NE agreement
Date: 05/17/96
Cabelas, Inc. Contract type: N/A -0-
812 13th Avenue Noncompetition
Sidney, NE agreement
Date: 05/17/96
Cabelas, Inc. Contract type: N/A -0-
812 13th Avenue Nonresidential
Sidney, NE lease
Beginning date:
05/17/96
Debtor's interest:
Lessor
Description:
Wilmot, WI
Cappel, Peggy Contract type: N/A -0-
12400 Fox River Retention
Road agreement
Wilmot, WI 53192 Date: 03/06/96*
E3 Associates, Contract type: N/A -0-
Ltd. Software licensing
1700 Parkway agreement
Place, Suite 600 Date: 8/18/94
Marietta, GA Debtor's interest:
30067-8288 Lessee
E3 Associates, Contract type: N/A $1,073.51
Ltd. Service contract
1800 Parkway Beginning date:
Place 05/31/95
Suite 600 Debtor's interest:
Marietta, GA Lessee
30067
First Federal Contract type: N/A -0-
Financial Serv. Vehicle lease
W176 N9830 Beginning date:
Rivercrest Drive 09/19/94
Germantown, WI Debtor's interest:
53022 Lessee
First Federal Contract type: N/A -0-
Financial Service Tractor lease
Inc. Date: 06/16/96
P.O. Box 654 Debtor/s interest:
Menomonee Falls Lessee
WI 53052-0054
First United Contract type: N/A -0-
Leasing Corp. Copiers
100 Corporate Beginning date:
North 07/12/95
Bannockburn, IL Debtor's interest:
60015 Lessee
Description:
Master Operating
Lease
Agreement No. 1655
Franklin Outdoor Contract type: St. Cloud $3,120.00
Advertising Billboard lease
Company Debtor's interest:
Box 218 Lessee
Albertville, MN
55301
Freitag, Ralph Contract type: N/A -0-
12400 Fox River Retention
Road agreement
Wilmot, WI 53192 Date: 08/08/96
Freitag, Ralph Contract type: N/A -0-
12400 Fox River Employment
Road agreement
Wilmot, WI 53192 Date: 03/19/96
Gannett (f/k/a Contract type: Flint $3,147.97
Outdoor Systems) Billboard lease
6083 Taylor Drive Date: 09/08/96
Flint, MI 48507 Debtor's interest:
Lessee
Description:
Gannett Outdoor
Network USA
Outdoor Display
Agreement
Gannett (f/k/a Contract type: Grand Rapids -0-
Outdoor Systems) Billboard lease
6083 Taylor Drive Date: 06/12/96
Flint, MI 48507 Debtor's interest:
Lessee
Description:
Gannett Outdoor
Network USA
Outdoor Display
Agreement
Garlow, Jim Contract type: N/A -0-
12400 Fox River Retention
Road agreement
Wilmot, WI 53192 Date: 03/06/96*
Garlow, Jim Contract type: N/A -0-
12400 Fox River Severance
Road agreement
Wilmot, WI 53192 Date: 12/06/95*
Giesen, Cindy Contract type: N/A -0-
12400 Fox River Severance
Road agreement
Wilmot, WI 53192 Date: 12/06/95*
Glyzewski, David Contract type: N/A -0-
A. Severance
12400 Fox River Agreement
Road Date: 12/06/95*
Wilmot, WI 53192
Guerrini, Kenneth Contract type: N/A -0-
J. Severance
12400 Fox River agreement
Road Date: 12/06/95*
Wilmot, WI 53192
Hans G. Stute Contract type: 19500 W. -0-
5131 South 60th Non-residential Bluemound
Street lease Road
Greendale, WI Beginning date: Brookfield,
53192 04/15/87 WI 53045
Debtor's interest:
Lessee
Hansen, Todd Contract type: N/A -0-
12400 Fox River Retention
Road agreement
Wilmot, WI 53192 Date: 03/06/96*
Hansen, Todd Contract type: N/A -0-
12400 Fox River Severance
Road agreement
Wilmot, WI 53192 Date: 12/06/95*
Hauger, Gary Contract type: N/A -0-
12400 Fox River Retention
Road agreement
Wilmot, WI 53192 Date: 03/06/96
Hauger, Gary Contract type: N/A -0-
12400 Fox River Retention
Road agreement
Wilmot, WI 53192 Date: 08/08/96
Horizon Contract type: 2002 Zeier -0-
Investment & Nonresidential Road
Development Corp. lease Madison, WI
37 Kassel Court, Beginning date: 53704
Suite 211 04/27/92
Madison, WI 53711 Debtor's interest:
Lessee
Ithaca Contract type: N/A $311.92
Peripherals Maintenance
Incorporated agreement
20 Bomax Drive Date: undated
Ithaca, NY 14650 Debtor's interest:
lessee
JDA Software Contract type: N/A -0-
Services, Inc. Software lease
5011 N. Granite Beginning date:
Reef Road 08/20/90
Scottsdale, AZ Debtor's interest:
85253 Lessee
Description:
Software Support
Agreement
Kunz, Jeffrey Contract type: N/A -0-
12400 Fox River Retention
Road agreement
Wilmot, WI 53192 Date: 03/06/96*
Kunz, Jeffrey Contract type: N/A -0-
12400 Fox River Severance
Road agreement
Wilmot, WI 53192 Date: 12/06/95*
Lakehead Outdoor Contract type: Hwy. 2 and -0-
Advertising Billboard lease Hwy. 53
910 Hammond Debtor's interest:
Avenue Lessee
Superior, WI
54880
Lakeview Contract type: N/A -0-
Technology Inc. Software USA
2301 West 22nd Agreement No.
Street, Suite 206 920730
Oak Brook, IL Date: 08/18/92
60521 Debtor's interest:
Lessee
Lucent Contract type: Grand Rapids $3,228.79
Technologies Maintenance
Minneapolis CSC agreement
00793 Debtor's interest:
420 Third Avenue Lessee
South, Room 1210
Minneapolis, MN
55415-1384
Lucent Contract type: Taylor, -0-
Technologies Maintenance Pontiac and
Minneapolis CSC agreement Utica
00793 Debtor's interest:
420 Third Avenue Lessee
South, Room 1210
Minneapolis, MN
55415-1384
Lucent Contract type: Saginaw -0-
Technologies Maintenance
Minneapolis CSC agreement
00793 Debtor's interest:
420 Third Avenue Lessee
South, Room 1210
Minneapolis, MN
55415-1384
Lucent Contract type: Brookfield, -0-
Technologies Maintenance Wausau,
Minneapolis CSC agreement Appleton,
00793 Debtor's interest: and Madison
420 Third Avenue Lessee
South, Room 1210
Minneapolis, MN
55415-1384
Manhattan Contract type: N/A -0-
Associates, Inc. PkMS
225 S. Sepulveda training/installat
Blvd., Suite 301 ion consulting
Manhattan Beach, agreement
CA 90266 Date: 12/22/93
Debtor's interest:
Lessee
Matheson, Scott Contract type: N/A -0-
12400 Fox River Retention
Road agreement
Wilmot, WI 53192 Date: 03/06/96*
Matheson, Scott Contract type: N/A -0-
12400 Fox River Severance
Road agreement
Wilmot, WI 53192 Date: 12/06/95*
Norwest Equipment Contract type: N/A -0-
Finance Stockpicker lease
733 Marquette Beginning date:
Ave., Suite 300 06/12/95
Minneapolis, MN Debtor's interest:
55402 Insured
Description:
Master Lease No.
21292
Supplemental
Number 21292-100-m
Ohm, Susan Contract type: N/A -0-
12400 Fox River Severance
Road Agreement
Wilmot, WI 53192 Date: 04/16/96
Ohm, Susan Contract type: N/A -0-
12400 Fox River Retention
Road Agreement
Wilmot, WI 53192 Date: 04/16/96*
Pleasant Company Contract type: Wilmot, WI -0-
Incorporated Nonresidential
8400 Fairway leases
Place Beginning date:
P.O. Box 998 08/01/96
Middleton, WI Debtor's interest:
53562 Lessee
Description:
Wilmot
Rymer, Todd Contract type: N/A -0-
12400 Fox River Retention
Road agreement
Wilmot, WI 53192 Date: 03/06/96*
Rymer, Todd Contract type: N/A -0-
12400 Fox River Severance
Road agreement
Wilmot, WI 53192 Date: 12/06/95*
Security Contract type: N/A -0-
Financial and Equipment lease
Leasing Services, Debtor's interest:
Inc. Lessee
7600 W. Layton Description:
Avenue, Suite 200 Equipment lease
Milwaukee, WI 94GMI and 94GMI-2
53220
Silvon Software, Contract type: N/A -0-
Inc. Software license
P.O. Box 88465 agreement
Chicago, IL 60680- Debtor's interest:
1465 Lessee
Silvon Software, Contract type: N/A -0-
Inc. Software
P.O. Box 88466 Maintenance
Chicago, IL 60680- Agreement No.
1466 4072515
Date: 07/18/94
Debtor's interest:
Lessee
Silvon Software, Contract type: N/A -0-
Inc. Software
P.O. Box 88466 Maintenance
Chicago, IL 60680- Agreement No.
1466 M6670
Date: 07/18/94
Debtor's interest:
Lessee
Silvon Software, Contract type: N/A -0-
Inc. Software
P.O. Box 88466 Maintenance
Chicago, IL 60680- Agreement
1466 Date: 10/11/93
Debtor's interest:
Lessee
Silvon Software, Contract type: N/A -0-
Inc. Software
P.O. Box 88466 Maintenance
Chicago, IL 60680- Agreement No.
1488 081324
Date: 05/31/95
Debtor's interest:
Lessee
Skoglund Contract type: Hwy. 53, $5,378.86
Communications Billboard lease West Lie
Inc. Debtor's interest:
9331 Westgate Lessee
Blvd.
Duluth, MN 55818
Skoglund Contract type: Hwy. 10 -0-
Communications, Billboard lease North
Inc. Debtor's interest:
9331 Westgate Lessee
Blvd.
Duluth, MN 55818
Softpoint Inc. Contract type: N/A $2,640.46
850A South Rock System Purchase
Boulevard Agreement
Sparks, NV 89431 Date: 11/22/93
Debtor's interest:
Lessee
Softpoint, Inc. Contract type: N/A -0-
5450 Riggins Maintenance
Court, Suite 4 agreement
Reno, NV 89502 Date: 10/30/96
Debtor's interest:
Lessee
Softpoint, Inc. Contract type: N/A -0-
850A South Rock POS software
Boulevard license
Sparks, NV 89431 Debtor's interest:
Lessee
Software 2000, Contract type: N/A -0-
Inc. Master Software
One Park Center Agreement No. 88-
Independence Park 313
Hyannis, MA 02601 Date: 03/15/88
Debtor's interest:
Lessee
Strouse, David Contract type: N/A -0-
12400 Fox River Retention
Road agreement
Wilmot, WI 53192 Date: 03/06/96*
Strouse, David Contract type: N/A -0-
12400 Fox River Severance
Road agreement
Wilmot, WI 53192 Date: 12/06/95*
Synon, Inc. Contract type: N/A -0-
1100 Larkspur Software license
Landing Circle agreement
Larkspur, CA Date: 06/24/91
94939 Debtor's interest:
Lessee
Thelen Sand and Contract type: NW corner of 275.00
Gravel, Inc. Billboard lease Illinois
Hwy 173 Debtor's interest: Route 173
Antioch, IL 60002 lessee and
Description: Land Johnsburg-
Lease Wilmot Road
Westhill Partners Contract type: 535 N. -0-
I Nonresidential Westhill
c/o Horizon lease Blvd.
Investment Beginning date: Grand Chute,
37 Kessel Court, 03/18/91 WI 54911
Suite 211 Debtor's interest:
Madison, WI Lessee
53711
Westhill Partners Contract type: 2002 Zeier -0-
III Madison Nonresidential Road
(f/k/a Horizon lease Madison, WI
Investment & Beginning date: 53704
Development 04/27/92
Corp.) Debtor's interest:
37 Kassel Court, Lessee
Suite 211
Madison, WI
53711
Whiteco Outdoor Contract type: Merrillville -0-
Advertising Billboard lease N/L I-94,
1770 West 41st Date: 11/1/96 1/4 mi E/O
Avenue Debtor's interest: Burr, F/W
Gary, IN 46408 Lessee
Description:
Bulletin Display
Agreement
Whiteco Outdoor Contract type: Merrillville -0-
Advertising Billboard lease W/L I-65,
1770 West 41st Date: 11/1/96 1.2 mi S/O
Avenue Debtor's interest: 231, F/S
Gary, IN 46408 Lessee
Description:
Bulletin Display
Agreement
Whiteco Outdoor Contract type: Merrillville -0-
Advertising Billboard lease Merrillville
1770 West 41st Date: 11/1/96 rotary
Avenue Debtor's interest:
Gary, IN 46408 Lessee
Description:
Bulletin Display
Agreement
Whiteco Outdoor Contract type: Merrillville -0-
Advertising Billboard lease S/L I-94,
1770 West 41st Date: 10/1/96 2.4 mi. E/O
Avenue Debtor's interest: Rt. 51 F/E
Gary, IN 46408 Lessee
Description:
Bulletin Display
Agreement
Whiteco Outdoor Contract type: Wausau 8,776.00
Advertising Billboard lease Hwy 29
9237 Highway 10 Date: 08/01/96 Approx. 4 mi
East Debtor's interest W/O Birch
P.O. Box 548 Lessee S/S F/E
Marshfield, WI Description:
54449 Bulletin Display
Agreement
Whiteco Outdoor Contract type: Wausau -0-
Advertising Billboard lease Hwy 29W W/O
9237 Highway 10 Date: 08/10/96 28th Ave.
East Debtor's interest: LH/EB
P.O. Box 548 Lessee
Marshfield, WI Description:
54448 Bulletin Display
Agreement
Whiteco Outdoor Contract type: Wausau -0-
Advertising Billboard lease US51 W/O Jct
9237 Highway 10 Date: 08/10/96 SR153 @
East Debtor's interest: Mosinee E/S
P.O. Box 548 Lessee F/S
Marshfield, WI Description:
54449 Bulletin Display
Agreement
Whiteco Outdoor Contract type: Wausau -0-
Advertising Billboard lease US51 1 mi.
9237 Highway 10 Date: 08/01/96 N/O Hwy 54
East Debtor's interest: E/S F/N
P.O. Box 548 Lessee
Marshfield, WI Description:
54449 Bulletin Display
Agreement
Wolverine Outdoor Contract type: Flint 1,488.72
Advertising Billboard lease I-69 5 miles
923 Bradley Date: 07/28/95 west of
Street Debtor's interest: Flint
Owosso, MI 48867 Lessee
*To be assumed as amended pursuant to a motion
currently pending before this Court.
MW1-56086-1
MW1-63157-1
MW1-57410-1
EXHIBIT 9.2 TO
JOINT PLAN OF REORGANIZATION
(Leases and Contracts to be Assumed
and Assigned to Holiday)
GRS, INC.
NAME AND ADDRESS NOTES OF CONTRACT DEFAULT TO
OF OTHER PARTIES OR LEASE AND BE
TO INSTRUMENTS DEBTOR'S INTEREST LOCATION CURED ON
EFFECTIVE
DATE
3M National Contract type: Flint -0-
6405 Hix Road Billboard lease 1/4 Mi. E/O
North Effective date: Miller Rd
Westland, MI 12/4/95 Exit N/S I-
48185 Debtor's interest: 69 F/E
Lessee
Description: 3M
Media Outdoor
Display
Advertising
Agreement
3M National Contract type: Utica -0-
6405 Hix Road Billboard lease East side I-
North Date: 07/16/96 94, 300'
Westland, MI Debtor's interest: N/O 14 mi.
48185 Lessee facing
Description 3M south
Media Outdoor
Display
Advertising
Agreement
3M National Contract type: Shared -0-
6405 Hix Road Billboard lease among
North Date: 08/12/96 Detroit
Westland, MI Debtor's interest: stores
48185 Lessee (Utica,
Description: 3M Pontiac,
Media Outdoor Taylor) E/S
Display I-75, 1.2
Advertising miles W/O
Agreement Holly Rd.
facing
north
3M National Contract type: Taylor -0-
6405 Hix Road Billboard lease West side I-
North Date: 07/24/96 75, .5 mile
Westland, MI Debtor's interest: north of
48185 Lessee Outer
Description: 3M Drive,
Media Outdoor facing
Display north
Advertising
Agreement
3M National Contract type: Taylor -0-
6405 Hix Road Billboard lease E/S I-75 at
North Date: 06/04/96 Vernor Hwy
Westland, MI 48185 Debtor's interest: F/N
Lessee
Description: 3M
Media Outdoor
Display
Advertising
Agreement
Apple Mountain LLC Contract type: 72270 -0-
1460 Walton Blvd., Nonresidential Habawa
Suite 105 lease Street
Rochester Hill, MI Beginning date: Saginaw, MI
48309 05/19/94 48805
Debtor's interest:
Lessee
Collins Outdoor Contract type: LaCrosse $4,040.00
Advertising Billboard lease I-90 East
325 N. 3rd Street Debtor's interest: of Bangor
P.O. Box 968 Lessee exit
LaCrosse, WI 54602-
0968
Collins Outdoor Contract type: LaCrosse -0-
Advertising Billboard lease I-90 West
325 N. 3rd Street Debtor's interest: Fact I-90
P.O. Box 968 Lessee Exits 3 & 4
LaCrosse, WI 54602-
0968
Cook 28th, Inc. Contract type: 2875 -0-
Oxford Partners Nonresidential Acquest
126 Ottawa Avenue lease Avenue
NW Beginning date: Grand
Grand Rapids, MI 10-19-94 Rapids, MI
49503 Debtor's interest: 49512
Lessee
Gary Joint Venture Contract type: 1630 South -0-
25425 Center Ridge Nonresidential Lake Mall
Road lease Merriville,
Cleveland, OH Beginning date: IN 46410
44145 08/01/94
Debtor's interest:
Lessee
Giesen, Cindy Contract type: N/A -0-
12400 Fox River Retention
Road agreement
Wilmot, WI 53192 Date: 04/16/96*
L.D. Clark Contract type: 6353 Gander -0-
Building Co. Nonresidential Drive
6851 Millett lease Swartz
Highway Beginning date: Creek, MI
Lansing, MI 48917 02/02/94 48473
Debtor's interest:
Lessee
National Contract type: Saginaw -0-
Advertising Billboard lease .1 mi. N/W
Company Date: 07/12/95 Busch Rd.,
Bedford Park, IL Debtor's interest: W/S I-75
60501 Lessee F/S
New Plan Realty Contract type: 13975 Hall -0-
Trust (f/k/a Dean Nonresidential Road
Witter Realty lease Utica, MI
Income Partnership Beginning date: 48315
III, L.P.) 08/19/94
Two World Trade Debtor's interest:
Center Lessee
New York, NY 10048
Ohm, Susan Contract type: N/A -0-
12400 Fox River Retention
Road agreement
Wilmot, WI 53192 Date: 04/16/96*
Pardee Associates Contract type: 14100 -0-
22725 Greater Mack Nonresidential Pardee Road
Avenue lease Taylor, MI
St. Clair Shores, Beginning date: 48180
MI 48080 02/09/95
Debtor's interest:
Lessee
Russ Darrow Contract type: N/A $411.39
Leasing Corp. Car lease
P.O. Box 515 Debtor's interest:
West Bend, WI Lessee
53095 Contract No. 2669
Russ Darrow Contract type: N/A -0-
Leasing Corp. Car lease
P.O. Box 515 Debtor's interest:
West Bend, WI Lessee
53095 Contract No. 2627
Skoglund Contract type: I-94 -0-
Communications, Billboard lease Eau Claire
Inc. Debtor's interest:
2209 Birsch Street Lessee
Eau Claire, WI
54700
Summit North LP Contract type: Waterford, 5,133.49
and Wineman Nonresidential MI
Investment Company lease
27600 Northwestern Beginning date:
Hwy Suite 200 02/02/95
Southfield, MI Debtor's interest:
48034 Lessee
Westhall Partners Contract type: Imperial -0-
V Nonresidential Avenue
c/o Horizon lease Rothschild,
Investment Beginning date: WI
37 Kessel Court, 04/06/93
Suite 211 Debtor's interest:
Madison, WI 53711 Lessee
*To be assumed as amended pursuant to a motion
currently pending before this Court.
MW1-56088-1
MW1-63157-1
MW1-57410-1
EXHIBIT 9.2 TO
JOINT PLAN OF REORGANIZATION
(Leases and Contracts to be Assumed
and Assigned to Holiday)
GMO, INC.
NAME AND ADDRESS NOTES OF CONTRACT DEFAULT TO
OF OTHER PARTIES OR LEASE AND BE
TO INSTRUMENTS DEBTOR'S INTEREST LOCATION CURED ON
EFFECTIVE
DATE
Cabelas, Inc. Trademark License N/A -0-
812 13th Avenue Agreement
Sidney, NE Date: 05/17/96
Cabelas, Inc. Trademark License N/A -0-
812 13th Avenue Agreement
Sidney, NE Date: 05/17/96
Exhibit B
TO
DISCLOSURE STATEMENT RELATING TO
SECOND AMENDED JOINT PLAN OF REORGANIZATION
FINANCIAL STATEMENTS
Consolidated Balance Sheets at
June 29, 1996 and July 1, 1995
Consolidated Statements of Operations
for the years ended June 29, 1996,
July 1, 1995 and July 2, 1994
Consolidated Statement of Shareholders'
Equity for the years ended June 29,
1996,
July 1, 1995, and July 2, 1994
Consolidated Statements of Cash Flows
for
the years ended June 29, 1996, July
1, 1995,
and July 2, 1994
Notes to Unaudited Consolidated
Financial Statements
(See Attached)
CONSOLIDATED BALANCE SHEETS
At June 29, 1996 and July 1, 1995
(in thousands, except share data)
Unaudited
1996 1995
ASSETS
CURRENT ASSETS
Cash $3,287 $2,818
Accounts receivable 1,623 7,802
Refundable income taxes 500 1,420
Inventories 37,352 100,639
Prepaid catalog expenses - 13,242
Other current assets 584 1,065
Assets held for sale 7,335 100
Total current assets 50,681 127,086
PROPERTY AND EQUIPMENT - net 13,834 35,585
DEFERRED INCOME TAXES - 154
INTANGIBLE ASSETS - net - 816
$64,515 $163,641
LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES
Accounts payable 24,282 44,472
Notes payable to bank 29,376 9,500
Current portion of long-term - 1,400
obligations
Other current liabilities 15,207 8,877
Total current liabilities 68,865 64,249
LONG-TERM OBLIGATIONS - 69,000
COMMITMENTS AND CONTINGENCIES
(NOTES 8 AND 13)
SERIES A REDEEMABLE, CUMULATIVE,
CONVERTIBLE, EXCHANGEABLE PREFERRED STOCK
$0.10 par value: 200,000 shares
authorized. 200,000 shares issued and 20,000 20,000
outstanding at June 29, 1996 and July 1,
1995 (see note 10)
SHAREHOLDERS' EQUITY
Class B preferred stock, $0.10 par value:
300,000 shares authorized. None issued - -
and outstanding at June 29, 1996 and July
1, 1995
Common stock, $0.01 par value: 20,000,000
shares authorized. 3,261,453 and 33 32
3,240,081 shares issued and outstanding at
June 29, 1996 and July 1, 1995
respectively.
Additional paid-in capital 12,662 12,564
Accumulated deficit (35,495) (1,604)
Less notes receivable from shareholders (550) (600)
Total shareholders' equity (deficit) (24,350) 10,392
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $64,515 $163,641
CONSOLIDATED STATEMENTS OF OPERATIONS
Years ended June 29, 1996, July 1, 1995 and July 2,
1994
(in thousands, except share data)
Unaudited
1996 1995 1994
Net sales $291,935 $297,784 $246,054
Cost of goods sold 206,978 201,843 166,198
Gross profit 84,957 95,941 79,856
Operating expenses 95,144 95,453 73,911
Special charge 3,599 11,510 -
Loss on exit from catalog business 13,308 - -
Income (loss) from operations (27,094) (11,022) 5,945
Other expense
Interest expense - net 5,955 4,635 2,362
Other - net 623 1,326 368
Total other expense 6,578 5,961 2,730
Income (loss) before income taxes (33,672) 16,983 3,215
Income tax provision (benefit) 109 (6,199) 1,254
Income (loss) before cumulative effect
of a change in accounting principle (33,781) (10,784) 1,961
Cumulative effect of change in - - 120
accounting principle
Net income (loss) ($33,781)($10,784) $2,081
Preferred redeemable stock dividends 1,110 1,112 418
Net income (loss) to common ($34,891) ($11,896) $1,663
shareholders
Primary and fully diluted income per
share:
Income (loss) per share before ($10.7 ($3.69 $0.48
cumulative effect of a change in 4) )
accounting principle
Per share cumulative effect of - - 0.04
change in accounting principle
Net income (loss) per common ($10.74) ($3.69) $0.52
share
CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY
Years ended June 29, 1996, July 1, 1995 and July 2,
1994
(in thousands)
Unaudited
Retained Notes
Earnings Receivable
Common Addit- (Accumu- from
Stock ional lated
Shares Amount Paid-in- Deficit) Share- Total
Capital holders
Balance at June 30, 3,047 $30 $11,080 $8,629 - $19,739
1993
Series A redeemable - - (418)
preferred dividends - - (418)
Stock options 31 1 274 - - 275
exercised
Executive stock 130 1 1,299 - (1,250) 50
purchase plan
Net income - 2,081 - 2,081
- -
Balance at July 2, 3,20 32 12,653 10,292 (1,250 21,72
1994 8 ) 7
Series A redeemable - - - (1,112) - (1,11
preferred dividends 2)
Stock options 26 - 247 - - 247
exercised
Executive stock - - (394) - 650 256
purchase plan
Associate stock 6 - 58 - - 58
purchase plan
Net loss - (10,784) - (10,784)
- -
Balance at July 1, 3,240 32 12,584 (1,604) (600) 10,392
1995
Series A redeemable - - - (1,110) - (1,110)
preferred dividends
Stock options 4 - 37 - - 37
exercised
Executive stock - - (25) - 50 24
purchase plan
Associate stock 17 1 87 - - 88
purchase plan
Net loss - (33,781) - (33,781)
- -
Balance at June 29, 3,261 $33 $12,652 ($36,495) ($550) ($24,350)
1996
CONSOLIDATED STATEMENTS OF CASH FLOW
Years ended June 28, 1996, July 1, 1995 and July 2,
1994
(in thousands)
Unaudited
1996 1995 1994
CASH FLOWS FROM OPERATING
ACTIVITIES:
Net income (loss) ($33,781) ($10,784) $2,081
Adjustments to reconcile net
income to net cash provided by
(used for) operating activities:
Net loss on exit from 13,308 - -
catalog business
Special charge 3,599 11,510 -
Depreciation and 4,108 4,827 3,592
amortization
Deferred income taxes 154 (3,527) 1,358
Cumulative effect of change - - (120)
in accounting principle
Changes in operating assets and
liabilities net of effect of exit
from catalog business
Accounts receivable 6,179 (1,211) (5,275)
Refundable income taxes 920 790 (1,610)
Inventories 33,373 (36,172) (15,597)
Prepaid catalog expenses 11,516 1,284 (25)
Accounts payable (20,190) 21,254 (9,255)
Deferred income taxes 48 (2,645) 1,174
Other (665) 2,064 (216)
Cash provided by (used for) 18,569 (12,610) (23,893)
operating activities
CASH FLOWS FROM INVESTING
ACTIVITIES:
Net proceeds from sale of 33,571 - -
catalog assets
Acquisition of property, (1,628) (11,852) (9,778)
plant and equipment
Disposal of property, plant 332 - -
and equipment
Cash provided by (used for) 32,275 (11,852) (9,778)
investing activities
CASH FLOWS FROM FINANCING
ACTIVITIES:
Net proceeds from issuance 149 561 325
of common stock
Net proceeds from (repayment (30,124) 25,632 11,810
of) line of credit agreement
Net proceeds from (repayment (20,400) (400) 2,931
of) long-term debt
Proceeds from sale of - - 20,000
preferred stock
Cash dividends paid on - (850) (370)
preferred stock
Cash provided by (used for) (50,375) 24,943 34,696
financing activities
INCREASE IN CASH 469 481 1,025
CASH BEGINNING OF YEAR 2,818 2,337 1,312
CASH END OF YEAR $3,287 $2,818 $2,337
SUPPLEMENTAL CASH FLOW
DISCLOSURE:
Cash paid (received) during
the year for:
Interest $6,975 $3,883 $2,274
Income taxes ($1,347) ($784) $493
Notes to Unaudited Consolidated Financial Statements
NOTE 1 - PETITION FOR REORGANIZATION UNDER CHAPTER 11
AND BASIS OF PRESENTATION
On August 9, 1996, the Company its two wholly-owned
subsidiaries, GRS, Inc. ("GRS") and GMO, Inc. ("GMO")
filed voluntary petitions for reorganization under
Chapter 11 of the United States Code (the "Bankruptcy
Code") in the United States Bankruptcy Court for the
Eastern District of Wisconsin (the "Bankruptcy Court").
Since August 9, 1996 the Company has been operating as
a debtor-in-possession.
The consolidated financial statements have been
prepared in accordance with generally accepted
accounting principles applicable to a going concern,
which contemplates the realization of assets and the
satisfaction of liabilities in the normal course of
business. Accordingly, the consolidated financial
statements do not purport to show (a) the realizable
value of assets on a liquidation basis or their
availability to satisfy liabilities; (b) pre-petition
liability amounts that may be allowed for claim or
contingencies or the status and priority thereof; (c)
the effect of any changes that may be made to the
capitalization of the Company; or (d) the effect of any
changes that may be made in the Company's business
operations. The outcome of these matters is not
presently determinable. The Company has recently
experienced recurring losses from operations; has an
accumulated deficit at June 29, 1996; had difficulty in
meeting its amended Revolving Line of Credit and Term
Loan Agreement covenants and cannot presently determine
with certainty the ultimate liability which may result
from the filing of claims in connection with the
Bankruptcy Proceedings. These conditions raise doubt
as to the Company's ability to continue as a going
concern.
Due to the Bankruptcy Proceedings, substantially all
claims against the Company, prior to August 9, 1996,
are subject to the automatic stay provisions under the
Bankruptcy Code while the Company continues business
operations as a debtor-in-possession. Pre-petition
claims may arise from the determination by the
Bankruptcy Court of allowed claims for contingencies
and other disputed amounts.
Liabilities recorded by the Company as of June 29, 1996
that would be subject to compromise under any plan of
reorganization consisted of the following (in
thousands):
Amount
Accounts payable $ 24,282
Accrued liabilities 4,755
Total $ 29,037
At the Company's request, the Bankruptcy Court
established a bar date of October 25, 1996 for pre-
petition claims against the Company. A bar date is the
date by which claims against the Company must be filed
if the claimants wish to receive any distribution in
the Bankruptcy Proceedings. The Company has given
notice to all known actual or potential claimants
subject to the bar date of their need to file a proof
of claim with the Bankruptcy Court. The Company will
reconcile claims that differ from the Company's
records, and any differences that cannot be resolved by
negotiated agreement between the Company and the
claimant will be resolved by the Bankruptcy Court.
Accordingly, allowed claims may arise which are not
currently reflected in the Company's financial
statements and recorded claims are subject to change.
The ultimate amount of and settlement terms for such
liabilities are subject to a plan or reorganization
which is subject to approval by the Bankruptcy Court
and, accordingly, are not presently determinable.
NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Nature of Business -
Gander Mountain, Inc., (the "Company"), has principally
been engaged in catalog and retail store sales of
functional outdoor products serving the lifestyle of
the hunting, fishing, camping and hiking enthusiasts.
In the fourth quarter of 1996, the Company exited the
catalog business (see note 3).
Principles of Consolidation -
The consolidated financial statements of the Company
include the accounts of its respective subsidiaries.
All significant intercompany accounts and transactions
have been eliminated in consolidation.
Use of Estimates -
The preparation of financial statements in conformity
with generally accounting principles requires
management to make estimates and assumptions that
affect the reported amounts of assets and liabilities
and disclosure of contingent assets and liabilities at
the date of the financial statements, and the reported
amounts of revenues and expenses during the reporting
period. Actual results could differ from those
estimates.
Revenue Recognition -
Revenue is recognized at time of sale and is reduced
for anticipated merchandise returns.
Cash -
Included in cash at June 29, 1996 is a $1.6 million
cash reserve held on deposit by the Company's credit
card transaction processing bank for potential future
credit card credits and chargebacks. The Company
believes that the amount of future credits and
chargebacks will not be material and is fully reserved
for in other liabilities. The cash reserve was reduced
to $0.9 million in August, 1996.
Accounts Receivable -
Accounts receivable consist primarily of amounts due
from customers related to the sale of the Company's
products. The Company believes it has provided
adequate reserves for potentially uncollectible
accounts. Allowances for estimated uncollectible
accounts were $575,000 and $896,000 as of June 29, 1996
and July 1, 1995, respectively.
Inventories -
Inventories consist of purchased finished merchandise
available for sale and are stated at the lower of cost
or market. The first-in, first-out (FIFO) method is
used to determine cost of inventories.
Store Pre-Opening Costs -
In fiscal 1995, the Company changed the amortization
period for store pre-opening costs to be more
consistent with industry practice. Costs associated
with the opening of a new store are capitalized and
then fully amortized during the first full month of
operations. Prior to fiscal 1995, pre-opening costs
were capitalized and amortized to expense based on a
benefit period which did not exceed twelve months. Pre-
opening expense for the years ended June 29, 1996, July
1, 1995 and July 2, 1994 was $0.9 million, $2.3 million
and $0.4 million, respectively. Changing the
amortization period impacted fiscal 1995 operating
results by $1.3 million.
Deferred Costs -
Catalog costs were capitalized and charged to expense
based upon the projected revenue stream which did not
exceed twelve months. Certain costs to acquire
customer names were capitalized and amortized over a
three year period. At June 29, 1996, there were no
deferred costs recorded due to the Company's exit from
this business during the fourth quarter of 1996.
Advertising -
Advertising costs are expensed in the period in which
the advertising occurs. For the years ended June 29,
1996, July 1, 1995 and July 2, 1994, advertising
expense of $2.9 million, $2.1 million and $1.3 million
was recorded, respectively.
Property and Equipment -
Property and equipment are stated at cost less
accumulated depreciation and amortization and include
external and incremental internal costs of developing
computer software. The Company follows the policy of
capitalizing interest as a component of the cost of
property, plant and equipment constructed for its own
use. For the years ended, June 29, 1996, July 1, 1995
and July 2, 1994, $0, $246,000 and $341,000 of interest
was capitalized, respectively.
Depreciation of assets is computed using the straight-
line method over the estimated useful lives which range
from 5 years for fixtures and equipment, including
capitalized software, to 30 years for buildings and
improvements. Leasehold improvements are amortized
over the lesser of the term of the lease or asset life.
Earnings Per Share -
Primary earnings per share amounts are computed based
on the weighted average number of shares actually
outstanding plus the shares that would be outstanding
assuming exercise of dilutive stock options. Net
income has been adjusted for dividends on the Series A
Redeemable Preferred Stock. The number of common and
common equivalent shares used in the computation were
3,249,000, 3,224,000 and 3,212,000 for the years ended
June 29, 1996, July 1, 1995 and July 2, 1994,
respectively.
NOTE 3 - LOSS ON EXIT FROM CATALOG BUSINESS
On May 17, 1996, the Company sold selected catalog
assets including the customer list, certain other
intangible assets and selected inventory with a gross
book value of $26.5 million to Cabela's Inc. for $35.0
million in cash. As a result of the sale, the Company
exited the catalog business during the fourth quarter
of fiscal 1996. The catalog business exit strategy
included liquidation of the remaining catalog inventory
not sold above through the retail stores (see Note 5),
selling the fixed-assets of the catalog business and
selling the Company's combined headquarters,
distribution and retail stores facility in Wilmot, WI
with the intent of leasing back the portion needed to
operate the retail business. As a result of the sale
and exit strategy, the Company recognized a net charge
of $13.3 million in the fourth quarter of fiscal 1996
as summarized below (in millions):
Amount
Gross proceeds $ 35.0
Less: Direct transaction costs 1.4
Net proceeds 33.6
Less: Book value of assets sold 26.5
Writedown assets held for sale 12.2
to net realizable value
Accrual of remaining lease 3.1
payments on equipment primarily
used in the catalog operation
Employee severance and 1.5
termination benefits
Write-off unamortized prepaid 1.5
catalog expenses
Estimated cost of contract 1.7
related litigation and claims
Write-off of deferred 0.4
organization and financing
costs
Loss on exit from catalog $ 13.3
business
Included in the impaired fixed assets above are the
office equipment and furniture used in the catalog
operation and phone center as well as warehouse
equipment and racking utilized in catalog order
fulfillment. The fair value of these assets was
determined based on estimates provided by resellers of
such equipment. The fair value of the Wilmot complex
was based on the negotiated sale price as discussed in
Note 4. The carrying value of these assets is included
in a separate caption in the accompanying balance
sheet.
The liabilities recorded above are included in "Other
Current Liabilities" on the balance sheet. The
following table summarizes the activity and remaining
balance of these liabilities (in millions):
Initial Balance
Balance Utilized June 29, 1996
Accrual of
remaining lease
payments on
equipment
primarily used $ 3.1 $ 0.1 $ 3.0
in the catalog
operation
Employee
severance and
termination 1.5 0.9 0.6
benefits
Estimated cost
of contract
related
litigation and $ 1.7 --- 1.7
contingent
claims
$ 6.3 $ 1.0 $ 5.3
Included in the consolidated statements of operations
are the following amounts for the catalog business (in
thousands):
Fiscal Years Ended
June 29, July 1, July 2,
1996 1995 1994
Net sales $ 154,861 $ 202,270 $ 181,684
Cost of goods 108,186 136,992 122,032
sold
Gross profit $ 46,675 $ 65,278 $ 59,652
Direct catalog
expenses
included in $ 45,220 $ 51,926 $ 34,688
operating
expenses
In addition the level of inventories (in thousands)
associated with the catalog business as of the end of
the 1996, 1995 and 1994 fiscal years was $557, $66,069
and $51,142, respectively.
NOTE 4 - SUBSEQUENT EVENTS
On July 31, 1996, the Company sold its combined
headquarters, distribution and retail store facility in
Wilmot, Wisconsin to Pleasant Company for cash proceeds
net of transaction costs, tax prorations and escrowed
funds of $6.6 million which was used to reduce debt.
The Company may continue to occupy the facility subject
to a lease under which the Company must vacate the
facility by June 1, 1997, except for its retail store
and attached support area for which is has five one-
year lease renewal options. As the facility had
previously been written down to net realizable value as
an asset held for sale as part of the exit from catalog
costs, no gain or loss will be recorded on this sale.
On July 25, 1996, the Company sold the assets of its
three Minnesota stores (Duluth, Maple Grove and St.
Cloud) and two stores in western Wisconsin (Eau Claire
and LaCrosse) to Holiday Stationstores, Inc.
("Holiday") for cash proceeds net of transaction costs
of $16.0 million which was used to reduce debt. The
sale included the purchase of inventory, store fixtures
and leasehold improvements, along with the assumption
of certain existing leases for the facilities and other
liabilities. The net book value of assets sold net of
liabilities assumed was $12.2 million resulting in a
pre-tax gain of $3.8 million. In addition, Holiday
offered employment to all of the Company's existing
employees in the above stores. Holiday will continue
to have the right to operate under the Gander Mountain
name until January 31, 1997. Also included in the
above transaction was a $0.5 million long-term loan to
the Company from Holiday due on July 25, 2000 at 6.0
percent interest due at loan maturity.
Included in the consolidated statements of operations
are the following amounts for the five stores sold to
Holiday (in thousands):
Fiscal Years Ended
June 29, July 1, July 2,
1996 1995 1994
Net sales $ 32,022 $ 23,278 $ 16,424
Cost of goods 23,094 15,773 11.041
sold
Gross profit $ 8,928 $ 7,505 $ 5,383
Direct store
expenses
included in $ 7,480 $ 5,283 $ 3,799
operating
expenses
In addition the level of inventories (in thousands)
associated with the above five stores, as of the end of
the 1996, 1995 and 1994 fiscal years was $8,442, $7,371
and $5,378, respectively.
NOTE 5 - SPECIAL CHARGE
In an effort to generate additional funds from existing
inventory stocks to reduce bank debt levels and provide
short term liquidity, the Company developed a large
scale inventory liquidation plan in the third quarter
of fiscal 1996. Inventory which was discontinued from
the standard merchandise mix and primarily out of
season was progressively marked down and aggressively
promoted at each of the stores. In addition,
discontinued, slower moving and aged inventory was
transferred from the catalog division into the retail
stores and included in the special liquidation plan
which was substantially completed by June, 1996.
Historically, the majority of such inventory would have
been sold above cost in the normal course throughout
the year in the appropriate seasons.
As a result of the liquidation plan, the Company
recorded a net $3.6 million special charge to reduce
this inventory to the estimated lower of cost or market
value. The charge was initially estimated at $5.3
million, but was reduced by $1.7 million to $3.6
million in the fourth quarter reflecting better than
expected cost recovery margins on the liquidated
inventory. The components of this special charge were
as follows (in millions):
Inventory Net
Value at Cost Charge Inventory
Retail $ 8.5 $ 2.5 $ 6.0
Inventory
Catalog 3.8 1.1 2.7
Inventory
Total 12.3 3.6 8.7
Reduction thru
June 29, 1996 (11.5) (3.1) (8.4)
Balance at June
29, 1996 $ 0.8 $ 0.5 $ 0.3
In fiscal 1995, the Company recorded an $11.5 million
special charge comprised of $5.0 million for the
Company's abandonment of certain internally developed
software, $4.5 million for the write-down of certain
aged inventory and $2.0 million for other catalog
charges. The table below summarizes the activity
associated with these charges during the current year
(in millions):
Reserve at Reserve at
July 1, 1995 Utilized June 29, 1996
Aged inventory $ 2.4 $ (2.4) $ ---
write-off
Other catalog
charges: 0.6 - 0.6
Severance 0.5 (0.2) 0.3
costs 0.1 - 0.1
EZ Pay
program
Other
Total $ 3.6 $ (2.6) $ 1.0
NOTE 6 - PROPERTY AND EQUIPMENT
Property and equipment consisted of the following (in
thousands):
June 29, July 1,
1996 1995
Land and land $ - $ 886
improvements
Building and
leasehold 8,331 22,501
improvements
Equipment 12,946 21,468
Furniture and 5,791 5,773
fixtures
Construction in ---- 790
progress
Less: accumulated $27,068 $51,418
depreciation
(13,234) (15,833)
Total $ 13,834 $ 35,585
NOTE 7 - BORROWING ARRANGEMENTS
At June 29, 1996, the Company maintained a revolving
line of credit with a Bank Group (the "Banks") which
was subject to changing availability as set forth in
short-term waiver agreements, as discussed below,
whereby it could borrow up to $32.8 million, subject to
a borrowing base formula, expiring on July 20, 1996.
Subsequent to July 20, 1996, the Company negotiated
successive waiver agreements with the Banks which
extended the waiver of defaults until August 16, 1996
and limited total borrowings to $11.0 million. This
credit facility was used for working capital needs and
letters of credit and provided for borrowings at the
prime rate of interest. As of June 29, 1996, $29.4
million was outstanding at an interest rate of 8.25
percent. At June 29, 1996, the Company had $2.9
million available under the revolving line of credit.
The entire balance was subsequently paid utilizing the
Debtor-In-Possession Revolving Credit Agreement
discussed below. A commitment fee of 0.375 percent was
payable quarterly on the revolving line.
In December 1992, the Company obtained a term loan for
up to $20.0 million from the banks participating in the
line of credit facility. The term loan had quarterly
principal payments of $0.5 million commencing on March
1, 1996 and was completely paid-off by June 29, 1996
utilizing the proceeds from the sale of catalog assets
(see Note 3). The term loan bore interest at the prime
rate.
The revolving line of credit and term loan were secured
by substantially all assets of the Company. The
Company was not in compliance with certain of the
financial covenants related to these borrowings. As a
result, the Company and the Banks signed successive
amendments waiving these defaults, the final of which
expired on August 16, 1996. The entire balance owing
to the Banks was paid utilizing the Debtor-In-
Possession Revolving Credit Agreement discussed below.
On August 12, 1996, the Company entered into a Debtor-
In-Possession Revolving Credit Agreement, as amended,
with CIT Group/Business Credit, Inc. (the "Lender")
which was approved by the Bankruptcy Court on September
6, 1996. The Debtor-In-Possession Revolving Credit
Agreement paid-off the previous revolving line of
credit with the Banks. The Debtor-In-Possession
Revolving Credit Agreement provides for extensions of
revolving credit loans and letters of credit, limited
to a percentage of eligible inventory and receivables
less certain reserves for gift certificates and other
fees, up to a maximum of $25.0 million through the
earlier of the effective date of a confirmed plan of
reorganization of the August 8, 1999 termination date.
The Debtor-In-Possession Revolving Credit Agreement
provides for a security interest in substantially all
of the Company's assets and is guaranteed by GRS and
GMO. Interest is 1.5 percent over the Prime Rate and
unused line fees accrue at 0.375 percent per annum,
both payable monthly. Payment of dividends is
prohibited under the Debtor-In-Possession Revolving
Credit Agreement and the Company is restricted to $1.0
million in capital expenditures in any fiscal year.
The Debtor-In-Possession Revolving Credit Agreement
provides certain restrictive covenants for which
management believes that it has adequate flexibility
and that such covenants should not impose undue
restrictions on the operations of the Company during
its Chapter 11 proceedings. The Company is currently
in compliance with the terms of the Debtor-In-
Possession Revolving Credit Agreement.
The carrying value of the Company's bank loans as of
June 29, 1996 approximate fair value, which was
determined based on transactions reflected under the
Debtor-In-Possession Revolving Credit Agreement.
NOTE 8 - COMMITMENTS
The Company leases retail stores and office equipment
under non-cancelable operating leases. Total rental
expense under these leases was $6,110,000, $3,838,000
and $2,283,000 for the years ended June 29, 1996, July
1, 1995 and July 2, 1994, respectively. Five stores
were sold subsequent to year-end and their related
leases were assumed by the purchaser. For purposes of
determining the future minimum lease payments, these
five stores were excluded. Future minimum annual lease
payments under these leases at June 29, 1996 are as
follows (in thousands):
Fiscal Years Ending
1997 $4,605
1998 4,047
1999 3,221
2000 2,684
2001 2,727
2002 14,997
and after
Total $32,281
Under the Bankruptcy Code, the Company may elect to
assume or reject real estate leases, and other
unexpired executory pre-petition contracts, subject to
Bankruptcy Court approval. The Company cannot
presently determine with certainty the ultimate
liability which may result from the filing of claims
for all contracts which may be rejected.
NOTE 9 - INCOME TAXES
Effective July 1, 1993, the Company adopted the
provisions of Statement of Financial Accounting
Standards No. 109 (SFAS 109), "Accounting for Income
Taxes". The Company reported the cumulative effect of
that change in the method of accounting for income
taxes in the first quarter of fiscal 1994. Under the
asset and liability approach prescribed by SFAS 109,
deferred tax assets and liabilities are recognized for
the future tax consequences attributable to differences
between the financial statement carrying amounts of
existing assets and liabilities and their respective
tax bases. The cumulative effect of adopting the
standard resulted in an increase in net income of
$120,000 or $0.04 per common share.
The Company's provision (benefit) for income taxes
consisted of the following (in thousands):
Fiscal Years
Ended
June 29, July 1, July 2,
1996 1995 1994
Federal $ - $ $ ( 700)
(104)
State 109 90 ( 325)
Deferred - 2,279
(6,185)
$ 109 $ $ 1,254
(6,199)
The reconciliation between the statutory tax rate
expressed as a percentage of pre-tax income (loss) and
the effective tax rate is as follows:
Fiscal Years Ended
June 29, July 1, July 2,
1996 1995 1994
Federal income tax 34.0% 34.0 34.0%
rate
State taxes, net of 5.2 5.6 3.7
federal benefit
Change in valuation (41.1) (1.5) -
allowance
Other 1.6 (1.6) 1.3
( 0.3)% 36.5% 39.0%
The Company's temporary differences and carry-forwards
that give rise to deferred tax assets and deferred tax
liabilities at June 29, 1996 and July 1, 1995 are as
follows (in thousands):
June 29, 1996 July 1, 1995
Current Long-Term Current Long-Term
Deferred Deferred Deferred Deferred
Tax Tax Tax Tax
Asset Asset Asset Asset
Liability) Liability) Liability) Liability)
Amortizati $ --- $ --- $ (5,193) $ ---
on of
catalogs
Property --- 1,176 --- (2,420)
and
Equipment
Inventory 508 --- 1,777 ---
cost
capitaliza
tion
Software --- --- --- (1,676)
developmen
t
Nondeducti 5,140 --- 2,384 61
ble
accruals
Net --- 6,806 1,309 4,202
operating
loss
carryforwa
rds
Alternativ --- 181 43 138
e minimum
tax credit
carryover
Other 175 --- (210) 47
Valuation (5,823) (8,163) (62) (198)
allowance
$ --- $ --- $ 48 $ 154
At June 29, 1996, the Company had $15.7 million and
$24.5 million of federal and state net operating loss
carryforwards; these carryforwards expire in 2008
through 2011. During fiscal 1996, the Company recorded
a valuation allowance of $13.7 million to write down
deferred tax assets to zero due to the level of
uncertainty surrounding the Company's ability to
generate sufficient future taxable earnings in order to
utilize tax benefits. During fiscal 1995, the Company
recorded a valuation allowance of $260,000 to reflect
the estimated amount of deferred tax assets which may
not be realized due to the expiration of state net
operating loss carryforwards. Future changes in
ownership could limit the amount of net operating less
carryforwards used in any one year.
NOTE 10 - SERIES A REDEEMABLE PREFERRED STOCK
Series A Preferred Stock -
On December 23, 1993, the Company entered into a
Preferred Stock Purchase Agreement with GS Capital
Partners, L.P., and certain other affiliates of the
Goldman Sachs Group, L.P. (the "GS Investors").
Pursuant to this agreement, the Company issued and sold
to GS Investors 100,000 shares of Redeemable,
Cumulative, Convertible, Exchangeable Preferred Stock
("Series A Redeemable Preferred Stock") at a purchase
price of $100 per share. On April 5, 1994, the Company
issued and sold 100,000 additional shares of Series A
Redeemable Preferred Stock to the GS Investors for $100
per share. The April 5th sale required shareholder
approval, which was obtained at a special meeting on
March 28, 1994.
By its terms, the Series A Redeemable Preferred Stock
accrues a 5 1/2 percent annual dividend and is
exchangeable at the Company's option for subordinated
notes. The Company is currently prohibited under the
August 12, 1996 Debtor-in-Possession Revolving Credit
Agreement from paying any dividends or exchanging the
Series A Redeemable Preferred Stock for subordinated
notes. If the Company fails to make the required
quarterly dividend payment on the Series A Redeemable
Preferred Stock for four consecutive quarters, GS
Investors is entitled to nominate a third director to
the Company's board of directors. Either the Series A
Redeemable Preferred Stock or the subordinated notes
may be converted into common stock at an initial
conversion price of $13.75 per share at the option of
the GS Investors. Both the Series A Redeemable
Preferred Stock and the subordinated notes carry voting
rights on an as-converted basis with outstanding common
stock and have mandatory redemption in years 2004 and
2005.
Dividends -
No dividends were paid in fiscal 1996. For the years
ended July 1, 1995 and July 2, 1994, dividends of
$850,000 and $369,000 were paid on the Series A
Redeemable Preferred Stock, respectively. Dividends of
$1,420,000, $311,000 and $49,000 were payable at June
29, 1996, July 1, 1995 and July 2, 1994, respectively,
and are included in the balance sheet under the
caption, "Other Current Liabilities."
NOTE 11 - SHAREHOLDERS' EQUITY
Capital Stock -
The Company currently has authorized 20.0 million
shares of $0.01 par value common stock and 300,000
shares of $0.10 par value Class B Preferred Stock. The
Company's Board of Directors is authorized to fix the
voting powers, designation, dividend rate, conversion,
redemption or liquidation preferences or other special
rights of the shares of any series of Class B Preferred
Stock. In conjunction with the Series A Redeemable
Preferred Stock sale, 200,000 shares of Class B
Preferred Stock was redesignated. The Company has no
plans to issue any part of the remaining Class B
Preferred Stock.
Preferred Stock Rights -
The Company has a Rights Agreement, as amended in
December 1993, which entitles the Company's common
shareholders to one Right for each common share held if
certain events transpire. The Rights Agreement
provides that under certain circumstances, a Right may
be exercised to purchase one one-hundredth of a share
of Class B Preferred Stock at an exercise price of
$35.00. The Rights become exercisable only if an
entity has acquired 20 percent or more of the Company's
common stock or announces an offer to acquire 30
percent or more of the Company's common stock. The
exception to this provision is that GS Investors may
acquire through conversion of Series A Redeemable
Preferred Stock up to 35 percent of the Company's
common stock before the Rights become exercisable.
NOTE 12 - STOCK INCENTIVE PLANS
Stock Purchase Plans -
On October 20, 1993, the shareholders of the Company
approved an Executive Stock Purchase Plan. Under the
provisions of the plan, the officers, directors and key
associates of the Company were given a one-time
opportunity to acquire shares of common stock of the
Company. A total of 130,000 shares of common stock
were offered to and purchased by participants at a
purchase price of $10 per share.
Participants had the option of paying for the shares in
cash or by promissory note held by the Company. Each
promissory note is secured by a pledge of the
participants' common stock and bears an interest rate
of 5.35 percent. The notes are payable over seven
years. The outstanding loans are reported as "Notes
Receivable from Shareholders" and shown as a reduction
of shareholders' equity on the balance sheet.
The Company offers all eligible associates of the
Company two programs for acquiring shares of the
Company's common stock, a 401k Savings Plan and an
Associate Stock Purchase Plan (ASPP). The 401k Savings
Plan allows associates of the Company that have
completed one year of service to have pre-tax dollars
withheld from their earnings to acquire the Company's
common stock. The ASPP allows associates to purchase
shares of common stock through payroll withholdings.
Stock Option Plans -
The Company has stock option plans that provide for the
granting of incentive stock options or non-qualified
options to directors, officers and key associates. The
plans provide that options become exercisable ratably
over a vesting period as determined by the Board of
Directors and expire over terms not exceeding ten years
from the grant date or within certain time periods
specified by the plans in the event of termination of
employment. As of June 29, 1996, 726,000 shares are
authorized under these plans.
These shares can be granted either as incentive stock
options or non-qualified stock options at a per share
price not less than fair market value at the date of
grant. Additionally, the plans allow for the awarding
of performance shares, of which none have been awarded
as of June 29, 1996.
The following table summarizes information relating to
shares under option and shares available for grant
under the plans:
Weighted
Number of Average Option
Shares Price Per
Share
Options outstanding at June 29, 261,408 $ 10.55
1996
Options exercised 72,812 7.44
Options available for grant at 391,780
June 29, 1996
Total 726,000
Activity involving the plans is summarized in the
following table:
Number of Option Price
Shares Per Share
Balance at June 30, 1993 256,183 $6.14 to $
11.50
Granted 363,000 $9.00 to $
13.00
Canceled ( 39,525) $6.14 to $
12.50
Exercised ( 31,288) $6.14 to $
10.88
Balance at July 2, 1994 548,370 $6.14 to $
13.00
Granted 99,250 $8.75 to $
17.25
Canceled ( 267,450) $6.14 to $
12.75
Exercised ( 27,737) $6.14 to $
9.00
Balance at July 1, 1995 354,433 $6.14 to $
17.25
Granted 17,250 $4.63 to $
9.50
Canceled ( 105,725) $9.00 to $
13.25
Exercised ( 4,550) $6.14 to $
9.00
Balance at June 29, 1996 261,408 $4.63 to $
17.25
Exercisable at June 29, 1996 154,033
NOTE 13 - CONTINGENCIES
As a result of an audit by the Internal Revenue Service
(the "Service") for fiscal years ended June 30, 1985
and 1986, the Company received two adjustments having a
potential tax exposure of $402,000 plus interest of
$301,000. At issue is the Company's method of
allocating purchase price to inventory and customer
lists resulting from the acquisition of the Company as
of September 14, 1984. The Company has challenged the
Service's position and has paid the tax and interest
while immediately filing a claim for refund in the
Court of Claims. An agreement with the Service,
subject to final approval by the Office of Review of
the U.S. Department of Justice, has been reached which
would result in a refund to the Company of
approximately $375,000 plus interest of approximately
$125,000 as of June 29, 1996. Should approval not be
reached, management believes that adequate reserves
have been established to cover the loss, if any,
resulting from these assessments and that the outcome
of the case will not have a material effect on the
Company's financial statements.
In the fourth quarter of fiscal 1996, the Company has
been sued by several creditors seeking overdue trade
payable amounts which are generally recorded in the
Company's financial statements and the Company was
served with a summons and complaint in a breach of
contract matter relating to a catalog paper order in
the amount of $4.6 million. The plaintiff is seeking
$4.6 million in damages. Management believes that the
outcome of these matters will not have a material
effect on the Company's financial statements.
In the first quarter of fiscal 1995, the Company was
served with a summons and complaint in a products
liability matter. The plaintiff is seeking $83 million
in compensatory damages and $50 million in punitive
damages. The manufacturer has agreed to defend and
indemnify the Company for all damages and expenses
related to their product. However, in addition to
claims of a defective product, the plaintiff alleges
the Company was negligent in selling and delivering the
product to a minor, in contravention of New York state
law. Although management believes that the Company is
not negligent in this matter, it concludes it has
adequate insurance to cover any compensatory damages
that might be awarded and believes punitive damages
awarded, if any, would not have a material effect on
the Company's financial statements.
NOTE 14 - RELATED PARTY TRANSACTIONS
David J. Lubar, Chairman of the Board, is President of
Lubar & Co., Incorporated, a private investment company
which owns 10.6 percent of the Common Stock of the
Company. In fiscal 1996, the Company paid $306,250 to
Mr. Lubar, representing Lubar & Co., Incorporated, for
consulting and advisory services which included
representing the Company in the various asset sale
negotiations.
NOTE 15 - QUARTERLY RESULTS (UNAUDITED)
The following tables present selected quarterly data
for fiscal 1996 and 1995 (in thousands, except per
share data):
Fiscal 1996
1st Qtr 2nd Qtr 3rd Qtr 4th Qtr
Net sales $ 96,279 $120,818 $ 47,389 $ 27,449
Gross profit 28,874 38,045 11,552 6,486
Pre-tax income (1,784) 3,373 (13,361) (21,900)11
(loss)
Net income (1,106) 2,073 (14,774) (19,974)1
(loss)
Primary net (0.43) 0.55 ( 4.63) ( 6.22)
income (loss)
per share
Fully diluted (0.43) 0.44 ( 4.63) ( 6.22)
net income
(loss) per
share
Fiscal 1995
1st Qtr 2nd Qtr 3rd Qtr 4th Qtr
Net sales $ 85,973 $114,566 $ 43,355 $ 53,890
Gross profit 28,008 38,614 12,757 16,562
Pre-tax income 2,862 6,359 (19,811) (6,393)12
(loss)
Net income 1,717 3,752 (12,122) (4,131)2
(loss)
Primary net 0.44 1.02 ( 3.82) ( 1.36)
income (loss)
per share
Fully diluted 0.36 0.77 ( 3.82) ( 1.36)
net income
(loss) per
share
Exhibit C
TO
DISCLOSURE STATEMENT RELATING TO
SECOND AMENDED JOINT PLAN OF REORGANIZATION
ANALYSIS OF UNSECURED CLAIMS
(as of December 31, 1996)
1. Total Unsecured Claims:13 $37,221,642
2. Less: Objections to
Unsecured Claims: ($14,033,360)
3. Total Unsecured Claims
Less Objections $23,188,282
4. Plus: Post-Confirmation
Contract Rejection Claims $4,000,000
5. Plus: Litigation and/or
Specialty Goods Claims $3,500,000
6. Total Allowed Unsecured Claims
(including Unsecured Convenience
Claims) $30,688,282
7. Amount in Trust Available
for Distribution14 18,500,000
8. Less: Distribution to Allowed
Unsecured Convenience Claims
($250,000 of Claims x 80%) ($200,000)
9. Amount for Distribution to
Allowed Unsecured Claims $18,300,000
10. Estimated Distribution Per Dollar of
Allowed Unsecured Claim15 $60.12
EXHIBIT E
TO
DISCLOSURE STATEMENT RELATING TO
SECOND AMENDED JOINT PLAN OF REORGANIZATION
LIQUIDATION ANALYSIS
(Values as of December 31, 1996 unless otherwise noted)
ESTIMATED
BOOK PERCENTAGE LIQUIDA-
NET ASSET SUMMARY VALUE OF TION DEDUC- NET
RECOVERY VALUE TIONS
I. ASSETS
A. CURRENT ASSETS
1. Pleasant Co. $ 1,000 1.000 $ 100,000
Deposit(1)
2. Harris Bank 1,000,000 1.000 1,000,000
Deposit(2)
3. Receivables 900,000 .830 747,000
4. Inventory 20,000,000 .839 16,780,000
5. Tradename(3) 7,000,000 1.000 7,000,000
6. Other Current 490,000 .184 90,000
Assets
Total Current Assets $29,490,000 1.00 $25,717,000
B. FIXED ASSETS
(NET OF DEPRECIATION) 9,500,000 .100 950,000
Total Assets $38,990,000 $26,667,000
BOOK LIQUIDATION
VALUE VALUE DEDUCTIONS NET
II CLAIMS
A. SECURED CLAIMS
1. CIT $4,300,000
2. Harris Bank4
100,000
Total Secured $4,400,000
Claims
B. ADMINISTRATIVE
CLAIMS
1. Chapter 7
a) Liquidator fees(5) $1,000,000
b) Operating expenses(6) 3,000,000
c) Interest expense (7) 200,000
d) Professional fees 200,000
e) Trustee commissions(8) 823,260
Total Chapter 7 $5,223,260
Administrative Expenses
2. Chapter 11
a) Professional Fees $ 800,000
b) Accrued Postpetition
Administrative Expenses 3,900,000
Total Chapter 11 $4,700,000
Administrative Expenses
Total $9,923,260
Administrative Expenses
C. TOTAL PRIORITY 15,000
CLAIMS(10)
D.TOTAL SECURED, ADMINISTRATIVE AND $14,338,260
PRIORITY CLAIMS UPON LIQUIDATION
II TOTAL FUNDS AVAILABLE TO
I. SATISFY UNSECURED CREDITORS $12,328,740
UPON LIQUIDATION
IV TOTAL UNSECURED CLAIMS UPON
. LIQUIDATION $34,688,282
(INCLUDING REJECTION CLAIMS)
V. DIVIDEND PERCENTAGE TO 35.54
UNSECURED
CREDITORS UPON LIQUIDATION(11)
VI TOTAL FUNDS AVAILABLE TO
. UNSECURED
CREDITORS UNDER PLAN(12) $18,500,000
VI DIVIDEND PERCENTAGE TO 60.12
I. UNSECURED
CREDITORS UNDER PLAN(13)
1 Funds on deposit pending Debtors vacating space
currently leased from the Pleasant Company.
2 Funds on deposit to secure obligations under credit
card service agreements.
3 Based upon price discussed for proposed license and
repurchase agreement for tradename.
4 Estimated loss on inventory returned under credit card
obligations.
5 Assumes a liquidation period of 3 months and that
liquidator conducts liquidation. Estimate derived
through conversations with potential
liquidators.
6 Includes all costs to operate stores and facilities
for 3 month liquidation period.
7 Interest expense estimated for 3 months of liquidation
pending full payment of projected $4.3 million CIT
debtor-in-possession loan facility.
8 Calculated on a base of $19,677,000 pursuant to
formula contained in 11 U.S.C. 326(a).
9 Comprised of average accruals unpaid at any given
time.
10Estimate based upon review of claims filed.
11$12,428,740 divided by $34,688,282.
12Assumes the Trigger Event has not occurred and
amounts paid out of Trust assets for expense
reimbursements and indemnification of the Trustee, if
any, have been reimbursed by Holiday.
13From Exhibit C, Line 10.
_______________________________
1 Option grants include incentive stock options and non-
qualified stock options.
2 Except as otherwise indicated, comprised of Company's
matching contributions on behalf of each named
executive under the Company's 401(k) Associates'
Savings Plan and Executive Deferred Compensation
Plan.
3 The stated amount for fiscal 1996 includes $12,000
for automobile allowance, $7,274 for the portion of
Mr. Freitag's life insurance premium related to the
death benefit payable to Mr. Freitag's beneficiaries
and $3,960 for group term life insurance.
4 The stated amount represents $100,000 stay-put bonus.
5 The stated amount represents group term life
insurance.
6 The stated amount for fiscal 1996 includes $1,638 for
the value of Mr. Reirden's life insurance premium
related to the death benefit payable to Mr. Reirden's
beneficiaries and $2,070 for group term life
insurance.
7 $175,000 of the stated amount represents severance
pay.
8 The stated amount of $50,000 represents a transaction
bonus related to the sale of catalog assets.
9 The stated amount of $145,151 represents severance
pay.
10 The stated amount includes $1,338 for the exercise of
stock options.
11 The fourth quarter of 1996 includes the loss on exit
from catalog business of $13.3 million and the ($1.7 )
million adjustment of the special charge recorded in
the third quarter of fiscal 1996.
12 The fourth quarter of 1995 includes an additional
$1.2 million in pre-opening costs over the same quarter
of 1994 reflecting four new stores compared to none in
the respective periods.
13 Net of duplicate claims, claims covered by insurance,
claims of certain parties to litigation against the
Debtors or of manufacturers of specialty goods for
which the Debtors have disclaimed certain liability and
claims of non-debtor parties to executory contracts and
leases.
14 Assumes the Trigger Event has not occurred and
amounts paid out of Trust assets for expense
reimbursements and indemnificaiton of the Trustee, if
any, have been reimbursed by Holiday.
15 Amount on line 9 divided by the difference between
amounts on line 6 (Total Allowed Unsecured Claims
(including Unsecured Convenience Claims)) and the
Allowed Unsecured Convenience Claims ($250,000).
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.
_____________________________________________________________________
MODIFICATION TO SECOND AMENDED
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.
_______________________________________________________
Gander Mountain, Inc., GMO, Inc., GRS, Inc., The
Official Committee of Unsecured Creditors of Gander
Mountain, Inc., and Holiday Stationstores, Inc., by
their respective attorneys, submit the following
modification to the Second Amended 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. (the "Plan") pursuant to 11 U.S.C.
51127(a) and Rule 3019 of the Federal Rules of
Bankruptcy Procedures. Terms not otherwise defined
herein shall have the meanings assigned to such terms
in the Plan.
Section 1.50 of the Plan shall be deleted in its
entirety, and the following shall be inserted in its
place:
"Section 1.50 "Effective Date" shall mean
the date designated in writing by the Proponents
subsequent to, but no more than fifteen Business
Days after, the date that all conditions precedent
to the effectiveness of the Plan, as provided in
Article VIII, have been satisfied. The Proponents
shall file with the Court the written designation
of the Effective Date."
The Proponents believe that the foregoing
modification does not adversely affect the treatment
under the Plan of the Claim of any Creditor or the
Interest of any equity security holder who have not
accepted in writing such modification.
Dated this 23rd day of January, 1997.
GODFREY & KAHN, S.C.
Attorneys for GANDER MOUNTAIN, INC.
By:
Howard A. Schoenfeld
780 North Water Street
Milwaukee, WI 53202-3590
(414) 273-3500
QUARLES & BRADY
Attorneys for GRS, INC.
By:
Andrew M. Barnes
411 East Wisconsin Avenue
Milwaukee, WI 53202
(414) 277-5000
MCNALLY, MALONEY & PETERSON, S.C.
Attorneys for GMO, INC.
By:
Michael R. Stein, Esq.
2600 North Mayfair Road, Suite 1080
Milwaukee, WI 53226
(414) 257-3399
FAEGRE & BENSON
Attorneys for HOLIDAY STATIONSTORES, INC.
By:
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:
Bruce Dopke, Esq.
55 East Monroe Street, Suite 4100
Chicago, IL 60603-5896
(312) 807-4600
3
UNITED STATES BANKRUPTCY COURT
EASTERN DISTRICT OF WISCONSIN
In the Matters of:
GANDER MOUNTAIN, INC.
a Wisconsin corporation,
Case Nos. 96-26478-RAE
GRS, INC. 96-26479-RAE
a Wisconsin corporation, 96-26480-RAE
GMO, INC. Chapter 11 Cases
a Wisconsin corporation (Jointly Administered)
Debtors in Possession.
ORDER CONFIRMING DEBTORS' SECOND AMENDED
JOINT PLAN OF REORGANIZATION
AS MODIFIED ON JANUARY 23, 1997
The Second Amended 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
December 16, 1996 (the "Plan"); having been transmitted
to creditors and equity interest holders holding
impaired claims and equity interests;
It having been determined after hearing on due
notice that (i) the Modification to Second Amended
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. (the "Modification") filed
on January 21, 1997, does not adversely change the
treatment of the claim or interest of any creditor or
equity security holder who has not accepted in writing
the Modification, and accordingly, is deemed accepted
by all creditors and equity security holders who have
previously accepted the Plan; (ii) the requirements for
confirmation of the Plan (as modified by the
Modification) set forth in 11 U.S.C. 1129(b) have been
satisfied; and (iii) pursuant to paragraph 1.95 of the
Appendix to the Plan, entitled "Defined Terms," Mr.
Scott Peltz has been elected, and is hereby designated,
Trustee (as that term is defined in the Plan),
NOW, THEREFORE,
IT IS ORDERED that the Plan (as modified by the
Modification) is confirmed. Copies of the confirmed
Plan and the Modification are attached.
IT IS FURTHER ORDERED that, notwithstanding any
provision of the Plan to the contrary, the liens of CIT
Group/Business Credit, Inc. ("CIT") on property of the
Debtors shall not be released until all claims of CIT
have been paid in full.
IT IS FURTHER ORDERED that the assumption and
assignment of all leases and/or contracts pursuant to
the Plan shall have the effect provided for by 11
U.S.C. 365(k).
Dated at Milwaukee, Wisconsin, this 23rd day of
January, 1997.
/s/ Russell A. Eisenberg
__________________________
Honorable Russell A. Eisenberg
United States Bankruptcy Judge
