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) - April 9, 1997
REUNITED HOLDINGS, INC.
(Exact Name of Registrant as Specified in Charter)
Rhode Island 0-15238 05-0301429
(State or Other Jurisdiction (Commission (I.R.S. Employer
of Incorporation) File Number) Identification No.)
Two Executive Drive, Fort Lee, NJ 07024-3308
(Address of Principal Executive Offices) (Zip Code)
Registrant's telephone number, including area code 201-585-2100
Item 3. Bankruptcy or Receivership.
As previously reported, the Registrant and its parent company,
United Merchants and Manufacturers, Inc., each filed petitions
for reorganization relief under Chapter 11 of the United States
Bankruptcy Code on February 22, 1996. The petitions were filed
with the United States Bankruptcy Court for the Southern District
of New York ("Court").
Registrant and its parent company continued to operate their
respective businesses as debtors-in-possession while the
reorganization cases were pending.
Registrant and its parent company each filed an Amended and
Restated Reorganization Plan with the Court dated February 25,
1997. After the solicitation procedures set forth by the Court
were completed, a confirmation hearing was held on April 9, 1997.
At the conclusion of the hearing, the Amended and Restated
Reorganization Plan of the Registrant (and of its parent company)
was confirmed by the Court.
Item 7. Financial Statements, Pro Forma Financial Information
and Exhibits.
Exhibit 2.1 Amended and Restated Reorganization Plan of
Reunited Holdings, Inc. (formerly Victoria
Creations, Inc.), dated February 25, 1997
Exhibit 99.1 Findings of Fact, Conclusion of Law, and Order
under 11 U.S.C. Sections 1129(a) and (b) and Fed.
R. Bankr. P. 3020 Confirming Amended and Restated
Reorganization Plan of Reunited Holdings, Inc.
(Formerly Victoria Creations, Inc.) Dated February
25, 1997, dated April 10, 1997
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.
Reunited Holdings, Inc.
Date April 24, 1997 By /s/ Norman R. Forson
Norman R. Forson
Senior Vice President
UNITED STATES BANKRUPTCY COURT
SOUTHERN DISTRICT OF NEW YORK
- - - - - - - - - - - - - - - - - - - - - - -x
In re :
: Chapter 11
UNITED MERCHANTS AND : Case Nos. 96 B 40940 (AJG)
MANUFACTURERS, INC. and : and 96 B 40941 (AJG)
VICTORIA CREATIONS, INC., : (Jointly Administered)
:
Debtors. :
- - - - - - - - - - - - - - - - - - - - - - -x
AMENDED AND RESTATED REORGANIZATION PLAN OF
REUNITED HOLDINGS, INC. (FORMERLY VICTORIA CREATIONS, INC.)
SKADDEN, ARPS, SLATE, MEAGHER & FLOM LLP
Attorneys for Reunited Holdings, Inc.,
Debtor-in-Possession
MICHAEL L. COOK (MC 7887)
LAWRENCE V. GELBER (LG 9384)
919 Third Avenue
New York, New York 10022-3897
(212) 735-3000
Dated: New York, New York
February 25, 1997
TABLE OF CONTENTS
Page
INTRODUCTION
ARTICLE I.
DEFINITIONS, RULES OF INTERPRETATION, AND COMPUTATION OF TIME
A. Scope Of Definitions....................................... 1
B. Definitions................................................ 1
C. Rules Of Interpretation.................................... 6
D. Computation Of Time........................................ 6
ARTICLE II.
CLASSIFICATION OF CLAIMS AND INTERESTS
A. Introduction............................................... 7
B. Unclassified Claims........................................ 7
1. Administrative Claims................................ 7
2. Priority Tax Claims.................................. 7
C. Impaired Classes Of Claims................................. 7
1. Class 1: Other Priority Claims...................... 7
2. Class 2: Secured Claims............................. 7
3. Class 3: General Unsecured Claims................... 7
4. Class 4: Subordinated Claims........................ 7
D. Unimpaired Class Of Interests.............................. 7
Class 5: Common Stock Interests......................... 7
ARTICLE III.
TREATMENT OF CLAIMS AND INTERESTS
A. Unclassified Claims........................................ 8
1. Administrative Claims................................ 8
2. Priority Tax Claims.................................. 8
B. Impaired Classes Of Claims................................. 8
1. Class 1: Other Priority Claims...................... 8
2. Class 2: Secured Claims............................. 8
3. Class 3: General Unsecured Claims................... 9
4. Class 4: Subordinated Claims........................ 9
C. Unimpaired Class Of Interests.............................. 9
Class 5: Common Stock Interests......................... 9
ARTICLE IV.
MEANS FOR IMPLEMENTATION OF THE PLAN
A. Continued Corporate Existence.............................. 9
B. Articles of Incorporation and By-Laws...................... 9
C. Directors And Officers..................................... 10
D. Revesting Of Assets........................................ 10
E. Creditors' Committee....................................... 10
F. Substantial Contribution Compensation And
Expenses Bar Date........................................ 10
G. Cancellation of Existing Agreements........................ 10
H. Securities To Be Issued In Connection With
The Plan................................................. 10
I. Effectuating Documents; Further Transactions............... 11
ARTICLE V.
ACCEPTANCE OR REJECTION OF THE PLAN;
EFFECT OF REJECTION BY IMPAIRED CLASS OF CLAIMS
A. Classes Entitled To Vote................................... 11
B. Class Acceptance Requirement............................... 11
C. Cramdown................................................... 11
ARTICLE VI.
PRESERVATION OF LITIGATION CLAIMS
A. Retained Litigation Claims................................. 11
B. Preservation of Insurance.................................. 12
ARTICLE VII.
PROVISIONS GOVERNING DISTRIBUTIONS
A. Date Of Distributions...................................... 12
B. Interest On Claims......................................... 12
C. Disbursing Agent........................................... 12
D. Means Of Cash Payment...................................... 12
E. Delivery Of Distributions.................................. 12
F. Purchase of New RHI Debentures by UM&M..................... 13
ARTICLE VIII.
TREATMENT OF EXECUTORY CONTRACTS AND UNEXPIRED LEASES
A. Rejection of Executory Contracts And
Unexpired Leases......................................... 13
B. Bar Date For Rejection Damages............................. 13
ARTICLE IX.
CONDITIONS PRECEDENT
A. Conditions To Confirmation................................. 13
B. Conditions To Consummation................................. 14
C. Waiver Of Conditions To Confirmation And
Consummation............................................. 14
ARTICLE X.
PROCEDURES FOR RESOLVING AND TREATING
DISPUTED AND CONTINGENT CLAIMS
A. Objection Deadline......................................... 14
B. No Distributions Pending Allowance......................... 15
C. Distribution Reserve....................................... 15
D. Distributions After Allowance.............................. 15
ARTICLE XI.
MODIFICATIONS AND AMENDMENTS
ARTICLE XII.
RETENTION OF JURISDICTION
ARTICLE XIII.
COMPROMISES AND SETTLEMENTS
A. Compromise of PBGC Claims.................................. 17
B. Compromise of CIT Claim.................................... 17
ARTICLE XIV.
MISCELLANEOUS PROVISIONS
A. Setoffs.................................................... 17
B. Withholding And Reporting Requirements..................... 17
C. Discharge Of RHI........................................... 17
D. Exculpation And Limitation Of Liability.................... 18
E. Binding Effect............................................. 18
F. Withdrawal Or Non-Consummation............................. 18
G. Indemnification Obligations................................ 18
H. Term Of Injunctions Or Stays............................... 19
I. No Liability for Certain Tax Claims........................ 19
J. Administrative Claims Bar Date............................. 19
K. Notices.................................................... 19
L. Governing Law.............................................. 20
EXHIBIT LIST
Exhibit A: Amended Articles Of Incorporation And By-Laws
Exhibit B: Description of New RHI Debentures
Exhibit C: Holders of Class 3 General Unsecured Claims
Deemed Not To Be Trade Creditors
Exhibit D: PBGC Agreement
Exhibit E: CIT Agreement
INTRODUCTION
Reunited Holdings, Inc. ("RHI"), formerly Victoria Creations, Inc.
("VCI"), debtor and debtor-in-possession in the above-captioned Chapter 11
reorganization case, proposes this amended and restated reorganization plan
(as may be further amended, the "Plan") for the resolution of its
outstanding creditor claims and equity interests. Reference is made to the
Disclosure Statement (defined below) for results of operations, projections
for future operations, risk factors, a summary and analysis of the Plan,
and certain related matters.
All holders of Claims are encouraged to read the Plan and the
Disclosure Statement in their entirety before voting to accept or reject
the Plan. Subject to the restrictions on modifications set forth in section
1127 of the Bankruptcy Code and those restrictions on modifications set
forth in Article XI of the Plan, RHI reserves its right to alter, amend or
modify the Plan one or more times before its substantial consummation.
ARTICLE I.
DEFINITIONS, RULES OF INTERPRETATION, AND COMPUTATION OF TIME
A. Scope Of Definitions
For purposes of this Plan, except as expressly provided or unless the
context otherwise requires, all capitalized terms not otherwise defined
shall have the meanings ascribed to them in Article I of the Plan. Any term
used in the Plan that is not defined herein, but is defined in the
Bankruptcy Code or the Bankruptcy Rules, shall have the meaning ascribed to
that term in the Bankruptcy Code or the Bankruptcy Rules. Whenever the
context requires, such terms shall include the plural as well as the
singular number, the masculine gender shall include the feminine, and the
feminine gender shall include the masculine.
B. Definitions
1.1 "Administrative Claim" means a Claim for payment of an
administrative expense of a kind specified in section 503(b) of the
Bankruptcy Code and entitled to priority pursuant to section 507(a)(1) of
the Bankruptcy Code, including, but not limited to, the actual, necessary
costs and expenses, incurred after the Petition Date, of preserving the
Estate and operating the business of RHI, including wages, salaries,
commissions, or other employment-related expenses for services rendered
after the commencement of the Chapter 11 Case, Professional Fees, and all
fees and charges assessed against the Estate under chapter 123 of title 28,
United States Code.
1.2 "Allowed Claim" means a Claim or any portion thereof (a) that has
been allowed by a Final Order, (b) either (x) that is Scheduled, other than
a Claim that is Scheduled at zero or as disputed, contingent, or
unliquidated, or (y) for which a proof of Claim has been timely filed with
the Bankruptcy Court pursuant to the Bankruptcy Code, any Final Order of
the Bankruptcy Court, and as to which either (i) no objection to its
allowance has been filed within the periods of limitation fixed by the
Bankruptcy Code or by any Final Order of the Bankruptcy Court or (ii) any
objection to its allowance has been settled or withdrawn, or has been
denied by a Final Order, or (c) that is expressly allowed in the Plan.
1.3 "Allowed Class...Claim" means an Allowed Claim in the particular
Class described.
1.4 "Allowed Class...Interest" means an Interest in the particular
Class described (a) that has been allowed by a Final Order, (b) either (x)
that is Scheduled or (y) for which a proof of interest has been timely
filed with the Bankruptcy Court pursuant to the Bankruptcy Code, any Final
Order of the Bankruptcy Court, or other applicable bankruptcy law, and as
to which either (i) no objection to its allowance has been filed within the
periods of limitation fixed by the Bankruptcy Code or by any Final Order of
the Bankruptcy Court or (ii) any objection to its allowance has been
settled or withdrawn, or has been denied by a Final Order, or (c) that is
expressly allowed in the Plan.
1.5 "Amended Articles of Incorporation and By-laws" means Reorganized
RHI's articles of incorporation and by-laws in effect under the laws of the
State of Rhode Island, as amended by the Plan, in substantially the form
annexed hereto as Exhibit A.
1.6 "Ballot" means each of the forms that will be distributed with
the Disclosure Statement to holders of Claims in Classes that are impaired
under the Plan and entitled to vote under Article V.A. hereof in connection
with the solicitation of acceptances of the Plan.
1.7 "Bankruptcy Code" means title 11 of the United States Code, 11
U.S.C. ss.ss. 101-1330, as in effect on the date hereof.
1.8 "Bankruptcy Court" means the Bankruptcy Court of the United
States District Court for the Southern District of New York or such other
court as may have jurisdiction over the Chapter 11 Case.
1.9 "Bankruptcy Rules" means the Federal Rules of Bankruptcy
Procedure and the Official Bankruptcy Forms, as amended, the Federal Rules
of Civil Procedure, as amended, as applicable to the Chapter 11 Case or
proceedings therein, and the Local Rules of the Bankruptcy Court, as
applicable to the Chapter 11 Case or proceedings therein, as the case may
be.
1.10 "Business Day" means any day, excluding Saturdays, Sundays, and
legal holidays, on which commercial banks are open for business in New
York, New York.
1.11 "Cash" means legal tender of the United States or its
equivalent.
1.12 "Chapter 11 Case" means the Chapter 11 case of Victoria
Creations, Inc., now known as Reunited Holdings, Inc., pending in the
Bankruptcy Court and bearing case number 96-40940 (AJG).
1.13 "CIT" means The CIT Group/Commercial Services, Inc., a New York
Corporation, located at 1211 Avenue of the Americas, New York, New York
10036.
1.14 "CIT Claim" means the claim, evidenced by proof of Claim number
0029, filed against RHI by CIT in the amount of $30,000,000, based on VCI's
purported guaranty of UM&M's obligations to CIT under the CIT Note.
1.15 "CIT Note" means the 5% Subordinated Note due June 30, 2019, in
the principal amount of $30,000,000, given by UM&M to CIT.
1.16 "Claim" means a claim against RHI, whether or not asserted, as
defined in section 101(5) of the Bankruptcy Code.
1.17 "Class" means a category of holders of Claims or holders of
Interests described in Article II hereof.
1.18 "Class 3 Cash" means the Cash to be paid to holders of Allowed
Class 3 General Unsecured Claims on the Distribution Date or as soon
thereafter as practicable, in accordance with Articles III.C., VII, and X
hereof.
1.19 "Class 4 Cash" means the Cash to be paid to the holder of the
Allowed Class 4 Subordinated Claim on the Distribution Date or as soon
thereafter as practicable, in accordance with Articles III.C., VII, and X
hereof; provided, however, that the aggregate amount of Class 4 Cash to be
distributed under the Plan shall be equal to the Pro Rata share of Class 3
Cash that would otherwise be payable to the holder of the Allowed Class 4
Subordinated Claim if such Claim were instead an Allowed Class 3 General
Unsecured Claim.
1.20 "Confirmation Date" means the date the Confirmation Order is
entered.
1.21 "Confirmation Order" means the order, entered by the Bankruptcy
Court, confirming the Plan.
1.22 "Confirmation Hearing" means the hearing to consider
confirmation of the Plan under section 1128 of the Bankruptcy Code.
1.23 "Committee" means the creditors' committee appointed by the
United States Trustee in this Chapter 11 Case on March 5, 1996, to
represent unsecured creditors of RHI, as such committee may be constituted
from time to time.
1.24 "Common Stock" means the issued and outstanding shares of RHI
common stock, par value $0.01 per share, as of the Petition Date.
1.25 "Common Stock Interest" means the rights of a holder and owner
of issued and outstanding shares of Common Stock.
1.26 "Consummation Date" means the Business Day on which all
conditions to the consummation of the Plan set forth in Article IX.B.
hereof have been satisfied or waived as provided in Article IX.C. hereof.
1.27 "Cure" means the distribution of Cash, or such other property as
may be agreed upon by the parties and ordered by the Bankruptcy Court after
notice to the Committee, with respect to the assumption of an executory
contract or unexpired lease, pursuant to section 365(b) of the Bankruptcy
Code, in an amount equal to all unpaid monetary obligations, without
interest, or such other amount as may be agreed upon by the parties, under
such executory contract or unexpired lease, to the extent such obligations
are enforceable under the Bankruptcy Code and applicable non-bankruptcy
law.
1.28 "Disallowed Claim" means (a) a Claim, or any portion thereof,
that has been disallowed by a Final Order, (b) a Claim that is Scheduled at
zero or as contingent, disputed, or unliquidated and as to which no proof
of Claim has been filed or deemed timely filed with the Bankruptcy Court
pursuant to either the Bankruptcy Code or any Final Order of the Bankruptcy
Court, or (c) a Claim that has not been scheduled and as to which no proof
of Claim has been filed or deemed timely filed with the Bankruptcy Court
pursuant to either the Bankruptcy Code or any Final Order of the Bankruptcy
Court.
1.29 "Disbursing Agent" means the party designated by RHI and
consented to by the Committee to serve as a disbursing agent under Article
VII of the Plan. The Disbursing Agent will be chosen by RHI on or before
the Confirmation Date.
1.30 "Disclosure Statement" means the written disclosure statement
relating to the Plan and approved by the Bankruptcy Court, as such
disclosure statement may be amended, modified, or supplemented from time to
time.
1.31 "Disputed Claim" means a Claim or any portion thereof that is
neither an Allowed Claim nor a Disallowed Claim.
1.32 "Distribution Date" means the date, occurring as soon as
practicable after the Consummation Date, upon which the first distributions
are made to holders of Allowed Claims in accordance with Article III
hereof; provided, however, that in no event shall the Distribution Date
occur later than thirty (30) days after the Consummation Date, unless
otherwise ordered by the Bankruptcy Court.
1.33 "Distribution Reserve" means the amount of Cash, New RHI
Debentures, or other property that would have been distributed on the
Distribution Date to holders of (A) Disputed Claims, (B) contingent
liquidated Claims, if such Claims had been undisputed or noncontingent
Claims on the Distribution Date, pending (i) the allowance of such Claims,
(ii) the estimation of such Claims for purposes of allowance or (iii) the
realization of the contingencies, and (C) unliquidated Claims, if such
Claims had been liquidated on the Distribution Date, such amounts to be
estimated by the Bankruptcy Court or agreed upon by RHI and the Committee
as sufficient to satisfy such unliquidated Claim upon such Claim's (i)
allowance, or (ii) estimation for purposes of allowance or (iii)
liquidation, pending the occurrence of such estimation or liquidation.
1.34 "Estate" means the estate of RHI in its Chapter 11 Case,
pursuant to section 541 of the Bankruptcy Code.
1.35 "Face Amount" means, (a) when used in reference to a Disputed or
Disallowed Claim, the full stated amount claimed by the holder of such
Claim in any proof of Claim timely filed with the Bankruptcy Court or
otherwise deemed timely filed by any Final Order of the Bankruptcy Court or
other applicable bankruptcy law, and (b) when used in reference to an
Allowed Claim, the allowed amount of such Claim.
1.36 "Final Order" means an order or judgment, the operation or
effect of which has not been stayed, reversed, or amended and as to which
order or judgment (or any revision, modification, or amendment thereof) the
time to appeal or to seek review or rehearing has expired and as to which
no appeal or petition for review or rehearing was filed or, if filed,
remains pending.
1.37 "Fiscal Year" means, with respect to RHI, the fiscal year ending
June 30th of each year, or such other fiscal year as RHI may designate.
1.38 "Foothill" means Foothill Capital Corporation, a California
corporation, located at 11111 Santa Monica Boulevard, Suite 1500, Los
Angeles, California 90025.
1.39 "Internal Revenue Code" means the Internal Revenue Code of 1986,
as amended, 26 U.S.C. ss.ss. 1-9722.
1.40 "New RHI Debentures" means the 3 1/2% Subordinated Debentures
due March 31, 2022 of Reorganized RHI, to be issued and distributed
pursuant to the Article III.C. of the Plan on the Distribution Date, or as
soon thereafter as practicable, as more fully described in the annexed
Exhibit B.
1.41 "Other Priority Claim" means a Claim entitled to priority
pursuant to section 507(a) of the Bankruptcy Code other than a Priority Tax
Claim or an Administrative Claim.
1.42 "PBGC" means the Pension Benefit Guaranty Corporation, a
wholly-owned United States government corporation created under Title IV of
ERISA.
1.43 "PBGC Claims" means, collectively, the claims, evidenced by
proofs of Claim numbers 1152, 1153, and 1154, filed against RHI by the PBGC
in an aggregate amount in excess of $44,486,078, based on VCI's purported
joint and several liability for UM&M's obligations to the PBGC.
1.44 "Person" means an individual, corporation, partnership, joint
venture, association, joint stock company, trust, estate, unincorporated
organization, or other entity.
1.45 "Petition Date" means February 22, 1996, the date on which RHI
filed its petition for reorganization commencing the Chapter 11 Case.
1.46 "Priority Tax Claim" means a Claim entitled to priority pursuant
to section 507(a)(8) of the Bankruptcy Code.
1.47 "Professional Fees" means a Claim of a professional, retained in
the Chapter 11 Case pursuant to sections 327 and 1103 of the Bankruptcy
Code or otherwise, for compensation or reimbursement of costs and expenses
relating to services incurred prior to and including Confirmation, when and
to the extent any Claim described above is approved by a Final Order
entered pursuant to sections 330, 503(b), or 1103 of the Bankruptcy Code.
1.48 "Pro Rata" means, at any time, the proportion that the Face
Amount of a Claim in a particular Class bears to the aggregate Face Amount
of all Claims (including Disputed Claims, but excluding Disallowed Claims)
in such Class, unless the Plan provides otherwise.
1.49 "Reinstated" or "Reinstatement" means leaving unaltered the
legal, equitable, and contractual rights to which a Claim entitles the
holder of such Claim so as to leave such Claim unimpaired in accordance
with section 1124 of the Bankruptcy Code, thereby entitling the holder of
such Claim to, but not more than, (a) reinstatement of the original
maturity of the obligations on which such Claim is based and (b) payment,
as provided herein, of an amount of Cash consisting solely of the sum of
(i) matured but unpaid principal installments, without regard to any
acceleration of maturity, accruing prior to the Consummation Date, (ii)
accrued but unpaid interest as of the Petition Date, and (iii) reasonable
fees, expenses, and charges, to the extent such fees, expenses, and charges
are allowed under the Bankruptcy Code and are provided for in the agreement
or agreements on which such Claim is based; provided, however, that any
contractual right that does not pertain to the payment when due of
principal and interest on the obligation on which such Claim is based,
including, but not limited to, financial covenant ratios, negative pledge
covenants, covenants or restrictions on merger or consolidation, and
affirmative covenants regarding corporate existence prohibiting certain
transactions or actions contemplated by the Plan, or conditioning such
transactions or actions on certain factors, shall not be reinstated in
order to accomplish Reinstatement.
1.50 "Reorganized RHI" means reorganized RHI organized on and after
the Consummation Date under the laws of the State of Rhode Island.
1.51 "RHI" means Reunited Holdings, Inc., a Rhode Island corporation,
formerly Victoria Creations, Inc., and an approximately 80% owned
subsidiary of UM&M. With respect to any and all events occurring on or
before July 1, 1996, RHI also means VCI.
1.52 "Scheduled" means, with respect to any Claim or Interest, the
status and amount, if any, of such Claim or Interest as set forth in the
Schedules.
1.53 "Schedules" means (a) the schedules of assets and liabilities
and the statements of financial affairs filed with the Bankruptcy Court by
RHI on April 29, 1996, and (b) the list of equity security holders filed
with the Bankruptcy Court on April 3, 1996, as such schedules, statements
and lists have been or may be further amended or supplemented from time to
time in accordance with Fed. R. Bankr. P. 1009.
1.54 "Secured Claim" means a Claim, other than a Setoff Claim, (a)
secured by a security interest in or lien upon property of the Estate to
the extent of the value, as of the Consummation Date, or such later date as
is established by the Bankruptcy Court, of such interest or lien as
determined by a Final Order of the Bankruptcy Court pursuant to section 506
of the Bankruptcy Code or as otherwise agreed upon in writing by RHI and
the holder of such Claim, subject to the approval of the Bankruptcy Court.
1.55 "Setoff Claim" means a Claim of a holder of a Claim who has a
valid right of setoff with respect to such Claim, which right is
enforceable under section 553 of the Bankruptcy Code as determined by a
Final Order or as otherwise agreed upon by RHI and the holder of such
Claim, to the extent of the amount subject to such right of setoff.
1.56 "Subordinated Claims" means the intercompany Allowed Claims of
UM&M against RHI, in the aggregate Face Amount of $15,330,966 (i) which,
pursuant to Section 7(g) of the Amended and Restated Asset Purchase
Agreement dated as of May 31, 1996 among Victoria Acquisition Group, Inc.
and Victoria Creations, Inc., UM&M agreed would be subordinated in right of
payment to the Allowed Claims of VCI's trade creditors, and (ii) $5,000,000
of which UM&M has agreed to forgive in connection with its retention of an
approximately 79% ownership interest in RHI.
1.57 "Substantial Consummation" means the (a) transfer of all or
substantially all of the property proposed by the Plan to be transferred,
(b) assumption by Reorganized RHI of the business or of the management of
all or substantially all of the property dealt with by the Plan, and (c)
substantial distribution of the property proposed by the Plan to be
distributed thereunder, as recognized by the Committee or by order of the
Bankruptcy Court..
1.58 "Substantial Consummation Date" means the date on which
Substantial Consummation of the Plan occurs.
1.59 "UM&M" means United Merchants and Manufacturers, Inc., debtor
and debtor-in-possession in Chapter 11 Case No. 96-40941 (AJG) pending in
the Bankruptcy Court, and the approximately 80% owner of RHI.
1.60 "Unsecured Claim" means a Claim that is not an Administrative
Claim, Priority Tax Claim, Other Priority Claim, or Secured Claim.
1.61 "VCI" means Victoria Creations, Inc., debtor and
debtor-in-possession in Chapter 11 Case No. 96-40940 (AJG) pending in the
Bankruptcy Court, subsequently renamed RHI.
C. Rules Of Interpretation
For purposes of the Plan (a) any reference in the Plan to a contract,
instrument, release, indenture, or other agreement or documents being in a
particular form or on particular terms and conditions means that such
document shall be substantially in such form or substantially on such terms
and conditions, (b) any reference in the Plan to an existing document or
exhibit filed or to be filed means such document or exhibit as it may have
been or may be amended, modified, or supplemented, (c) unless otherwise
specified, all references in the Plan to Articles, Schedules, and Exhibits
are references to Articles, Schedules, and Exhibits of or to the Plan, (d)
the words "herein" and "hereto" refer to the Plan in its entirety rather
than to a particular portion of the Plan, (e) captions and headings to
Articles are inserted for convenience of reference only and are not
intended to be a part of or to affect the interpretation of the Plan, and
(f) the rules of construction set forth in section 102 of the Bankruptcy
Code and in the Bankruptcy Rules shall apply.
D. Computation Of Time
In computing any period of time prescribed or allowed by the Plan,
unless otherwise expressly provided, the provisions of Fed. R. Bankr. P.
9006(a) shall apply.
ARTICLE II.
CLASSIFICATION OF CLAIMS AND INTERESTS
A. Introduction
All Claims and Interests, except Administrative Claims and Priority
Tax Claims, are placed in the Classes set forth below. In accordance with
section 1123(a)(1) of the Bankruptcy Code, Administrative Claims and
Priority Tax Claims, as described below, have not been classified.
A Claim or Interest is placed in a particular Class only to the
extent that the Claim or Interest falls within the description of that
Class, and is classified in other Classes to the extent that any portion of
the Claim or Interest falls within the description of such other Classes. A
Claim or Interest is also placed in a particular Class for the purpose of
receiving distributions pursuant to the Plan only to the extent that such
Claim or Interest is an Allowed Claim in that Class and such Claim or
Interest has not been paid, released, or otherwise settled prior to the
Consummation Date.
B. Unclassified Claims (not entitled to vote on the Plan)
1. Administrative Claims
2. Priority Tax Claims
C. Impaired Classes Of Claims (entitled to vote on the Plan)
1. Class 1: Other Priority Claims
Class 1 consists of all Other Priority Claims.
2. Class 2: Secured Claims
Class 2 consists of all Claims against RHI, if any, secured by a
security interest in or lien upon property in which the Estate has an
interest.
3. Class 3: General Unsecured Claims
Class 3 consists of all Unsecured Claims.
4. Class 4: Subordinated Claims
Class 4 consists of all Subordinated Claims.
D. Unimpaired Class Of Interests (not entitled to vote on the Plan)
Class 5: Common Stock Interests
Class 5 consists of all Common Stock Interests.
ARTICLE III.
TREATMENT OF CLAIMS AND INTERESTS
A. Unclassified Claims
1. Administrative Claims
On the Distribution Date, or as soon thereafter as practicable, a
holder of an Allowed Administrative Claim shall receive in full
satisfaction, settlement, release, and discharge of and in exchange for
such Allowed Administrative Claim (a) Cash equal to the unpaid portion of
such Allowed Administrative Claim, or (b) such other treatment as to which
RHI and such holder shall have agreed upon in writing; provided, however,
that Allowed Administrative Claims with respect to liabilities incurred by
RHI in the ordinary course of its business during the Chapter 11 Case shall
be paid in the ordinary course of business in accordance with the terms and
conditions of any agreements relating thereto.
2. Priority Tax Claims
On the Distribution Date, or as soon thereafter as practicable, a
holder of an Allowed Priority Tax Claim shall be entitled to receive in
full satisfaction, settlement, release, and discharge of and in exchange
for such Allowed Priority Tax Claim (a) deferred Cash payments in an
aggregate principal amount equal to the amount of such Allowed Priority Tax
Claim plus interest on the unpaid portion thereof at the rate of five (5)
percent per annum from the Consummation Date through the date of payment
thereof, or (b) such other treatment as to which RHI and such holder shall
have agreed upon in writing, with the approval of the Bankruptcy Court. If
deferred Cash payments are made to a holder of an Allowed Priority Tax
Claim, payments of principal shall be made in annual installments, each
such installment amount being equal to 10 percent of such Allowed Priority
Tax Claim plus accrued and unpaid interest, with the first payment to be
due on the Distribution Date, and subsequent payments to be due on the
anniversary of the first payment date or as soon thereafter as is
practicable; provided, however, that any installments remaining unpaid on
the date that is six years after the date of assessment of the tax that is
the basis for the Allowed Priority Tax Claim shall be paid on the first
Business Day following such date, together with any accrued and unpaid
interest to the date of payment; and provided, further, that RHI reserves
the right to pay any Allowed Priority Tax Claim, or any remaining balance
of any Allowed Priority Tax Claim, in full at any time on or after the
Consummation Date without premium or penalty; and provided, further, that
no holder of an Allowed Priority Tax Claim shall be entitled to any
payments on account of any pre-Consummation interest accrued or penalty
arising on or after the Petition Date with respect to or in connection with
such Allowed Priority Tax Claim.
B. Impaired Classes Of Claims
1. Class 1: Other Priority Claims
On the Distribution Date, or as soon thereafter as practicable, a
holder of an Allowed Class 1 Other Priority Claim shall receive in full
satisfaction, settlement, release, and discharge of and in exchange for
such Allowed Class 1 Other Priority Claim (a) Cash equal to the amount of
such Allowed Class 1 Other Priority Claim or (b) such other treatment as to
which RHI and such holder shall have agreed upon in writing.
2. Class 2: Secured Claims
On the Distribution Date, or as soon thereafter as practicable, a
holder of an Allowed Class 2 Secured Claim, in full satisfaction,
settlement, release, and discharge of, and in exchange for, such Allowed
Class 2 Secured Claim, shall, in the sole discretion of RHI, (i) upon
abandonment by RHI receive the property securing such Allowed Class 2
Secured Claim, (ii) receive deferred cash payments totalling at least the
amount of such Allowed Class 2 Secured Claim, of a value, as of the
Consummation Date, of at least the value of such holder's interest in the
Estate's interest in the property securing such Allowed Class 2 Secured
Claim, (iii) receive payments or liens amounting to the indubitable
equivalent of the value of such holder's interest in the Estate's interest
in the property securing the Allowed Class 2 Secured Claim, (iv) be
Reinstated, or (iii) receive such other treatment as to which RHI and the
holder shall have agreed upon in writing as announced prior to or at the
Confirmation Hearing.
3. Class 3: General Unsecured Claims
On the Distribution Date, or as soon thereafter as practicable, a
holder of an Allowed Class 3 General Unsecured Claim, in full satisfaction,
settlement, release, and discharge of, and in exchange for, such Allowed
Class 3 General Unsecured Claim, shall receive, (x) its Pro Rata share of
Class 3 Cash and (y) a New RHI Debenture in principal amount equal to (i)
the Face Amount of such holder's Allowed Class 3 General Unsecured Claim,
minus (ii) the Pro Rata share of Class 3 Cash distributed to such holder in
such initial distribution of Class 3 Cash.
4. Class 4: Subordinated Claims
On the Distribution Date, or as soon thereafter as practicable, the
holder of the Allowed Class 4 Subordinated Claim, in full satisfaction,
settlement, release, and discharge of, and in exchange for, such Allowed
Class 4 Subordinated Claim, shall receive (x) the Class 4 Cash and (y) a
New RHI Debenture in principal amount equal to (i) the Face Amount of such
holder's Allowed Class 4 Subordinated Claim, minus (ii) the Class 4 Cash
distributed to such holder in such initial distribution of Class 4 Cash;
provided, however, that the Class 4 Cash shall be used by such holder only
for the purposes and in the manner described in Article VII.F. hereof.
C. Unimpaired Class Of Interests
Class 5: Common Stock Interests
A holder of an Allowed Class 5 Common Stock Interest shall retain
such Interest, in the proportionate and equivalent amount as held on the
Confirmation Date, which, on the Consummation Date, shall become a
proportionate and equivalent interest in Reorganized RHI.
ARTICLE IV.
MEANS FOR IMPLEMENTATION OF THE PLAN
A. Continued Corporate Existence
RHI will continue to exist as a separate corporate entity in
accordance with the laws of Rhode Island and pursuant to the articles of
incorporation and by-laws in effect prior to the Consummation Date, except
to the extent such articles of incorporation and by-laws are amended under
this Plan.
B. Articles of Incorporation and By-Laws
The articles of incorporation and by-laws of RHI will be amended as
necessary to satisfy the provisions of the Plan and the Bankruptcy Code.
The Amended Articles of Incorporation shall include, among other things,
pursuant to section 1123(a)(6) of the Bankruptcy Code, a provision
prohibiting the issuance of non-voting equity securities.
C. Directors And Officers
The directors and officers of RHI before the Consummation Date shall
serve as the initial directors and officers of Reorganized RHI after the
Consummation Date. Not later than 60 days after the Consummation Date, or
as soon thereafter as practicable, Reorganized RHI shall conduct a
shareholders' meeting, at which time the term of the current board of
directors shall expire and the shareholders shall elect a new board of
directors for Reorganized RHI. The board of directors of Reorganized RHI
shall have the responsibility for the management, control, and operation of
Reorganized RHI on and after the Consummation Date.
D. Revesting Of Assets
Pursuant to section 1141(b) of the Bankruptcy Code, the property of
the Estate, and any property of RHI that is not property of the Estate and
that is not specifically disposed of pursuant to the Plan, shall revest in
RHI on the Confirmation Date. Thereafter, RHI may operate its business and
may use, acquire, and dispose of property free of any restrictions of the
Bankruptcy Code, the Bankruptcy Rules, and the Bankruptcy Court. As of the
Confirmation Date, all property of RHI shall be free and clear of all
Claims and Interests, including liens and security interests, except as
specifically provided in the Plan or in the Confirmation Order. Without
limiting the foregoing, RHI may, without application to or approval by the
Bankruptcy Court, pay professional fees and expenses that it may incur
after the Confirmation Date.
E. Creditors' Committee
The Committee will cease to exist after the Substantial Consummation
Date, except to the extent necessary to (i) monitor RHI's compliance with
its obligations hereunder, (ii) perform all acts expressly provided for
herein, and (iii) to the extent the Committee has previously done so,
continue the prosecution or defense of pending motions, applications or
adversary proceedings, or any appeal therefrom.
F. Substantial Contribution Compensation And Expenses Bar Date
Any person or entity who requests compensation or expense
reimbursement for making a substantial contribution in the Chapter 11 Case
pursuant to section 503(b)(3),(4), and (5) of the Bankruptcy Code must file
a request with the clerk of the Bankruptcy Court, on or before 5:00 p.m.
Eastern Standard Time on March 31, 1997, (the "Substantial Contribution Bar
Date") and serve such application on counsel for RHI, counsel for the
Committee, and as otherwise required by the Bankruptcy Court on or before
the Substantial Contribution Bar Date or be forever barred from seeking
such compensation or expense reimbursement.
G. Cancellation of Existing Agreements
On the Consummation Date, except as otherwise provided for herein,
(i) any note, bond, indenture, or other instrument or document evidencing
or creating any indebtedness or obligation of RHI, except such notes or
other instruments evidencing indebtedness or obligations of RHI that are
Reinstated under the Plan, shall be canceled, and (ii) the obligations of
RHI under any agreements, indentures or certificates of designations
governing any such note, bond, indenture or other instrument or document
evidencing or creating any indebtedness or obligation of RHI, except such
notes or other instruments evidencing indebtedness or obligations of RHI
that are Reinstated under the Plan, as the case may be, shall be
discharged.
H. Securities To Be Issued In Connection With The Plan
On or before the Distribution Date, Reorganized RHI shall issue for
distribution in accordance with the provisions of the Plan the New RHI
Debentures required for distribution pursuant to the provisions of the
Plan. The principal terms of the New RHI Debentures are summarized in
Exhibit B hereto and incorporated herein by reference.
I. Effectuating Documents; Further Transactions
The Chairman of the Board of Directors, the President, the Chief
Executive Officer, the Chief Financial Officer, or any other appropriate
officer of RHI, shall be authorized to execute, deliver, file, or record
such contracts, instruments, releases, indentures, and other agreements or
documents, and take such actions as may be necessary or appropriate to
effectuate and further evidence the terms and conditions of the Plan. The
Secretary or Assistant Secretary of RHI shall be authorized to certify or
attest to any of the foregoing actions, if necessary.
ARTICLE V.
ACCEPTANCE OR REJECTION OF THE PLAN;
EFFECT OF REJECTION BY IMPAIRED CLASS OF CLAIMS
A. Classes Entitled To Vote
Each impaired Class that will (or may) receive or retain property or
an interest in property under the Plan shall be entitled to vote to accept
or reject the Plan. Each unimpaired Class of Claims or Interests shall be
deemed to have accepted the Plan and shall not be entitled to vote to
accept or reject the Plan.
B. Class Acceptance Requirement
Under section 1126(c) of the Bankruptcy Code, an impaired Class of
Claims has accepted the Plan if the holders of at least two-thirds (2/3) in
dollar amount and more than one-half (1/2) in number of the Allowed Claims
of such Class who have voted on the Plan, have voted to accept the Plan.
C. Cramdown
RHI hereby requests confirmation of the Plan, as it may be modified
or amended from time to time, under section 1129(b) of the Bankruptcy Code,
if necessary.
ARTICLE VI.
PRESERVATION OF LITIGATION CLAIMS
A. Retained Litigation Claims
In accordance with section 1123(b)(3) of the Bankruptcy Code, and
except as otherwise provided herein, Reorganized RHI shall retain and may
enforce all claims, rights of action, suits, and proceedings, whether in
law or in equity, whether known or unknown, that RHI or the Estate may hold
against any entity; provided, however, that, notwithstanding the foregoing,
RHI shall waive, effective upon the Confirmation Date, any and all rights
that RHI or the Estate may hold against any entity to enforce claims,
rights of action, suits, and proceedings, whether known or unknown, under
section 547 of the Bankruptcy Code. Reorganized RHI or any of its
successors may pursue such retained litigation claims in accordance with
the best interests of Reorganized RHI or its successors who hold such
rights of action. All proceeds from recoveries on such litigation,
including without limitation causes of action under sections 544, 545, and
548 of the Bankruptcy Code, will be paid to holders of Allowed Class 3
General Unsecured Claims until such holders have received 100% of their
Allowed Class 3 General Unsecured Claims. Any surplus will remit to the
working capital of Reorganized RHI, to be used, to the extent necessary,
for the payment of reorganization expenses and current operations.
B. Preservation of Insurance
RHI's discharge and release from all Claims as provided herein,
except as necessary to be consistent with the Plan, shall not diminish or
impair the enforceability of any insurance policy that may cover Claims
against RHI or any other Person. Insurance policies that have policy
periods that have expired shall not be deemed to be executory contracts
under the Plan and such insurance policies shall remain in full force and
effect according to the terms of such policies.
ARTICLE VII.
PROVISIONS GOVERNING DISTRIBUTIONS
A. Date Of Distributions
Distributions under the Plan shall be made on the Distribution Date,
or as soon thereafter as practicable, except as otherwise provided for
herein or ordered by the Bankruptcy Court.
B. Interest On Claims
Unless otherwise specifically provided for in the Plan or the
Confirmation Order, or as required by applicable bankruptcy law, interest
shall not accrue on Claims, and no holder of a Claim shall be entitled to
interest accruing on or after the Petition Date on any Claim. Interest
shall not accrue or be paid upon any Disputed Claim in respect of the
period from the Petition Date to the date a final distribution is made
thereon if and after such Disputed Claim becomes an Allowed Claim.
C. Disbursing Agent
The Disbursing Agent shall make all distributions required under this
Plan. The Disbursing Agent may be required to give a bond or surety or
other security for the performance of its duties, unless otherwise ordered
by the Bankruptcy Court.
D. Means Of Cash Payment
Cash payments made pursuant to this Plan shall be in U.S. funds, by
the means agreed to by the payor and the payee, including by check or wire
transfer, or, in the absence of an agreement, such commercially reasonable
manner as the payor shall determine in its sole discretion.
E. Delivery Of Distributions
Distributions to holders of Allowed Claims shall be made by the
Disbursing Agent or the appropriate agent, or servicer, as the case may be,
(a) at the addresses set forth on the proofs of Claim filed by such holders
(or at the last known addresses of such holders if no proof of Claim is
filed or if RHI has been notified of a change of address), (b) at the
addresses set forth in any written notices of address changes delivered to
the Disbursing Agent after the date of any related proof of Claim, (c) at
the addresses reflected in the Schedules if no proof of Claim has been
filed and the Disbursing Agent has not received a written notice of a
change of address. If any holder's distribution is returned to the
Disbursing Agent, agent, or servicer, as undeliverable, no further
distributions to such holder shall be made unless and until the Disbursing
Agent or the appropriate agent, or servicer is notified of such holder's
then current address, at which time all missed distributions shall be made
to such holder without interest. Amounts in respect of undeliverable
distributions made through the Disbursing Agent or the agent, or servicer,
shall be returned to Reorganized RHI until such distributions are claimed.
All claims for undeliverable distributions shall be made on or before the
fifth (5th) anniversary of the Consummation Date. After such date, all
unclaimed property shall revert to Reorganized RHI and the claim of any
holder or successor to such holder with respect to such property shall be
discharged and forever barred.
F. Purchase of New RHI Debentures by UM&M
UM&M shall use the Class 4 Cash distributed to it on account of its
Allowed Class 4 Subordinated Claim to purchase, at par value, on a Pro Rata
basis, the New RHI Debentures issued pursuant to Article III.C. hereof to
those holders of Allowed Class 3 General Unsecured Claims which, prior to
the Petition Date and continuing thereafter, provided goods or services to
RHI in the ordinary course of business on usual and customary trade terms
and conditions (the "Trade Creditors"); provided, however, that any surplus
of Class 4 Cash remaining after UM&M has purchased 100% of the New RHI
Debentures issued to Trade Creditors shall remit to the working capital of
UM&M.
The determination as to which holders of Allowed Class 3 General
Unsecured Claims are deemed not to be Trade Creditors has been made by UM&M
and RHI, after consultation with the Committee. A list of such holders,
i.e., holders deemed not to be Trade Creditors, is annexed hereto as
Exhibit C.
ARTICLE VIII.
TREATMENT OF EXECUTORY CONTRACTS AND UNEXPIRED LEASES
A. Rejection of Executory Contracts And Unexpired Leases
Unless assumed by order of the Bankruptcy Court entered on or before
Confirmation, all executory contracts and unexpired leases of RHI shall be
deemed automatically rejected on the Confirmation Date. The Confirmation
Order shall constitute an order of the Bankruptcy Court approving such
rejections, pursuant to section 365(a) of the Bankruptcy Code.
B. Bar Date For Rejection Damages
If the rejection by RHI, pursuant to the Plan, of an executory
contract or unexpired lease results in a Claim, which is not theretofore
evidenced by a timely filed proof of Claim or a proof of Claim that is
deemed to be timely filed under applicable law, then such Claim shall be
forever barred and shall not be enforceable against RHI or Reorganized RHI
or the properties of either of them unless a proof of Claim is filed with
the clerk of the Bankruptcy Court and served upon counsel to RHI within
thirty (30) days after service of the earlier of (i) notice of the
Confirmation Order, or (ii) other notice that the executory contract or
unexpired lease has been rejected.
ARTICLE IX.
CONDITIONS PRECEDENT
A. Conditions To Confirmation
The following are conditions precedent to confirmation of the Plan
that must be satisfied unless waived in accordance with Article IX.C. of
the Plan:
1. The Confirmation Order shall be in form and substance
reasonably acceptable to RHI and the Committee.
2. The PBGC Agreement shall be approved by the Bankruptcy
Court.
3. The CIT Agreement shall be approved by the Bankruptcy
Court.
B. Conditions To Consummation
The following are conditions precedent to the occurrence of the
Consummation Date, each of which must be satisfied unless waived in
accordance with Article IX.C. of the Plan:
1. Confirmation will have occurred and the Confirmation Order
shall, among other things, provide that:
a. The provisions of the Confirmation Order are nonseverable and
mutually dependent;
b. The transfers of property by RHI (a) to Reorganized RHI (i) are
or shall be legal, valid, and effective transfers of property,
(ii) vest or shall vest Reorganized RHI with good title to such
property free and clear of all liens, charges, Claims,
encumbrances, or interests, except as expressly provided in the
Plan or Confirmation Order, (iii) do not and shall not constitute
avoidable transfers under the Bankruptcy Code or under applicable
bankruptcy or nonbankruptcy law, and (iv) do not and shall not
subject Reorganized RHI to any liability by reason of such
transfer under the Bankruptcy Code or under applicable
nonbankruptcy law, including, without limitation, any laws
affecting successor or transferee liability, and (b) to holders of
Claims and holders of Interests under the Plan are for good
consideration and value and are in the ordinary course of RHI's
business;
c. Except as expressly provided in the Plan, RHI is discharged
effective on the Confirmation Date from any "debt" (as that term
is defined in section 101(12) of the Bankruptcy Code), and RHI's
liability in respect thereof is extinguished completely, whether
reduced to judgment or not, liquidated or unliquidated, contingent
or noncontingent, asserted or unasserted, fixed or unfixed,
matured or unmatured, disputed or undisputed, legal or equitable,
or known or unknown, or that arose from any agreement of RHI that
has either been assumed or rejected in the Chapter 11 Case or
pursuant to the Plan, or obligation of RHI incurred before
Confirmation, or from any conduct of RHI prior to Confirmation, or
that otherwise arose before Confirmation, including, without
limitation, all interest, if any, on any such debts, whether such
interest accrued before or after the Petition Date;
d. The Plan does not provide for the liquidation of all or
substantially all of the property of RHI and its confirmation is
not likely to be followed by the liquidation of Reorganized RHI or
the need for further financial reorganization;
e. No request for revocation of the Confirmation Order under
section 1144 of the Bankruptcy Code shall have been made, or, if
made, shall remain pending.
C. Waiver Of Conditions To Confirmation And Consummation
The conditions set forth in Articles IX.A. and IX.B. of the Plan,
except that condition set forth in Article IX.A.2, may be waived by RHI,
with the consent of the Committee,without notice or a hearing.
ARTICLE X.
PROCEDURES FOR RESOLVING AND TREATING
DISPUTED AND CONTINGENT CLAIMS
A. Objection Deadline
As soon as practicable, but in no event later than 90 days after
the Confirmation Date (unless extended by RHI after obtaining the
approval of the Bankruptcy Court), RHI, or any other applicable entity,
shall file objections to Claims with the Bankruptcy Court and serve such
objections upon the holders of each of the Claims to which objections
are made.
B. No Distributions Pending Allowance
Notwithstanding any other provision of the Plan, no payments or
distributions shall be made with respect to all or any portion of a
Disputed Claim unless and until all objections to such Disputed Claim
have been settled or withdrawn or have been determined by Final Order,
and the Disputed Claim, or some portion thereof, has become an Allowed
Claim.
C. Distribution Reserve
1. The Disbursing Agent shall withhold the Distribution Reserve
from the Cash or other property to be distributed under the Plan. As to
any Disputed Claim, upon a request for estimation by the Committee or
RHI, the Bankruptcy Court shall determine what amount is sufficient to
withhold as the Distribution Reserve. RHI may request estimation for
every Disputed Claim that is unliquidated and the Disbursing Agent shall
withhold the Distribution Reserve based upon the estimated amount of
such Claim as set forth in a Final Order. If RHI elects not to request
such an estimation from the Bankruptcy Court with respect to a Disputed
Claim that is liquidated, the Disbursing Agent shall withhold the
Distribution Reserve based upon the Face Amount of such Claim. Nothing
in the Plan or herein shall be deemed to entitle the holder of a
Disputed Claim to post-petition interest on such Claim, and such holder
shall not be entitled to any such interest.
2. If practicable, the Disbursing Agent shall invest any Cash that
is withheld as the Distribution Reserve in a manner that shall yield a
reasonable net return, taking into account the safety of the investment.
D. Distributions After Allowance
Payments and distributions from the Distribution Reserve to each
holder of a Disputed Claim, to the extent that all or part of such Claim
ultimately becomes an Allowed Claim, shall be made in accordance with
the provisions of the Plan governing the class of Claims to which the
respective holder belongs; provided, however, that until a Final Order
has been entered or other final resolution has been reached with respect
to every Disputed Claim, no Cash or other property held in the
Distribution Reserve shall be distributed. After a Final Order has been
entered, or other final resolution has been reached, with respect to
each Disputed Claim, any Cash, New RHI Debentures, or other property
remaining in the Distribution Reserve shall be distributed Pro Rata to
holders of Allowed Class 3 Claims and Allowed Class 4 Claims.
ARTICLE XI.
MODIFICATIONS AND AMENDMENTS
RHI may alter, amend, or modify the Plan or any Exhibits thereto
under section 1127(a) of the Bankruptcy Code at any time prior to the
Confirmation Date. After the Confirmation Date and prior to substantial
consummation of the Plan as defined in section 1101(2) of the Bankruptcy
Code, RHI may, under section 1127(b) of the Bankruptcy Code, institute
proceedings in the Bankruptcy Court to remedy any defect or omission or
reconcile any inconsistencies in the Plan, the Disclosure Statement
approved with respect to the Plan, or the Confirmation Order, and such
matters as may be necessary to carry out the purpose and effect of the
Plan so long as such proceedings do not adversely affect the treatment
of holders of Claims or Interests under the Plan; provided, however,
that prior notice of such proceedings shall be served in accordance with
the Bankruptcy Rules or order of the Bankruptcy Court.
ARTICLE XII.
RETENTION OF JURISDICTION
The Bankruptcy Court shall have exclusive jurisdiction, under
sections 105(a) and 1142 of the Bankruptcy Code, of all matters arising
out of, and related to, the Chapter 11 Case and the Plan including,
among other things, the following matters:
a. To hear and determine any and all pending or future objections
to the allowance of claims relating to events or transactions
occurring on or prior to the Consummation Date;
b. To consider and rule on the compromise and settlement of any
claim against or cause of action on behalf of the Estate;
c. To hear and determine all pending or future controversies,
suits, and disputes that may arise in connection with the
interpretation of the Plan or any documents intended to implement
the provisions of the Plan;
d. To hear and determine any and all applications for the
allowance of compensation and reimbursement of expenses;
e. To hear and determine, if necessary, or to estimate or
liquidate any and all claims arising therefrom or from the
rejection of executory contracts or unexpired leases pursuant to
the Plan or otherwise;
f. To consider any modifications of the Plan permitted by the
Bankruptcy Code;
g. To correct any defect, cure any omission or reconcile any
inconsistency in the Plan, including any exhibit thereto, or in
any order of the Bankruptcy Court, including the Confirmation
Order, as may be necessary to carry out the purposes and intent of
the Plan and to implement and effectuate the Plan;
h. To determine such other matters as may be provided for in the
Confirmation Order or other orders of the Bankruptcy Court as may
be authorized under the provisions of the Bankruptcy Code or any
other applicable law;
i. To enforce all orders, judgments, injunctions, and rulings
entered in the Chapter 11 case;
j. To issue such orders as may be necessary or appropriate in aid
of confirmation and to facilitate consummation of the Plan;
k. To enter an order closing the Chapter 11 Case;
l. To recover all assets of RHI and property of the Estate,
wherever located; and
m. To hear and determine (a) all motions, applications, adversary
proceedings, and contested and litigated matters pending on the
Consummation Date, and (b) all claims by or against RHI arising
under the Bankruptcy Code or nonbankruptcy law, if made applicable
by the Bankruptcy Code, including claims to avoid preferential or
fraudulent transfers under sections 547 and 548 of the Bankruptcy
Code, whether such claims are commenced before or after the
Consummation Date.
ARTICLE XIII.
COMPROMISES AND SETTLEMENTS
Pursuant to section 1123(b)(3) of the Bankruptcy Code and Fed. R.
Bankr. P. 9019(a), RHI shall effectuate the compromises and settlements
described below.
A. Compromise of PBGC Claims
RHI and the PBGC have agreed to compromise the PBGC Claims as
follows: (i) the PBGC Claims shall be Allowed as a single Class 1 Other
Priority Claim (the "Allowed PBGC Claim") in the aggregate amount of
Four Hundred Thousand Dollars ($400,000.00), and, together with all
claims derivative thereof, shall be disallowed and expunged in all other
amounts and priorities; and (ii) on the Distribution Date, or as soon
thereafter as practicable, RHI shall pay to the PBGC, in full
satisfaction, settlement, release, and discharge of, and in exchange
for, the Allowed PBGC Claim, the sum of $400,000.00 in Cash. A copy of
the PBGC Agreement is annexed hereto as Exhibit D and is incorporated
herein by reference.
B. Compromise of CIT Claim
RHI and CIT have agreed to compromise the CIT Claim as follows:
(i) the CIT Claim shall be Allowed as a Class 3 General Unsecured Claim
in such amount as is required to yield a Cash distribution to CIT, under
this Plan, in the amount of Twenty Five Thousand Dollars ($25,000.00),
and shall be disallowed and expunged in all other amounts and
priorities; (ii) on the Distribution Date, or as soon thereafter as
practicable, RHI shall pay to CIT, in full satisfaction, settlement,
release, and discharge of, and in exchange for, the Allowed CIT Claim,
the sum of $25,000.00 in Cash; and (iii) on the Distribution Date, as a
condition precedent to any distribution to CIT, RHI and CIT shall enter
into a general mutual release in the form of the release annexed to the
CIT Agreement as Exhibit A, to be effective as of the Distribution Date.
A copy of the CIT Agreement is annexed hereto as Exhibit E and is
incorporated herein by reference.
ARTICLE XIV.
MISCELLANEOUS PROVISIONS
A. Setoffs
RHI may, but shall not be required to, set off against any Claim,
and the payments or other distributions to be made under the Plan on
account of such Claim, claims of any nature whatsoever that RHI may have
against the holder of such Claim; but neither the failure to do so nor
the allowance of any Claim hereunder shall constitute a waiver or
release by RHI of any claim that RHI may have against such holder.
B. Withholding And Reporting Requirements
In connection with the Plan and all instruments issued in
connection therewith and distributions thereon, RHI 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.
C. Discharge Of RHI
All property distributed under the Plan shall be in exchange for,
and in complete satisfaction, settlement, discharge, and release of, all
Claims of any nature whatsoever against RHI or any of its assets or
properties, and, except as otherwise provided herein or in the
Confirmation Order, on the Confirmation Date, RHI shall be deemed
discharged and released under section 1141(d)(1)(A) of the Bankruptcy
Code from any and all debts. The Confirmation Order shall be a judicial
determination of discharge of all liabilities of RHI, subject to the
occurrence of Consummation.
D. Exculpation And Limitation Of Liability
Neither Reorganized RHI, the Committee, nor any of their
respective present or former members, officers, directors, employees,
advisors, attorneys, or agents, shall have or incur any liability to any
holder of a Claim or an Interest, or any other party in interest, or any
of their respective agents, employees, representatives, financial
advisors, attorneys, or affiliates, or any of their successors or
assigns, for any act or omission in connection with, relating to, or
arising out of, RHI's Chapter 11 Case, the pursuit of confirmation of
the Plan, the consummation of the Plan, or the administration of the
Plan or the property to be distributed under the Plan, except for their
willful misconduct, and in all respects shall be entitled to reasonably
rely upon the advice of counsel with respect to their duties and
responsibilities under the Plan.
Notwithstanding any other provision of this Plan, any holder of a
Claim or an Interest, any other party in interest, and any of their
respective agents, employees, representatives, financial advisors,
attorneys, or affiliates, and any successors or assigns of the
foregoing, shall have no right of action against Reorganized RHI, the
Committee or any of their respective present or former members,
officers, directors, employees, advisors, attorneys, or agents, for any
act or omission in connection with, relating to, or arising out of,
RHI's Chapter 11 Case, the pursuit of confirmation of the Plan, the
consummation of the Plan, or the administration of the Plan or the
property to be distributed under the Plan, except for their willful
misconduct.
E. Binding Effect
The Plan shall be binding upon and inure to the benefit of RHI,
the holders of Claims, the holders of Interests, and their respective
successors and assigns.
F. Withdrawal Or Non-Consummation
If RHI withdraws the Plan prior to the Confirmation Date, or if
Confirmation or Consummation of the Plan does not occur, then the Plan,
any settlement or compromise embodied in the Plan (including the fixing
or limiting to an amount certain any Claim or Class of Claims),
assumption or rejection of executory contracts or leases affected by the
Plan, and any document or agreement executed pursuant to the Plan, shall
be deemed null and void. In such event, nothing contained herein, and no
acts taken in preparation for Consummation of the Plan, shall be deemed
to constitute a waiver or release of any Claims by or against RHI or any
other Person, to prejudice in any manner the rights of RHI or any Person
in any further proceedings involving RHI, or to constitute an admission
of any sort by RHI or any other Person.
G. Indemnification Obligations
Except as otherwise limited in the Plan, any obligations or rights
of RHI to indemnify its present and former directors, officers, or
employees pursuant to RHI's articles of incorporation, by-laws, board of
directors resolutions, and established policy of providing employee
indemnification, and applicable state law or specific agreement in
respect of any claims, demands, suits, causes of action, or proceedings
against such directors, officers, or employees based upon any act or
omission related to such present and former directors', officers', or
employees' service with, for, or on behalf of RHI, shall survive
confirmation of this Plan and remain unaffected thereby, irrespective of
whether indemnification is owed in connection with an occurrence before
or after the Petition Date.
H. Term Of Injunctions Or Stays
Unless otherwise provided in the Plan or the Confirmation Order,
all injunctions or stays provided for in the Chapter 11 Case and extant
on the Confirmation Date (excluding any injunctions or stays contained
in this Plan or the Confirmation Order), shall remain in full force and
effect until the Consummation Date.
I. No Liability for Certain Tax Claims
Unless a taxing authority has filed a proof of Claim, including
but not limited to those proofs of Claim, if any, deemed filed prior to
the Bar Date, no Claim of such authority shall be Allowed for taxes or
the disallowance of tax losses arising out of the failure of RHI to have
filed any income tax return, or arising out of an audit of any return,
for any tax period prior to the Petition Date. To the extent that any
Claim asserted by a taxing authority seeks recovery of interest, a
penalty, or a fine against RHI, that portion of such claim, if Allowed,
which represents such interest, penalty or fine shall be disallowed.
J. Administrative Claims Bar Date
The Confirmation Order will operate to establish an Administrative
Claims Bar Date for all holders of Administrative Claims, except for
Professional Fees and the expenses of the members of the Committee, 30
days after the Confirmation Date. Holders of asserted Administrative
Claims, except for Professional Fees and the expenses of the members of
the Committee, not paid on or following the Consummation Date, may
submit proofs of Claim on or before such Administrative Claims Bar Date.
The notice of Confirmation to be delivered pursuant to Fed. R. Bankr. P.
3020(c) and 2002(f) will set forth such date and constitute notice of
this Administrative Claims Bar Date. Reorganized RHI will have 90 days
following the Administrative Claims Bar Date to review and object to
such Administrative Claims before a hearing for determination of
Allowance of such Administrative Claims.
At or before the Confirmation Hearing, each professional retained
in the Chapter 11 Case and the members of the Committee shall submit to
the Bankruptcy Court, with notice to RHI and the Committee, an estimate
of its Claim for Professional Fees, including reimbursement of expenses,
through Confirmation. RHI shall place in escrow or a segregated account
a sum sufficient to pay the estimated, unpaid Professional Fees and
expenses in full. Each professional retained in the Chapter 11 Case
shall file its final application for payment of fees and expenses on or
before the forty-fifth (45th) day following Confirmation.
K. Notices
Any notice required or permitted to be provided to RHI and the
Committee under the Plan shall be in writing and served by (a) certified
mail, return receipt requested, (b) hand delivery, or (c) overnight
delivery service, to be addressed as follows:
Skadden, Arps, Slate, Meagher & Flom LLP
Attorneys for Victoria Creations, Inc.
919 Third Avenue
New York, New York 10022-3897
Attn: Michael L. Cook, Esq.
and
Zalkin, Rodin & Goodman LLP
Attorneys for the Committee
750 Third Avenue
New York, New York 10017-2771
Attn: Andrew D. Gottfried, Esq.
L. Governing Law
Unless a rule of law or procedure is supplied by federal law
(including the Bankruptcy Code and Bankruptcy Rules), the laws of the
State of New York shall govern the construction and implementation of
the Plan and any agreements, documents, and instruments executed in
connection with the Plan. The laws of the State of Rhode Island shall
govern corporate governance matters.
Dated: New York, New York
February 25, 1997
REUNITED HOLDINGS, INC.,
Debtor-in-Possession
By: /s/ Uzi Ruskin
Uzi Ruskin
Chairman and Chief
Executive Officer
SKADDEN, ARPS, SLATE, MEAGHER & FLOM LLP
Attorneys for Reunited Holdings, Inc.,
Debtor-in-Possession
By: /s/ Michael L. Cook
(A Member of the Firm)
Michael L. Cook (MC 7887)
Lawrence V. Gelber (LG 9384)
919 Third Avenue
New York, New York 10022-3897
(212) 735-3000
EXHIBIT A
TO
AMENDED AND RESTATED
REORGANIZATION PLAN OF REUNITED HOLDINGS, INC.
AMENDED ARTICLES OF INCORPORATION AND BY-LAWS
Filing Fee $50.00
State of Rhode Island and Providence Plantations
DUPLICATE ORIGINAL OF
ARTICLES OF AMENDMENT
TO THE
ARTICLES OF INCORPORATION
OF
REUNITED HOLDINGS, INC.
---------------------------------------------------------
Pursuant to the provisions of Section 7-1.1-56 of the General
Laws, 1956, as amended, the undersigned corporation adopts the following
Articles of Amendment to its Articles of Incorporation:
FIRST: The name of the corporation is Reunited Holdings, Inc.
---------------------------------------------------------------
SEE BELOW
[Insert Amendments(s)]
Pursuant to the provisions of Section ___________ of the General
Laws, 1956, as amended, the undersigned corporation adopts the following
amendment to the Articles of Incorporation:
ARTICLE FIFTH is hereby amended to read as follows:
The total number of shares which the Corporation shall
have the authority to issue is 10,000,000 shares of common
stock with $.01 par value per share (the "Common Stock").
Notwithstanding the foregoing, the Corporation shall not
issue any non-voting equity securities.
THIRD: The number of shares of the corporation outstanding at the
time of such adoption was 7,800,000; and the number of shares entitled
to vote thereon was 7,800,000.
FOURTH: The designation and number of outstanding shares of each
class entitled to vote thereon as a class were as follows: (if
inapplicable, insert "none")
Class Number of Shares
Common Stock, one cent 7,800,000
($.01) par value per share
FIFTH: The number of shares voted for such amendment was N/A; and
the number of shares voted against such amendment was N/A.
SIXTH: The number of shares of each class entitled to vote thereon
as a class voted for and against such amendment, respectively, was: (if
applicable, insert "none")
Class Number of Shares Voted
For Against
None
SEVENTH: The manner, if not set forth in such amendment, in which
any exchange, reclassification, or cancellation of issued shares
provided for in the amendment shall be effected, is as follows: (If no
change, so state)
No change
EIGHTH: The manner in which such amendment effects a change in the
amount of stated capital, and the amount of stated capital as changed by
such amendment, are as follows: (if no change, so state)
No change
Dated: __________, _____
By
Its Chairman
and
Its Secretary
STATE OF RHODE ISLAND )
}SC.
COUNTY OF )
At in said county on this
day of , 19, ,
personally appeared before me. , who,
being by me first duly sworn, declared that he is the
of
that he signed the foregoing document as
of the corporation, and that the statements therein contained
are true.
(NOTARIAL SEAL)
------------------
STATE OF RHODE ISLAND AND PROVIDENCE PLANTATIONS
OFFICE OF THE SECRETARY OF STATE
CERTIFICATE OF AMENDMENT
TO ARTICLES OF INCORPORATION OF
---------------------------------------------------
I, ______________________________ Secretary of State, hereby certify
that duplicate originals of Articles of Amendment to the Articles of
Incorporation of ________
- -----------------------------------------------------------------------,
duly signed and verified pursuant to the provisions of Chapter 7-1.1 of the
General Laws, 1956, as amended, have been received in this office and are
found to conform to law and that the foregoing is a duplicate original of
the Articles of Amendment.
Witness my hand and the seal of
the State of Rhode Island
this day of 19 .
Secretary of State
EXHIBIT B
TO
AMENDED AND RESTATED
REORGANIZATION PLAN OF REUNITED HOLDINGS, INC.
DESCRIPTION OF NEW RHI DEBENTURES
REUNITED HOLDINGS, INC.
DESCRIPTION OF NEW RHI DEBENTURES
The principal terms of the New RHI Debentures to be issued by
Reorganized RHI under the Plan are as follows:
Issuer: Reunited Holdings, Inc. (the "Issuer")
Securities: 3-1/2% Subordinated Debentures (the
"Securities")
Principal Amount: [To be determined upon resolution of
disputed claims]
Final Maturity: 25 years
Interest: 3-1/2% per annum; provided, however,that the
Issuer will pay interest on overdue
installments of interest on the Securities
at the applicable federal rate.
Optional Redemption: The Issuer may redeem all or a portion of
the Securities at a redemption price of 100%
of the principal amount plus accrued
interest to the applicable redemption date.
Subordination: Securities are subordinated to all Senior
Indebtedness.
Denominations: $1,000 and integral multiples of $1,000.
Covenants: (A) Payment of Securities: The Issuer will
pay the principal of and interest on the
Securities on the dates and in the manner
provided in the Securities.
(B) Compliance Certificate and Notice of
Default: The Issuer shall deliver to the
trustee an officers' certificate (i) within
120 days after the end of each fiscal year
stating whether or not any Default or Event
of Default has occurred during the fiscal
year and (ii) within 30 days upon becoming
aware of any Default or Event of Default.
(C) Securities and Exchange Commission
("SEC") Reports: The Issuer shall file with
the trustee within 15 days after it files
them with the SEC, copies of the annual
reports and other information which the
Issuer is required to file with the SEC
pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934, as amended.
The Issuer shall also comply with TIA ss.
314(a).
(D) Consolidation and Mergers: The Issuer
shall not consolidate or merge with or into,
or transfer or lease all or substantially
all of its assets to, any other person
unless:
i) no Default or Event of Default shall have
occurred and be continuing at the time of
such transaction and no Event of Default
shall occur as a consequence thereof; and
(ii) the successor person surviving such
consolidation or merger (if other than the
Company), or to which such sale or
conveyance has been made, expressly assumes
by supplemental indenture in a form
satisfactory to the trustee all the
obligations of the Issuer under the
Securities.
Events of Default: Any one or more of the following shall
constitute an Event of Default:
(A) Default shall occur in the payment of
principal of any Security when the same
shall have become due and such default shall
continue for 30 days; or
(B) Default shall occur in the payment of
interest on any Security when the same
becomes due and payable and the default
continues for 30 days; or
(C) The Issuer fails to comply with any of
its other agreements in the Securities or
the Indenture and the Default continues for
60 days after receipt of notice from the
trustee or holders of at least 50% in
principal amount of the Securities then
outstanding that such non-compliance con-
stitutes an Event of Default; or
(D) The Company, pursuant to or within the
meaning of any Bankruptcy Law: commences a
voluntary case; consents to the entry of an
order for relief against it in an
involuntary case; consents to the
appointment of a Custodian of it or for any
substantial part of its property; or makes a
general assignment for the benefit of its
creditors; or
(E) A court enters an order or decree under
any Bankruptcy Law that: is for relief
against the Issuer in an involuntary case;
appoints a Custodian of the Issuer or for
any substantial part of its property; or
orders the liquidation of the Issuer and the
order or decree remains unstayed and in
effect for 30 days; or
(F) The Issuer defaults in the performance
of the terms of any Indebtedness (other
than the Securities) in the aggregate
principal amount of $5,000,000 or more, and
such Indebtedness shall have been declared
to be due and payable immediately and such
acceleration shall not have been rescinded
or annulled at the time of declaration of
acceleration.
Definitions: "Indebtedness" shall mean (i) the principal
of and premium, if any, and interest on
(including, without limitation, interest
accruing after the commencement of a case
arising under Bankruptcy Law), and any other
amounts owing with respect to (a) all
obligations for money borrowed by the Issuer
(including without limitation, obligations
to banks and other financial institutions in
respect of letters of credit, bankers'
acceptances and similar obligations), (b)
capital and financing lease obligations of
the Issuer (including trade payables), (c)
obligations of the Issuer in connection
with the acquisition of all or any portion
of any Property or asset representing all or
a portion of the deferred purchase price
thereof, and (d) any guaranty, endorsement
or other contingent obligation of the Issuer
in respect of obligations of others of the
type described in the preceding subclauses
(a), (b) and (c) (in each case without
regard to when such obligations were
incurred or whether they are secured or
unsecured), and (ii) any refundings,
renewals of, extensions or other
modifications of or supplements to any
obligation described in the preceding clause
(i).
"Senior Indebtedness" shall mean
Indebtedness, unless by the terms of the
instrument creating or evidencing any such
obligation it is expressly provided that
such obligation is on parity with, or
otherwise not superior in right of payment
to, the Securities.
EXHIBIT C
TO
AMENDED AND RESTATED
REORGANIZATION PLAN OF REUNITED HOLDINGS, INC.
HOLDERS OF CLASS 3 GENERAL UNSECURED CLAIMS
DEEMED NOT TO BE TRADE CREDITORS
REUNITED HOLDINGS, INC.
- ------------------------------------------------------------------------------
NOT TO BE TRADE CREDITORS
<TABLE>
<CAPTION>
Claim # Claimant's Name Amount
<S> <C> <C> <C>
A/P ABCO WELDING SUPPLY WATERFORD, CT 144.00
0065 ABF FREIGHT SYSTEM, INC. FORT SMITH, AR 523.89
0174 ACADEMY ENGRAVING, INC. NEW YORK, NY 2,145.52
A/P ACCESSORIES COUNCIL NEW YORK, NY 1,000.00
1328 ACE YOUNG INC. JAMAICA, NY 1,140.00
A/P ACHIN, MARK R. PROVIDENCE, RI 540.00
A/P ADLER POLLOCK SHEEHAN PROVIDENCE, RI 15,171.00
A/P AEI MUSIC NETWORK SEATTLE, WA 18.00
1480 ALL CITY CORPORATE TRANSPORTATION BRONX, NY 22,000.00
A/P ALL PHASE ELECTRIC BENTON HARBOR, MI 66.00
A/P AMERICAN ELECTROPLATERS ORLANDO, FL 140.00
1398 AMERICAN EXPRESS T.R.S., CO. MALVERN, PA 7,268.67
A/P AMERICAN TRUCKING ASSOC. ALEXANDRIA, VA 30.00
0999 ANGEL-ACE CO LTD BANGRAK, THAILAND, TA 850.00
A/P ANZAC COMPUTER EQUIPMENT HAYWARD, CA 307.00
A/P APPLIED SOUND & COMMUNICATION MINEOLA, NY 1,220.00
A/P ARMY & AIR FORCE EXCHANGE DALLAS, TX 3,780.00
0089 ARRIOLA, JESUS LOS ANGELES, CA 60,000.00
A/P ASIA CORAL JADE TAIPEI, TAIWAN, 421.00
A/P ASIAN WALL STREET JOURNAL CHICOPEE, MA 245.00
A/P AU BON PAIN CO, INC BOSTON, MA 512.00
A/P AUTOMATIC HEATING PROVIDENCE, RI 38.00
A/P BGL ASSOCIATES WARWICK, RI 580.00
1246 BLOOMINGDALES/INV. PROC. CINCINNATI, OH 94,283.30
A/P BOC GASES PITTSBURGH, PA 23.00
A/P BOWCAM CONTAINER PAWTUCKET, RI 125.00
A/P BROWDER DISPLAYS CHARLOTTE, NC 55.00
0079 BUCKEYE BUS. PROD. INC. CLEVELAND, OH 1,583.00
0611 BUDGET RENT A CAR SYSTEMS INC. CARROLLTON, TX 4,324.00
1245 BURDINES CINCINNATI, OH 1,675.00
A/P BUREAU OF BUSINESS PRACTICE WATERFORD, CT 577.00
A/P BUS & INST FURNITURE CO MILWAUKEE, WI 285.00
A/P C.C.H. INC CHICAGO, IL 496.00
A/P C.T.P. SPA ITALY, 38.00
A/P CARIBMAR FORWARDING MIAMI, FL 69.00
A/P CARRIER EXPRESS TRANSPORT WOONSOCKET, RI 42.00
A/P CHAMELEON GROUP NEW YORK, NY 2,200.00
A/P CHAMPION AMERICAN MACEDONIA, OH 54.00
A/P CHEMICAL BANK NEW YORK, NY 330.00
0847 CHILDREN INSTITUTE LIVINGSTON, NJ 34.70
0029 CIT GROUP/COMMERCIAL SERVICES, INC. NEW YORK,NY 30,000,000.00
A/P CITIBANK N.A. NEW YORK, NY 110.00
A/P CITY LOCK SERVICES PROVIDENCE, RI 108.00
0545 CLARK INTERNATIONAL CORP. LEWISTON, ME 153.00
1331 CLIO/02 CLOTHING & ACCESSORIES ONTARIO M5SV3B1, CN 3,673.74
A/P COLONIAL TRUCKING AVON, MA 54.00
A/P COLOR WHEEL NEW YORK, NY 353.00
A/P COMMPLEX ROCKLAND, MA 143.00
0703 COMPANIA INDUSTRIAL DE CRISTAL MEXICO, MX 4,263.00
0707 COMPUTER REPAIR SPECIALISTS PLAINVIEW, NY 1,068.00
A/P COOPERATIVE BUSINESS FORMS WEST MILFORD, NJ 2,097.00
0319 CORPORATE COFFEE SYS. INC. CEDARHURST, NY 2,324.00
A/P COUNTERPOINT PUBLISHING CAMBRIDGE, MA 595.00
A/P CRANSTON TYPEWRITER CRANSTON, RI 525.00
A/P CROWN LINEN SERVICE NASHUA, NH 482.00
A/P CUSTOM HEADSETS OF NE DUXBURY, MA 289.00
0159 DAISY DIG'INS FLORIST & GIFTS BARRINGTON, RI 871.12
A/P DAVID WILSON ASSOCIATES NEEDHAM, MA 2,623.00
A/P DAY TIMERS LEHIGH VALLEY, PA 33.00
1332 DEVAG TOKYO, JA 1,219.36
0812 DRAWING BOARD HARTFORD, CT 480.00
1468 DUN & BRADSTREET INFORMATION SVCS BETHLEHEM, PA 1,051.66
0618 DYNASTY EXPRESS INC. JAMAICA, NY 320.00
A/P DYTEX CHEMICAL CENTRAL FALLS, RI 393.00
A/P E.I.L. INSTRUMENTS BALTIMORE, MD 35.00
0135 EAGLE LEASING CO. ORANGE, CT 531.00
A/P EASTERN BEARINGS WALTHAM, MA 49.00
0451 EDWARD S. GORDON CO INC NEW YORK, NY 69,300.00
A/P ELDER PRINTING SILER CITY, NC 171.00
A/P ELLE DECOR BOULDER, CO 13.00
A/P ELLIOT GROUP PAWTUCKET, RI 84.00
A/P EMBASSY NEW YORK, NY 60.00
0041 EMPLOYMENT CONTRACTOR SERVICES, INC.BINGHAMTON, NY 1,627.50
0856 EPSTEIN BECKER & GREEN NEW YORK, NY 21,431.45
A/P EQUITABLE LOS ANGELES, CA 5,912.00
A/P ESSEX GROUP CHICAGO, IL 637.00
0497 EVERTS, LIENARD POSTBUS 19352, AM 50,000.00
A/P EXECUTIVE COFFEE NEW BEDFORD, MA 3,699.00
A/P EXECUTIVE SEARCH INC NEWARK, NJ 10,600.00
A/P EXIMBANK WASHINGTON, DC 2,906.00
A/P FABB FASHION ACCESSORIES EASTON, CT 4,000.00
A/P FAIRCHILD PUBLICATIONS PHILADELPHIA, PA 1,060.00
0261 FAIRFIELD STORE FAIRFIELD, CT 34.00
1054 FEDERAL EXPRESS CORPORATION MEMPHIS, TN 19,892.99
A/P FELLAN CO NEW YORK, NY 3,442.00
A/P FILTERED WATER SERVICE NEW YORK, NY 474.00
A/P FINKELSTEIN, BORA, ET AL NEW YORK, NY 193.00
A/P FLOW CONTROLS INC 651.00
A/P FLOWER POT WARWICK, RI 39.00
A/P FRANK I. ROUNDS CO RANDOLPH, MA 261.00
1014 GAUS, RUTH LOMBARD, IL 708.33
A/P GEM AIR POWER PAWTUCKET, RI 71.00
A/P GENERAL TRAFFIC SYSTEMS JAMAICA, NY 188.00
1330 GIA LTDA SANTIAGO DE CHILE, CH 2,973.40
A/P GIRARD SPRING WATER N. PROVIDENCE, RI 1,188.00
0929 GRAY, DEBRA CARBONDALE, IL 32.00
0274 GREENWICH GROUP EAST GREENWICH, RI 108.75
A/P GULTON GRAPHICS CHICAGO, IL 216.00
1526 GZA GEOENVIRONMENTAL INC NEWTON UPPER FALLS, MA 1,150.00
A/P HACH CO DENVER, CO 167.00
A/P HARRIS TRUST CHICAGO, IL 2,598.00
A/P HARVARD BUSINESS REVIEW BOULDER, CO 75.00
A/P HERALD NEWS FALL RIVER, MA 394.00
1397 HEWLETT-PACKARD COMPANY CUPERTINO, CA 313.00
1329 HOLODENSCHI, DELLIA ST. THOMAS, VI 113.19
1346 HOOGESTEGER, GERT BUSSUM, NE 7,500.00
A/P HUEBNER, KAREN MADISON, WI 1,531.00
A/P IBM CORP ATLANTA, GA 339.00
A/P IDMD ONTARIO, CN 2,575.00
A/P ILAS ACCENTS NEW YORK, NY 20.00
0487 INDIANA MARKET& CATERING NEW YORK, NY 1,905.00
A/P INTERIOR FOLIAGE L.I.C., NY 1,755.00
1510 INTERNAL REVENUE SERVICE NEW YORK, NY 5,020,641.28
A/P INTERNATIONAL ASSOC OF AIRPORT
DUTY FREE WASHINGTON, DC 1,488.00
A/P INTERSTATE DISTRIBUTION CULVER CITY, CA 279.00
A/P IRON MOUNTAIN RI ALBANY, NY 242.00
1457 J.P. NINA S.A. CARTAGO, CR 77,914.07
1333 J8C INTERNATIONAL AUCKLAND, NZ 830.33
0348 JACOBSON CAPITAL SERVICES, INC. CROMPOND, NY 1,284.00
0960 JESOKO, INC. NEW YORK, NY 2,200.00
A/P K2M, INC PROVIDENCE, RI 300.00
0829 KAMPURA MFG. CO. LTD. JAPAN, JA 10,000.00
0623 KANG, SAN N. PROVIDENCE, RI 0.00
1327 KARL LAGERFELD PARIS, FR 57,800.00
A/P KENNEDY INC WOONSOCKET, RI 330.00
A/P KENT COUNTY OVERHEAD DOOR WARWICK, RI 188.00
A/P KINKO'S SERVICE CORP VENTURA, CA 3,707.00
A/P KNAPP, GARY BROOKLYN, NY 375.00
A/P KPMG PEAT MARWICK NEW YORK, NY 33,700.00
0839 LAMPREY FAITH E. WOONSOCKET, RI 660.00
0692 LARTIGIANABOTTONI S.P.A. 24060 BOLGARE ITALY, IT 13,940.15
A/P LE CAFE CREME NEW YORK, NY 1,860.00
A/P LEVY KERSON ARONSCN NEW YORK, NY 3,250.00
A/P LIBERTY ENVIRONMENTAL SVCS WINDHAM, ME 36.00
A/P LNM INDUSTRIES PROVIDENCE, RI 107.00
A/P LUND BAXTER ENTERPRISES NEW YORK, NY 3,054.00
0075 LYNDEN AIR FREIGHT SEATTLE, WA 154.00
A/P LYNN TRADING SEOUL, KOREA, 8.00
0277 M J R CORP. HONOLULU, HI 129.85
A/P M R O SUPPLY WARWICK, RI 38.00
A/P M. BURNS TRUCKING SEEKONK, MA 88.00
1310 MAGI ASSOCIATES PROVIDENCE, RI 1,500.00
1383 MALONE, MATTHEW ALEXANDRIA, VA 574.23
A/P MANHATTAN FIRE & SAFETY NEW YORK, NY 80.00
0863 MANSOUR'S LA GRANGE, GA 217.80
A/P MASON TACKEL OTISVILLE, MI 54.00
A/P MASTERMAN'S AUBURN, MA 594.00
A/P MASTERS & SERVANT WARREN, RI 36,366.00
0178 MASTERSOURCE INC LODI, NJ 196.50
A/P MASUEN BUFFALO, NY 142.00
A/P MATHEZ TRANSPORT NICE, FR 1,879.00
0069 MAY DEPARTMENT STORES CO. ST. LOUIS, MO 18,910.50
0049 MIDCOM COMMUNICATIONS, INC. SEATTLE, WA 1,485.00
0134 MIDEASTERN ENVELOPE OXFORD, CT 724.00
A/P MIDRANGE COMPUTING CARLSBAD, CA 104.00
A/P MILAN DELICATESSEN NEW YORK, NY 48.00
A/P MILLENIUM RUBBER MERRIMACK, NH 260.00
A/P MOON KYUNG CORP SEOUL, KOREA, 23.00
0068 MOUNTAIN WEST SIOUX FALLS, SD 207.65
A/P NAT'L ASSOC OF CREDIT MANAGEMENT GLASTONBURY, CT 0.00
A/P NATIONS WAY TRANSPORT DENVER, CO 358.00
1069 NEW KYOEI INC. OSAKA, JAPAN, JP 63,014.39
0782 NEW METAL BOX CORP. WOONSOCKET, RI 8,010.75
A/P NICE BLOOM CENTRAL HONG KONG, 9.00
1055 NILE, DEMETRA SAN JOSE, CA 793.27
0024 NORTH AMERICAN VAN LINES FORTWAYNE, IN 2,707.49
A/P NORTHLAND ENVIRONMENTAL PROVIDENCE, RI 20.00
A/P NYNEX MOBILE COMMUNICATIONS WORCESTER, MA 131.00
1524 NYS DEPARTMENT OF TAXATION
AND FINANCE ALBANY, NY 2,283.74
0026 OFFICE SPECIALISTS PEABODY, MA 5,152.00
0386 OSTRANDER, TRICIA PROVIDENCE, RI 15,000.00
A/P OVERSEAS PUBLISHERS REP NEW YORK, NY 2,612.00
1516 OWENS & MINOR PITTSBURGH, PA 472.78
A/P P.T. FORTUNE STAR AIR 122.00
A/P PACE MOTOR LINES BRIDGEPORT, CT 47.00
0486 PACIFIC DESIGN RESOURCES, LTD HONOLULU, HI 2,981.48
A/P PARFUMS INTERNATIONAL ROANOKE, VA 1,664.00
A/P PARKER MANUFACTURING E PROVIDENCE, RI 21.00
A/P PARTS CO OF AMERICA PALATINE, IL 99.00
0070 PAYLESS CASHWAYS, INC. KANSAS CITY, MO 71.24
1156 PENSION BENEFIT GUARANTY
CORPORATION WASHINGTON, DC 0.00
1157 PENSION BENEFIT GUARANTY
CORPORATION WASHINGTON, DC 37,398,000.00
1158 PENSION BENEFIT GUARANTY
CORPORATION WASHINGTON, DC 7,088,078.00
A/P PHELON SHELDON & MARSAR FAIRVIEW, NJ 135.00
A/P PHILADELPHIA NEWSPAPER PHILADELPHIA, PA 186.00
A/P PLYMOUTH ROCK TRANSPORTATION STONEHAM, MA 138.00
A/P POLAND SPRING LOUISVILLE, KY 67.00
A/P PREMENOS SAN FRANCISCO, CA 270.00
A/P PRENTICE HALL DES MOINES, IA 133.00
A/P PRICE-DRISCOLL WATERFORD, CT 3.00
A/P PRIME TIME NEW YORK, NY 1,781.00
A/P PRODATA COMPUTER SERVICES OMAHA, NB 149.00
A/P PROGRESSIVE BUSINESS PUBLICATIONS MALVERN, PA 264.00
A/P R&J DESIGN & DEVELOP. W. BABYLON, NY 3,025.00
A/P R.C. DAVIS CO PLAINVIEW, NY 226.00
A/P R.S. RENTAL & EQUIP SOMERSET, MA 68.00
1461 RAND LIGHTING CORPORATION NEW YORK, NY 325.96
0151 RAND MATERIALS HANDLING EQUIPMENT PAPAPAWTUCKET, RI 127.00
A/P RAPID MEDIA NEW YORK, NY 95.00
1080 RASULO GRAPHIC SERVICE INC. NEW YORK, NY 3,620.38
A/P REED REFERENCE PUBLISHING PHILADELPHIA, PA 184.00
0472 REGISTRAR & TRANSFER CO CRANFORD, NJ 1,774.86
A/P REMINDER COVENTRY, RI 186.00
1320 RICH'S INV PROCES DIP CINCINNATI, OH 20,720.48
A/P RLC ASSOCIATES FOSTER, RI 118.00
A/P ROLAND INC PROVIDENCE, RI 15.00
A/P ROPER ORGANIZATION NEW YORK, NY 247.00
1190 ROYAL PROMOTION GROUP INC. NEW YORK, NY 10,651.86
1085 RUBBER COVERED PRODUCTS CO INC. SMITHFIELD, RI 400.00
A/P SAERIM METAL CO SEOUL, KOREA, 22.00
A/P SAGE MFG. CO., INC. PROVIDENCE, RI 4.00
A/P SAM SHIN INDUSTRIAL SEOUL, KOREA, 28.00
0933 SAMPO TRADING CO LTD SEOUL, KO 25,695.00
0161 SEASIDE DESIGN, INC. PAWTUCKET, RI 9,841.30
A/P SEIGEE JEWELRY CORP SEOUL, KOREA, 50.00
A/P SHIN WOO ENTERPRISE CO SEOUL, KOREA, 63.00
A/P SIGNATURE COMPUTERS WARWICK, RI 1,327.00
A/P SIMONS SUPPLY FALL RIVER, MA 333.00
A/P SKYLINE CREDIT RIDE INC LONG ISLAND CITY, NY 839.00
1206 SPECIAL LINE HAUL INC SALEM, NH 185.00
A/P SPEED GRAPHICS NEW YORK, NY 2,185.00
A/P SPOTLESS CLEANING NEW YORK, NY 1,104.00
A/P STANLEY FASTENING PITTSBURGH, PA 86.00
A/P STELLAE INTERNATIONAL JAMAICA, NY 471.00
1319 STERN'S/INV. PROC. CINCINNATI, OH 496.99
0044 STORAGE TECHNOLOGY CORPORATION DENVER, CO 5,297.16
A/P SUMMIT OFFICE SUPPLY 96.00
A/P SUN CHRONICLE ATTLEBORO, MA 36.00
1478 SUN COMPANY, INC. (R&M) MALVERN, PA 1,457.00
A/P SUNOCO LOUISVILLE, KY 1,069.00
A/P SUPPLY DEPOT PROVIDENCE, RI 1,370.00
0294 SWEZEYS PATCHOGUE, NY 170.30
0358 SYGMA NEW YORK, NY 570.00
A/P SYMANTEC CORP SAN FRANCISCO, CA 40.00
A/P TELXON CORP CLEVELAND, OH 589.00
A/P TOWN CRIER SWANSEA, MA 350.00
0902 TRADERS INTERNATIONAL PROVIDENCE, RI 7,726.05
A/P TRANS-LINK EXHIBITION SINGAPORE, 60.00
0751 TRUK-AWAY OF R.I. INC. WARWICK, RI 3,847.00
A/P UNITECH LOS ANGELES, CA 123.00
0362 UNITED CHAIN MFG. INC. PROVIDENCE, RI 613.00
A/P UNITED LOCK WARWICK, RI 450.00
A/P UNITED STATES FILTER PITTSBURGH, PA 1,589.00
0137 UNITED STATES PLASTIC CORP. LIMA, OH 33.00
0819 US COAST GUARD OTIS ANG BASE, MA 996.40
A/P USA BLUEBOOK NORTHBROOK, IL 234.00
1050 UTOG 2-WAY RADIO INC LONG ISLAND CITY, NY 8,641.00
A/P WALCHEM CORP HOLLISTON, MA 69.00
A/P WRIGHT LINE PITTSBURGH, PA 136.00
1059 YOUNG PRODUCTS, INC. SEOUL, KOREA, KO 26,051.96
0220 YOUR IMAGE PLUS INC NEW YORK, NY 333.00
0925 ZAK, STASIA PARK RIDGE, IL 932.39
</TABLE>
EXHIBIT D
TO
AMENDED AND RESTATED
REORGANIZATION PLAN OF REUNITED HOLDINGS, INC.
PBGC AGREEMENT
UNITED STATES BANKRUPTCY COURT CONFORMED COPY
SOUTHERN DISTRICT OF NEW YORK
- - - - - - - - - - - - - - - - - - - - x
In re :
UNITED MERCHANTS AND MANUFACTURERS, : Jointly Administered
INC. and VICTORIA CREATIONS, INC., Chapter 11 Case No.
: 96 B 40941 (AJG)
Debtors.
:
- - - - - - - - - - - - - - - - - - - - x
AGREEMENT TO COMPROMISE CLAIMS OF THE
PENSION BENEFIT GUARANTY CORPORATION
THIS AGREEMENT (the "Agreement") is made and entered into this
19th day of February, 1997, by and among United Merchants and
Manufacturers, Inc. ("UM&M"), Reunited Holdings, Inc.(1) ("RHI," and
together with UM&M, the "DIPs"), and the Pension Benefit Guaranty
Corporation ("PBGC").
W I T N E S S E T H:
WHEREAS, on February 22, 1996, UM&M and VCI each filed a
petition in the United States Bankruptcy Court for the Southern District
of New York (the "Bankruptcy Court") for reorganization relief under
Chapter 11 of the United States Bankruptcy Code, 11 U.S.C. ss.ss.
101-1330, as amended (the "Bankruptcy Code"); and
WHEREAS, the PBGC is a wholly-owned United States Government
corporation created under Title IV of the Employee Retirement Income
Security Act of 1974, 29 U.S.C. ss.ss. 1301-1461, as amended ("ERISA"),
which guarantees the payment of certain pension benefits upon
termination of a pension plan; and
- --------
1 Formerly Victoria Creations, Inc. ("VCI").
WHEREAS, effective May 28, 1942, UM&M established and adopted
the Pension Plan of United Merchants and Manufacturers, Inc. &
Subsidiaries (the "Pension Plan"), to provide pension benefits for
certain of its employees, which Pension Plan is covered by ERISA; and
WHEREAS, UM&M was the contributing sponsor and Plan
Administrator of the Pension Plan within the meaning of 29 U.S.C. ss.ss.
1002(16)(A), (B), 1301(a)(1), and (13); and
WHEREAS, pursuant to (a) the "Agreement for Appointment of
Trustee and Termination of Pension Plan" by and between UM&M and the
PBGC, dated August 6, 1996, and (b) 29 U.S.C. ss.ss. 1342(c) and 1348,
the Pension Plan was terminated and the PBGC was appointed trustee
thereof, effective January 31, 1996; and
WHEREAS, the PBGC has filed proofs of claim in UM&M's Chapter
11 case, asserting that UM&M owes the PBGC (i) $7,088,078 for unpaid
minimum funding contributions on a priority basis, (ii) $37,398,000 for
unfunded benefit liabilities on a general unsecured basis, and (iii) an
unliquidated amount for unpaid premiums, interest and penalties imposed
by 29 U.S.C. ss. 1307(a), of which the portion arising post-petition is
owed on a priority basis and the remainder on a general unsecured basis
(collectively, the "UM&M Claims"); and
WHEREAS, the PBGC has filed proofs of claim in RHI's Chapter
11 case, asserting that (a) RHI is a member of UM&M's controlled group
within the meaning of 29 U.S.C. ss. 1301(a)(13) and (14) and,
accordingly, is jointly and severally liable with UM&M for certain
liabilities arising from the Pension Plan, and (b) RHI owes to the PBGC
(i) $7,088,078 for unpaid minimum funding contributions on a priority
basis, (ii) $37,398,000 for unfunded benefit liabilities on a general
unsecured basis, and (iii) an unliquidated amount for unpaid premiums,
interest and penalties imposed by 29 U.S.C. ss. 1307(a), of which the
portion arising post-petition is owed on a priority basis and the
remainder on a general unsecured basis (collectively, the "RHI Claims"
and, together with the UM&M Claims, the "PBGC Claims"); and
WHEREAS, the DIPs and the PBGC dispute, among other things,
the nature, validity and amount of the PBGC Claims and the inclusion of
RHI as a member of UM&M's controlled group; and
WHEREAS, the PBGC has stated its intention to prosecute
vigorously the PBGC Claims and the DIPS have asserted that they will
litigate vigorously the validity, nature, and amount of the PBGC Claims;
and
WHEREAS, the DIPs have negotiated with the PBGC concerning the
PBGC Claims in an effort to resolve the parties' disputes regarding such
claims; and
WHEREAS, as a result of such negotiations, the DIPs and the
PBGC have reached an agreement which will allow for the compromise and
settlement of the PBGC Claims; and
WHEREAS, if the PBGC Claims are not compromised now, future
proceedings could be protracted and expensive, involve complex issues of
liability and/or damages, and involve substantial uncertainties and
risks inherent in litigation; and
WHEREAS, the DIPs and the creditors' committee appointed in
their cases have considered the benefit to the DIPs' estates and
creditors that will be received as a result of the compromise and
settlement of the PBGC Claims, particularly in light of the costs,
uncertainties, and risks of further litigation, and have concluded that
the settlement contained herein is (i) fair and equitable, (ii) a
reasonable resolution of the PBGC Claims, and (iii) in the best
interests of the DIPs, their creditors, and their estates; and
WHEREAS, on January 31, 1997, UM&M and RHI each filed a
reorganization plan (the "UM&M Plan" and the "RHI Plan" and, together,
the Plans") in their Chapter 11 cases; and
WHEREAS, this Agreement is contained in and made part of each
of the Plans;
NOW THEREFORE, in consideration of the promises herein, the
receipt and sufficiency of which are hereby acknowledged, and in full
satisfaction of the PBGC Claims, UM&M, RHI, and the PBGC, intending to
be legally bound, hereby agree as follows:
1. The UM&M Claims shall be allowed in UM&M's Chapter 11 case
as a single Class 1 Other Priority Claim, as that term is defined in the
UM&M Plan, in the aggregate amount of Seventeen Million Two Hundred
Thousand Dollars ($17,200,000.00) and, together with any and all claims
derivative thereof, shall be disallowed and expunged in all other
amounts and priorities (the "Allowed UM&M Claim").
2. On the UM&M Distribution Date,(2) or as soon thereafter as
practicable, the PBGC, in full satisfaction, settlement, release, and
discharge of the Allowed UM&M Claim, and in exchange for, the Allowed
UM&M Claim, shall receive $17,200,000.00 in principal amount of New
Subordinated Debentures, as that term is defined in the UM&M Plan.
3. The RHI Claims shall be allowed in RHI's Chapter 11 case as
a single Class 1 Other Priority Claim, as that term is defined in the
RHI Plan, in the aggregate amount of Four Hundred Thousand Dollars
($400,000.00) and, together with any and all claims derivative thereof,
shall be disallowed and expunged in all other amounts and priorities
(the "Allowed RHI Claim").
4. On the RHI Distribution Date,(3) or as soon thereafter as
practicable, the PBGC, in full satisfaction, settlement, release, and
discharge of the Allowed RHI Claim, and in exchange for, the Allowed RHI
Claim, shall receive $400,000.00 in cash.
5. The parties hereto represent and warrant to each other that
the signatories to this Agreement are authorized to execute this
Agreement; that each has full power and authority to enter into this
Agreement; that this Agreement is duly executed and delivered, and
constitutes a valid and binding agreement in accordance with its terms.
- --------
2 The UM&M Distribution Date is the date upon which the first
distributions are made to holders of Allowed Claims in accordance
with the terms of the UM&M Plan.
3 The RHI Distribution Date is the date upon which the first
distributions are made to holders of Allowed Claims in accordance
with the terms of the RHI Plan.
6. This Agreement constitutes the entire agreement between the
parties with respect to the subject matter hereof and supersedes all
prior agreements or understandings between the parties with respect to
the subject matter hereof.
7. This Agreement is expressly subject to and contingent upon
(i) Bankruptcy Court approval, and (ii) confirmation of the Plans. If
this Agreement is not approved by the Bankruptcy Court or the Plans are
not confirmed, neither this Agreement, its terms, nor any negotiations
in connection with this Agreement shall be, or in any way be construed
as or deemed to be, evidence or an admission by or against UM&M, RHI, or
the PBGC.
8. This Agreement shall be binding upon and shall inure to the
benefit of the representatives, successors, and assigns of the parties
hereto, including, without limitation, any trustee appointed in UM&M's
case or RHI's case under any chapter of the Bankruptcy Code.
9. Nothing contained herein shall constitute an admission of
liability, of any type or in any amount, on the part of UM&M, RHI or the
PBGC.
10. This Agreement may be executed and delivered in any number
of original or telecopied counterparts, each of which shall be deemed an
original, but which together shall constitute one and the same.
IN WITNESS WHEREOF, and in agreement herewith, the parties
have executed this Agreement as of the day and year first written above.
REUNITED HOLDINGS, INC.,
Debtor-in-Possession
2 Executive Drive
Suite 780
Fort Lee, New Jersey 07024
By: /s/ Uzi Ruskin
Uzi Ruskin
Its: Chairman of the Board
of Directors
UNITED MERCHANTS AND
MANUFACTURERS, INC.,
Debtor-in-Possession
2 Executive Drive
Suite 780
Fort Lee, New Jersey 07024
By: /s/ Uzi Ruskin
Uzi Ruskin
Its: Chairman of the Board
of Directors
THE PENSION BENEFIT
GUARANTY CORPORATION
1200 K Street, N.W.
Washington, DC 20006
By: /s/ Andrea E. Schneider
Andrea E. Schneider
Its: Corporate Finance and
Negotiation Department
Director
EXHIBIT E
TO
AMENDED AND RESTATED
REORGANIZATION PLAN OF REUNITED HOLDINGS, INC.
CIT AGREEMENT
This document is subject to modification and amendment prior
to completion as provided in Article XI of the Plan.
UNITED STATES BANKRUPTCY COURT
SOUTHERN DISTRICT OF NEW YORK
- - - - - - - - - - - - - - - - - - - - x
In re :
UNITED MERCHANTS AND MANUFACTURERS, : Jointly Administered
INC. and VICTORIA CREATIONS, INC., Chapter 11 Case No.
: 96 B 40941 (AJG)
Debtors.
:
- - - - - - - - - - - - - - - - - - - - x
AGREEMENT TO SETTLE CLAIM OF
THE CIT GROUP/COMMERCIAL SERVICES, INC.
THIS AGREEMENT (the "Agreement") is made and entered into this
___ day of __________, 1997, by and between Reunited Holdings, Inc.(1)
("RHI"), and The CIT Group/Commercial Services, Inc. ("CIT").
W I T N E S S E T H:
WHEREAS, on February 22, 1996, RHI, as VCI, filed a petition
for reorganization relief under Chapter 11 of the United States
Bankruptcy Code, 11 U.S.C. ss.ss. 101-1330, as amended (the "Bankruptcy
Code"); and
WHEREAS, RHI continues to operate its business and manage its
property as debtor-in-possession pursuant to sections 1107(a) and 1108
of the Bankruptcy Code; and
WHEREAS, on May 10, 1996, CIT filed a proof of claim (the "CIT
Claim") in RHI's case in the amount of $30,000,000, based on the
purported pre-petition guaranty by VCI of a 5% subordinated, unsecured,
contingent interest note, due June 30, 2019, given by United Merchants
and Manufacturers, Inc. ("UM&M"), RHI's approximately 80% parent, on
June 30, 1994;
WHEREAS, on June 21, 1996, RHI objected (the "RHI Objection")
to the CIT Claim on the ground that CIT released the purported guaranty
on June 30, 1994; and
WHEREAS, CIT has stated its intention to prosecute vigorously
the CIT Claim and RHI has asserted that it will litigate vigorously the
validity, nature, and amount of the CIT Claim; and
WHEREAS, RHI has negotiated with CIT concerning the CIT Claim
in an effort to resolve the parties' disputes regarding such claim; and
WHEREAS, as a result of such negotiations, RHI and CIT have
reached an agreement which will allow for the compromise and settlement
of the CIT Claim; and
WHEREAS, if the CIT Claim is not compromised now, future
proceedings could be protracted and expensive, involve complex issues of
liability and/or damages, and involve substantial uncertainties and
risks inherent in litigation; and
WHEREAS, RHI and the creditors' committee appointed in its
case has considered the benefit to RHI's estate and creditors that will
be received as a result of the compromise and settlement of the CIT
Claim, particularly in light of the costs, uncertainties, and risks of
further litigation, and have concluded that the settlement contained
herein is (i) fair and equitable, (ii) a reasonable resolution of the
CIT Claim, and (iii) in the best interests of RHI, its creditors, and
its estate; and
WHEREAS, on January 31, 1997, RHI filed a reorganization plan
(the "Plan") in its Chapter 11 case; and
WHEREAS, this Agreement is contained in and made part of the
Plan;
NOW THEREFORE, in consideration of the promises herein, the
receipt and sufficiency of which are hereby acknowledged, RHI and CIT,
intending to be legally bound, hereby agree as follows:
11. The CIT Claim shall be allowed as a Class 3 General
Unsecured Claim (as that term is defined in the Plan) only in such
amount as is required to yield a cash distribution to CIT under the
Plan, as confirmed by the United States Bankruptcy Court for the
Southern District of New York (the "Bankruptcy Court"), in the amount of
Twenty Five Thousand Dollars ($25,000.00), and shall be disallowed and
expunged in all other amounts and priorities (the "Allowed CIT Claim");
12. RHI shall, subject to the terms hereof, and in full
satisfaction, settlement, release, and discharge of, and in exchange
for, the Allowed CIT Claim, pay the sum of $25,000.00 to CIT on the
distribution date (the "Distribution Date") specified in the Plan for
initial distributions by RHI to all other holders of allowed Class 3
General Unsecured Claims in RHI's case;
13. On the Distribution Date, as a condition precedent to any
distribution to CIT, RHI and CIT shall enter into a general mutual
release in the form of the release annexed hereto as Exhibit A, to be
effective as of the Distribution Date;
14. The parties hereto represent and warrant to each other
that the signatories to this Agreement are authorized to execute this
Agreement; that each has full power and authority to enter into this
Agreement; that this Agreement is duly executed and delivered, and
constitutes a valid and binding agreement in accordance with its terms;
15. This Agreement constitutes the entire agreement between
the parties with respect to the subject matter hereof and supersedes all
prior agreements or understandings between the parties with respect to
the subject matter hereof;
16. This Agreement is expressly subject to and contingent upon
(i) Bankruptcy Court approval, and (ii) confirmation of the Plan. If
this Agreement is not approved by the Bankruptcy Court or the Plan is
not confirmed, neither this Agreement, its terms, nor any negotiations
in connection with this Agreement shall in any way be construed as or
deemed to be evidence or an admission by or against RHI or CIT;
17. This Agreement shall be binding upon and shall inure to
the benefit of the representatives, successors, and assigns of the
parties hereto, including, without limitation, any trustee appointed in
RHI's case under any chapter of the Bankruptcy Code;
18. Nothing contained herein shall constitute an admission of
liability on the part of RHI or CIT;
- --------
1 Formerly Victoria Creations, Inc. ("VCI").
19. This Agreement may be executed and delivered in any number
of original or telecopied counterparts, each of which shall be deemed an
original, but which together shall constitute one and the same
instrument.
IN WITNESS WHEREOF, and in agreement herewith, the parties
have executed this Agreement as of the day and year first written above.
THE CIT GROUP/COMMERCIAL SERVICES, INC.
1211 Avenue of the Americas
New York, New York 10036
By:___________________________
Its:
REUNITED HOLDINGS, INC.,
Debtor-in-Possession
2 Executive Drive
Suite 780
Fort Lee, New Jersey 07024
By:___________________________
Its:
Exhibit A
Mutual Release
KNOW ALL MEN BY THESE PRESENTS, that in consideration of the
promises and covenants set forth below and for other good and valuable
consideration, the receipt and sufficiency of which are hereby
acknowledged, the undersigned Reunited Holdings, Inc. ("RHI"), formerly
Victoria Creations, Inc., for itself and its affiliates, subsidiaries,
administrators, successors and assigns, hereby remises, releases and
forever discharges The CIT Group/Commercial Services, Inc. ("CIT"), and
its affiliates, subsidiaries, administrators, successors, assigns,
officers, directors, employees, representatives, authorized signers,
agents, accountants and attorneys, as well as their respective
affiliates, subsidiaries, administrators, successors and assigns, from
any and all claims, demands, liabilities, actions, causes of action,
offsets, recoupments, obligations, suits, debts, judgments and damages,
including costs, expenses and attorneys' fees of any kind whatsoever
that RHI now has or may have had against CIT, on behalf of itself or any
other entity from the beginning of time through the date hereof, whether
arising at law or in equity, whether direct or contingent, matured or
unmatured, liquidated or unliquidated, now known or unknown.
In consideration of the promises and covenants set forth above
and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the undersigned CIT, for
itself and its affiliates, subsidiaries, administrators, successors and
assigns, hereby remises, releases and forever discharges RHI and its
affiliates, subsidiaries, administrators, successors, assigns, officers,
directors, employees, representatives, authorized signers, agents,
accountants and attorneys, as well as their respective affiliates,
subsidiaries, administrators, successors and assigns, from any and all
claims, demands, liabilities, actions, causes of action, offsets,
recoupments, obligations, suits, debts, judgments and damages, including
costs, expenses and attorneys' fees of any kind whatsoever that CIT now
has or may have had against RHI on behalf of itself or any other person
or entity from the beginning of time through the date hereof, whether
arising at law or in equity, whether direct or contingent, matured or
unmatured, liquidated or unliquidated, now know or unknown, including,
but not limited to, RHI's obligations, if any, arising out of or in
connection with its purported guaranty of a 5% subordinated, unsecured,
contingent interest note, due June 30, 2019, given by United Merchants
and Manufacturers, Inc. ("UM&M"), RHI's approximately 80% parent, on
June 30, 1994 (the "UM&M Note"); provided, however, that nothing
contained herein shall in any manner abridge, limit, or otherwise affect
UM&M's obligations under the UM&M Note.
It is expressly understood and agreed that this Mutual Release
be, and is, a general release, and that the consideration for this
Mutual Release is not, and is not to be construed as, an admission of
liability on the part of any of the parties hereto or any of their
respective officers, directors, employees, agents, accountants, and
attorneys, or any of them, such liability being expressly denied by each
of the parties hereto.
The parties hereto represent and warrant that they have
entered into this Mutual Release voluntarily, with full opportunity to
obtain the advice of independent legal counsel in connection herewith,
and have read each and every paragraph of this Mutual Release, and
understand their rights and obligations hereunder.
This Mutual Release contains the entire agreement between the
parties hereto, and the terms hereof are contractual and not a mere
recital. If any provision of this Mutual Release is at any time held
illegal, invalid, or unenforceable, such illegality, invalidity, or
unenforceability will not affect any other provision hereof, and such
illegal, invalid, or unenforceable provision and the remainder of the
Mutual Release shall be deemed modified to the extent necessary to
render enforceable the remainder hereof.
The parties hereto stipulate that no adequate remedy at law
exists for any breach of the provisions of this Mutual Release, and that
it shall be specifically enforceable. This Mutual Release shall be
governed by and construed in accordance with the laws of the State of
New York without regard to the choice of law provisions thereof.
This Mutual Release may be executed in two or more
counterparts, each of which shall be deemed an original, but all of
which together shall constitute one and the same instrument.
Executed at Fort Lee, New Jersey on this _____ day of
____________, 1997.
REUNITED HOLDINGS, INC.,
2 Executive Drive
Suite 780
Fort Lee, New Jersey 07024
By:___________________________
[NAME]
Its: [TITLE]
THE CIT GROUP/COMMERCIAL SERVICES, INC.
1211 Avenue of the Americas
New York, New York 10036
By:___________________________
[NAME]
Its: [TITLE]
Executed at New York, New York on this day of ____________,
1997.
REUNITED HOLDINGS, INC.,
2 Executive Drive
Suite 780
Fort Lee, New Jersey 07024
By:___________________________
[NAME]
Its: [TITLE]
THE CIT GROUP/COMMERCIAL SERVICES, INC.
1211 Avenue of the Americas
New York, New York 10036
By:___________________________
[NAME]
Its: [TITLE]
CONFORMED COPY UNITED STATES BANKRUPTCY COURT
SOUTHERN DISTRICT OF NEW YORK
- - - - - - - - - - - - - - - - - - - - x
In re :
UNITED MERCHANTS AND MANUFACTURERS, : Jointly Administered
INC. and VICTORIA CREATIONS, INC., Chapter 11 Case No.
: 96 B 40941 (AJG)
Debtors.
:
- - - - - - - - - - - - - - - - - - - - x
FINDINGS OF FACT, CONCLUSIONS OF LAW, AND ORDER UNDER 11 U.S.C.
ss.ss. 1129(a) AND (b) AND FED. R. BANKR. P. 3020 CONFIRMING AMENDED
AND RESTATED REORGANIZATION PLAN OF REUNITED HOLDINGS, INC.
(FORMERLY VICTORIA CREATIONS, INC.), DATED FEBRUARY 25, 1997
TABLE OF CONTENTS
Page
RECITALS....................................................... 1
FINDINGS OF FACT AND CONCLUSIONS OF LAW........................ 3
1. Core Proceeding And Exclusive
Jurisdiction (28 U.S.C. ss.ss. 157(b)(2) and
1334(a))........................................... 3
2. Judicial Notice...................................... 3
3. Burden of Proof...................................... 4
4. Transmittal And Mailing Of Materials; Notice......... 4
5. Plan Compliance With Bankruptcy Code (11
U.S.C.ss.1129(a)(1))............................... 4
(a) Proper Classification (11 U.S.C.
ss.ss.1122, 1123(a)(1))....................... 4
(b) Specify Unimpaired Classes (11
U.S.C.ss.1123(a)(2)).......................... 5
(c) Specify Treatment of Impaired
Classes (11 U.S.C.ss.1123(a)(3)).............. 5
(d) No Discrimination (11 U.S.C.ss.
1123(a)(4))................................... 5
(e) Implementation Of The Plan (11
U.S.C.ss.1123(a)(5)).......................... 5
(f) Nonvoting Equity Securities (11
U.S.C.ss.1123(a)(6)).......................... 7
(g) Selection Of Officers And
Directors (11 U.S.C.ss.1123(a)(7))............ 7
(h) Additional Plan Provisions (11
U.S.C.ss. 1123(b))............................ 7
6. RHI's Compliance With The Bankruptcy
Code (11 U.S.C. ss. 1129(a)(2)).................... 8
7. Plan Proposed In Good Faith (11 U.S.C.
ss. 1129(a)(3)).................................... 9
8. Payments For Services Or Costs And
Expenses (11 U.S.C. ss. 1129(a)(4))................ 9
9. Directors, Officers, And Insiders (11
U.S.C. ss. 1129(a)(5))............................. 10
10. No Rate Changes (11 U.S.C. ss. 1129(a)(6)).......... 10
11. Best Interests Of Creditors Test (11
U.S.C. ss. 1129(a)(7))............................ 10
12. Acceptance By Certain Classes (11
U.S.C. ss. 1129(a)(8))............................ 10
13. Treatment Of Administrative And
Priority Claims (11 U.S.C. ss. 1129(a)(9))........ 11
14. Acceptance By Impaired Classes (11
U.S.C. ss. 1129(a)(10))........................... 11
15. Feasibility (11 U.S.C. ss. 1129(a)(11))............. 11
16. Payment Of Fees (11 U.S.C. ss.
1129(a)(12))...................................... 12
17. Continuation Of Retiree Benefits (11
U.S.C. ss. 1129(a)(13))........................... 12
18. Fair And Equitable; No Unfair
Discrimination (11 U.S.C. ss. 1129(b))............ 12
19. Principal Purpose Of Plan (11 U.S.C. ss.
1129(d)).......................................... 12
20. Settlements With The PBGC And CIT................... 13
21. Objections.......................................... 13
22. Technical Amendments................................ 13
23. Amendment of Article X.C.1.......................... 14
24. Amendment Of Article XIV.I.......................... 14
25. Exemption From Securities Laws (11
U.S.C. ss. 1145(a))............................... 14
26. Good Faith Solicitation; Good Faith
Sale Of Securities (11 U.S.C. ss. 1125(e))........ 15
27. Transfers Of Property............................... 16
28. No Liquidation...................................... 16
29. Conditions To Confirmation.......................... 17
30. Jurisdiction........................................ 17
31. Satisfaction Of Confirmation Requirements........... 17
DECREES........................................................ 17
32. Confirmation........................................ 17
33. Objections.......................................... 18
34. Provisions Of Plan And Order
Nonseverable And Mutually Dependent............... 18
35. Executory Contracts And Unexpired Leases............ 18
36. Release of Preference Actions....................... 19
37. Binding Effect; Discharge........................... 19
38. Injunctions; Stays.................................. 20
39. Continuation of Automatic Stay...................... 21
40. Exculpation and Limitation of Liability............. 21
41. Settlements With The PBGC And CIT................... 22
42. General Authorizations.............................. 22
43. Authorizations Under Rhode Island Law............... 24
44. Cancellation of Existing Agreements................. 24
45. No Issuance of New Shares........................... 24
46. Exemption From Securities Laws...................... 25
47. Exemption From Certain Taxes........................ 25
48. Plan Classification Controlling..................... 26
49. Administrative Claims Bar Date...................... 26
50. Rejection Damages Bar Date.......................... 27
51. Failure To Consummate Plan.......................... 27
52. Retention Of Jurisdiction........................... 28
53. Notice Of Entry Of Confirmation Order............... 28
54. Sufficiency of Notice of Confirmation............... 30
RECITALS
WHEREAS, Reunited Holdings, Inc., debtor-in-possession
("RHI"), filed its Amended And Restated Reorganization Plan Of Reunited
Holdings, Inc. (Formerly Victoria Creations, Inc.), dated February 25,
1997 (as modified herein, the "Plan"),1 and the Amended Disclosure
Statement With Respect To Amended And Restated Reorganization Plan Of
Reunited Holdings, Inc. (Formerly Victoria Creations, Inc., dated
February 25, 1997 (the "Disclosure Statement"); and
WHEREAS, on February 25, 1997, the court entered an order
(the "Solicitation Procedures Order") that, among other things, (i)
approved the Disclosure Statement under section 1125 of the Bankruptcy
Code and Fed. R. Bankr. P. 3017, (ii) fixed April 9, 1997 for the
hearing on confirmation of the Plan (the "Confirmation Hearing"), (iii)
approved the form and method of notice of the Confirmation Hearing (the
"Confirmation Hearing Notice"), and (iv) established certain procedures
for soliciting and tabulating votes with respect to the Plan; and
WHEREAS, the Confirmation Hearing Notice, the Disclosure
Statement, the Plan, and, as to Class 1, 2, 3, and 4 Claims, a ballot
and return envelope (such ballot and envelope being referred to as a
"Ballot"), were transmitted in accordance with Fed. R. Bankr. P. 3017(d)
and the Solicitation Procedures Order, as set forth in (i) the affidavit
of Diane Sayek of Registrar and Transfer Company, sworn to April 3,
1997, (ii) the affidavit of Edward D. Taffet, legal consultant for UM&M,
sworn to April 4, 1997, and (iii) the affidavit of Lawrence V. Gelber,
sworn to April 4, 1997; and
WHEREAS, RHI filed the certification of Arlene Moller,
Principal Clerk of the Publisher of The New York Times, dated March 17,
1997, demonstrating that the Confirmation Hearing Notice was published
in accordance with the Solicitation Procedures Order; and
WHEREAS, RHI filed the affidavit of Scott B. Davis, sworn to
April 7, 1997, attesting to and certifying the method and results of the
ballot tabulation for the Classes of Claims (Classes 1, 2, 3, and 4)
voting to accept or reject the Plan (the "Voting Report"); and
WHEREAS, 6 objections or purported objections to
confirmation of the Plan were timely filed and served and 2 objections
or purported objections were filed and served after the deadline for
objections; and
WHEREAS, on April 7, 1997, RHI filed (i) a memorandum of law
in support of confirmation of the Plan and in response to objections to
confirmation of the Plan (the "Confirmation Memorandum") and (ii) a
response to the renewed motion of Franklin Feldman for the appointment
of a Chapter 11 trustee and a memorandum of law in support thereof; and
WHEREAS, the Confirmation Hearing was held on April 9, 1997;
NOW, THEREFORE, based upon the court's review of the
affidavits and Voting Report previously filed with the court; and upon
the Confirmation Memorandum; and upon all of the evidence proffered or
adduced at, memoranda and objections filed in connection with, and
arguments of counsel made at, the Confirmation Hearing; and after due
deliberation thereon; and upon the entire record of this Chapter 11 case
(the "Chapter 11 Case");
FINDINGS OF FACT AND CONCLUSIONS OF LAW
IT IS HEREBY FOUND AND DETERMINED THAT2
1. Core Proceeding And Exclusive Jurisdiction (28 U.S.C.
ss.ss. 157(b)(2) and 1334(a)). Confirmation of the Plan is a core
proceeding under 28 U.S.C. ss. 157(b)(2). This court has exclusive
jurisdiction to determine whether the Plan complies with applicable
provisions of the Bankruptcy Code and should be confirmed.
2. Judicial Notice. This court takes judicial notice of the
docket of this case maintained by the Clerk of the Bankruptcy Court
and/or its duly-appointed agent, including, without limitation, all
pleadings and other documents filed, all orders entered, and all
evidence and argument made, proffered or adduced at, the hearing(s) on
(a) RHI's request for authorization to use cash collateral, held on
February 27 and March 5, 7, 8, 15, 26, and 29, 1996, (b) the motion of
Franklin Feldman, dated April 2, 1996, for the appointment of a Chapter
11 trustee, held on May 17, 1996, and (c) approval of the Disclosure
Statement, held on February 25, 1997.
3. Burden of Proof. RHI, as proponent of the Plan, has the
burden of proving the elements of sections 1129(a) and (b) by a
preponderance of the evidence.
4. Transmittal And Mailing Of Materials; Notice. The
Disclosure Statement, Plan, Ballots, and Confirmation Hearing Notice
were transmitted and served in compliance with the Solicitation
Procedures Order and the Federal Rules of Bankruptcy Procedure, and such
transmittal and service were adequate and sufficient. Adequate and
sufficient notice of the Confirmation Hearing and the other matters
described in the Solicitation Procedures Orders was given in compliance
with the Federal Rules of Bankruptcy Procedure and the Solicitation
Procedures Order, and no other or further notice is or shall be
required.
5. Plan Compliance With Bankruptcy Code (11 U.S.C. ss.
1129(a)(1)). The Plan complies with the applicable provisions of the
Bankruptcy Code, thereby satisfying section 1129(a)(1) of the Bankruptcy
Code.
(a) Proper Classification (11 U.S.C. ss.ss. 1122,
1123(a)(1)). In addition to Administrative Claims and Priority Tax
Claims, which need not be designated, the Plan designates five (5)
Classes of Claims and/or interests. The Claims and/or interests placed
in each Class are substantially similar to other Claims or interests, as
the case may be, in each such Class. Valid business, factual and legal
reasons exist for separately classifying the various Classes of Claims
and interests created under the Plan, and such Classes do not unfairly
discriminate between holders of Claims or interests. Thus, the Plan
satisfies sections 1122 and 1123(a)(1) of the Bankruptcy Code.
(b) Specify Unimpaired Classes (11 U.S.C. ss. 1123(a)(2)).
The Plan specifies that Class 5 is not impaired under the Plan, thereby
satisfying section 1123(a)(2) of the Bankruptcy Code.
(c) Specify Treatment of Impaired Classes (11 U.S.C. ss.
1123(a)(3)). Article III.B of the Plan designates Classes 1, 2, 3, and 4
as impaired and specifies the treatment of Claims in those Classes,
thereby satisfying section 1123(a)(3) of the Bankruptcy Code.
(d) No Discrimination (11 U.S.C. ss. 1123(a)(4)). The Plan
provides for the same treatment for each Claim or Interest in each
respective Class unless the holder of a particular Claim or Interest
has agreed to a less favorable treatment of such Claim or Interest,
thereby satisfying section 1123(a)(4) of the Bankruptcy Code.
(e) Implementation Of The Plan (11 U.S.C. ss. 1123(a)(5)).
The Plan provides adequate and proper means for implementation of the
Plan, thereby satisfying section 1123(a)(5) of the Bankruptcy Code.
Among other things:
i) The Plan provides for post-consummation financing
of Reorganized RHI through use of (a) cash generated from its own
operations and the post-consummation operations of Reunited
Reinsurance, Ltd., a wholly-owned subsidiary of RHI's
approximately 80% owner, United Merchants and Manufacturers,
Inc. ("UM&M"), and (b) payments received from UM&M. RHI has
determined that, together, the aforementioned sources of financing
will provided Reorganized RHI with liquidity sufficient to meet
its working capital needs.
ii) The Plan provides for the rejection of all
unexpired leases and executory contracts not previously assumed or
rejected, thus relieving Reorganized RHI of unnecessary and
burdensome obligations.
iii) The Plan provides for the discharge of
substantial pre-petition indebtedness in exchange for cash and the
securities and instruments described in Article IV.H of the Plan;
the continued corporate existence of Reorganized RHI; the
revesting of property of the estate in Reorganized RHI as
described in Article IV.D of the Plan; the creation of a
Distribution Reserve to resolve claims and make distributions, as
described in (a) Article X.C of the Plan and (b) Exhibit B to this
Confirmation Order; and the settlement of certain disputes and
claims between (x) RHI and the Pension Benefit Guaranty
Corporation ("PBGC") and (y) RHI and The CIT Group/Commercial
Services, Inc. ("CIT"), as described in Article XIII of the Plan.
(f) Nonvoting Equity Securities (11 U.S.C. ss. 1123(a)(6)).
Pursuant to Article IV.B of the Plan, Reorganized RHI's Amended Articles
of Incorporation, annexed to the Plan as Exhibit A, prohibits the
issuance of nonvoting equity securities, thereby satisfying section
1123(a)(6) of the Bankruptcy Code.
(g) Selection Of Officers And Directors (11 U.S.C. ss.
1123(a)(7)). The Plan and RHI's Amended Articles of Incorporation
contain only provisions that are consistent with the interests of
creditors and equity security holders and with public policy, with
respect to the manner of selection of officers and directors of
Reorganized RHI, thereby satisfying section 1123(a)(7) of the Bankruptcy
Code. Specifically, Article IV.C of the Plan provides that the directors
and officers of RHI before Consummation will serve as the initial
officers of Reorganized RHI after Consummation. Not later than 60 days
after the Consummation Date, or as soon thereafter as practicable,
Reorganized RHI will conduct a shareholder's meeting, at which time the
term of the current board of directors will expire and the shareholders
will elect a new board of directors for Reorganized RHI.
(h) Additional Plan Provisions (11 U.S.C. ss. 1123(b)). The
Plan's provisions are appropriate and not inconsistent with the
applicable provisions of the Bankruptcy Code.
6. RHI's Compliance With The Bankruptcy Code (11 U.S.C. ss.
1129(a)(2)). RHI has complied with the applicable provisions of the
Bankruptcy Code, thereby satisfying section 1129(a)(2) of the Bankruptcy
Code. Specifically:
(a) RHI, a Rhode Island corporation, is a proper debtor
under section 109 of the Bankruptcy Code and a proper proponent of the
Plan pursuant to section 1121(a) of the Bankruptcy Code.
(b) On February 22, 1996, RHI commenced this Chapter 11 Case
by filing a petition pursuant to section 301 of the Bankruptcy Code. The
court has jurisdiction over this Chapter 11 Case pursuant to 28 U.S.C.
ss.ss. 157 and 1334 and the "Standing Order of Referral of Cases to
Bankruptcy Judges," dated July 10, 1984 of District Judge Robert T.
Ward. Venue is proper in this district pursuant to 28 U.S.C. ss.ss. 1408
and 1409.
(c) RHI has complied with applicable provisions of the
Bankruptcy Code, except as otherwise provided or permitted by orders of
this court.
(d) RHI has complied with the applicable provisions of the
Bankruptcy Code, the Bankruptcy Rules, and the Solicitation Procedures
Order in transmitting the Plan, the Disclosure Statement, the Ballots,
and related documents and notices and in soliciting and tabulating votes
on the Plan.
- --------
1 Unless otherwise defined, capitalized terms used herein shall have
the meanings ascribed to them in the Plan. Any term used in the
Plan or herein that is not defined in the Plan or herein, but that
is used in the United States Bankruptcy Code, 11 U.S.C. ss.ss.
101-1330, as amended (the "Bankruptcy Code") or the Federal Rules
of Bankruptcy Procedure (the "Bankruptcy Rules"), shall have the
meaning assigned to that term in the Bankruptcy Code or the Bank-
ruptcy Rules. If there is any direct conflict between the Plan and
the Confirmation Order, the terms of the Confirmation Order shall
control.
2 When appropriate, findings of fact shall be construed as
conclusions of law and conclusions of law shall be construed as
findings of fact. See Fed. R. Bankr. P. 7052.
7. Plan Proposed In Good Faith (11 U.S.C. ss. 1129(a)(3)).
RHI has proposed the Plan in good faith and not (a) by any means
forbidden by law or (b) in violation of any fiduciary duty owed to
creditors or equity security holders, thereby satisfying section
1129(a)(3) of the Bankruptcy Code. In determining that the Plan has been
proposed in good faith, the court has examined the totality of the
circumstances surrounding the formulation of the Plan. The Chapter 11
Case was filed and the Plan was proposed with the legitimate and honest
purpose of reorganizing the business and financial affairs of RHI,
modifying its financially burdensome pre-petition capital structure,
reducing its debt and other obligations, and dealing with its
pre-petition debt defaults. Moreover, the extensive arm's-length
negotiations among RHI, its major creditor constituencies, and the
creditors' committee (the "Committee") with respect to the terms of the
Plan provide independent evidence of the good faith of RHI in proposing
the Plan.
8. Payments For Services Or Costs And Expenses (11 U.S.C.
ss. 1129(a)(4)). Any payment made or to be made by RHI, or by a person
issuing securities or acquiring property under the Plan, for services or
for costs and expenses in or in connection with the Chapter 11 Case, or
in connection with the Plan and incident to the Chapter 11 Case, has
been approved by, or is subject to the approval of, the court as
reasonable, thereby satisfying section 1129(a)(4) of the Bankruptcy
Code.
9. Directors, Officers, And Insiders (11 U.S.C. ss.
1129(a)(5)). RHI has complied with section 1129(a)(5) of the Bankruptcy
Code. Specifically, RHI properly and adequately disclosed the procedure
for determining the individuals that will serve, after Consummation of
the Plan, as directors or officers of Reorganized RHI and the identities
of any insiders who will be employed or retained by Reorganized RHI and
the nature of such person's compensation, to the extent known.
10. No Rate Changes (11 U.S.C. ss. 1129(a)(6)). No
governmental regulatory commission has jurisdiction over the rates
charged by RHI. Thus, section 1129(a)(6) of the Bankruptcy Code is not
applicable in this Chapter 11 Case.
11. Best Interests Of Creditors Test (11 U.S.C. ss.
1129(a)(7)). The Plan satisfies section 1129(a)(7) of the Bankruptcy
Code. The liquidation analysis annexed to the Disclosure Statement and
other evidence proffered or adduced at the Confirmation Hearing (a) are
persuasive and credible, (b) have not been controverted by other
evidence, and (c) establish that each holder of a Claim or interest in
an impaired Class either (i) has accepted the Plan or (ii) will receive
or retain under the Plan, on account of such Claim or interest, property
of a value, as of the effective date of the Plan, that is not less that
the amount that it would receive if RHI were liquidated under Chapter 7
of the Bankruptcy Code on such date.
12. Acceptance By Certain Classes (11 U.S.C. ss.
1129(a)(8)). Each populated class of Claims or interests (a) has
accepted the Plan or (b) is not impaired under the Plan. Classes 1, 3,
and 4 are the only populated impaired classes entitled to vote on the
Plan. Holders of Claims in Classes 1, 3, and 4 have voted to accept the
Plan, thereby satisfying the requirements of Section 1129(a)(8).
13. Treatment Of Administrative And Priority Claims (11
U.S.C. ss. 1129(a)(9)). The treatment of Administrative Claims and Other
Priority Claims under Articles III.A.1 and III.B.1 of the Plan satisfies
the requirements of section 1129(a)(9)(A) and (B) of the Bankruptcy
Code, and the treatment of Priority Tax Claims under Article III.A.2 of
the Plan satisfies the requirements of section 1129(a)(9)(C) of the
Bankruptcy Code.
14. Acceptance By Impaired Classes (11 U.S.C. ss.
1129(a)(10)). At least one Class of Claims (e.g., Class 3) that is
impaired under the Plan has accepted the Plan, determined without
including any acceptance of the Plan by any insider of RHI holding a
Claim in such Class, thereby satisfying section 1129(a)(10) of the
Bankruptcy Code.
15. Feasibility (11 U.S.C. ss. 1129(a)(11)). Based upon the
evidence proffered or adduced at or prior to the Confirmation Hearing,
reasonable prospects exist that Reorganized RHI will have adequate
capital to meet its ongoing obligations and operate its business and be
able to perform its obligations under the Plan. Thus, the Plan is
feasible and confirmation of the Plan is not likely to be followed by
the liquidation, or the need for further financial reorganization, of
RHI or any successor to RHI, thereby satisfying section 1129(a)(11) of
the Bankruptcy Code.
16. Payment Of Fees (11 U.S.C. ss. 1129(a)(12)). All fees
payable under 28 U.S.C. ss. 1930 have been paid or will be paid on the
Consummation Date pursuant to Article III.A.1 of the Plan, thereby
satisfying section 1129(a)(12) of the Bankruptcy Code.
17. Continuation Of Retiree Benefits (11 U.S.C. ss.
1129(a)(13)). RHI is not obligated to provide any "retiree benefits" as
defined in section 1114(a) of the Bankruptcy Code. Thus, section
1129(a)(13) of the Bankruptcy Code is inapplicable.
18. Fair And Equitable; No Unfair Discrimination (11 U.S.C.
ss. 1129(b)). Classes 1, 3, and 4 the only populated impaired classes
under the Plan, have voted to accept the Plan. No other class of
rejecting or deemed rejecting class of Claims or interests exists.
Section 1129(b) requires a finding by the court that the Plan does not
discriminate unfairly, and is fair and equitable, with respect to each
of the rejecting or deemed rejecting classes. No class of Claims or
interests is rejecting or deemed rejecting under the Plan; the Plan thus
satisfies section 1129(b) of the Bankruptcy Code.
19. Principal Purpose Of Plan (11 U.S.C. ss. 1129(d)). The
principal purpose of the Plan is not the avoidance of taxes or the
avoidance of the application of Section 5 of the Securities Act of
1933 (15 U.S.C. ss. 77e), and no governmental unit has requested that
the court not confirm the Plan.
20. Settlements With The PBGC And CIT. The settlements in
the Plan of certain claims and disputes between RHI and the PBGC and CIT
are fair and reasonable and in the best interests of RHI, its Estate,
and its creditors, considering the potential costs of litigation and the
uncertainty of the outcome of such disputes.
21. Objections. Each of the objections to Confirmation of
the Plan which has not been withdrawn, waived or settled, and all
reservations of rights included therein, are overruled. To the extent
that pleadings or letters filed by individuals or entities constitute
objections to Confirmation of the Plan and have not been withdrawn,
waived or settled, they are hereby overruled.
22. Technical Amendments. The modifications of the Plan
announced at the Confirmation Hearing and described in paragraphs 23 and
24 below constitute technical changes and do not materially adversely
affect any creditor, interest holder, or other party in interest. As
such, under Fed. R. Bankr. P. 3019, these modifications do not require
additional disclosure under section 1125 of the Bankruptcy Code or
resolicitation of acceptances or rejections of the Plan under section
1126 of the Bankruptcy Code, nor do they require that holders of Claims
or interests be afforded an opportunity to change previously cast
acceptances or rejections of the Plan.
23. Amendment of Article X.C.1. Article X.C.1 of the Plan is
hereby amended by deleting the fourth (4th) sentence thereof in its
entirety and replacing it with the following:
If RHI elects not to request such an estimation from the
Bankruptcy Court with respect to a Disputed Claim that is
liquidated, the Disbursing Agent shall withhold that amount for
such Disputed Claim in the Distribution Reserve as is calculated
in accordance with the formula (set forth in Exhibit B to the
Confirmation Order) developed and agreed to by RHI and the
Committee.
24. Amendment Of Article XIV.I. The text of Article XIV.I of
the Plan is hereby amended by deleting it in its entirety and replacing
it with the following text:
The exceptions to discharge specified in 11 U.S.C. ss. 523
shall not limit or abridge in any way RHI's entitle-ment to a
discharge of the pre-petition Claims of federal, state, and local
taxing authorities. To the extent that any Claim asserted by a
taxing authority seeks recovery of interest, a penalty, or a fine
against RHI, that portion of such claim, if Allowed, which
represents such interest, penalty or fine shall be disallowed;
provided, however, that the provisions of this second sentence of
Article XIV.I shall not apply to any Claim asserted against RHI by
the United States Department of Treasury - Internal Revenue
Service.
25. Exemption From Securities Laws (11 U.S.C. ss. 1145(a)).
To the extent, if any, that they constitute "securities," the issuance
and distribution of the New RHI Debentures has been duly authorized, and
when issued as provided in the Plan, will be validly issued. The offer
and sale of the New RHI Debentures is in exchange for Claims or
interests, or principally in exchange for Claims or interests and partly
for cash or property, within the meaning of section 1145(a)(1) of the
Bankruptcy Code. In addition, under Section 1145 of the Bankruptcy Code,
to the extent, if any, that the New RHI Debentures constitute
"securities," (I) the offering of such debentures is exempt and the
issuance and distribution of such debentures will be exempt from Section
5 of the Securities Act of 1933 and any state or local law requiring
registration prior to the offering, issuance, distribution or sale of
securities, and (II) the New RHI Debentures items will be freely
tradable by the recipients thereof, subject to the provisions of section
1145(b)(1) of the Bankruptcy Code relating to the definition of an
underwriter in Section 2(11) of the Securities Act of 1933, as amended,
and compliance with any rules and regulations of the Securities and
Exchange Commission, if any, applicable at the time of any future
transfer of such securities or instruments. Neither RHI nor any of its
agents or affiliates is an underwriter under section 2(11) of the
Securities Act or under section 1145(b)(1) of the Bankruptcy Code with
respect to the offer, sale, issuance or distribution of any securities
to be distributed under the Plan.
26. Good Faith Solicitation; Good Faith Sale Of Securities
(11 U.S.C. ss. 1125(e)). To the extent that RHI, the Committee, and
their agents, accountants, business consultants, representatives,
attorneys, and advisors (collectively, "Agents"), or any of them, have
solicited votes on the Plan, such solicitation was in good faith and in
compliance with the applicable provisions of the Bankruptcy Code, and
they are entitled to the protections afforded by section 1125(e) of the
Bankruptcy Code and the exculpation provisions set forth in Article
XIV.D of the Plan, as such provisions are modified by paragraph 40
below. In addition, to the extent that RHI, the Committee, and their
Agents, or any of them, participated in the offer, sale, issuance, and
purchase of the New RHI Debentures, they did so in good faith and in
compliance with the applicable provisions of the Bankruptcy Code, and
are entitled to the protections afforded by section 1125(e) of the
Bankruptcy Code and the exculpation provisions set forth in Article
XIV.D of the Plan, as such provisions are modified by paragraph 40
below.
27. Transfers Of Property. The transfers of property by RHI
(a) to Reorganized RHI (i) are or shall be legal, valid, and effective
transfers of property, (ii) vest or shall vest Reorganized RHI with good
title to such property free and clear of all liens, charges, Claims,
encumbrances, or interests, except as expressly provided in the Plan or
this Confirmation Order, (iii) do not and shall not constitute avoidable
transfers under the Bankruptcy Code or under applicable bankruptcy or
nonbankruptcy law, and (iv) do not and shall not subject Reorganized RHI
to any liability by reason of such transfer under the Bankruptcy Code or
under applicable nonbankruptcy law, including, without limitation, any
laws affecting successor or transferee liability, and (b) to holders of
Claims under the Plan are for good consideration and value and are in
the ordinary course of RHI's business.
28. No Liquidation. Because (a) the Plan does not provide
for the liquidation of all or substantially all of the property of RHI's
Estate and (b) Reorganized RHI will engage in business following
consummation of the Plan, section 1141(d)(3) of the Bankruptcy Code is
inapplicable.
29. Conditions To Confirmation. Each of the conditions to
confirmation set forth in Article IX.A of the Plan has been satisfied,
or may be satisfied or waived on or before the Confirmation Date.
30. Jurisdiction. The court may properly retain jurisdiction
over the matters set forth in Article XII of the Plan, including any
action or process commenced after the Confirmation Date that arose from
an act, omission, occurrence or transaction that RHI allegedly performed
on or before the Confirmation Date.
31. Satisfaction Of Confirmation Requirements. The Plan
satisfies the requirements for confirmation set forth in section 1129 of
the Bankruptcy Code.
DECREES
NOW THEREFORE, IT IS HEREBY ORDERED, ADJUDGED, AND DECREED
THAT,
32. Confirmation. The Plan, a copy of which is annexed
hereto as Exhibit A, as amended or otherwise modified herein or on the
record of the Confirmation Hearing, is hereby confirmed. All acceptances
and rejections previously cast for or against the Plan are hereby deemed
to constitute acceptances or rejections of the Plan as amended or
otherwise modified by this Confirmation Order or the record of the
Confirmation Hearing, and all parties in interest are authorized and
empowered, or enjoined, as the case may be, to act in accordance with
its terms. The terms of the Plan and the exhibits thereto are
incorporated by reference into and are an integral part of this
Confirmation Order.
33. Objections. All objections to confirmation of the Plan
that have not been withdrawn, waived, or settled, and all reservations
of rights included therein, are overruled on the merits. To the extent
that pleadings or letters filed by individuals or entities constitute
objections to Confirmation of the Plan and have not been withdrawn,
waived or settled, they are hereby overruled.
34. Provisions Of Plan And Order Nonseverable And
Mutually Dependent. The provisions of the Plan and this
Confirmation Order, including the findings of fact and conclu-
sions of law set forth herein, are nonseverable and mutually
dependent.
35. Executory Contracts And Unexpired Leases. All executory
contracts or unexpired leases assumed by RHI during the Chapter 11 Case
shall be assigned and transferred to, and remain in full force and
effect for the benefit of, Reorganized RHI or any assignee thereof,
notwithstanding any provision in such executory contract or unexpired
lease (including those described in sections 365(b)(2) and (f) of the
Bankruptcy Code) which prohibits such assignment or transfer or that
enables or requires termination of such executory contract or unexpired
lease. All other executory contracts and unexpired leases of RHI shall
be deemed automatically rejected on the Confirmation Date. The rejection
of all remaining executory contracts and unexpired leases is hereby
approved pursuant to sections 105(a) and 365(a) of the Bankruptcy Code.
36. Release of Preference Actions. The release by RHI of all
claims, rights of action, suits, and proceedings, whether known or
unknown, under section 547 of the Bankruptcy Code, as described in
Article VI.A of the Plan, is hereby approved.
37. Binding Effect; Discharge. Pursuant to section 1141 of
the Bankruptcy Code and subject to consummation of the Plan:
(a) Except as expressly provided in the Plan, on the
Consummation Date, the provisions of the Plan (including the exhibits
to, and all documents and agreements executed pursuant to, the Plan) and
the Confirmation Order shall be binding on (i) RHI, (ii) all holders of
Claims against and interests in RHI, whether or not impaired under the
Plan and whether or not, if impaired, such holders accepted the Plan,
(iii) each person or entity issuing securities or acquiring property
under the Plan, (iv) any other party in interest, (v) any person or
other entity making an appearance in this Chapter 11 Case, and (vi) each
of the foregoing's respective heirs, successors, assigns, trustees,
executors, administrators, affiliates, officers, directors, agents,
representatives, attorneys, beneficiaries, or guardians;
(b) Except as expressly provided in the Plan, RHI is
discharged effective on the Confirmation Date from any "debt" (as that
term is defined in section 101(12) of the Bankruptcy Code), and RHI's
liability in respect thereof is extinguished completely, whether reduced
to judgment or not, liquidated or unliquidated, contingent or
noncontingent, asserted or unasserted, fixed or unfixed, matured or
unmatured, disputed or undisputed, legal or equitable, or known or
unknown, or that arose from any agreement of RHI that has either been
assumed or rejected in the Chapter 11 Case or pursuant to the Plan, or
obligation of RHI incurred before Confirmation, or from any conduct of
RHI prior to Confirmation, or that otherwise arose before Confirmation,
including, without limitation, all interest, if any, on any such debts,
whether such interest accrued before or after the Petition Date.
(c) Except as expressly provided in the Plan, all property
of the Estate shall vest in Reorganized RHI on the Consummation Date,
and such property shall be free and clear of all Claims and interests of
creditors and equity security holders.
38. Injunctions; Stays. Except as otherwise provided in the
Plan, effective on the Confirmation Date, pursuant to section 524(a) of
the Bankruptcy Code:
(a) the commencement or continuation of any action or the
employment of process with respect to any Claim or debt discharged
hereunder, or any act to collect, recover, or offset any Claim or debt
discharged hereunder as a personal liability of RHI or Reorganized RHI,
or from properties of RHI or Reorganized RHI is forever enjoined; and
(b) any judgment at any time obtained is null and void to
the extent that such judgment is a determination of personal liability
of RHI with respect to any Claim or debt discharged under the Plan or
hereunder.
39. Continuation of Automatic Stay. Except as other wise
provided herein, all stays or injunctions provided for in the Chapter 11
Case under sections 105 or 362 of the Bankruptcy Code or otherwise, and
extant on the Confirmation Date, shall remain in full force and effect
until the Consummation Date.
40. Exculpation and Limitation of Liability. The provisions
of Article XIV.D of the Plan are hereby approved; provided, however,
that nothing in the Plan or this Confirmation Order shall effect a
release in favor of any person or entity described in Article XIV.D with
respect to (a) any act or omission occurring or arising prior to
February 22, 1996, or (b) any debt owed to (i) the United States
Government for any liability arising under the Internal Revenue Code,
any environmental laws or any criminal laws of the United States, (ii) a
state or local governmental agency or authority, or (iii) any person or
entity that did not receive actual or constructive notice of the Plan
and the Confirmation Hearing; provided, further, that nothing in the
Plan or this Confirmation Order shall enjoin or restrain the United
States Government from any act to enforce the Internal Revenue Code, any
environmental laws or any criminal laws of the United States; provided,
further, however, that nothing contained in this paragraph shall in any
way affect or limit the discharge granted to RHI under Chapter 11 of the
Bankruptcy Code.
41. Settlements With The PBGC And CIT. The Plan constitutes
a settlement between (a) RHI and the PBGC and (b) RHI and CIT. In
approving the PBGC Agreement, the CIT Agreement, and the settlements
contemplated thereby as fair and reasonable, the court has taken note of
and considered the evidence presented concerning the disputed PBGC
Claims and CIT Claim. The court has found that the settlements embodied
in the Plan will save RHI and its creditors the cost and expense of
litigating over the PBGC Claims and the CIT Claim, the outcome of which
is not guaranteed and the litigation of which is likely to expend
significant resources and require substantial time to adjudicate. The
court has also found that the settlements have facilitated the creation
and implementation of the Plan and benefit the creditors of RHI's
Estate.
42. General Authorizations. Pursuant to section 1142(b) of
the Bankruptcy Code, RHI and all other necessary parties, are authorized
and empowered to execute and deliver any instrument, security, agreement
or document, and perform any act, that is necessary, desirable, or
required to comply with the terms and conditions of the Plan and
consummation of the Plan, and are authorized and empowered, without
limitation, to:
(a) Issue, execute, deliver, file and record any documents,
court papers or pleadings, and to take any and all actions that are
necessary or desirable to implement, effect or consummate the
transactions contemplated by the Plan whether or not specifically
referred to in the Plan or related documents and without further
application to or order of this court, including but not limited to,
execution and delivery of the New RHI Debentures Indenture; provided,
however, that RHI may make such additional ministerial changes thereto
as RHI deems necessary, without notice and a hearing under section
1127(b) of the Bankruptcy Code or disclosure or resolicitation under
section 1127(c) of the Bankruptcy Code, as long as such changes do not
adversely affect the rights of any party in interest;
(b) pay on the Distribution Date, or as soon thereafter as
practicable, as provided in Article VII.A of the Plan, to holders of
Allowed Class 1, 3, and 4 Claims of RHI, the amounts, less the
Distribution Reserve, as provided in the Plan, and as calculated in
accordance with the formula described in Exhibit B hereto.
(c) issue or cause the issuance of the securities and other
instruments contemplated by the Plan, including the New RHI Debentures;
and
(d) file with the Rhode Island Secretary of State the
Articles of Amendment to the Articles of Incorporation of Reunited
Holdings, Inc., substantially in the form as Exhibit A to the Plan.
43. Authorizations Under Rhode Island Law. RHI and each of
its officers is authorized, empowered, and directed, to the extent
permitted by the Rhode Island General Laws, to take any and all actions
necessary or desirable to implement the transactions contemplated by the
Plan and this Confirmation Order, all without further corporate action
or action of the directors or stockholders of RHI.
44. Cancellation of Existing Agreements. On the Consummation
Date, except as otherwise provided for in the Plan, (i) any note, bond,
indenture, or other instrument or document evidencing or creating any
indebtedness or obligation of RHI, except such notes or other
instruments evidencing indebtedness or obligations of RHI that are
Reinstated under the Plan, shall be canceled, and (ii) the obligations
of RHI under any agreements, indentures or certificates of designations
governing any such note, bond, indenture or other instrument or document
evidencing or creating any indebtedness or obligation of RHI, except
such notes or other instruments evidencing indebtedness or obligations
of RHI that are Reinstated under the Plan, as the case may be, shall be
discharged.
45. No Issuance of New Shares. Pursuant to Article III.C of
the Plan, effective as of the Consummation Date, all equity interests in
RHI shall become equivalent and proportional interests in Reorganized
RHI without the issuance of new share certificates.
46. Exemption From Securities Laws. To the extent, if any,
that the New RHI Debentures constitute a "security," (a) section 5 of
the Securities Act of 1933 (the "Securities Act") and any state or local
law requiring registration for the offer or registration or licensing of
an issuer of, underwriter of, or broker or dealer in, a security do not
apply to the offer, sale, issuance or distribution of New RHI
Debentures, and (b) the New RHI Debentures will be freely tradable by
the recipients thereof, subject to the provisions of section 1145(b)(1)
of the Bankruptcy Code relating to the definition of an "underwriter" in
section 2(11) of the Securities Act, as amended, and section 1145(b) of
the Bankruptcy Code.
47. Exemption From Certain Taxes. Pursuant to section
1146(c) of the Bankruptcy Code:
(a) the issuance, transfer, or exchange of any security, or
the making, delivery, filing, or recording of any instrument of transfer
under the Plan, shall not be taxed under any law imposing a recording
tax, stamp tax, transfer tax, or similar tax;
(b) without limiting the generality of subpara-graph (a)
above, the making, delivery, filing, or recording at any time of any
deed, bill of sale, mortgage, leasehold mortgage, deed of trust,
leasehold deed of trust, memorandum of lease, notice of lease,
assignment, leasehold assignment, security agreement, financing
statement, or other instrument of absolute or collateral transfer
required by, or deemed necessary or desirable by RHI and any party to
any instruments, documents, or other agreements contemplated by or
related to Consummation of the Plan, shall not be so taxed; and
(c) notice of entry of this Confirmation Order in the form
approved by the court (i) shall have the effect of an order of the
court, (ii) shall constitute sufficient notice of the entry of this
Confirmation Order to all filing or recording officers, wherever located
and by whomever appointed, and (iii) shall be a recordable instrument
notwithstanding any contrary provision of nonbankruptcy law.
48. Plan Classification Controlling. The classification of
Claims and interests for purposes of payment of the distributions to be
made under the Plan is governed solely by the terms of the Plan. The
classifications set forth on the Ballots in connection with voting on
the Plan (a) were set forth thereon solely for purposes of voting on the
acceptance or rejection of the Plan and tabulation of such votes, (b) do
not necessarily represent and in no event shall be deemed to modify or
otherwise affect the actual classification of such Claims and interests
under the terms of the Plan for distribution purposes, and (c) may not
be relied upon by any creditor or equity security holder as actually
representing the actual classification of such Claims and interests
under the terms of the Plan for distribution purposes.
49. Administrative Claims Bar Date. Except as otherwise
ordered by the court, any final request for payment of an Administrative
Claim (other than Claims for Professional Fees and expenses of the
members of the Committee) must be filed no later than 30 days after the
Confirmation Date; provided, however, that each professional retained in
the Chapter 11 Case shall file its final application for payment of fees
and expenses on or before the forty-fifth (45th) day following the
Confirmation Date.
50. Rejection Damages Bar Date. The holder of any Claim
arising from the rejection of an executory contract or unexpired lease
under the Plan must file a proof of claim with respect to such Claim
within thirty (30) days after service of the notice of this Confirmation
Order, or be forever barred from asserting or pursuing such Claim, and
such Claim shall not be enforceable against RHI or its property.
51. Failure To Consummate Plan. In accordance with Article
XIV.F of the Plan, if the Consummation Date does not occur, then (a) the
Plan, (b) any settlement or compromise in connection with the Plan
(including the fixing or limiting to an amount certain any Claim or
Class of Claims), (c) assumption or rejection of executory contracts or
unexpired leases pursuant to the Plan, (d) any document or agreement
executed pursuant to the Plan, and (e) any actions authorized by this
order or any order in aid of consummation of the Plan shall be deemed
null and void. In such event, nothing contained in this Confirmation
Order, any order in aid of consummation of the Plan, or the Plan, and no
acts taken in preparation for consummation of the Plan, (x) shall be
deemed to constitute a waiver or release of any Claims or interests by
or against RHI or any other person or entity, to prejudice in any manner
the rights of RHI or any person or entity in any further proceedings
involving RHI, or to constitute an admission of any sort by RHI or any
other person or entity as to any issue, including, without limitation,
issues relating to the ownership by or the rights of RHI in all or any
part of the property owned, sold, held by or in the possession of RHI or
(y) shall be construed as a finding of fact or conclusion of law in
respect thereof.
52. Retention Of Jurisdiction. This court shall retain
jurisdiction in accordance with the terms of Article XII of the Plan,
the other provisions of this Confirmation Order, and section 1142 of the
Bankruptcy Code, including any action or process commenced after the
Confirmation Date that arose from any alleged act, omission, occurrence
or transaction of RHI on or before the Confirmation Date. Until this
Chapter 11 Case is closed, any party in interest may commence a
proceeding in this court in respect of any matter as to which
jurisdiction has been retained.
53. Notice Of Entry Of Confirmation Order. On or before the
tenth (10th) day following the Confirmation Date, pursuant to Fed. R.
Bankr. P. 2002(f)(7), 2002(k), and 3020(c), RHI shall (a) serve notice
of entry of this Confirmation Order in substantially the form of the
notice annexed hereto as Exhibit C, which form is hereby approved (the
"Notice of Confirmation"), by United States first class mail postage
prepaid, by hand or by overnight courier service to, without
duplication, upon (i) the United States Trustee, (ii) counsel for the
Committee, (iii) the Securities and Exchange Commission (Manhattan),
(iv) the District Director of Internal Revenue (Manhattan), (v) the
United States Attorney for the Southern District of New York, (vi) each
department, agency or instrumentality of the United States that
asserts a non-tax claim against RHI, (vii) Secretary of the Treasury,
(viii) entities that requested notice under Fed. R. Bankr. P. 2002, and
(ix) all creditors that have filed proofs of claim in this case or are
scheduled in RHI's schedules of assets and liabilities, dated April 29,
1996 (other than those scheduled at zero), and (b) cause the Notice of
Confirmation to be published in the national edition of The New York
Times; provided, however, that the Notice of Confirmation need not be
sent to holders of RHI's equity securities; and provided, further, that
notice need not be given or served under the Bankruptcy Code, the
Federal Rules of Bankruptcy Procedure or this Confirmation Order to any
person or entity to whom RHI mailed a notice of the hearing on the
Disclosure Statements or the various solicitation packages, but received
any of such notices returned marked "undeliverable as addressed," "moved
- - left no forwarding address" or "forward- ing order expired," or
similar reason, unless RHI has been informed in writing by such person
or entity of that person's or entity's new address.
54. Sufficiency of Notice of Confirmation. Notice of
Confirmation as set forth in paragraph 53 is adequate notice to all
creditors and equity security holders of RHI, known and unknown, and
satisfies the requirements of Fed. R. Bankr. P. 2002 and 3020(c), and no
other or further notice is or shall be necessary.
Dated: New York, New York
April 10, 1997
/s/ Arthur J. Gonzalez
United States Bankruptcy Judge
Exhibit B
Calculation of Disputed Claims Reserve
============================================================================
Step Calculation
- ----------------------------------------------------------------------------
1. Calculate estimated Divide (i) estimated cash available for
distribution per $1 of all distribution (after payment of priority,
Class 3 and Class 4 Claims administrative, PBGC, and CIT Claims) by (ii)
aggregate dollar amount of all allowed and
disputed Class 3 and Class 4 Claims (exclusive
of CIT Claim)
- -----------------------------------------------------------------------------
2. Calculate amount of A. Multiply (i) result obtained in Step 1
disputed claims reserve times (ii) aggregate dollar amount of disputed
without giving effect to Class 3 Claims
subordination of Class 4 B. Deposit amount obtained in Step 2.A into
Claims disputed claims reserve
- -----------------------------------------------------------------------------
3. Calculate additional A. Multiply (i) result obtained in Step 1
amount of disputed claims times (ii) the aggregate dollar amount of
reserve required to give Allowed Class 4 Claims
effect to subordination of B. Multiply (i) result obtained in Step 3.A
Class 4 Claims times (ii) ratio of (x) aggregate dollar amount
of disputed Claims of Trade Creditors to (y)
aggregate dollar amount of all Claims of Trade
Creditors
C. Deposit amount obtained in Step 3.B into
disputed claims reserve
==============================================================================
