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): June 24, 1997
MID-AMERICAN WASTE SYSTEMS, INC.
----------------------------------------------------------------------
(Exact Name of Registrant as Specified in Charter)
Delaware 1-10727 31-1161917
(State or Other Jurisdiction (Commission (I.R.S. Employer
of Incorporation) File Number) Identification No.)
1006 Walnut Street, Canal Winchester, Ohio 43110
- ---------------------------------------------------------------------------
(Address of Principal Executive Offices) (Zip Code)
Registrant's telephone number, including area code (614) 833-9155
N/A
(Former Name or Former Address, if Changed Since Last Report)
Item 5. Other Events.
On June 20, 1997, Mid-American Waste Systems, Inc., a Delaware
corporation (the "Company"), and the Company's subsidiaries filed a joint
liquidating plan of reorganization (the "Plan") and a disclosure statement
(the "Disclosure Statement") that relates to the Plan with the United
States Bankruptcy Court for the District of Delaware (the "Bankruptcy
Court"). Attached hereto is a copy of the Plan and the Disclosure
Statement.
The Company is prohibited from soliciting acceptances of the
Plan until the Bankruptcy Court has approved the Disclosure Statement. A
hearing to consider objections to and to approve the Disclosure Statement
is scheduled for July 23, 1997.
Item 7. Financial Statements, Pro Forma Financial
Information, and Exhibits.
(c) Exhibits
99.1 Joint Liquidating Plan of Reorganiza-
tion of the Company and the
Company's subsidiaries.
99.2 Disclosure Statement.
Signatures
Pursuant to the requirements of the Securities Exchange Act of
1934, the Company has duly caused this report to be signed on its behalf by
the undersigned hereunto duly authorized.
Date: June 24, 1997
MID-AMERICAN WASTE SYSTEMS, INC.
By: /s/ Gene A. Meredith
Gene A. Meredith
Chairman of the Board,
President, Secretary, and
Chief Executive Officer
EXHIBIT INDEX
Exhibits
99.1 Joint Liquidating Plan of Reorganization of
the Company and the Company's subsidiaries.
99.2 Disclosure Statement.
EXHIBIT 99.1
UNITED STATES BANKRUPTCY COURT
DISTRICT OF DELAWARE
- - - - - - - - - - - - - - - - - - - - - -x
In re :
: Jointly Administered
MID-AMERICAN WASTE SYSTEMS, INC., et al. : Chapter 11
: Case Nos.
: 97-104(PJW) through 97-108(PJW)
Debtors. : and 97-110(PJW) through
: 97-135(PJW)
- - - - - - - - - - - - - - - - - - - - - -x
JOINT LIQUIDATING PLAN OF REORGANIZATION OF
MID-AMERICAN WASTE SYSTEMS, INC. AND SUBSIDIARIES
SKADDEN, ARPS, SLATE, MEAGHER & FLOM LLP
Alesia Ranney-Marinelli
Lawrence V. Gelber
919 Third Avenue
New York, New York 10022-3897
(212) 735-3000
-and-
Anthony W. Clark
P.O. Box 636
One Rodney Square
Wilmington, Delaware 19899-0636
(302) 651-3000
Attorneys for Mid-American
Waste Systems, Inc., et al.,
Debtors-in-Possession
Dated: Wilmington, Delaware
June 20, 1997
TABLE OF CONTENTS
Page
INTRODUCTION
ARTICLE I.
DEFINITIONS, RULES OF INTERPRETATION,
AND COMPUTATION OF TIME
A. Scope Of Definitions; Rules of Construction................... 1
B. Definitions................................................... 1
C. Rules Of Interpretation....................................... 14
D. Computation Of Time........................................... 14
ARTICLE II.
CLASSIFICATION OF CLAIMS AND INTERESTS
A. Introduction.................................................. 14
B. Unclassified Claims........................................... 15
1. Administrative Claims............................. 15
2. Priority Tax Claims............................... 15
C. Unimpaired Classes Of Claims ................................. 15
1. Class 1: Other Priority Claims................... 15
2. Class 2: Convenience Claims...................... 15
D. Impaired Classes Of Claims ................................... 15
1. Class 3: Secured Claims.......................... 15
2. Class 4: Unsecured Claims........................ 17
3. Class 5: L/C Bank Contingent Claims.............. 17
4. Class 6: Fines, Penalties, and Punitive
Damages Claims.................................. 17
5. Class 7: Securities Claims....................... 18
6. Class 8: Intercompany Claims..................... 18
E. Impaired Class Of Interests .................................. 18
Class 9: Equity Securities .......................... 18
ARTICLE III.
TREATMENT OF CLAIMS AND INTERESTS
A. Unclassified Claims........................................... 18
1. Administrative Claims............................. 18
2. Priority Tax Claims............................... 18
B. Unimpaired Classes Of Claims ................................. 19
1. Class 1: Other Priority Claims................... 19
2. Class 2: Convenience Claims...................... 19
C. Impaired Classes Of Claims ................................... 19
1. Class 3: Secured Claims.......................... 19
2. Class 4: Unsecured Claims........................ 23
3. Class 5: L/C Bank Contingent Claims.............. 24
4. Class 6: Fines, Penalties, and Punitive
Damages Claims.................................. 24
5. Class 7: Securities Claims....................... 24
6. Class 8: Intercompany Claims.................... 24
D. Impaired Class Of Interests................................... 25
Class 9: Equity Securities ...................... 25
E. Special Provision Regarding Unimpaired Claims................. 25
ARTICLE IV.
MEANS FOR IMPLEMENTATION OF THE PLAN
A. Substantive Consolidation..................................... 25
1. Consolidation of the Chapter 11 Cases............. 25
2. Substantive Consolidation Order................... 25
B. Merger Of Subsidiaries Into MAWS.............................. 26
C. Continued Corporate Existence; Reorganized MAWS............... 26
D. Certificate Of Incorporation And By-laws...................... 26
E. Directors And Officers; Effectuating Documents;
Further Transactions........................................ 26
F. The Plan Administrator........................................ 26
1. Appointment....................................... 26
2. Rights, Powers and Duties of Reorganized MAWS
and the Plan Administrator............................ 26
3. Compensation of the Plan Administrator............ 27
4. Indemnification................................... 27
5. Insurance......................................... 28
6. Authority to Object to Claims and Interests
and to Settle Disputed Claims......................... 28
G. No Revesting Of Assets........................................ 29
H. Preservation Of Rights Of Action; Settlement of
Litigation Claims........................................... 29
1. Preservation of Rights Of Action.................. 29
2. Settlement of Litigation Claims................... 29
I. ADR........................................................... 29
J. Creditors' Committee And Plan Committee....................... 29
1. Dissolution of Creditors' Committee............... 29
2. Creation of Plan Committee; Procedures............ 29
3. Function and Duration; Compensation and
Expenses........................................ 30
4. Retention of Professionals........................ 30
5. Liability; Indemnification........................ 30
K. Cancellation Of Existing Securities And Agreements........... 30
L. Sources Of Cash For Plan Distributions........................ 31
M. Release Of Liens.............................................. 31
N. Special Provisions Regarding Insured Claims................... 31
O. Exemption From Certain Transfer Taxes......................... 31
ARTICLE V.
ACCEPTANCE OR REJECTION OF THE PLAN
A. Classes Entitled To Vote...................................... 32
B. Acceptance By Impaired Classes................................ 32
C. Cramdown...................................................... 32
ARTICLE VI.
PROVISIONS GOVERNING DISTRIBUTIONS
A. Distributions For Claims Allowed As Of The
Consummation Date........................................... 32
B. Interest On Claims............................................ 32
C. Distributions By Reorganized MAWS............................. 32
D. Delivery Of Distributions And Undeliverable Or
Unclaimed Distributions..................................... 33
1. Delivery of Distributions in General.............. 33
2. Undeliverable and Unclaimed Distributions......... 33
E. Record Date For Distributions................................. 33
F. Means Of Cash Payment......................................... 33
G. Withholding And Reporting Requirements........................ 34
H. Setoffs....................................................... 34
I. Surrender Of Cancelled Debt Instruments Or
Securities.................................................. 34
J. Fractional Dollars; De Minimis Distributions.................. 34
ARTICLE VII.
TREATMENT OF EXECUTORY CONTRACTS
AND UNEXPIRED LEASES
A. Rejected Contracts And Leases................................. 34
B. Bar To Rejection Damages...................................... 35
C. Assumed Contracts And Leases.................................. 35
ARTICLE VIII.
PROCEDURES FOR RESOLVING DISPUTED,
CONTINGENT AND UNLIQUIDATED CLAIMS
A. Objection Deadline; Prosecution Of Objections................. 35
B. No Distributions Pending Allowance............................ 36
C. Accounts; Escrows; Reserves................................... 36
D. Reserve Amount; Estimated Amount.............................. 36
1. Disputed Claims Reserve........................... 36
2. Administrative Claims Reserve..................... 36
3. L/C Bank Contingent Claims Reserve................ 36
E. Distributions After Allowance................................. 36
ARTICLE IX.
CONDITIONS PRECEDENT TO CONFIRMATION
AND CONSUMMATION OF THE PLAN
A. Conditions To Confirmation.................................... 37
B. Conditions To Consummation Date............................... 37
C. Waiver Of Conditions.......................................... 38
ARTICLE X.
MODIFICATIONS AND AMENDMENTS
ARTICLE XI.
RETENTION OF JURISDICTION
ARTICLE XII.
EFFECTS OF CONFIRMATION
A. Binding Effect................................................ 39
B. Waiver Of Claims; Covenant Not To Sue ........................ 40
C. Exculpation And Limitation Of Liability....................... 40
D. Injunction.................................................... 40
E. Termination Of Subordination Rights; Settlement Of
Related Claims And Controversies............................ 40
F. Continuation of ADR........................................... 41
ARTICLE XIII.
COMPROMISES AND SETTLEMENTS
ARTICLE XIV.
MISCELLANEOUS PROVISIONS
A. Bar Dates For Certain Claims.................................. 41
1. Administrative Claims ............................ 41
2. Professional Fee Claims; Substantial
Contribution Claims............................. 42
B. Payment Of Statutory Fees..................................... 42
C. Revocation, Withdrawal Or Non-Consummation.................... 42
D. Severability Of Plan Provisions............................... 42
E. Successors And Assigns........................................ 42
F. Service Of Documents.......................................... 43
G. Term Of Injunctions Or Stays.................................. 43
H. Consummation Of Plan.......................................... 43
I. Governing Law................................................. 44
TABLE OF EXHIBITS
Exhibit A Plan Administrator Agreement
Exhibit B Schedule of Executory Contracts and Unexpired Leases
to be Assumed and Assigned
Exhibit C Schedule of Causes of Action to be Retained
Exhibit D Identified Officers and Directors
Exhibit E Subsidiaries of MAWS
INTRODUCTION
Mid-American Waste Systems, Inc. and its subsidiaries, debtors
and debtors-in-possession (collectively, the "Debtors"), hereby proposes
the following joint liquidating plan of reorganization (the "Plan") for the
resolution of the Debtors' outstanding creditor claims and equity
interests. Reference is made to the Disclosure Statement (as that term is
defined herein), distributed contemporaneously herewith, for a discussion
of the Debtors' history, businesses, properties, and operations, a summary
and analysis of the Plan, and certain related matters including, among
others, the proposed substantive consolidation of the Debtors' cases. The
Debtors are proponents of this Plan within the meaning of section 1129 of
the Bankruptcy Code (as that term is defined herein). Subject to certain
restrictions and requirements set forth in section 1127 of the Bankruptcy
Code and Fed. R. Bankr. P. 3019, the Debtors reserve the right to alter,
amend, modify, revoke or withdraw this Plan prior to its substantial
consummation.
ARTICLE I.
DEFINITIONS, RULES OF INTERPRETATION,
AND COMPUTATION OF TIME
A. Scope Of Definitions; Rules of Construction
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 this Plan.
Any term used in this 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) or 1114(e)(2)
of the Bankruptcy Code and entitled to priority pursuant to section
507(a)(1) of the Bankruptcy Code, including, but not limited to, (a) the
actual, necessary costs and expenses, incurred after the Petition Date, of
preserving the Estates and operating the businesses of the Debtors,
including wages, salaries, or commissions for services rendered after the
commencement of the Chapter 11 Cases, (b) Professional Fees, (c) all fees
and charges assessed against the Estate under chapter 123 of title 28,
United States Code, and (d) all Allowed Claims that are entitled to be
treated as Administrative Claims pursuant to a Final Order of the
Bankruptcy Court under section 546(c)(2)(A)of the Bankruptcy Code.
1.2 "Administrative Claims Reserve" means the reserve
maintained by Reorganized MAWS to pay Administrative Claims, Priority Tax
Claims, and Other Priority Claims that first become Allowed Claims after
the Consummation Date.
1.3 "ADR" means the alternative dispute resolution procedure
that shall be approved by the Bankruptcy Court prior to the Consummation
Date for the liquidation of Damage Claims.
1.4 "Allowed Claim" means a Claim or any portion thereof (a)
that has been allowed by a Final Order, (b) as to which, on or by the
Consummation Date, (i) no proof of claim has been filed with the Bankruptcy
Court and (ii) the liquidated and non-contingent amount of which is
Scheduled, other than a Claim that is Scheduled at zero or as disputed, or
(c) for which a proof of claim in a liquidated amount 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 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 (d) that is expressly
allowed in a liquidated amount in the Plan.
1.5 "Allowed Class . . . Claim" means an Allowed Claim in the
particular Class described.
1.6 "Amended Certificate of Incorporation and By-laws" means
Reorganized MAWS' certificate of incorporation and by-laws in effect under
the laws of the State of Delaware, as amended by the Plan.
1.7 "Arnold" means the Estate of Tom G. Arnold.
1.8 "Arnold Collateral" means the real property located in
Gwinnett County, Georgia, in which MAWS and MAWS of Georgia granted
security interests or liens to secure MAWS' and MAWS of Georgia's
obligations under the Arnold Notes, or the fair market value of the
proceeds of the sale thereof, to the extent that such property or proceeds,
as of the Consummation Date, remain encumbered by valid, enforceable and
perfected security interests or liens of Arnold in MAWS' and MAWS of
Georgia's Estates' interest in such property or proceeds that are not
avoidable under the Bankruptcy Code or applicable nonbankruptcy law.
1.9 "Arnold Notes" means the (a) purchase money real estate
note, dated August 1, 1989, between Button Gwinnett Landfill, Inc., as
buyer, and Tom G. Arnold, as seller, and (b) purchase money real estate
note, dated October 1, 1987, between Button Gwinnett Landfill, Inc., as
buyer, and Tom G. Arnold, as seller, and all agreements and other documents
relating thereto.
1.10 "Asset Purchase Agreement" means the asset purchase
agreement, dated as of January 21, 1997, as subsequently amended, and
related Company Disclosure Letter and Purchaser Disclosure Letter, between
certain of the Debtors as sellers, and USA Waste Services, Inc. and its
designated acquisition subsidiaries, as purchasers.
1.11 "Available Cash" means all Cash held by Reorganized MAWS
as of the date ten (10) Business Days prior to the date of any
distribution, other than, (i) with respect to distributions to be made on
the Distribution Date, (a) Cash to be distributed on the Distribution Date
to holders of Administrative Claims, Allowed Priority Tax Claims, Allowed
Other Priority Claims, Allowed Secured Claims, and Allowed Convenience
Claims that became Allowed Claims on or before the Consummation Date, and
(b) Restricted Cash and (ii) with respect to distributions to be made on
any Periodic Distribution Date, Restricted Cash.
1.12 "Ballots" means each of the ballot forms distributed with
the Disclosure Statement to holders of Impaired Claims entitled to vote
under Article II hereof in connection with the solicitation of acceptances
of the Plan.
1.13 "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.
1.14 "Bankruptcy Court" means the United States Bankruptcy
Court for the District of Delaware or such other court as may have
jurisdiction over the Chapter 11 Cases.
1.15 "Bankruptcy Rules" means, collectively, 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 Cases or proceedings therein, and the Local Rules of the Bankruptcy
Court, as applicable to the Chapter 11 Cases or proceedings therein, as the
case may be.
1.16 "Barr" means William M. Barr, P.O. Box 566, Kerr, Ohio.
1.17 "Barr Collateral" means the real property located in
Morgan Township, Gallia County, Ohio in which Mound Landfill granted Barr
security interests or liens to secure Mound Landfill's obligations under
the Barr Note, or the fair market value of the proceeds of the sale
thereof, to the extent that such property or proceeds, as of the
Consummation Date, remain encumbered by valid, enforceable and perfected
security interests or liens of Barr in Mound Landfill's Estate's interest
in such property or proceeds that are not avoidable under the Bankruptcy
Code or applicable nonbankruptcy law.
1.18 "Barr Note" means the mortgage note, dated September 9,
1991, between Mound Landfill, as buyer, and Barr, as seller, and all
agreements and other documents relating thereto.
1.19 "Business Day" means any day, excluding Saturdays, Sundays
or "legal holidays" (as defined in Fed. R. Bankr. P. 9006(a)), on which
commercial banks are open for business in New York, New York.
1.20 "Campbell" means, together, Donald R. Campbell and Barbara
Campbell, RD #2, Irwin, Pennsylvania.
1.21 "Campbell Collateral" means the real property located in
Penn Township, Westmoreland County, Pennsylvania in which National Waste
granted Campbell security interests or liens to secure National Waste's
obligations under the Campbell Note, or the fair market value of the
proceeds of the sale thereof, to the extent that such property or proceeds,
as of the Consummation Date, remain encumbered by valid, enforceable and
perfected security interests or liens of Campbell in National Waste's
Estate's interest in such property or proceeds that are not avoidable under
the Bankruptcy Code or applicable nonbankruptcy law.
1.22 "Campbell Note" means the mortgage note, dated August 7,
1996, between National Waste, as buyer, and Campbell, as seller, and all
agreements and other documents relating thereto.
1.23 "Cash" means legal tender of the United States or
equivalents thereof.
1.24 "Caterpillar" means Caterpillar Financial Services
Corporation, P.O. Box 60197, St. Louis, Missouri.
1.25 "Caterpillar Collateral" means the equipment described in
(a) the installment sale contract and security agreement, dated May 16,
1995, in which MAWS granted Blanchard Machinery Company, assignor to
Caterpillar, security interests or liens to secure MAWS' obligations
thereunder, and (b) the finance lease, dated as of September 21, 1994, in
which MAWS granted Caterpillar security interests or liens to secure MAWS'
obligations thereunder, or the fair market value of the proceeds of the
sale of such equipment, to the extent that such equipment or proceeds, as
of the Consummation Date, remain encumbered by valid, enforceable and
perfected security interests or liens of Caterpillar in MAWS' Estate's
interest in such property that are not avoidable under the Bankruptcy Code
or applicable nonbankruptcy law.
1.26 "Caterpillar Contract" means the installment sales
contract and security agreement, dated May 16, 1995, between MAWS (d/b/a
Lee County Regional Landfill & Disposal Facility), as borrower, and
Blanchard Machinery Company, as lender, as such installment sales contract
was assigned to Caterpillar, effective May 16, 1995, and all agreements and
other documents relating thereto.
1.27 "Caterpillar Lease" means the finance lease and security
agreement, dated as of September 21, 1994, between MAWS, as lessee, and
Caterpillar as lessor, and all agreements and other documents relating
thereto.
1.28 "Chapter 11 Case(s)" means, individually, the Chapter 11
case of any of MAWS or the Subsidiaries, and, collectively, the Chapter 11
cases of MAWS and the Subsidiaries.
1.29 "Claim" means a claim against any Debtor, whether or not
asserted, as defined in section 101(5) of the Bankruptcy Code.
1.30 "Class" means a category of holders of Claims or
Interests, as described in Article II below.
1.31 "Confirmation" means entry by the Bankruptcy Court of the
Confirmation Order.
1.32 "Confirmation Date" means the date of entry by the
Bankruptcy Court of the Confirmation Order.
1.33 "Confirmation Hearing" means the hearing to consider
confirmation of the Plan under section 1128 of the Bankruptcy Code.
1.34 "Confirmation Order" means the order entered by the
Bankruptcy Court confirming the Plan.
1.35 "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 and is the
effective date of the Plan.
1.36 "Convenience Claim" means a Claim that would otherwise be
classified as a Class 4 Unsecured Claim, other than a Claim arising out of
or in connection with the ownership of Senior Notes or Subordinated Notes,
that is (a) $2,000 or less or (b) more than $2,000 if the holder has
elected, on a timely cast Ballot, to accept $2,000 in Cash in full
satisfaction, discharge, and release of such Claim.
1.37 "Credit Agreement" means the Credit Agreement dated as of
May 24, 1994, as subsequently amended, supplemented, or otherwise modified,
among certain of the Debtors and the several lenders from time to time
parties to the Credit Agreement.
1.38 "Creditors' Committee" means the official committee of
unsecured creditors appointed by the United States Trustee in these Chapter
11 Cases on February 4, 1997, as constituted from time to time.
1.39 "Cure" means the distribution within a reasonable period
of time following the Consummation Date of Cash, or such other property as
may be agreed upon by the parties or ordered by the Bankruptcy Court, 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 bankruptcy law.
1.40 "Damage Claim" means a Claim (i) for personal injury or
property damage allegedly caused by the tortious acts of any Debtor or its
employee, agent or representative or (ii) under any workers' compensation
laws.
1.41 "Debtor(s)" means, individually, MAWS or any of the
Subsidiaries and, collectively, MAWS and the Subsidiaries.
1.42 "Debt Securities" means, collectively, the Senior Notes
and the Subordinated Notes.
1.43 "Debt Securities Claim" means a Securities Claim arising
from a Debt Security.
1.44 "Delaware General Corporation Law" means title 8 of the
Delaware Code, in effect as of the date hereof.
1.45 "Disallowed Claim" means a Claim, or any portion thereof,
that (a) has been disallowed by a Final Order, (b) is Scheduled at zero or
as contingent, disputed, or unliquidated and as to which a proof of claim
bar date has been established but 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 otherwise
deemed timely filed under applicable law, (c) is not Scheduled and as to
which a proof of claim bar date has been established but 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
otherwise deemed timely filed under applicable law, or (d) is the subject
of an objection filed by the Debtors with the Bankruptcy Court and which
objection has not been withdrawn or overruled by a Final Order of the
Bankruptcy Court.
1.46 "Disbursing Agent" means Reorganized MAWS or any party
designated by Reorganized MAWS, in consultation with the Creditors'
Committee, to serve as a disbursing agent under the Plan.
1.47 "Disclosure Statement" means the written disclosure
statement that relates to the Plan, as approved by the Bankruptcy Court
pursuant to section 1125 of the Bankruptcy Code and Fed. R. Bankr. P. 3017,
as such disclosure statement may be amended, modified, or supplemented from
time to time.
1.48 "Disputed Claim" means a Claim, or any portion thereof,
that is neither an Allowed Claim nor a Disallowed Claim, including, but not
limited to, Claims that (a) (i) have not been Scheduled by a Debtor or (ii)
have been Scheduled at zero or as contingent, unliquidated or disputed, (b)
are the subject of an objection or request for estimation in the Bankruptcy
Court by a Debtor, and (c) the allowance or disallowance of which is not
yet the subject of a Final Order.
1.49 "Disputed Claims Reserve" means the reserve established
and maintained by Reorganized MAWS into which Reorganized MAWS shall
deposit the amount of Cash or other property that would have been
distributed by Reorganized MAWS 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 amount to be estimated by the Bankruptcy Court or
agreed upon by the Debtors and the Creditors' Committee as sufficient to
satisfy such unliquidated Claim upon such Claim's (x) allowance, (y)
estimation for purposes of allowance, or (z) liquidation, pending the
occurrence of such estimation or liquidation.
1.50 "Distribution Date" means the date, occurring as soon as
practicable after the Consummation Date, upon which distributions from
Reorganized MAWS are made to holders of Allowed Class 1, 2, 3, and 4
Claims; provided, however, that in no event shall the Distribution Date
occur sooner than five (5) Business Days or later than fifteen (15)
Business Days after the Consummation Date; provided further, however, that
distributions to holders of Allowed Class 4 Unsecured Claims in Group 4-A
may commence on the Consummation Date in accordance with the terms of the
Plan Administrator Agreement.
1.51 "8.85% Senior Notes" means the 8.85% Senior Notes, Series
A, Due May 1, 1999 of MAWS and the Subsidiaries, issued and outstanding
under the Senior Notes Agreement
1.52 "Elmore" means Mary Louise Elmore, Highway 15 South, Box
1706, Bishopville, South Carolina.
1.53 "Elmore Collateral" means the real property located in Lee
County, South Carolina in which MAWS of South Carolina granted Elmore
security interests or liens to secure MAWS of South Carolina's obligations
under the Elmore Note, or the fair market value of the proceeds of the sale
thereof, to the extent that such property or proceeds, as of the
Consummation Date, remain encumbered by valid, enforceable and perfected
security interests or liens of Elmore in MAWS of South Carolina's Estate's
interest in such property or proceeds that are not avoidable under the
Bankruptcy Code or applicable nonbankruptcy law.
1.54 "Elmore Note" means the mortgage note, dated September 14,
1993, between MAWS of South Carolina, as buyer, and Elmore, as seller, and
all agreements and other documents relating thereto.
1.55 "Equity Securities" means, collectively, the Old Common
And Other Stock, the Old Options and the Old Warrants.
1.56 "Equity Securities Claim" means a Securities Claim arising
from any Equity Security.
1.57 "ERC" means ERC General Contracting Services, Inc., 13330
West Colonial Drive, Suite 140, Winter Haven, Florida.
1.58 "ERC Contract" means the construction contract, dated July
25, 1996, between Speedway and ERC, and all agreements and other documents
relating thereto.
1.59 "ERC Escrow" means the escrow account at Huntington Banks,
Account No. 04895116969, established pursuant to the stipulation and order
between the Debtors and ERC, dated March 6, 1997, and approved by the
Bankruptcy Court on March 7, 1997.
1.60 "Escrow Orders" means orders of the Bankruptcy Court
ordering or approving the establishment of escrows, segregated accounts
(whether or not physically segregated or merely segregated on the Debtors'
books and records) or other funds arrangements for the benefit of the
holder of a Claim, including, without limitation, the ERC Escrow and the
Palladino Group Escrow.
1.61 "Estate(s)" means, individually, the estate of MAWS or any
of the Subsidiaries, and, collectively, the estates of MAWS and the
Subsidiaries, created under section 541 of the Bankruptcy Code.
1.62 "Existing Securities" means, together, the Equity
Securities and the Debt Securities.
1.63 "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.
1.64 "Final Order" means an order or judgment of the Bankruptcy
Court, or other court of competent jurisdiction, as entered on the docket
in any Chapter 11 Case, 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 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.
1.65 "General Unsecured Claim" means a Claim that is not an
Administrative Claim; Priority Tax Claim; Other Priority Claim; Convenience
Claim; Secured Claim; Senior Note Claim; Subordinated Note Claim; L/C Bank
Contingent Claim; Fines, Penalties, and Punitive Damages Claim; Securities
Claim; or Intercompany Claim.
1.66 "Identified Officers and Directors" means, collectively,
those officers and directors of the Debtors listed in Exhibit D hereto.
1.67 "Illinois EPA" means the Illinois Environmental Protection
Agency, 2200 Churchill Road, Springfield, Illinois.
1.68 "Illinois EPA Collateral" means the funds on deposit at
Key Trust Company of Ohio, N.A., Account No. 32847100, in the amount of
$1,323,217.17 as of June 1, 1997.
1.69 "Impaired . . ." means, when used with reference to a
Claim or Interest, a Claim or Interest that is impaired within the meaning
of section 1124 of the Bankruptcy Code.
1.70 "INA" means, together, Insurance Company of North America
and Pacific Employers Insurance Company, 1601 Chestnut Street,
Philadelphia, Pennsylvania.
1.71 "INA Agreements" means, collectively (a) the insurance
policies issued to MAWS by INA and denominated by policy numbers SCF C2
813022-3, BCF 012276, HDO G1 288681-0, WLR C3 821264-3, CCS C2 838335-6,
ISA 001993, and HDO G1 288858-2 and (b) the program agreements between MAWS
and INA denominated as the Paid Loss Retro, High Deductible, Paid Loss
Premium Collection, and Workers Compensation Deductible Funding Agreements.
1.72 "INA Collateral" means the funds on deposit with INA in a
Paid Loss Deposit Fund, in the amount of $205,100 as of May 23, 1997.
1.73 "Initial Group 4-A Distribution Amount" means the amount
of Cash to be distributed to all holders of Allowed Group 4-A Claims on the
Distribution Date, which shall be calculated as the sum of (a) the Pro Rata
share of Available Cash allocated to holders of Allowed Class 4 Unsecured
Claims in Group 4-A plus (b) the Subordination Redistribution Amount;
provided, however, that if the Pro Rata share of Available Cash allocated
to holders of Allowed Class 4 Unsecured Claims in Group 4-B on the
Distribution Date is less than or equal to the Subordination Redistribution
Amount, then (i) the Initial Group 4-A Distribution Amount shall equal (A)
the Pro Rata share of Available Cash allocated to holders of Allowed Class
4 Unsecured Claims in Group 4-A on the Distribution Date plus (B) the Pro
Rata share of Available Cash allocated to holders of Allowed Class 4
Unsecured Claims in Group 4-B on the Distribution Date, and (ii) the unpaid
balance of the Subordination Redistribution Amount (i.e., the difference
between the Subordination Redistribution Amount and the Pro Rata share of
Available Cash allocated to holders of Allowed Class 4 Unsecured Claims in
Group 4-B on the Distribution Date) shall be deducted from Periodic Group
4-B Distribution Amounts and added to Periodic Group 4-A Distribution
Amounts until such Subordination Redistribution Amount has been paid in
full.
1.74 "Initial Group 4-B Distribution Amount" means the amount
of Cash to be distributed to all holders of Allowed Group 4-B Claims on the
Distribution Date, which shall be calculated as (a) the Pro Rata share of
Available Cash allocated to holders of Allowed Class 4 Unsecured Claims in
Group 4-B minus (b) the Subordination Redistribution Amount; provided,
however, that if the Pro Rata share of Available Cash allocated to holders
of Allowed Class 4 Unsecured Claims in Group 4-B on the Distribution Date
is less than or equal to the Subordination Redistribution Amount, then (i)
the Initial Group 4-B Distribution Amount shall be zero, (ii) the Pro Rata
share of Available Cash allocated to holders of Allowed Class 4 Unsecured
Claims in Group 4-B on the Distribution Date shall become part of the
Initial Group 4-A Distribution Amount as provided for in clause (b) of
Article I.B.1.73 above, and (iii) the unpaid balance of the Subordination
Redistribution Amount (i.e., the difference between the Subordination
Redistribution Amount and the Pro Rata share of Available Cash allocated to
holders of Allowed Class 4 Unsecured Claims in Group 4-B on the
Distribution Date) shall be deducted from Periodic Group 4-B Distribution
Amounts and added to Periodic Group 4-A Distribution Amounts until such
Subordination Redistribution Amount has been paid in full.
1.75 "Initial Group 4-C Distribution Amount" means the amount
of Cash to be distributed to all holders of Allowed Group 4-C Claims on the
Distribution Date, which shall be calculated as the Pro Rata share of
Available Cash allocated to holders of Allowed Class 4 Unsecured Claims in
Group 4-C.
1.76 "Insured Claim" means any Claim that is covered under the
Debtors' insurance policies.
1.77 "Intercompany Claim" means any Claim held by a Debtor
against another Debtor, including, without limitation, (a) any account
reflecting intercompany book entries by one Debtor with respect to any
other Debtor, (b) any Claim not reflected in such book entries that is held
by a Debtor, and (c) any derivative Claim asserted by or on behalf of one
Debtor against another.
1.78 "Interest" means (a) the legal, equitable, contractual and
other rights of any Person with respect to Old Common Stock, Old Warrants,
Old Options, or any other equity securities of MAWS or a Subsidiary and (b)
the legal, equitable, contractual or other rights of any Person to acquire
or receive any of the foregoing.
1.79 "L/C Bank(s)" means, individually or collectively, Fleet
Bank, N.A., successor to by merger to NatWest Bank N.A., in its capacity as
lender and agent under the Credit Agreement, The First National Bank of
Boston, and Bank One, Columbus, N.A.
1.80 "L/C Bank Collateral" means the funds on deposit with
Fleet Bank, Capital Markets Group, Account No. M1D10XM71, in the amount of
$1,093,206.45 as of June 1, 1997.
1.81 "L/C Bank Contingent Claim" means a contingent Claim of an
L/C Bank arising under Letters of Credit that are outstanding on the
Consummation Date, but only to the extent of the undrawn balance of such
Letters of Credit as of the Consummation Date.
1.82 "L/C Bank Contingent Claims Reserve" means the account to
be established and maintained by Reorganized MAWS into which Reorganized
MAWS shall deposit an amount of Cash equal to 103 % of the face amount of
the Letters of Credit that remain outstanding and undrawn on the
Consummation Date.
1.83 "L/C Bank Non-Contingent Claim" means a non-contingent
claim of an L/C Bank resulting from a draw down on a Letter of Credit
occurring prior to the Consummation Date.
1.84 "Letters of Credit" or "L/C's" means the letters of credit
issued under the Credit Agreement.
1.85 "Litigation Claims" means the claims, rights of action,
suits, or proceedings, whether in law or in equity, whether known or
unknown, that any Debtor or Estate may hold against any Person, including
but not limited to the claims, rights of action, suits and proceedings
described in Exhibit C to this Plan, to be retained by Reorganized MAWS
pursuant to Article IV.H of this Plan.
1.86 "LSS" means Local Sanitation Services, Inc., debtor and
debtor-in-possession in Chapter 11 Case No. 97-119 (PJW) pending in the
Bankruptcy Court.
1.87 "MAWS" means Mid-American Waste Systems, Inc., debtor and
debtor-in-possession in Chapter 11 Case No. 97-104 (PJW) pending in the
Bankruptcy Court.
1.88 "MAWS of Cuyahoga" means Mid-American Waste Systems of
Cuyahoga, Inc., debtor and debtor-in-possession in Chapter 11 Case No.
97-125 (PJW) pending in the Bankruptcy Court.
1.89 "MAWS of Georgia" means Mid-American Waste Systems of
Georgia, Inc., debtor and debtor-in-possession in Chapter 11 Case No.
97-108 (PJW) pending in the Bankruptcy Court.
1.90 "MAWS of Ohio" means Mid-American Waste Systems of Ohio,
Inc., debtor and debtor-in-possession in Chapter 11 Case No. 97-126 (PJW)
pending in the Bankruptcy Court.
1.91 "MAWS of South Carolina" means Mid-American Waste Systems
of South Carolina, Inc., debtor and debtor-in-possession in Chapter 11
Case No. 97-132 (PJW) pending in the Bankruptcy Court.
1.92 "Mellon" means Mellon US Leasing, 525 Market Street, Suite
3500, San Francisco, California, successor in interest to United States
Leasing Corporation.
1.93 "Mellon Collateral" means the equipment described in the
equipment schedule to the master lease agreement, dated November 17, 1992,
in which MAWS granted United States Leasing Corporation security interests
or liens to secure MAWS' obligations thereunder, or the fair market value
of the proceeds of the sale of such equipment, to the extent that such
equipment or proceeds, as of the Consummation Date, remain encumbered by
valid, enforceable and perfected security interests or liens of Mellon in
MAWS' Estate's interest in such property that are not avoidable under the
Bankruptcy Code or applicable nonbankruptcy law.
1.94 "Mellon Lease" means the master lease agreement, dated
November 17, 1992, between MAWS, as lessee, and United States Leasing
Corporation, as lessor, and all agreements and other documents relating
thereto.
1.95 "Mound Landfill" means Mound Landfill, Inc., debtor and
debtor-in-possession in Chapter 11 Case No. 97-127 (PJW) pending in the
Bankruptcy Court.
1.96 "9.23% Senior Notes" means the 9.23% Senior Notes, Series
B, Due May 1, 2002 of MAWS and the Subsidiaries, issued and outstanding
under the Senior Notes Agreement.
1.97 "National Union" means National Union Fire Insurance
Company of Pittsburgh, PA, 70 Pine Street, New york, New York.
1.98 "National Union Bonds" means any surety bond issued by
National Union to secure a Debtor's landfill closure or post-closure
obligations.
1.99 "National Union Collateral" means the funds on deposit at
Chase Bank, Account No. 323029485, in the amount of $3,029,457.13 as of
June 1, 1997.
1.100 "National Waste" means National Waste and Energy
Corporation, debtor and debtor-in-possession in Chapter 11 Case No. 97-106
(PJW) pending in the Bankruptcy Court.
1.101 "New Common Stock" means the share of common stock of
Reorganized MAWS authorized under Article IV.D hereof and the Amended
Certificate of Incorporation.
1.102 "Northwestern" means Northwestern Disposal Company,
debtor and debtor-in-possession in Chapter 11 Case No. 97-135 (PJW) pending
in the Bankruptcy Court.
1.103 "Ohio EPA" means the Ohio Environmental Protection Agency
Fiscal Administration, Columbus, Ohio.
1.104 "Ohio EPA Collateral" means the funds on deposit at Key
Bank, Account No. 20-20-208-0332560, in the amount of $12,640,245.35 as of
June 1, 1997.
1.105 "Old Common And Other Stock" means (a) shares of stock
and other ownership interests in MAWS and (b) shares of stock or other
ownership interests in any of the Subsidiaries, together with, in each
case, any options, warrants, or rights, contractual or otherwise, to
acquire or receive any such stock or ownership interests, including, but
not limited to, the Old Options, the Old Warrants and any contracts or
agreements pursuant to which the non-Debtor party was or could have been
entitled to receive MAWS stock or any shares of stock or other ownership
interests in any of the Subsidiaries.
1.106 "Old Options" means any outstanding options to purchase
Old Common And Other Stock.
1.107 "Old Warrants" means any outstanding warrants to purchase
Old Common And Other Stock.
1.108 "Operating Reserve" means the reserve account to be
established and maintained by Reorganized MAWS and into which Reorganized
MAWS shall, from time to time, deposit Cash to fund, among other things,
the expenses of the Plan Administrator and Reorganized MAWS, as set forth
more fully in Section 2.5 of the Plan Administrator Agreement.
1.109 "Ordinary Course Professionals Order" means the order
entered by the Bankruptcy Court on January 21, 1997, authorizing the
Debtors to retain, employ and pay certain professionals, as specified in
the order, which are not involved in the administration of the Chapter 11
Cases, in the ordinary course of the Debtors' businesses, without further
order of the Bankruptcy Court.
1.110 "Orix" means Orix Credit Alliance, Inc., P.O. Box 1650,
Pittsburgh, Pennsylvania.
1.111 "Orix Collateral" means the equipment described in the
equipment lease, dated August 4, 1993, in which Northwestern granted Cecil
I. Walker Machinery Company, assignor to Orix, security interests or liens
to secure Northwestern's obligations under the Orix Lease, or the fair
market value of the proceeds of the sale thereof, to the extent that such
equipment or proceeds, as of the Consummation Date, remain encumbered by
valid, enforceable and perfected security interests or liens of Orix in
Northwestern's Estate's interest in such property that are not avoidable
under the Bankruptcy Code or applicable nonbankruptcy law.
1.112 "Orix Lease" means the equipment lease, dated August 4,
1993, between Northwestern, as borrower, and Cecil I. Walker Machinery
Company, as lender, as such equipment lease was subsequently assigned to
Orix, and all agreements and other documents relating thereto.
1.113 "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.
1.114 "Other Secured Claims" means, collectively, all Secured
Claims against a Debtor other than the Secured Claims included in Classes
3.01 through 3.18.
1.115 "Palladino Agreement" means the asset purchase agreement,
dated December 20, 1991, by and among MAWS, MAWS of Cuyahoga, MAWS of Ohio,
and the Palladino Group, and all agreements and other documents relating
thereto.
1.116 "Palladino Group" means, collectively, James A.
Palladino, Inland Refuse Transfer Co., Inland Reclamation, Inc., Solon
Sanitary Landfill, Inc., Ohio Bulk Transfer Co., River Dock, Inc., Capital
Control, Inc., and Capital Acquisitions.
1.117 "Palladino Group Escrow" means the escrow account at
Huntington Banks, Account No. 04895116956, established pursuant to the
stipulation and order between the Debtors and the Palladino Group, dated
March 6, 1997, and approved by the Bankruptcy Court on March 7, 1997.
1.118 "Pennsylvania DEP" means the Pennsylvania Department of
Environmental Protection, 18th Floor, Fulton Building, 200 North 3rd
Street, Harrisburg, Pennsylvania.
1.119 "Pennsylvania DEP Collateral" means the cashier's checks
(a) in the amount of $951,147.90 drawn on Key Bank and (b) in the amount of
$1,069,757.94 drawn on Bank One, Columbus N.A., and held at the
Pennsylvania Department of Environmental Resources, 121 South Highland
Mall, Pittsburgh, Pennsylvania.
1.120 "Periodic Distribution Date" means (a) initially, the
first Business Day occurring three (3) full months after the Distribution
Date, and (b) subsequently, the first Business Day occurring three (3) full
months after the immediately preceding Periodic Distribution Date.
1.121 "Periodic Group 4-A Distribution Amount" means, with
respect to each Periodic Distribution Date, the amount of Cash to be
distributed to all holders of Allowed Group 4-A Claims on such Periodic
Distribution Date, which shall be calculated as the sum of (a) the Pro Rata
share of Available Cash allocated to holders of Allowed Class 4 Unsecured
Claims in Group 4-A plus (b) the portion of the Subordination
Redistribution Amount not previously paid, if any.
1.122 "Periodic Group 4-B Distribution Amount" means, with
respect to each Periodic Distribution Date, the amount of Cash to be
distributed to all holders of Allowed Group 4-B Claims on such Periodic
Distribution Date, which shall be calculated as (a) the Pro Rata share of
Available Cash allocated to holders of Allowed Class 4 Unsecured Claims in
Group 4-B minus (b) the portion of the Subordination Redistribution Amount
not previously paid, if any.
1.123 "Periodic Group 4-C Distribution Amount" means, with
respect to each Periodic Distribution Date, the amount of Cash to be
distributed to all holders of Allowed Group 4-C Claims on such Periodic
Distribution Date, which shall be calculated as the Pro Rata share of
Available Cash allocated to holders of Allowed Class 4 Unsecured Claims in
Group 4-C.
1.124 "Person" means an individual, corporation, partnership,
governmental unit, joint venture, association, joint stock company, limited
liability company, limited liability partnership, trust, estate,
unincorporated organization, or other entity.
1.125 "Petition Date" means January 21, 1997, the date on which
the Debtors filed their petitions for reorganization relief commencing the
Chapter 11 Cases.
1.126 "Plan" means this joint liquidating plan of
reorganization proposed by the Debtors for the resolution of their
outstanding Claims and Interests in these Chapter 11 Cases, as such plan
may be amended from time to time in accordance with the Bankruptcy Code and
Bankruptcy Rules.
1.127 "Plan Administrator" means the person designated by the
Creditors' Committee prior to the Confirmation Date and approved by the
Bankruptcy Court pursuant to the Confirmation Order to administer the Plan
in accordance with the terms of the Plan and the Plan Administrator
Agreement and to take such other actions as may be authorized under the
Plan Administrator Agreement, and any successor thereto.
1.128 "Plan Administrator Agreement" means the agreement
between and among the Debtors and the Plan Administrator, specifying the
rights, duties and responsibilities of and to be performed by the Plan
Administrator under the Plan, in substantially the form of the agreement
annexed hereto as Exhibit A.
1.129 "Plan Committee" means the Creditors' Committee as
reconstituted after the Confirmation Date, to monitor implementation of the
Plan, and take such other actions as are set forth in the Plan or as may be
approved by the Bankruptcy Court.
1.130 "Priority Tax Claim" means a Claim that is entitled to
priority pursuant to section 507(a)(8) of the Bankruptcy Code.
1.131 "Professional" means any professional employed in the
Chapter 11 Cases pursuant to sections 327 or 1103 of the Bankruptcy Code or
otherwise and the professionals seeking compensation or reimbursement of
expenses in connection with the Chapter 11 Cases pursuant to section
503(b)(4) of the Bankruptcy Code.
1.132 "Professional Fee Claim" means a Claim of a Professional
for compensation for services rendered, and/or reimbursement of costs and
expenses incurred, after the Petition Date and prior to and including the
Consummation Date.
1.133 "Professional Fee Order" means the order entered by the
Bankruptcy Court on January 21, 1997, establishing procedures for the
payment of Professional Fee Claims in the Debtors' Chapter 11 Cases.
1.134 "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.
1.135 "Record Date" means the record date for purposes of
making distributions under the Plan on account of Allowed Claims, which
date shall be the fifth (5th) Business Day preceding the Confirmation Date.
1.136 "Reliance" means, collectively, Reliance Insurance
Company, Planet Insurance Company, and United Pacific Insurance Company.
1.137 "Reliance Bond" means any performance bond issued by
Reliance to secure an obligation of a Debtor arising under, related to, or
in connection with the Debtors' municipal waste disposal contracts or
otherwise.
1.138 "Reliance Collateral" means the funds on deposit at
Corestates Bank, Account No. 07610702, in the amount of $3,920,656.00 as of
June 16, 1997.
1.139 "Reorganized MAWS" means Mid-American Waste Systems,
Inc., a Delaware corporation, on and after the Consummation Date.
1.140 "Reserves" means, collectively, the Administrative Claims
Reserve, Disputed Claims Reserve, Operating Reserve, L/C Bank Contingent
Claims Reserve, and Unclaimed Distributions Reserve.
1.141 "Restricted Cash" means the Cash segregated (whether
physically or merely on the books and records of Reorganized MAWS or the
Debtors) from time to time by Reorganized MAWS (a) to fund the Reserves or
(b) pursuant to Escrow Orders.
1.142 "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.
1.143 "Schedules" means the schedules of assets and liabilities
and the statements of financial affairs filed in the Bankruptcy Court by
each of the Debtors on March 17, 1997, as such schedules or statements have
been or may be further amended or supplemented from time to time in
accordance with Fed. R. Bankr. P. 1009 or orders of the Bankruptcy Court.
1.144 "Secured Claim" means a Claim, other than a Setoff Claim,
that is secured by a security interest in or lien upon property, or the
proceeds of the sale of such property, in which the Debtors have an
interest, 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 any Debtor or Reorganized MAWS and the holder of such Claim.
1.145 "Secured Claim Election" means the election made by a
holder of a Class 3 Secured Claim to accept an amount in Cash equal to the
Secured Claim Election Amount in full satisfaction and release of all its
Claims (secured and unsecured) in all Classes against each of the Debtors,
Reorganized MAWS, the Plan Administrator, and their property. The Secured
Claim Election is made only if the holder of the Class 3 Secured Claim (a)
votes to accept the Plan and (b) releases each of the Debtors, Reorganized
MAWS, the Plan Administrator, and their property from all Claims in all
Classes, in each case by checking the appropriate box on a timely cast
Ballot; provided, however, that the release shall be effective upon payment
of the Secured Claim Election Amount.
1.146 "Secured Claim Election Amount" means an amount equal to
the (a) principal and (b) interest, accrued at a non-default rate, in each
case without premium, penalty, fees, expenses or other charges, due and
owing as of the Petition Date under the mortgages, notes, leases,
contracts, or other documents or agreements evidencing or creating the
Class 3 Secured Claim.
1.147 "Securities Actions" means, collectively (a) Corporate
High Yield Fund, Inc., et al. v. Coopers & Lybrand, L.L.P, et al., Civil
Action No. 97-CV-325, pending in the United States District Court for the
District of New Jersey; (b) Federated Management Company, et al. v. Coopers
& Lybrand, et al., Case No. 97CVH01 2196, pending in the Court of Common
Pleas for Franklin County, Ohio; (c) Canyon Capital Management, L.P., et
al. v. Coopers & Lybrand, et al., Case No. C2 97-419, pending in the United
States District Court for the Southern District of Ohio; (d) Canyon Capital
Management, L.P., et al. v. Coopers & Lybrand, et al., Case No. 97CVH04
4481, pending in the Court of Common Pleas for Franklin County Ohio; and
(e) Bovee, et al. v. Coopers & Lybrand, et al., Case No. C2 97-449, pending
in the United States District Court for the Southern District of Ohio.
1.148 "Securities Claim" means a Claim arising from the
rescission of a purchase or sale of a security of any Debtor, including,
but not limited to, Old Common And Other Stock, Old Options, Old Warrants,
Senior Notes, Subordinated Notes, all other debt instruments and any and
all other rights to acquire Equity Securities of the Debtors, for damages
arising from the purchase or sale of such a security, or for reimbursement,
contribution or indemnification allowed under section 502 of the Bankruptcy
Code on account of such Claim, including, without limitation, a Claim with
respect to the actions pending against the Debtors, or their current or
former officers and directors in which Securities Claims are asserted,
including the Securities Actions.
1.149 "Senior Note Agreement" means the note agreement, dated
as of May 1, 1992, as amended and restated as of May 1, 1994, by and among
MAWS, the Subsidiaries, and the Senior Note Holders, pursuant to which the
8.85% Senior Notes and 9.23% Senior Notes were issued.
1.150 "Senior Note Claim" means a Claim of a Senior Note Holder
arising under or as a result of the Senior Notes.
1.151 "Senior Note Holders" means, collectively, holders of
8.85% Senior Notes and holders of 9.23% Senior Notes.
1.152 "Senior Notes" means, together, the 8.85% Senior Notes
and 9.23% Senior Notes.
1.153 "Setoff Claim" means a Claim of a holder that 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 in writing by any Debtor, to the extent of the amount
subject to such right of setoff.
1.154 "Speedway" means Speedway Grading Corporation, debtor and
debtor-in-possession in Chapter 11 Case No. 97-111 (PJW) pending in the
Bankruptcy Court.
1.155 "Subordinated Note Claim" means a Claim of a Subordinated
Note Holder arising under or as a result of the Subordinated Notes,
including, but not limited to, any guarantees thereof.
1.156 "Subordinated Note Holders" means holders of Subordinated
Notes.
1.157 "Subordinated Note Indenture" means the indenture, dated
May 24, 1994, between MAWS and Bankers Trust Company, as trustee, pursuant
to which the Subordinated Notes were issued.
1.158 "Subordinated Notes" means the 12.25% Senior Subordinated
Notes Due February 15, 2003 of MAWS, issued and outstanding under the
Subordinated Notes Indenture, and guaranteed by the Subsidiaries.
1.159 "Subordination Redistribution Amount" means the portion
of Group 4-B's allocation of Available Cash that shall be redistributed to
holders of Allowed Claims in Group 4-A to give effect to, and in
satisfaction of claims between holders of Allowed Claims in Group 4-A and
Group 4-B arising from, the contractual subordination, "make whole,"
default interest, post-petition interest, and other similar provisions set
forth in the Senior Note Agreement, the Subordinated Note Indenture, and
the Credit Agreement. If the initial distribution to the holders of Allowed
Senior Note Claims occurs on or before August 29, 1997, then the
Subordination Redistribution Amount shall equal that amount of Cash which,
when combined with the Pro Rata share of Available Cash allocated to
holders of Allowed Class 4 Unsecured Claims in Group 4-A, yields the
following distributions: (a) to the holders of 8.85% Senior Notes, an
aggregate distribution of $31,210,000, which equals 111% of the principal
amount outstanding as of the Petition Date under the terms of the 8.85%
Senior Notes (such aggregate distribution being referred to as the "8.85
Base Amount"); (b) to the holders of 9.23% Senior Notes, an aggregate
distribution of $44,680,000, which equals 113% of the principal amount
outstanding as of the Petition Date under the terms of the 9.23% Senior
Notes (such aggregate distribution being referred to as the "9.23 Base
Amount"); and (c) to the holders of L/C Bank Non-Contingent Claims, a
distribution equal to the sum of (i) the aggregate amount of all L/C's
which have been drawn on (but only to the extent of such draws) on or
before the Consummation Date plus (ii) accrued interest on such drawn
amount through the Distribution Date at the non-default rate of interest
specified in the Credit Agreement. If the initial distribution to the
holders of Allowed Senior Note Claims occurs after August 29, 1997, then
the Subordination Redistribution Amount shall equal that amount of Cash
which, when combined with the Pro Rata share of Available Cash allocated to
holders of Allowed Class 4 Unsecured Claims in Group 4-A, yields the
following distributions: (a) to the holders of 8.85% Senior Notes, an
aggregate distribution equal to the 8.85 Base Amount plus per diem interest
computed at the default rate set forth in the Senior Note Agreement on any
unpaid balance of the 8.85 Base amount from August 30, 1997 through the
date that the 8.85 Base Amount becomes paid in full; (b) to the holders of
9.23% Senior Notes, an aggregate distribution equal to the 9.23 Base Amount
plus per diem interest computed at the default rate set forth in the Senior
Note Agreement on any unpaid balance of the 9.23 Base amount from August
30, 1997 through the date that the 9.23 Base Amount becomes paid in full;
and (c) to the holders of L/C Bank Non-Contingent Claims, a distribution
equal to the sum of (i) the aggregate amount of all L/C's which have been
drawn on (but only to the extent of such draws) on or before the
Consummation Date plus (ii) accrued interest on such drawn amount through
the Distribution Date at the non-default rate of interest specified in the
Credit Agreement.
1.160 "Subsidiaries" means, collectively, Fairfield Sanitary
Landfill, Inc., Johnson Disposal, Inc., Mid-American Waste Systems of Ohio,
Inc., Mid-American Waste Systems of Cuyahoga, Inc., Mound Landfill, Inc.,
Triangle Landfill, Inc., United Waste Systems, Inc., B&L Sanitation, Inc.,
H&D Excavating, Inc., Mid-American Waste Systems of Indiana, Inc.,
Centerpoint Landfill, Inc., Mid-American Waste Systems of Illinois, Inc.,
Daubs Landfill, Inc., K/C Reclamation, Inc., Mid-American Waste Systems of
Pennsylvania, Inc., Resource Conservation Corp., Local Sanitation Service,
Inc., Plains Management, Inc., Mid-American Waste Systems of Florida, Inc.,
National Waste and Energy Corporation, Northwestern Disposal Co.,
Mid-American Waste Systems of Harrison, Inc., Mid-American Waste Systems of
West Virginia, Inc., Mid-American Waste Systems of Colorado, Inc.,
Mid-American Waste Systems of Georgia, Inc., Speedway Grading Corp.,
Newcorp Environmental, Inc., Mid-American Waste Systems of New Mexico,
Inc., Mid-American Waste Systems of New York, Inc., Mid-American Waste
Systems of South Carolina, Inc. A complete list of the Subsidiaries and the
trade names under which they operated is annexed hereto as Exhibit E.
1.161 "Subsidiary Interests" means, collectively, the issued
and outstanding shares of stock of the Subsidiaries, all of which are
directly or indirectly owned by MAWS, as of the Petition Date.
1.162 "Substantive Consolidation Order" means the order, or
provision of the Confirmation Order, substantively consolidating the
Chapter 11 Cases, as provided in Article IV.A of the Plan.
1.163 "363 Order" means the order of the Bankruptcy Court,
dated March 7, 1997, authorizing the Debtors' sale of substantially all of
their assets and business operations free and clear of all liens, claims,
encumbrances, rights of first refusal, and other interests, to USA Waste
pursuant to the Asset Purchase Agreement.
1.164 "Unimpaired Claim" means a Claim that is not an Impaired
Claim.
1.165 "USF&G" means United States Fidelity and Guaranty, 6225
Smith Avenue, Baltimore, Maryland.
1.166 "USF&G Bond" means any surety bond issued by USF&G to
secure a Debtors' landfill closure and post-closure obligations.
1.167 "USF&G Collateral" means the funds held by Van American
Insurance Company, as service manager/agent for USF&G, and on deposit at
PNC Bank, Account No. 80-80-004-5864964, Sub-Account No. 300043, in the
amount of $5,110,464.25 as of June 1, 1997.
1.168 "Unsecured Claim" means any Claim which is not an
Administrative Claim; Priority Tax Claim; Other Priority Claim; Convenience
Claim; Secured Claim; L/C Bank Contingent Claim; Fines, Penalties and
Punitive Damages Claim; Securities Claim; or Intercompany Claim.
1.169 "USA Waste" means, collectively, USA Waste Services, Inc.
and its designated acquisition subsidiaries under the Asset Purchase
Agreement.
1.170 "Voting Deadline" means the date and time, as fixed by an
order of the Bankruptcy Court and set forth in the Disclosure Statement, by
which all Ballots to accept or reject the Plan must be received in order to
be counted.
1.171 "West Virginia DEP" means the West Virginia Division of
Environmental Protection, 1201 Greenbrier, Street, Charleston, West
Virginia.
1.172 "West Virginia DEP Collateral" means the cashier's check
in the amount of $312,000.00 held by the West Virginia DEP and secured by
funds on deposit in Wesbanco Bank, Account Nos. 045-100-0000010832,
046-100-0000022629, 001-100-0000103046, and 040-100-0000004027.
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 document's
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 Sections, Articles,
Schedules, and Exhibits are references to Sections, 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 and Sections 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, 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 is also placed in a particular Class for the purpose of receiving
distributions pursuant to the Plan only to the extent that such Claim is an
Allowed Claim in that Class and such Claim 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. Unimpaired Classes Of Claims (deemed to have accepted the Plan
and, therefore, not entitled to vote)
1. Class 1: Other Priority Claims
Class 1 consists of all Other Priority Claims.
2. Class 2: Convenience Claims
Class 2 consists of all Convenience Claims.
D. Impaired Classes Of Claims (Class 3, 4, and 5 entitled to vote on
the Plan; Classes 6, 7 and 8 are deemed to have rejected the Plan
and, therefore, are not entitled to vote)
1. Class 3: Secured Claims
Class 3 consists of separate subclasses for each Secured Claim
secured by a security interest in or lien upon property in which the
Debtors' Estates have an interest. Each subclass is deemed to be a separate
Class for all purposes under the Bankruptcy Code.
a. Class 3.01: Barr Secured Claims
Class 3.01 consists of all Claims secured by the Barr
Collateral, directly or indirectly arising from or under, or relating in
any way to, the Barr Note, to the extent of the value (if any) of the Barr
Collateral.
b. Class 3.02: Campbell Secured Claims
Class 3.02 consists of all Claims secured by the Campbell
Collateral, directly or indirectly arising from or under, or relating in
any way to, the Campbell Note, to the extent of the value (if any) of the
Campbell Collateral.
c. Class 3.03: Caterpillar Secured Claims
Class 3.03 consists of all Claims secured by the Caterpillar
Collateral, directly or indirectly arising from or under, or relating in
any way to, the Caterpillar Contract and the Caterpillar Lease, to the
extent of the value (if any) of the Caterpillar Collateral.
d. Class 3.04: Elmore Secured Claims
Class 3.04 consists of all Claims secured by the Elmore
Collateral, directly or indirectly arising from or under, or relating in
any way to, the Elmore Note, to the extent of the value (if any) of the
Elmore Collateral.
e. Class 3.05: Arnold Secured Claims
Class 3.05 consists of all Claims secured by the Arnold
Collateral, directly or indirectly arising from or under, or relating in
any way to, the Arnold Notes, to the extent of the value (if any) of the
Arnold Collateral.
f. Class 3.06: Mellon Secured Claims
Class 3.06 consists of all Claims secured by the Mellon
Collateral, directly or indirectly arising from or under, or relating in
any way to, the Mellon Lease, to the extent of the value (if any) of the
Mellon Collateral.
g. Class 3.07: Orix Secured Claims
Class 3.07 consists of all Claims secured by the Orix
Collateral, directly or indirectly arising from or under, or relating in
any way to, the Orix Lease, to the extent of the value (if any) of the Orix
Collateral.
h. Class 3.08: Palladino Group Secured Claims
Class 3.08 consists of all Claims, if any, of the Palladino
Group, directly or indirectly arising from or under, or relating in any way
to, the Palladino Agreement, to the extent of the value (if any) of any
collateral held by or granted to the Palladino Group to secure such Claims.
i. Class 3.09: National Union Secured Claims
Class 3.09 consists of all Claims secured by the National Union
Collateral, directly or indirectly arising from or under, or relating in
any way to, the National Union Bonds, to the extent of the value (if any)
of the National Union Collateral.
j. Class 3.10: L/C Bank Secured Claims
Class 3.10 consists of all Claims secured by the L/C Bank
Collateral, directly or indirectly arising from or under, or relating in
any way to Letters of Credit that have become undisputed, non-contingent,
liquidated Claims on or before the Consummation Date. If, and to the extent
that the value of the L/C Bank Collateral is less than the total amount of
all L/C Bank Claims that have become Allowed Claims on or before the
Consummation Date, the difference shall be treated as an Allowed Class 4
Unsecured Claim in Group 4-A.
k. Class 3.11: Reliance Secured Claims
Class 3.11 consists of all Claims secured by the Reliance
Collateral, directly or indirectly arising from or under, or relating in
any way to, the Reliance Bonds, to the extent of the value (if any) of the
Reliance Collateral.
l. Class 3.12: Illinois EPA Secured Claims
Class 3.12 consists of all Claims secured by the Illinois EPA
Collateral, directly or indirectly arising from or under, or relating in
any way to, the Debtors' landfill closure or post-closure obligations in
the State of Illinois, to the extent of the value (if any) of the Illinois
EPA Collateral.
m. Class 3.13: Ohio EPA Secured Claims
Class 3.13 consists of all Claims secured by the Ohio EPA
Collateral, directly or indirectly arising from or under, or relating in
any way to, the Debtors' landfill closure or post-closure obligations in
the State of Ohio, to the extent of the value (if any) of the Ohio EPA
Collateral.
n. Class 3.14: Pennsylvania DEP Secured Claims
Class 3.14 consists of all Claims secured by the Pennsylvania
DEP Collateral, directly or indirectly arising from or under, or relating
in any way to, the Debtors' landfill closure or post-closure obligations in
the Commonwealth of Pennsylvania, to the extent of the value (if any) of
the Pennsylvania DEP Collateral.
o. Class 3.15: USF&G Secured Claims
Class 3.15 consists of all Claims secured by the USF&G
Collateral, directly or indirectly arising from or under, or relating in
any way to, the USF&G Bonds, to the extent of the value (if any) of the
USF&G Collateral.
p. Class 3.16: INA Secured Claims
Class 3.16 consists of all Claims secured by the INA Collateral
directly or indirectly arising from or under, or relating in any way to,
the INA Agreements, to the extent of the value (if any) of the INA
Collateral.
q. Class 3.17: West Virginia DEP Secured Claims
Class 3.17 consists of all Claims, secured by the West Virginia
DEP Collateral, directly or indirectly arising from or under, or relating
in any way to, the Debtors' landfill closure or post-closure obligations in
the State of West Virginia, to the extent of the value (if any) of the West
Virginia DEP Collateral.
r. Class 3.18: ERC Secured Claims
Class 3.18 consists of all Claims, if any, of ERC, directly or
indirectly arising from or under, or relating in any way to, the ERC
Contract, to the extent of the value (if any) of any collateral held by or
granted to ERC to secure such Claims.
s. Class 3.19: Other Secured Claims
Class 3.19 consists of all Other Secured Claims.
2. Class 4: Unsecured Claims
Class 4 consists of all Unsecured Claims. The Class 4 Unsecured
Claims have been divided into separate groups below for descriptive
purposes only. Together, all of the groups of Unsecured Claims constitute a
single Class of Claims for all other purposes under the Plan and the
Bankruptcy Code, including, but not limited to, voting on and receiving
distributions under the Plan.
a. Group 4-A: Group 4-A consists of all Senior Note Claims and
L/C Bank Non-Contingent Claims.
b. Group 4-B: Group 4-B consists of all Subordinated Note
Claims.
c. Group 4-C: Group 4-C consists of all General Unsecured
Claims.
3. Class 5: L/C Bank Contingent Claims
Class 5 consists of all L/C Bank Contingent Claims.
4. Class 6: Fines, Penalties, and Punitive Damages Claims
Class 6 consists of all Claims against any Debtor for any fine,
penalty, or forfeiture, or for multiple, exemplary, or punitive damages
(other than a penalty of the type specified in section 507(a)(8)(G) of the
Bankruptcy Code), to the extent that such fines, penalties, or forfeitures,
or damages, are not compensation for actual pecuniary loss suffered by the
holder of such Claim.
5. Class 7: Securities Claims
a. Class 7.01: Debt Securities Claims
Class 7.01 consists of all Debt Securities Claims.
b. Class 7.02: Equity Securities Claims
Class 7.02 consists of all Equity Securities Claims.
6. Class 8: Intercompany Claims
Class 8 consists of all Intercompany Claims.
E. Impaired Class Of Interests (deemed to have rejected the Plan
and, therefore, not entitled to vote)
Class 9: Equity Securities
Class 9 consists of all Interests directly or indirectly
arising from or under, or relating in any way to, any of the Equity
Securities.
ARTICLE III.
TREATMENT OF CLAIMS AND INTERESTS
A. Unclassified Claims
1. Administrative Claims
Except as otherwise provided for herein, and subject to the
requirements of Article XIV.A hereof, on, or as soon as reasonably
practicable after, the later of (i) the Distribution Date or (ii) the first
Periodic Distribution Date after the date such Administrative Claim becomes
an Allowed Administrative Claim, each holder of an Allowed Administrative
Claim shall receive in full satisfaction, settlement, and release 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 the Debtors or Reorganized MAWS and such holder shall have agreed
upon in writing; provided, however, that Allowed Administrative Claims with
respect to liabilities incurred by the Debtors in the ordinary course of
business during the Chapter 11 Cases 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, or as soon as reasonably practicable after, the later of
(a) the Distribution Date or (b) the first Periodic Distribution Date after
the date such Priority Tax Claim becomes an Allowed Priority Tax Claim,
each holder of an Allowed Priority Tax Claim shall receive in full
satisfaction, settlement, and release of and in exchange for such Allowed
Priority Tax Claim (i) Cash equal to the amount of such Allowed Priority
Tax Claim or (ii) such other treatment as to which the Debtors or
Reorganized MAWS and such holder shall have agreed upon in writing;
provided, however, that any Claim or demand for payment of a penalty (other
than a penalty of the type specified in section 507(a)(8)(G) of the
Bankruptcy Code) shall be disallowed pursuant to this Plan, and the holder
of an Allowed Priority Tax Claim shall not assess or attempt to collect
such penalty from the Debtors or their Estates, Reorganized MAWS, the Plan
Administrator, or their property.
B. Unimpaired Classes Of Claims
1. Class 1: Other Priority Claims
On, or as soon as reasonably practicable after, the later of
(a) the Distribution Date or (b) the first Periodic Distribution Date after
the date such Other Priority Claim becomes an Allowed Other Priority Claim,
each holder of an Allowed Other Priority Claim shall receive in full
satisfaction, settlement, and release of and in exchange for such Allowed
Other Priority Claim (i) Cash equal to the amount of such Allowed Other
Priority Claim or (ii) such other treatment as to which the Debtors or
Reorganized MAWS and such holder shall have agreed upon in writing.
2. Class 2: Convenience Claims
a. Distributions
On, or as soon as reasonably practicable after, the later of
(a) the Distribution Date or (b) the first Periodic Distribution Date after
the date such Convenience Claim becomes an Allowed Convenience Claim, the
holder of an Allowed Convenience Claim shall receive in full satisfaction,
settlement, and release of and in exchange for such Allowed Convenience
Claim Cash equal to the amount of such Allowed Convenience Claim.
b. Election to be Treated as Convenience Claim
By checking the appropriate box on a timely cast Ballot, the
holder of an Allowed Class 4 Unsecured Claim in an amount greater than
$2,000, other than an Unsecured Claim of the types described in Articles
II.D.2.a (Senior Note Claims and L/C Bank Non-Contingent Claims) and
II.D.2.b (Subordinated Note Claims) above, may elect to reduce the amount
of such holder's Allowed Class 4 Unsecured Claim to $2,000 and to receive
treatment as an Allowed Class 2 Convenience Claim in the amount of $2,000,
as described in Article III.B.2.a above. Such an election shall constitute
a waiver of the right to collect, and a release of, the amount of the
Allowed Class 4 Unsecured Claim in excess of $2,000, and the holder of such
Allowed Class 2 Convenience Claim shall be deemed to have released the
Debtors and their Estates, Reorganized MAWS, the Plan Administrator, and
their property from any and all liability for such excess amount. The
holder of an Allowed Class 4 Unsecured Claim that timely elects to reduce
the amount of its Allowed Claim shall be deemed to be the holder of an
Allowed Class 2 Convenience Claim for classification, voting, and all other
purposes under this Plan.
C. Impaired Classes Of Claims
1. Class 3: Secured Claims
Each holder of a Class 3 Secured Claim shall be treated as a
separate class for purposes of implementing and consummating the Plan, and
each holder of an Allowed Secured Claim shall receive the treatment set
forth below. Unless the holder of a Class 3 Secured Claim is eligible to
make and has timely made a Secured Creditor Election, the Bankruptcy Court
shall determine the value of the collateral securing a Class 3 Secured
Claim and, to the extent, if any, that the value of the collateral securing
a Class 3 Secured Claim (other than a Class 3.10 L/C Bank Secured Claim) is
less than the total amount of such Claim, the difference shall be treated
as a Class 4 Unsecured Claim in Group 4-C. The Debtors and Reorganized MAWS
reserve all rights to challenge the validity, nature and perfection of, and
to avoid pursuant to the provisions of the Bankruptcy Code and other
applicable law, any purported liens and security interests. If the holder
of the Class 3 Secured Claim is eligible to make and does make a timely
Secured Claim Election, such holder shall receive the treatment set forth
below and shall be deemed to have withdrawn all Proofs of Claim filed by
such holder against any of the Debtors or their Estates. Unless otherwise
specifically stated below, holders of Class 3 Secured Claims are not
eligible to make the Secured Claim Election.
a. Class 3.01: Barr Secured Claims
If the Secured Claim Election is not properly made, on, or as
soon as reasonably practicable after, the later of (i) the Distribution
Date or (ii) the first Periodic Distribution Date after the date such Barr
Secured Claim becomes an Allowed Barr Secured Claim, the holder of an
Allowed Barr Secured Claim shall receive in full satisfaction, settlement,
and release of and in exchange for such Allowed Barr Secured Claim (a) Cash
equal to the amount of such Allowed Barr Secured Claim or (b) such other
treatment as to which the Debtors or Reorganized MAWS and such holder shall
have agreed upon in writing.
The holder of the Barr Secured Claim is eligible to make the
Secured Claim Election. If a timely Secured Claim Election is made, at the
later of the dates set forth in the preceding paragraph, the holder of the
Barr Secured Claim shall receive Cash in an amount equal to the Secured
Claim Election Amount, which shall be deemed to be $26,669.76 absent other
agreement by Reorganized MAWS and the holder of the Barr Secured Claim, in
full satisfaction, settlement, and release of, and in exchange for, all of
such holder's Claims in all Classes.
b. Class 3.02: Campbell Secured Claims
If the Secured Claim Election is not properly made, on, or as
soon as reasonably practicable after, the later of (i) the Distribution
Date or (ii) the first Periodic Distribution Date after the date such
Campbell Secured Claim becomes an Allowed Campbell Secured Claim, the
holder of an Allowed Campbell Secured Claim shall receive in full
satisfaction, settlement, and release of and in exchange for such Allowed
Campbell Secured Claim (a) Cash equal to the amount of such Allowed
Campbell Secured Claim or (b) such other treatment as to which the Debtors
or Reorganized MAWS and such holder shall have agreed upon in writing.
The holder of the Campbell Secured Claim is eligible to make
the Secured Claim Election. If a timely Secured Claim Election is made, at
the later of the dates set forth in the preceding paragraph, the holder of
the Campbell Secured Claim shall receive Cash in an amount equal to the
Secured Claim Election Amount, which shall be deemed to be $152,348.52
absent other agreement by Reorganized MAWS and the holder of the Campbell
Secured Claim, in full satisfaction, settlement, and release of, and in
exchange for, all of such holder's Claims in all Classes.
c. Class 3.03: Caterpillar Secured Claims
If the Secured Claim Election is not properly made, on, or as
soon as reasonably practicable after, the later of (i) the Distribution
Date or (ii) the first Periodic Distribution Date after the date such
Caterpillar Secured Claim becomes an Allowed Caterpillar Secured Claim, the
holder of an Allowed Caterpillar Secured Claim shall receive in full
satisfaction, settlement, and release of and in exchange for such Allowed
Caterpillar Secured Claim (a) Cash equal to the amount of such Allowed
Caterpillar Secured Claim or (b) such other treatment as to which the
Debtors or Reorganized MAWS and such holder shall have agreed upon in
writing.
The holder of the Caterpillar Secured Claim is eligible to make
the Secured Claim Election. If a timely Secured Claim Election is made, at
the later of the dates set forth in the preceding paragraph, the holder of
the Caterpillar Secured Claim shall receive Cash in an amount equal to the
Secured Claim Election Amount, which shall be deemed to be $57,329.08
absent other agreement by Reorganized MAWS and the holder of the
Caterpillar Secured Claim, in full satisfaction, settlement, and release
of, and in exchange for, all of such holder's Claims in all Classes.
d. Class 3.04: Elmore Secured Claims
If the Secured Claim Election is not properly made, on, or as
soon as reasonably practicable after, the later of (i) the Distribution
Date or (ii) the first Periodic Distribution Date after the date such
Elmore Secured Claim becomes an Allowed Elmore Secured Claim, the holder of
an Allowed Elmore Secured Claim shall receive in full satisfaction,
settlement, and release of and in exchange for such Allowed Elmore Secured
Claim (a) Cash equal to the amount of such Allowed Elmore Secured Claim or
(b) such other treatment as to which the Debtors or Reorganized MAWS and
such holder shall have agreed upon in writing.
The holder of the Elmore Secured Claim is eligible to make the
Secured Claim Election. If a timely Secured Claim Election is made, at the
later of the dates set forth in the preceding paragraph, the holder of the
Elmore Secured Claim shall receive Cash in an amount equal to the Secured
Claim Election Amount, which shall be deemed to be $96,768.52 absent other
agreement by Reorganized MAWS and the holder of the Elmore Secured Claim,
in full satisfaction, settlement, and release of, and in exchange for, all
of such holder's Claims in all Classes.
e. Class 3.05: Arnold Secured Claims
On, or as soon as reasonably practicable after, the later of
(i) the Distribution Date or (ii) the first Periodic Distribution Date
after the date such Arnold Secured Claim becomes an Allowed Arnold Secured
Claim, the holder of an Allowed Arnold Secured Claim shall receive in full
satisfaction, settlement, and release of and in exchange for such Allowed
Arnold Secured Claim (a) Cash equal to the amount of such Allowed Arnold
Secured Claim or (b) such other treatment as to which the Debtors or
Reorganized MAWS and such holder shall have agreed upon in writing.
f. Class 3.06: Mellon Secured Claims
On, or as soon as reasonably practicable after, the later of
(i) the Distribution Date or (ii) the first Periodic Distribution Date
after the date such Mellon Secured Claim becomes an Allowed Mellon Secured
Claim, the holder of an Allowed Mellon Secured Claim shall receive in full
satisfaction, settlement, and release of and in exchange for such Allowed
Mellon Secured Claim (a) Cash equal to the amount of such Allowed Mellon
Secured Claim, which shall be deemed to be $85,525.72 or (b) such other
treatment as to which the Debtors or Reorganized MAWS and such holder shall
have agreed upon in writing.
g. Class 3.07: Orix Secured Claims
If the Secured Claim Election is not properly made, on, or as
soon as reasonably practicable after, the later of (i) the Distribution
Date or (ii) the first Periodic Distribution Date after the date such Orix
Secured Claim becomes an Allowed Orix Secured Claim, the holder of an
Allowed Orix Secured Claim shall receive in full satisfaction, settlement,
and release of and in exchange for such Allowed Orix Secured Claim (a) Cash
equal to the amount of such Allowed Orix Secured Claim or (b) such other
treatment as to which the Debtors or Reorganized MAWS and such holder shall
have agreed upon in writing.
The holder of the Orix Secured Claim is eligible to make the
Secured Claim Election. If a timely Secured Claim Election is made, at the
later of the dates set forth in the preceding paragraph, the holder of the
Orix Secured Claim shall receive Cash in an amount equal to the Secured
Claim Election Amount, which shall be deemed to be $56,233.15 absent other
agreement by Reorganized MAWS and the holder of the Orix Secured Claim, in
full satisfaction, settlement, and release of, and in exchange for, all of
such holder's Claims in all Classes.
h. Class 3.08: Palladino Group Secured Claims
On, or as soon as reasonably practicable after, the later of
(i) the Distribution Date or (ii) the first Periodic Distribution Date
after the date such Palladino Group Claim becomes an Allowed Palladino
Group Secured Claim, the holder of an Allowed Palladino Group Secured Claim
shall receive in full satisfaction, settlement, and release of and in
exchange for such Allowed Palladino Group Secured Claim (a) Cash equal to
the value, if any, of the collateral, if any, securing the Palladino Group
Secured Claim or (b) such other treatment as to which the Debtors or
Reorganized MAWS and such holder shall have agreed upon in writing;
provided, however, that in no event shall the amount of the Palladino Group
Secured Claim exceed the balance of the Palladino Group Escrow.
i. Class 3.09: National Union Secured Claims
On, or as soon as reasonably practicable after, the later of
(i) the Distribution Date or (ii) the first Periodic Distribution Date
after the date such National Union Secured Claim becomes an Allowed
National Union Secured Claim, the holder of an Allowed National Union
Secured Claim shall receive in full satisfaction, settlement, and release
of and in exchange for such Allowed National Union Secured Claim (a) Cash
equal to the amount of such Allowed National Union Secured Claim or (b)
such other treatment as to which the Debtors or Reorganized MAWS and such
holder shall have agreed upon in writing.
j. Class 3.10: L/C Bank Secured Claims
On, or as soon as reasonably practicable after, the
Distribution Date, the holder of an Allowed L/C Bank Secured Claim shall
receive in full satisfaction, settlement, and release of and in exchange
for such Allowed L/C Bank Secured Claim (a) Cash equal to the amount of
such Allowed L/C Bank Secured Claim or (b) such other treatment as to which
the Debtors or Reorganized MAWS and such holder shall have agreed upon in
writing. To the extent, if any, that the value of the L/C Bank Collateral
is less than the total amount of all L/C Bank Claims that have become
Allowed Claims on or before the Consummation Date, the difference shall be
treated as an Allowed Class 4 Unsecured Claim in Group 4-A.
k. Class 3.11: Reliance Secured Claims
On, or as soon as reasonably practicable after, the later of
(i) the Distribution Date or (ii) the first Periodic Distribution Date
after the date such Reliance Secured Claim becomes an Allowed Reliance
Secured Claim, the holder of an Allowed Reliance Secured Claim shall
receive in full satisfaction, settlement, and release of and in exchange
for such Allowed Reliance Secured Claim (a) Cash equal to the amount of
such Allowed Reliance Secured Claim or (b) such other treatment as to which
the Debtors or Reorganized MAWS and such holder shall have agreed upon in
writing.
l. Class 3.12: Illinois EPA Secured Claims
On, or as soon as reasonably practicable after, the later of
(i) the Distribution Date or (ii) the first Periodic Distribution Date
after the date such Illinois EPA Secured Claim becomes an Allowed Illinois
EPA Secured Claim, the holder of an Allowed Illinois EPA Secured Claim
shall receive in full satisfaction, settlement, and release of and in
exchange for such Allowed Illinois EPA Secured Claim (a) Cash equal to the
amount of such Allowed Illinois EPA Secured Claim or (b) such other
treatment as to which the Debtors or Reorganized MAWS and such holder shall
have agreed upon in writing.
m. Class 3.13: Ohio EPA Secured Claims
On, or as soon as reasonably practicable after, the later of
(i) the Distribution Date or (ii) the first Periodic Distribution Date
after the date such Ohio EPA Secured Claim becomes an Allowed Ohio EPA
Secured Claim, the holder of an Allowed Ohio EPA Secured Claim shall
receive in full satisfaction, settlement, and release of and in exchange
for such Allowed Ohio EPA Secured Claim (a) Cash equal to the amount of
such Allowed Ohio EPA Secured Claim or (b) such other treatment as to which
the Debtors or Reorganized MAWS and such holder shall have agreed upon in
writing.
n. Class 3.14: Pennsylvania DEP Secured Claims
On, or as soon as reasonably practicable after, the later of
(i) the Distribution Date or (ii) the first Periodic Distribution Date
after the date such Pennsylvania DEP Secured Claim becomes an Allowed
Pennsylvania DEP Secured Claim, the holder of an Allowed Pennsylvania DEP
Secured Claim shall receive in full satisfaction, settlement, and release
of and in exchange for such Allowed Pennsylvania DEP Secured Claim (a) Cash
equal to the amount of such Allowed Pennsylvania DEP Secured Claim or (b)
such other treatment as to which the Debtors or Reorganized MAWS and such
holder shall have agreed upon in writing.
o. Class 3.15: USF&G Secured Claims
On, or as soon as reasonably practicable after, the later of
(i) the Distribution Date or (ii) the first Periodic Distribution Date
after the date such USF&G Secured Claim becomes an Allowed USF&G Secured
Claim, the holder of an Allowed USF&G Secured Claim shall receive in full
satisfaction, settlement, and release of and in exchange for such Allowed
USF&G Secured Claim (a) Cash equal to the amount of such Allowed USF&G
Secured Claim or (b) such other treatment as to which the Debtors or
Reorganized MAWS and such holder shall have agreed upon in writing.
p. Class 3.16: INA Secured Claims
On, or as soon as reasonably practicable after, the later of
(i) the Distribution Date or (ii) the first Periodic Distribution Date
after the date such INA Secured Claim becomes an Allowed INA Secured Claim,
the holder of an Allowed INA Secured Claim shall receive in full
satisfaction, settlement, and release of and in exchange for such Allowed
INA Secured Claim (a) Cash equal to the amount of such Allowed INA Secured
Claim or (b) such other treatment as to which the Debtors or Reorganized
MAWS and such holder shall have agreed upon in writing.
q. Class 3.17: West Virginia DEP Secured Claims
On, or as soon as reasonably practicable after, the later of
(i) the Distribution Date or (ii) the first Periodic Distribution Date
after the date such West Virginia DEP Secured Claim becomes an Allowed West
Virginia DEP Secured Claim, the holder of an Allowed West Virginia DEP
Secured Claim shall receive in full satisfaction, settlement, and release
of and in exchange for such Allowed West Virginia DEP Secured Claim (a)
Cash equal to the amount of such Allowed West Virginia DEP Secured Claim or
(b) such other treatment as to which the Debtors or Reorganized MAWS and
such holder shall have agreed upon in writing.
r. Class 3.18: ERC Secured Claims
On, or as soon as reasonably practicable after, the later of
(i) the Distribution Date or (ii) the first Periodic Distribution Date
after the date such ERC Claim becomes an Allowed ERC Secured Claim, the
holder of an Allowed ERC Secured Claim shall receive in full satisfaction,
settlement, and release of and in exchange for such Allowed ERC Secured
Claim (a) Cash equal to the value, if any, of the collateral, if any,
securing the ERC Secured Claim or (b) such other treatment as to which the
Debtors or Reorganized MAWS and such holder shall have agreed upon in
writing; provided, however, that in no event shall the amount of the ERC
Secured Claim exceed the balance of the ERC Escrow.
s. Class 3.19: Other Secured Claims
On, or as soon as reasonably practicable after, the later of
(i) the Distribution Date or (ii) the first Periodic Distribution Date
after the date such Other Secured Claim becomes an Allowed Other Secured
Claim, the holder of an Allowed Other Secured Claim shall receive in full
satisfaction, settlement, and release of and in exchange for such Allowed
Other Secured Claim (a) Cash equal to the amount of such Allowed Other
Secured Claim or (b) such other treatment as to which the Debtors or
Reorganized MAWS and such holder shall have agreed upon in writing.
2. Class 4: Unsecured Claims
a. Group 4-A
The holder of an Allowed Unsecured Claim in Group 4-A shall
receive, in full satisfaction, settlement, and release of and in exchange
for such Allowed Unsecured Claim, the following treatment:
On, or as soon as reasonably practicable after, the later of
(i) the Distribution Date or (ii) the first Periodic Distribution Date
after the date such Unsecured Claim becomes an Allowed Unsecured Claim, the
holder of an Allowed Unsecured Claim in Group 4-A shall receive its Pro
Rata share of the Initial Group 4-A Distribution Amount. On each ensuing
Periodic Distribution Date, each holder of an Allowed Unsecured Claim in
Group 4-A shall receive its Pro Rata share of the Periodic Group 4-A
Distribution Amount, but only until such time as the holders Allowed
Unsecured Claims in Group 4-A have received the full amount of the
Subordination Redistribution Amount and other amounts to which they are
entitled hereunder.
On the Distribution Date, or as soon as thereafter as
practicable, each of Weil, Gotshal & Manges LLP, Richards, Layton & Finger,
and Arthur Andersen LLP, attorneys and financial advisors for certain
Senior Note Holders, shall be paid their reasonable fees and expenses, in
an amount not to exceed $100,000 in the aggregate (including the
application of any retainer previously paid by the Debtors), for services
rendered and disbursements incurred in connection with the Chapter 11
Cases, and such amount shall be deducted from the Initial and Periodic
Group 4-B Distribution Amounts until paid in full. Fee applications need
not be filed for such fees and expenses, and Bankruptcy Court approval
shall not be required, unless the aggregate sought exceeds $100,000.
b. Group 4-B
The holder of an Allowed Unsecured Claim in Group 4-B shall
receive, in full satisfaction, settlement, and release of and in exchange
for such Allowed Unsecured Claim, the following treatment:
On, or as soon as reasonably practicable after, the later of
(i) the Distribution Date or (ii) the first Periodic Distribution Date
after the date such Unsecured Claim becomes an Allowed Unsecured Claim, the
holder of an Allowed Unsecured Claim in Group 4-B shall receive its Pro
Rata share of the Initial Group 4-B Distribution Amount, less its Pro Rata
share of any amounts required to be paid for professional fees and expenses
as described in Article III.C.2.a above. On each ensuing Periodic
Distribution Date, each holder of an Allowed Unsecured Claim in Group 4-B
shall receive its Pro Rata share of the Periodic Group 4-B Distribution
Amount.
c. Group 4-C
The holder of an Allowed Unsecured Claim in Group 4-C shall
receive, in full satisfaction, settlement, and release of and in exchange
for such Allowed Unsecured Claim, the following treatment:
On, or as soon as reasonably practicable after, the later of
(i) the Distribution Date or (ii) the first Periodic Distribution Date
after the date such Unsecured Claim becomes an Allowed Unsecured Claim, the
holder of an Allowed Unsecured Claim in Group 4-C shall receive its Pro
Rata share of the Initial Group 4-C Distribution Amount. On each ensuing
Periodic Distribution Date, each holder of an Allowed Unsecured Claim in
Group 4-C shall receive its Pro Rata share of the Periodic Group 4-C
Distribution Amount.
3. Class 5: L/C Bank Contingent Claims
If, and to the extent that, any Letters of Credit remain
outstanding and undrawn on the Consummation Date, the Debtors or
Reorganized MAWS, as the case may be, shall establish the L/C Bank
Contingent Claims Reserve for the benefit of an L/C Bank by reserving an
amount of the Estates' Cash equal to 103% of the Face Amount of all Class 5
L/C Bank Contingent Claims. On, or as soon as reasonably practicable after,
the Distribution Date or the first Periodic Distribution Date after the
date any such L/C Bank Contingent Claim becomes a non-contingent,
liquidated and undisputed Claim, the holder of such Claim shall receive
Cash from the L/C Bank Contingent Claims Reserve in an amount equal to that
portion of the L/C Bank Contingent Claim that has become non-contingent,
liquidated and undisputed since the Consummation Date, the record date with
respect to the Distribution Date or the record date with respect to the
immediately preceding Periodic Distribution Date, as the case may be, as
described in the Plan Administrator Agreement. Upon the expiration or
cancellation of each undrawn Letter of Credit, funds shall be released from
the L/C Bank Contingent Claims Reserve in an amount equal to the face value
of such expired or cancelled undrawn Letter of Credit and applied in
accordance with the Plan Administrator Agreement.
4. Class 6: Fines, Penalties, and Punitive Damages Claims
The holders, if any, of Class 6 Fines, Penalties, and Punitive
Damages Claims shall not be entitled to, and shall not, receive or retain
any property or interest in property on account of such Claims.
5. Class 7: Securities Claims
a. Class 7.01: Debt Securities Claims
The holders of Class 7.01 Debt Securities Claims shall not be
entitled to, and shall not, receive or retain any property or interest in
property on account of such Claims.
b. Class 7.02: Equity Securities Claims
The holders of Class 7.02 Equity Securities Claims shall not be
entitled to, and shall not, receive or retain any property or interest in
property on account of such Claims.
6. Class 8: Intercompany Claims
In connection with, and as a result of, the substantive
consolidation of the Debtors' Estates and Chapter 11 Cases, on the
Confirmation Date or such other date as may be set by a Final Order of the
Bankruptcy Court, but subject to the occurrence of the Consummation Date,
all Intercompany Claims shall be eliminated and the holders of Class 8
Intercompany Claims shall not be entitled to, and shall not, receive or
retain any property or interest in property on account of such Claims.
D. Impaired Class Of Interests
Class 9: Equity Securities
In connection with, and as a result of, the substantive
consolidation of the Debtors' Estates and Chapter 11 Cases, on the
Confirmation Date or such other date as may be set by a Final Order of the
Bankruptcy Court, but subject to the occurrence of the Consummation Date,
all Subsidiary Interests shall be eliminated. On the Consummation Date, the
Equity Securities (including Subsidiary Interests) shall be canceled and
the holders of Equity Securities Interests (including Subsidiary Interests)
shall not be entitled to, and shall not, receive or retain any property or
interest in property on account of such Equity Securities Interests.
E. Special Provision Regarding Unimpaired Claims
Except as otherwise provided in the Plan, nothing shall affect
the Debtors' or Reorganized MAWS' rights and defenses, both legal and
equitable, with respect to any Unimpaired Claims, including, but not
limited to, all rights with respect to legal and equitable defenses to
setoffs or recoupments against Unimpaired Claims.
ARTICLE IV.
MEANS FOR IMPLEMENTATION OF THE PLAN
A. Substantive Consolidation
1. Consolidation of the Chapter 11 Cases
The Plan contemplates and is predicated upon entry of an order
substantively consolidating the Debtors' Estates and Chapter 11 Cases for
the purposes of all actions associated with confirmation and consummation
of the Plan. On the Confirmation Date or such other date as may be set by
an order of the Bankruptcy Court, but subject to the occurrence of the
Consummation Date, (i) all Intercompany Claims by, between, and among the
Debtors shall be eliminated, (ii) all assets and liabilities of the
Subsidiaries shall be merged or treated as if they were merged with the
assets and liabilities of MAWS, (iii) any obligation of a Debtor and all
guarantees thereof by one or more of the other Debtors shall be deemed to
be one obligation of MAWS, (iv) the Subsidiary Interests shall be
cancelled, and (v) each Claim filed or to be filed against any Debtor shall
be deemed filed only against MAWS and shall be deemed a single Claim
against and a single obligation of MAWS. On the Confirmation Date, and in
accordance with the terms of the Plan and the consolidation of the assets
and liabilities of the Debtors, all Claims based upon guarantees of
collection, payment, or performance made by the Debtors as to the
obligations of another Debtor shall be released and of no further force and
effect.
2. Substantive Consolidation Order
Unless the Bankruptcy Court has approved the substantive
consolidation of the Chapter 11 Cases by a prior order, this Plan shall
serve as, and shall be deemed to be, a motion for entry of an order
substantively consolidating the Debtors' Chapter 11 Cases. If no objection
to substantive consolidation is timely filed and served by any holder of an
Impaired Claim affected by the Plan as provided herein on or before five
(5) days prior the Voting Deadline or such other date as may be established
by the Bankruptcy Court, the Substantive Consolidation Order (which may be
the Confirmation Order) may be entered by the Bankruptcy Court. If any such
objections are timely filed and served, a hearing with respect to the
substantive consolidation of the Chapter 11 Cases and the objections
thereto shall be scheduled by the Bankruptcy Court, which hearing may, but
is not required to, coincide with the Confirmation Hearing.
B. Merger Of Subsidiaries Into MAWS
On the Consummation Date or as soon thereafter as practicable,
(i) the members of the board of directors of each of the Subsidiaries shall
be deemed to have resigned, (ii) subject to any limitations imposed by the
terms of the Asset Purchase Agreement, each of the Subsidiaries shall be
merged with and into MAWS, and (iii) the Chapter 11 Cases of the
Subsidiaries shall be closed, following which any and all proceedings that
could have been brought or otherwise commenced in the Chapter 11 Case of
any Subsidiary shall be brought or otherwise commenced in MAWS' Chapter 11
Case.
C. Continued Corporate Existence; Reorganized MAWS
MAWS shall continue to exist as Reorganized MAWS after the
Consummation Date in accordance with the laws of the State of Delaware and
pursuant to the certificate of incorporation and by-laws in effect prior to
the Consummation Date, except to the extent such certificate of
incorporation and by-laws are amended under this Plan.
D. Certificate Of Incorporation And By-laws
The certificate of incorporation and by-laws of MAWS shall be
amended as necessary to satisfy the provisions of the Plan and the
Bankruptcy Code. The certificate of incorporation of Reorganized MAWS shall
be amended to, among other things: (i) authorize one (1) share of New
Common Stock, $0.01 par value per share, (ii) provide, pursuant to section
1123(a)(6) of the Bankruptcy Code, for a provision prohibiting the issuance
of non-voting equity securities, and (iii) limit the activities of
Reorganized MAWS to matters related to the implementation of the Plan. The
Amended Certificate of Incorporation and By-laws will be filed with the
Bankruptcy Court on or before the date of the Confirmation Hearing.
E. Directors And Officers; Effectuating Documents; Further Transactions
From and after the Consummation Date, the Plan Administrator
shall serve as the sole officer and sole director of Reorganized MAWS. The
Plan Administrator shall be authorized to execute, deliver, file or record
such documents, instruments, releases, and other agreements and to take
such actions as may be necessary or appropriate to effectuate and further
evidence the terms and conditions of the Plan.
F. The Plan Administrator
1. Appointment
From and after the Consummation Date, [TO BE NAMED BY
COMMITTEE] or such other Person as may be designated by the Creditors'
Committee prior to the Confirmation Date, shall serve as the Plan
Administrator pursuant to the Plan Administrator Agreement and the Plan,
until death, resignation or discharge and the appointment of a successor
Plan Administrator in accordance with the Plan Administrator Agreement.
2. Rights, Powers and Duties of Reorganized MAWS and the Plan
Administrator
Reorganized MAWS shall retain and have all the rights, powers
and duties necessary to carry out its responsibilities under the Plan. Such
rights, powers and duties, which shall be exercisable by the Plan
Administrator on behalf of Reorganized MAWS pursuant to the Plan and the
Plan Administrator Agreement, shall include, among others:
(a) investing Reorganized MAWS' Cash, including, but not
limited to, the Cash held in the Reserves (in (a) direct
obligations of the United States of America or obligations of
any agency or instrumentality thereof which are guaranteed by
the full faith and credit of the United States of America; (b)
money market deposit accounts, checking accounts, savings
accounts, or certificates of deposit, or other time deposit
accounts that are issued by a commercial bank or savings
institution organized under the laws of the United States of
America or any state thereof; or (c) any other investments that
may be permissible under (i) section 345 of the Bankruptcy Code
or (ii) any order of the Bankruptcy Court entered in the
Debtors' Chapter 11 cases);
(b) calculating and paying of all distributions to be made
under the Plan, the Plan Administrator Agreement, the Escrow
Orders, and other orders of the Bankruptcy Court, to holders of
Allowed Administrative Claims, Allowed Priority Tax Claims,
Allowed Other Priority Claims, Allowed Convenience Claims,
Allowed Secured Claims, Allowed Unsecured Claims, and L/C Bank
Contingent Claims that have become undisputed, non-contingent,
and liquidated Claims;
(c) employing, supervising, and compensating professionals
retained to represent the interests of and serve on behalf of
Reorganized MAWS;
(d) making and filing tax returns for Reorganized MAWS;
(e) objecting to Claims or Interests filed against any of the
Debtors' Estates;
(f) seeking estimation of contingent or unliquidated claims
under 11 U.S.C ss. 502(c);
(g) seeking determination of tax liability under 11 U.S.C. ss.
505;
(h) prosecuting avoidance actions under 11 U.S.C. ss.ss. 544,
545, 547, 548, and 553;
(i) prosecuting turnover actions under 11 U.S.C. ss.ss. 542 and
543;
(j) implementing the ADR;
(k) prosecuting, settling, dismissing or otherwise disposing of
the Litigation Claims;
(l) dissolving Reorganized MAWS;
(m) exercising all powers and rights, and taking all actions,
contemplated by or provided for in the Plan Administrator
Agreement; and
(n) taking any and all other actions necessary or appropriate
to implement or consummate this Plan and the provisions of the
Plan Administrator Agreement.
3. Compensation of the Plan Administrator
The Plan Administrator shall be compensated from the Operating
Reserve pursuant to the terms of the Plan Administrator Agreement. Any
professionals retained by the Plan Administrator shall be entitled to
reasonable compensation for services rendered and reimbursement of expenses
incurred from the Operating Reserve. The payment of the fees and expenses
of the Plan Administrator and its retained professionals shall be made in
the ordinary course of business and shall not be subject to the approval of
the Bankruptcy Court, but shall be subject to review by the Plan Committee.
4. Indemnification
Reorganized MAWS shall indemnify and hold harmless the Plan
Administrator and its professionals, or any duly designated agent or
representative thereof (in its capacity as such), from and against and in
respect to any and all liabilities, losses, damages, claims, costs and
expenses, including, but not limited to attorneys' fees arising out of or
due to their actions or omissions, or consequences of such actions or
omissions, with respect to Reorganized MAWS or the implementation or
administration of the Plan, if the Plan Administrator, its professionals,
or any duly designated agent or representative thereof (in its capacity as
such) acted in good faith and in a manner reasonably believed to be in or
not opposed to the best interests of Reorganized MAWS, and, with respect to
any criminal action or proceeding, had no reasonable cause to believe its
conduct was unlawful. To the extent Reorganized MAWS indemnifies and holds
harmless the Plan Administrator and its professionals, or any duly
designated agent or representative thereof (in its capacity as such), as
provided above, the legal fees and related costs incurred by counsel to the
Plan Administrator in monitoring and participating in the defense of such
claims giving rise to the right of indemnification shall be paid out of the
Operating Reserve.
Reorganized MAWS and the Estates shall, to the fullest extent
permitted by the laws of the State of Delaware, indemnify and hold harmless
the Plan Administrator (in its capacity as such and as officer and director
of Reorganized MAWS) and the Plan Administrator's and Reorganized MAWS'
agents, representatives, professionals, and employees (collectively, the
"Indemnified Parties"), from and against and in respect to any and all
liabilities, losses, damages, claims, costs and expenses, including, but
not limited to attorneys' fees arising out of or due to their actions or
omissions, or consequences of such actions or omissions, with respect to
Reorganized MAWS and the Estates or the implementation or administration of
the Plan and the Plan Administrator Agreement, if the Indemnified Party
acted in good faith and in a manner reasonably believed to be in or not
opposed to the best interests of Reorganized MAWS and the Estates, and,
with respect to any criminal action or proceeding, had no reasonable cause
to believe its conduct was unlawful. To the extent Reorganized MAWS and the
Estates indemnify and hold harmless the Indemnified Parties as provided
above, the legal fees and related costs incurred by counsel to the Plan
Administrator in monitoring and participating in the defense of such claims
giving rise to the right of indemnification shall be paid out of the
Operating Reserve. The indemnification provisions of Section 4.6 of the
Plan Administrator Agreement shall remain available to and be binding upon
any former Plan Administrator or the estate of any decedent Plan
Administrator and shall survive the termination of the Plan Administrator
Agreement.
5. Insurance
The Plan Administrator shall be authorized to obtain all
reasonably necessary insurance coverage for itself, its agents,
representatives, employees or independent contractors, and Reorganized
MAWS, including, but not limited to, coverage with respect to (i) any
property that is or may in the future become the property of Reorganized
MAWS and (ii) the liabilities, duties, and obligations of the Plan
Administrator and its agents, representatives, employees or independent
contractors under the Plan Administrator Agreement (in the form of an
errors and omissions policy or otherwise), the latter of which insurance
coverage may, at the sole option of the Plan Administrator, remain in
effect for a reasonable period (not to exceed seven years) after the
termination of the Plan Administrator Agreement.
6. Authority to Object to Claims and Interests and to Settle
Disputed Claims
From and after the Consummation Date, Reorganized MAWS and the
Plan Administrator shall be authorized (i) to object to and Claims or
Interests filed against any of the Debtors' Estates and (ii) pursuant to
Fed. R. Bankr. P. 9019(b) and section 105(a) of the Bankruptcy Code, to
compromise and settle Disputed Claims, in accordance with the following
procedures, which shall constitute sufficient notice in accordance with the
Bankruptcy Code and the Bankruptcy Rules for compromises and settlements of
claims:
(a) If the Face Amount of the Disputed Claim is less than
$50,000, Reorganized MAWS and the Plan Administrator shall be
authorized and empowered to settle a Disputed Claim and execute
necessary documents, including a stipulation of settlement or
release, without notice to any party.
(b) If the Face Amount of the Disputed Claim is more than
$50,000 but less than $500,000, Reorganized MAWS and the Plan
Administrator shall be authorized and empowered to settle such
Disputed Claim and execute necessary documents, including a
stipulation of settlement or release, upon five Business Days
notice to the Plan Committee.
(c) If the Face Amount of the Disputed Claim is greater than
$500,000, Reorganized MAWS and the Plan Administrator shall be
authorized and empowered to settle such Disputed Claim and
execute necessary documents, including a stipulation of
settlement or release, only upon receipt of Bankruptcy Court
approval of such settlement.
If the Plan Committee objects to the proposed settlement of a
Disputed Claim within the prescribed time parameters, then (i) if the Plan
Committee withdraws for any reason its objection to such settlement, the
Plan Administrator may enter into the proposed settlement without further
notice and a hearing or entry of an order of the Bankruptcy Court (except
as required by subparagraph (e) above) or (ii) if the Plan Committee does
not withdraw its objection, the Plan Administrator shall have the option of
(A) foregoing entry into the settlement agreement that is the subject of
the Plan Committee's objection, (B) modifying the terms of the settlement
agreement in a way that results in the Plan Committee withdrawing its
objection, or (C) seeking an order of the Bankruptcy Court authorizing the
Plan Administrator to enter into the settlement agreement over the Plan
Committee's objection.
G. No Revesting Of Assets
The property of the Debtors' Estates shall not be vested in the
Debtors on or following the Confirmation Date or the Consummation Date, but
shall remain property of the Estate(s) and continue to be subject to the
jurisdiction of the Bankruptcy Court following confirmation of the Plan
until distributed to holders of Allowed Claims in accordance with the
provisions of the Plan, Plan Administrator Agreement, and Confirmation
Order. From and after the Consummation Date, all such property shall be
distributed in accordance with the provisions of the Plan, the Plan
Administrator Agreement, and the Confirmation Order.
H. Preservation Of Rights Of Action; Settlement of Litigation Claims
1. Preservation of Rights Of Action
Except as otherwise provided in the Plan, the Confirmation
Order, or in any document, instrument, release, or other agreement entered
into in connection with the Plan, in accordance with section 1123(b) of the
Bankruptcy Code, the Debtors and their Estates shall retain the Litigation
Claims. Reorganized MAWS, as the successor in interest to the Debtors, may,
in consultation with the Plan Committee, enforce, sue on, settle or
compromise (or decline to do any of the foregoing) any or all of the
Litigation Claims. The failure of the Debtors to list a claim, right of
action, suit, or proceeding on Exhibit C shall not constitute a waiver or
release by the Debtors or their Estates of such claim, right of action,
suit, or proceeding.
2. Settlement of Litigation Claims
At any time after the Confirmation Date and before the
Consummation Date, notwithstanding anything in this Plan to the contrary,
the Debtors, in consultation with the Creditors' Committee, may settle some
or all of the Litigation Claims with the approval of the Bankruptcy Court
pursuant to Fed. R. Bankr. P. 9019.
I. ADR
The Debtors have requested or shall request that the Bankruptcy
Court establish the ADR for the liquidation and payment of Damage Claims.
The ADR will be implemented prior to the Confirmation Date, but shall
continue after the Confirmation Date and the Consummation Date. The Debtors
anticipate that, pursuant to the ADR, each Damage Claim will be subjected
to a process designed to produce a settlement with respect to such Damage
Claim. If unsuccessful, the holder of the Damage Claim would then be
entitled to obtain relief from the Bankruptcy Court to pursue the Damage
Claim in an appropriate forum, which may include the Bankruptcy Court, if
so requested by Reorganized MAWS.
J. Creditors' Committee And Plan Committee
1. Dissolution of Creditors' Committee
The Creditors' Committee shall continue in existence until the
Consummation Date, to exercise those powers and perform those duties
specified in section 1103 of the Bankruptcy Code, and shall perform such
other duties as it may have been assigned by the Bankruptcy Court prior to
the Consummation Date. On the Consummation Date, the Creditors' Committee
shall be dissolved and its members shall be deemed released of all their
duties, responsibilities and obligations in connection with the Chapter 11
Cases or the Plan and its implementation, and the retention or employment
of the Creditors' Committee's attorneys, accountants, and other agents
shall terminate. All expenses of Creditors' Committee members and the fees
and expenses of their professionals through the Consummation Date shall be
paid in accordance with the terms and conditions of the Professional Fee
Order.
2. Creation of Plan Committee; Procedures
On the Consummation Date, the Plan Committee shall be formed
and constituted. The Plan Committee shall consist of three Creditors'
Committee members who shall be appointed by the Creditors' Committee and
whose identities shall be disclosed to the Bankruptcy Court. The Plan
Committee shall adopt bylaws which shall provide for the governance of the
Plan Committee and shall be filed with the Bankruptcy Court. In the event
that no one is willing to serve on the Plan Committee or there shall have
been no Plan Committee members for a period of thirty (30) consecutive
days, then the Plan Administrator may, during such vacancy and thereafter,
ignore any reference in the Plan, the Plan Administrator Agreement, or the
Confirmation Order to a Plan Committee, and all references to the Plan
Committee's ongoing duties and rights in the Plan, the Plan Administrator
Agreement, and the Confirmation Order shall be null and void.
3. Function and Duration; Compensation and Expenses
The Plan Committee (a) shall be responsible for (i) instructing
and supervising Reorganized MAWS and the Plan Administrator with respect to
their responsibilities under the Plan and the Plan Administrator Agreement,
(ii) reviewing the prosecution of adversary and other proceedings, if any,
including proposed settlements thereof, (iii) reviewing objections to and
proposed settlements of Disputed Claims, (iv) performing such other duties
that may be necessary and proper to assist Reorganized MAWS and the Plan
Administrator in effectuating the purposes of the Plan, and (v) approving
the payment of the fees and expenses of the Plan Administrator and its
retained professionals, and (b) shall remain in existence until such time
as the final distributions under the Plan have been made by Reorganized
MAWS. The members of the Plan Committee shall serve without compensation
for their performance of services as members of the Plan Committee, except
that they shall be entitled to reimbursement of reasonable expenses by
Reorganized MAWS.
4. Retention of Professionals
The Plan Committee shall have the right to retain the services
of attorneys, accountants, and other agents which, in the discretion of the
Plan Committee, are necessary to assist the Plan Committee in the
performance of its duties. The fees and expenses of such professionals
shall be paid by Reorganized MAWS from the Operating Reserve upon the
monthly submission of bills to the Plan Administrator and the Plan
Committee. The payment of the fees and expenses of the Plan Committee's
retained professionals shall be made in the ordinary course of business and
shall not be subject to the approval of the Bankruptcy Court.
5. Liability; Indemnification
Neither the Plan Committee, nor any of its members, designees,
or professionals, nor any duly designated agent or representative of the
Plan Committee, or their respective employees, shall be liable for the act
or omission of any other member, designee, agent, or representative of the
Plan Committee, nor shall any member be liable for any act or omission
taken or omitted to be taken in its capacity as a member of the Plan
Committee, other than acts or omissions resulting from such member's
willful misconduct or gross negligence. The Plan Committee may, in
connection with the performance of its functions, and in its sole and
absolute discretion, consult with counsel, accountants and its agents, and
shall not be liable for any act taken, omitted to be taken, or suffered to
be done in accordance with advice or opinions rendered by such
professionals. Notwithstanding such authority, the Plan Committee shall be
under no obligation to consult with counsel, accountants or its agents, and
its determination to not do so shall not result in the imposition of
liability on the Plan Committee, or its members and/or designees, unless
such determination is based on willful misconduct or gross negligence.
Reorganized MAWS shall indemnify and hold harmless the Plan Committee and
its members, designees, and professionals, and any duly designated agent or
representative thereof (in their capacity as such), from and against and in
respect to any and all liabilities, losses, damages, claims, costs and
expenses, including, but not limited to attorneys' fees arising out of or
due to their actions or omissions, or consequences of such actions or
omissions, other than as a result of their willful misconduct or gross
negligence, with respect to Reorganized MAWS or the implementation or
administration of the Plan. To the extent Reorganized MAWS indemnifies and
holds harmless the Plan Committee and its members, designees, or
professionals, or any duly designated agent or representative thereof (in
their capacity as such), as provided above, the legal fees and related
costs incurred by counsel to the Plan Committee in monitoring and
participating in the defense of such claims giving rise to the right of
indemnification shall be paid out of the Operating Reserve.
K. Cancellation Of Existing Securities And Agreements
On the Consummation Date, except as otherwise provided for
herein, (i) the Existing Securities and any other note, bond, indenture, or
other instrument or document evidencing or creating any indebtedness or
obligation of any of the Debtors shall be canceled, and (ii) the
obligations of the Debtors under any agreements, indentures or certificates
of designations governing the Existing Securities and any other note, bond,
indenture or other instrument or document evidencing or creating any
indebtedness or obligation of a Debtor, shall be released; provided,
however, that each indenture or other agreement that governs the rights of
the holder of a Claim and that is administered by an indenture trustee, an
agent, or a servicer shall continue in effect solely for the purposes of
(i) allowing such indenture trustee, agent, or servicer to make the
distributions to be made on account of such Claims under the Plan as
provided in Article III hereof, and (ii) permitting such indenture trustee,
agent, or servicer to maintain any rights or liens it may have for fees,
costs and expenses under such indenture or other agreement; provided,
further, that the provisions of clause (ii) of this paragraph shall not
effect a release of the Debtors' liabilities under this Plan and the
Confirmation Order or result in any expense or liability to the Debtors or
Reorganized MAWS. Reorganized MAWS shall not have any obligations to any
indenture trustee, agent or servicer (or to any Disbursing Agent replacing
such indenture trustee, agent or servicer) for any fees, costs or expenses;
provided, however, that nothing herein shall preclude such indenture
trustee, agent or servicer (or any Disbursing Agent replacing such
indenture trustee, agent or servicer) from being paid or reimbursed for
pre-petition and post-petition fees, costs and expenses from the
distributions until payment in full of such fees, costs or expenses that
are governed by the respective indenture or other agreement in accordance
with the provisions set forth therein.
L. Sources Of Cash For Plan Distributions
Except as otherwise provided in the Plan or the Confirmation
Order, all Cash necessary for Reorganized MAWS and the Plan Administrator
to make payments pursuant to the Plan shall be obtained from the Debtors'
cash balances and the liquidation of the Debtors' remaining non-Cash
assets, if any. Cash payments to be made pursuant to the Plan shall be made
by Reorganized MAWS (or any successor thereto) or if the Disbursing Agent
is an entity other than Reorganized MAWS, the Disbursing Agent.
M. Release Of Liens
Except as otherwise provided in the Plan, the Confirmation
Order, or in any document, instrument, or other agreement created in
connection with the Plan, on the Consummation Date, all mortgages, deeds of
trust, liens or other security interests against the property of the
Estates shall be released.
N. Special Provisions Regarding Insured Claims
Distributions under the Plan to each holder of an Allowed
Insured Claim shall be in accordance with the treatment provided under the
Plan for the Class in which such Allowed Insured Claim is classified;
provided, however, that the maximum amount of any distribution under the
Plan on account of an Allowed Insured Claim shall be limited to an amount
equal to: (a) the applicable deductible under the relevant insurance policy
minus (b) any reimbursement obligations of the Debtors to the insurance
carrier for sums expended by the insurance carrier on account of such Claim
(including defense costs). Nothing in this Article IV.N shall constitute a
waiver of any claim, right, or cause of action the Debtors may hold against
any Person, including the Debtors' insurance carriers.
O. Exemption From Certain Transfer Taxes
Pursuant to section 1146(c) of the Bankruptcy Code, any
transfers from the Debtors to Reorganized MAWS pursuant to the Plan shall
not be subject to any document recording tax, stamp tax, conveyance fee,
intangibles or similar tax, mortgage tax, stamp act, real estate transfer
tax, mortgage recording tax or other similar tax or governmental
assessment, and the Confirmation Order shall direct the appropriate state
or local governmental officials or agents to forego the collection of any
such tax or governmental assessment and to accept for filing and
recordation any of the foregoing instruments or other documents without the
payment of any such tax or governmental assessment.
ARTICLE V.
ACCEPTANCE OR REJECTION OF THE PLAN
A. Classes Entitled To Vote
Each Impaired Class of Claims that will (or may) receive or
retain property or any interest in property under the Plan shall be
entitled to vote to accept or reject the Plan. Ballots shall be cast and
tabulated on a consolidated basis, in accordance with the expected
substantive consolidation of the Debtors' Estates and Chapter 11 Cases. By
operation of law, each Unimpaired Class of Claims is deemed to have
accepted the Plan and, therefore, is not entitled to vote to accept or
reject the Plan. Because holders of Class 6 Fines, Penalties, and Punitive
Damages Claims, Class 7 Securities Claims, Class 8 Intercompany Claims, and
Class 9 Equity Securities Interests are not entitled to receive or retain
any property under the Plan, Classes 6, 7, 8, and 9 are presumed to have
rejected the Plan and, therefore, are not entitled to vote on the Plan.
B. Acceptance By Impaired Classes
An Impaired Class of Claims shall have accepted the Plan if (i)
the holders (other than any holder designated under section 1126(e) of the
Bankruptcy Code) of at least two-thirds in amount of the Allowed Claims
actually voting in such Class have voted to accept the Plan and (ii) the
holders (other than any holder designated under section 1126(e) of the
Bankruptcy Code) of more than one-half in number of the Allowed Claims
actually voting in such Class have voted to accept the Plan.
C. Cramdown
The Debtors will request Confirmation of the Plan, as it may be
modified from time to time, under section 1129(b) of the Bankruptcy Code.
The Debtors reserve the right to modify the Plan to the extent, if any,
that Confirmation pursuant to section 1129(b) of the Bankruptcy Code
requires modification.
ARTICLE VI.
PROVISIONS GOVERNING DISTRIBUTIONS
A. Distributions For Claims Allowed As Of The Consummation Date
Except as otherwise provided herein or as ordered by the
Bankruptcy Court, distributions to be made on account of Claims that are
Allowed Claims as of the Consummation Date shall be made on the
Distribution Date. Distributions on account of Claims that first become
Allowed Claims after the Consummation Date shall be made pursuant to the
terms and conditions of the Plan Administrator Agreement and Articles III,
VI, and VIII of this Plan.
B. Interest On Claims
Unless otherwise specifically provided for in the Plan or
Confirmation Order, or required by applicable bankruptcy law, and subject
to the provisions of the second sentence of this Article VI.B,
post-petition interest shall not accrue or be paid on any Claims, and no
holder of a Claim shall be entitled to interest accruing on or after the
Petition Date on any Claim. Interest shall be paid upon Disputed Claims as
provided in Section 2.7 of the Plan Administrator Agreement.
C. Distributions By Reorganized MAWS
Reorganized MAWS shall make all distributions of Cash required
to be distributed under the applicable provisions of the Plan and the Plan
Administrator Agreement. Reorganized MAWS and the Plan Administrator may
employ or contract with other entities to assist in or make the
distributions required by the Plan and the Plan Administrator Agreement.
D. Delivery Of Distributions And Undeliverable Or Unclaimed Distributions
1. Delivery of Distributions in General
Distributions to holders of Allowed Claims shall be made at the
addresses set forth in the Schedules or other records of the Debtors or
Reorganized MAWS at the time of the distribution.
2. Undeliverable and Unclaimed Distributions
a. Holding and Investment of Undeliverable and Unclaimed
Distributions
If the distribution to any holder of an Allowed Claim is
returned to the Disbursing Agent as undeliverable or is otherwise
unclaimed, no further distributions shall be made to such holder unless and
until the Disbursing Agent is notified in writing of such holder's
then-current address. Undeliverable and unclaimed distributions shall be
set aside or, in the case of a Cash distribution, deposited in a
segregated, interest bearing account, designated as an "unclaimed
distribution reserve" (the "Unclaimed Distribution Reserve"), for the
benefit of all such similarly situated Persons until such time as a
distribution becomes deliverable or is claimed.
b. After Distributions Become Deliverable
On each Periodic Distribution Date, Reorganized MAWS shall make
all distributions that have become deliverable or have been claimed since
the Distribution Date or the immediately preceding Periodic Distribution
Date, as the case may be, together with any interest actually earned
thereon.
c. Failure to Claim Undeliverable Distributions
Any holder of an Allowed Claim that does not assert a claim
pursuant to the Plan for an undeliverable or unclaimed distribution within
three years after the Consummation Date shall be deemed to have forfeited
its claim for such undeliverable or unclaimed distribution and shall be
forever barred and enjoined from asserting any such claim for an
undeliverable or unclaimed distribution against the Debtors and the
Estates, Reorganized MAWS, the Plan Administrator, or their property. In
such cases, any Cash or other property held in the Unclaimed Distribution
Reserve for distribution on account of such claims for undeliverable or
unclaimed distributions shall become the property of Reorganized MAWS free
of any restrictions thereon and notwithstanding any federal or state
escheat laws to the contrary, and shall be distributed in accordance with
the terms of the Plan Administrator Agreement. Nothing contained in the
Plan or the Plan Administrator Agreement shall require any Disbursing
Agent, including, but not limited to, the Plan Administrator or Reorganized
MAWS, to attempt to locate any holder of an Allowed Claim.
E. Record Date For Distributions
At the close of business on the Record Date, the transfer
ledgers for the Debt Securities shall be closed, and there shall be no
further changes in the record holders of the Debt Securities. Reorganized
MAWS shall have no obligation to recognize any transfer of such Debt
Securities occurring after the Record Date and shall be entitled instead to
recognize and deal for all purposes hereunder with only those record
holders stated on the transfer ledgers as of the close of business on the
Record Date.
F. Means Of Cash Payment
Payments of Cash made pursuant to the Plan shall be in U.S.
dollars and shall be made, at the option and in the sole discretion of
Reorganized MAWS, by (i) checks drawn on or (ii) wire transfer from, a
domestic bank selected by Reorganized MAWS. If so requested in a writing
received by Reorganized MAWS no later than five (5) business days after the
Confirmation Date, Cash payments of $500,000.00 or more to be made pursuant
to the Plan shall be made by wire transfer from a domestic bank. Cash
payments to foreign creditors may be made, at the option of Reorganized
MAWS, in such funds and by such means as are necessary or customary in a
particular foreign jurisdiction.
G. Withholding And Reporting Requirements
In connection with the Plan and all distributions thereunder,
Reorganized MAWS 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.
H. Setoffs
Reorganized MAWS may, but shall not be required to, set off
against any Claim and the payments or other distributions to be made
pursuant to the Plan in respect of such Claim, claims of any nature
whatsoever that the Debtors or Reorganized MAWS may have against the holder
of such Claim; provided, however, that neither the failure to do so nor the
allowance of any Claim hereunder shall constitute a waiver or release by
Reorganized MAWS of any such claim that the Debtors or Reorganized MAWS may
have against such holder.
I. Surrender Of Cancelled Debt Instruments Or Securities
On or before the Distribution Date, or as soon thereafter as
practicable, each holder of an instrument evidencing a Claim on account of
Debt Securities (a "Certificate") shall surrender such Certificate to the
Plan Administrator or Reorganized MAWS or, with respect to indebtedness
that is governed by an indenture or other agreement, the respective
indenture trustee, agent, or servicer, as the case may be, and such
Certificate shall be cancelled. No distribution of property hereunder shall
be made to or on behalf of any such holder unless and until such
Certificate is received by the Plan Administrator or Reorganized MAWS or
the respective indenture trustee, agent, or servicer, as the case may be,
or the unavailability of such Certificate is reasonably established to the
satisfaction of the Plan Administrator or Reorganized MAWS or the
respective indenture trustee, agent, or servicer, as the case may be. Any
such holder who fails to surrender or cause to be surrendered such
Certificate or fails to execute and deliver an affidavit of loss and
indemnity reasonably satisfactory to the Plan Administrator or Reorganized
MAWS or the respective indenture trustee, agent, or servicer, as the case
may be, prior to the fifth (5th) anniversary of the Confirmation Date,
shall be deemed to have forfeited all rights and Claims in respect of such
Certificate and shall not participate in any distribution hereunder, and
all property in respect of such forfeited distribution, including interest
accrued thereon, shall revert to Reorganized MAWS notwithstanding any
federal or state escheat laws to the contrary.
J. Fractional Dollars; De Minimis Distributions
Notwithstanding any other provision of the Plan or the Plan
Administrator Agreement, (i) neither the Plan Administrator nor Reorganized
MAWS shall be required to make distributions or payments of fractions of
dollars, and whenever any payment of a fraction of a dollar under the Plan
would otherwise be called for, the actual payment made shall reflect a
rounding of such fraction to the nearest whole dollar (up or down), with
half dollars being rounded down, and (ii) the Plan Administrator shall have
no obligation to make a distribution on account of an Allowed Claim from
any Reserve or account (other than the L/C Bank Contingent L/C Reserve) (a)
to any holder of an Allowed Claim (other than a Class 5 L/C Bank Contingent
Claim) if the aggregate amount of all distributions authorized to be made
from all such Reserves or accounts on the Periodic Distribution Date in
question is less than $250,000 or (b) to a specific holder of an Allowed
Claim if the amount to be distributed to that holder on the particular
Distribution Date or Periodic Distribution Date (1) does not constitute a
final distribution to such holder and (2) is less than $50.00.
ARTICLE VII.
TREATMENT OF EXECUTORY CONTRACTS
AND UNEXPIRED LEASES
A. Rejected Contracts And Leases
Except as otherwise provided in the Plan, or in any contract,
instrument, release, or other agreement or document entered into in
connection with the Plan, each of the executory contracts and unexpired
leases to which any Debtor is a party, to the extent such contracts or
leases are executory contracts or unexpired leases, shall be rejected by
the applicable Debtor on the Confirmation Date, unless such contract or
lease (i) previously (a) shall have been assumed or rejected by the Debtors
(including, but not limited to, those executory contracts and unexpired
leases assumed and assigned to USA Waste) or (b) shall have expired or
terminated pursuant to its own terms (including, but not limited to, the
employment agreements between MAWS and Alan B. Howald, Dennis W. Marchetti,
Kent Adkins, R.J. Roberts, and Hilary Plauche, which have been terminated),
or (ii) is listed on the schedule of assumed contracts and leases annexed
hereto as Exhibit B; provided, however, that neither the inclusion by the
Debtors of a contract or lease on Exhibit B nor anything contained in this
Article VII.A shall constitute an admission by any Debtor that such
contract or lease is an executory contract or unexpired lease or that any
Debtor or its successors and assigns has any liability thereunder. The
Confirmation Order shall constitute an order of the Bankruptcy Court
approving the rejections described in this Article VII.A, pursuant to
section 365 of the Bankruptcy Code, as of the Confirmation Date.
B. Bar To Rejection Damages
If the rejection of an executory contract or unexpired lease
pursuant to Article VII.A above gives rise to a Claim by the other party or
parties to such contract or lease, such Claim shall be forever barred and
shall not be enforceable against the applicable Debtor or its Estate,
Reorganized MAWS, the Plan Administrator, or their respective successors or
properties unless a proof of Claim is filed and served on Reorganized MAWS
and counsel for Reorganized MAWS within 40 days after service of a notice
of entry of the Confirmation Order or such other date as prescribed by the
Bankruptcy Court.
C. Assumed Contracts And Leases
Except as otherwise provided in the Plan, or in any contract,
instrument, release, or other agreement or document entered into in
connection with the Plan, the Debtors shall assume (and assign, as the case
may be) each of the executory contracts and unexpired leases listed on
Exhibit B hereto. Any monetary amounts by which each executory contract and
unexpired lease to be assumed under the Plan may be in default shall be
satisfied, under section 365(b)(1) of the Bankruptcy Code, by cure payments
to be made on the Distribution Date. In the event of a dispute regarding
(i) the nature or amount of any cure payments, (ii) the ability of the
Debtors or any assignee of the Debtors to provide "adequate assurance of
future performance" (within the meaning of section 365 of the Bankruptcy
Code) under the contract or lease to be assumed, or (iii) any other matter
pertaining to assumption or assignment, the Debtors or Reorganized MAWS
shall make such cure payments following the entry of a Final Order
resolving the dispute and approving the assumption and, as the case may be,
assignment. The Confirmation Order shall constitute an order of the
Bankruptcy Court approving the assumptions (and assignments, as the case
may be) described in this Article VII.C, pursuant to section 365 of the
Bankruptcy Code, as of the Confirmation Date.
ARTICLE VIII.
PROCEDURES FOR RESOLVING DISPUTED,
CONTINGENT AND UNLIQUIDATED CLAIMS
A. Objection Deadline; Prosecution Of Objections
As soon as practicable, but in no event later than 120 days
after the Consummation Date (unless extended by an order of the Bankruptcy
Court), the Debtors or Reorganized MAWS, as the case may be, 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.
Nothing contained herein, however, shall limit Reorganized MAWS' right to
object to Claims, if any, filed or amended more than 120 days after the
Consummation Date. Subject to the limitations set forth in the Plan
Administrator Agreement and Article IV.F of this Plan, and the oversight of
the Plan Committee, Reorganized MAWS and the Plan Administrator shall be
authorized to, and shall, resolve all Disputed Claims by withdrawing or
settling such objections thereto, or by litigating to judgment in the
Bankruptcy Court or such other court having jurisdiction the validity,
nature, and/or amount thereof.
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. Accounts; Escrows; Reserves
Reorganized MAWS and the Plan Administrator shall, subject to
and in accordance with the provisions of Sections 2.1 through 2.6 of the
Plan Administrator Agreement, (i) establish one or more general accounts
into which shall be deposited all funds not required or permitted to be
deposited into any other account, Reserve, or Escrow, (ii) continue to hold
in escrow all amounts previously escrowed pursuant to an Escrow Order in
accordance with the terms and conditions of such Escrow Orders, and (iii)
create and fund the Operating Reserve, Administrative Claims Reserve,
Disputed Claims Reserve, Unclaimed Distributions Reserve, and L/C Bank
Contingent Claims Reserve from the Cash or other property to be distributed
under the Plan. Reorganized MAWS may sell non-Cash assets, if any, held in
any Reserve in accordance with the provisions of this Plan and the Plan
Administrator Agreement. The net proceeds of any such sales shall be
deposited in an account or Reserve pursuant to the terms of the Plan
Administrator Agreement.
D. Reserve Amount; Estimated Amount
The Debtors, in consultation with the Creditors' Committee, may
(i) request the Bankruptcy Court to determine the amount of the Estates'
Cash that must be reserved (the "Reserve Amount") for any given Disputed
Claim or, alternatively, (ii) request the Bankruptcy Court to estimate (the
"Estimated Amount") any such Disputed Claim that is unliquidated or
contingent.
1. Disputed Claims Reserve
Reorganized MAWS shall create and fund the Disputed Claims
Reserve with an amount of the Estates' Cash equal to the sum of (a) the
Reserve Amounts and (b) with respected to Dispute Claims as to which no
Reserve Amount has been established, seventy percent (70%) of the Estimated
Amounts of all such Disputed Claims (other than Disputed Administrative
Claims, Disputed Priority Tax Claims, Disputed Other Priority Claims, and
L/C Bank Contingent Claims) as set forth in one or more orders of the
Bankruptcy Court. If the Debtors or the Creditors' Committee elect not to
request such an estimation or Reserve Amount determination from the
Bankruptcy Court with respect to a particular Disputed Claim entitled to be
paid from the Disputed Claims Reserve, Reorganized MAWS shall withhold the
Disputed Claims Reserve for such Claim by reserving an amount of the
Estates' Cash equal to seventy percent (70%) of the Face Amount of such
Claim.
2. Administrative Claims Reserve
Reorganized MAWS shall create and fund the Administrative
Claims Reserve with an amount of the Estates' Cash equal to the sum of (i)
the aggregate Face Amount of all Disputed Administrative Claims, Disputed
Priority Tax Claims, and Disputed Other Priority Claims that have Face
Amounts, plus (ii) the Reserve Amount or the Estimated Amount of all such
Disputed Administrative Claims, Disputed Priority Tax Claims, and Disputed
Other Priority Claims that do not have Face Amounts.
3. L/C Bank Contingent Claims Reserve
Reorganized MAWS shall create and fund the L/C Bank Contingent
Claims Reserve with an amount of the Estates' Cash equal to 103% of the
Face Amount of all Class 5 L/C Bank Contingent Claims.
E. Distributions After Allowance
Reorganized MAWS shall make payments and distributions from the
appropriate Reserves to the holder of any (i) Disputed Administrative
Claim, Disputed Priority Tax Claim, Disputed Other Priority Claim, or
Disputed Claim that has become an Allowed Claim or (ii) L/C Bank Contingent
Claim that has become an undisputed, non-contingent, and liquidated Claim,
on the first Periodic Distribution Date following the date that all or part
of such Disputed Administrative Claim, Disputed Priority Tax Claim,
Disputed Other Priority Claim, or Disputed Claim becomes an Allowed Claim
or such L/C Bank Contingent Claim becomes an undisputed, non-contingent,
and liquidated Claim. All payments and distributions to holders of Allowed
Claims from the accounts, Reserves, and Escrows shall be made in accordance
with the provisions of the Plan governing the class of Claims to which the
holder of such Allowed Claim belongs and pursuant to the terms of Section
2.7 of the Plan Administrator Agreement. Holders of Disputed Administrative
Claims, Disputed Priority Tax Claims, Disputed Other Priority Claims, and
Disputed Claims (other than (i) Class 5 L/C Bank Contingent Claims and (ii)
Disputed Claims whose resolution and payment is subject to and Escrow
Order) that ultimately become Allowed Claims shall also be entitled to
receive interest for the Period between the Distribution Date and the date
of the initial distribution on account of such Claim (the "Disallowance
Period"), calculated by multiplying (A) the initial amount distributed to
such holder on the Periodic Distribution Date in question times (B) the
difference of (1) the then current rate of interest on a 30-day Treasury
Bill minus (2) 150 basis points times (C) the number of days in the
Disallowance Period divided by 365.
ARTICLE IX.
CONDITIONS PRECEDENT TO CONFIRMATION
AND CONSUMMATION OF THE PLAN
A. Conditions To Confirmation
The following are conditions precedent to confirmation of the
Plan:
1. The Bankruptcy Court shall have entered an order approving
the Disclosure Statement with respect to the Plan as containing adequate
information within the meaning of section 1125 of the Bankruptcy Code.
2. The Substantive Consolidation Order, which may be the
Confirmation Order, shall be in form and substance reasonably acceptable to
the Debtors and the Creditors' Committee and shall have been entered by the
Bankruptcy Court prior to or contemporaneously with the Confirmation Order.
B. Conditions To Consummation Date
The following are conditions precedent to the occurrence of the
Consummation Date, each of which may be satisfied or waived in accordance
with Article IX.C of the Plan:
1. The Confirmation Date shall have occurred and the
Confirmation Order, in form and substance reasonably acceptable to the
Debtors and the Creditors' Committee, confirming the Plan, as the same may
have been modified, shall have been entered and shall, among other things,
provide that:
a. the Debtors, Reorganized MAWS, the Plan Committee, and the
Plan Administrator are authorized and directed to take all actions
necessary or appropriate to enter into, implement and consummate the
instruments, releases, and other agreements or documents created in
connection with the Plan;
b. the provisions of the Confirmation Order are nonseverable
and mutually dependent;
c. all executory contracts or unexpired leases assumed and
assigned by the Debtors during the Chapter 11 Cases or under the Plan shall
remain in full force and effect for the benefit of the assignee(s) thereof,
notwithstanding any provision in such contract or lease (including those
described in sections 365(b)(2) and (f) of the Bankruptcy Code) that
prohibits such assignment or transfer or that enables, permits or requires
termination of such contract or lease; and
d. the waivers, exculpations, and injunctions described in
Article XII of the Plan are approved.
2. The Plan Administrator Agreement shall have been executed
and shall be in full force and effect.
3. The Confirmation Order shall have become a Final Order.
C. Waiver Of Conditions
The conditions set forth in Articles IX.A. and IX.B. of the
Plan, except that set forth in Article IX.A.1, may be waived in whole or in
part by the Debtors, with the consent of the Creditors' Committee, without
notice or a hearing.
ARTICLE X.
MODIFICATIONS AND AMENDMENTS
The Debtors 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, the Debtors 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
Federal Rules of Bankruptcy Procedure or order of the Bankruptcy Court.
ARTICLE XI.
RETENTION OF JURISDICTION
Under sections 105(a) and 1142 of the Bankruptcy Code, and
notwithstanding entry of the Confirmation Order and occurrence of the
Consummation Date, the Bankruptcy Court shall retain exclusive jurisdiction
over all matters arising out of, and related to, the Chapter 11 Cases and
the Plan to the fullest extent permitted by law, including, among other
things, jurisdiction to:
A. Allow, disallow, determine, liquidate, classify, estimate or
establish the priority or secured or unsecured status of any Claim or
Interest, including the resolution of any request for payment of any
Administrative Claim and the resolution of any objections to the allowance
or priority of Claims or Interests;
B. Hear and determine all applications for compensation and
reimbursement of expenses of Professionals under the Plan or under sections
330, 331, 503(b), 1103 and 1129(a)(4) of the Bankruptcy Code; provided,
however, that, from and after the Consummation Date the payment of the fees
and expenses of the retained professionals of Reorganized MAWS, the Plan
Committee, and the Plan Administrator shall be made in the ordinary course
of business and shall not be subject to the approval of the Bankruptcy
Court;
C. Hear and determine all matters with respect to the
assumption or rejection of any executory contract or unexpired lease to
which a Debtor is a party or with respect to which a Debtor may be liable,
including, if necessary, the liquidation or allowance of any Claims arising
therefrom;
D. Effectuate performance of and payments under the provisions
of the Plan;
E. Implement the ADR;
F. Determine any and all pending adversary proceedings,
motions, applications, and contested or litigated matters;
G. Enter such orders as may be necessary or appropriate to
execute, implement, or consummate the provisions of the Plan and all
contracts, instruments, releases, and other agreements or documents created
in connection with the Plan, the Disclosure Statement or the Confirmation
Order;
H. Hear and determine disputes arising in connection with the
interpretation, implementation, consummation, or enforcement of the Plan,
including disputes arising under agreements, documents or instruments
executed in connection with the Plan;
I. Consider any modifications of the Plan, cure any defect or
omission, or reconcile any inconsistency in any order of the Bankruptcy
Court, including, without limitation, the Confirmation Order;
J. Issue injunctions, enter and implement other orders, or take
such other actions as may be necessary or appropriate to restrain
interference by any entity with implementation, consummation, or
enforcement of the Plan or the Confirmation Order;
K. Enter and implement such orders as may be necessary or
appropriate if the Confirmation Order is for any reason reversed, stayed,
revoked, modified, or vacated;
L. Hear and determine any matters arising in connection with or
relating to the Plan, the Disclosure Statement, the Confirmation Order or
any contract, instrument, release, or other agreement or document created
in connection with the Plan, the Disclosure Statement or the Confirmation
Order;
M. Enforce all orders, judgments, injunctions, releases,
exculpations, indemnifications and rulings entered in connection with the
Chapter 11 Cases;
N. Hear and determine matters concerning state, local, and
federal taxes in accordance with sections 346, 505, and 1146 of the
Bankruptcy Code;
O. To hear and determine all disputes or other matters arising
in connection with the interpretation, implementation or enforcement of the
Asset Purchase Agreement and the 363 Order;
P. Hear and determine all matters related to (a) the property
of the Estate(s) from and after the Confirmation Date, as provided in
Article IV.G of the Plan, (b) the winding up of the Debtors' affairs, and
(c) the activities of Reorganized MAWS and the Plan Administrator,
including (i) challenges to or approvals of Reorganized MAWS' or the Plan
Administrator's activities, (ii) resignation, incapacity or removal of the
Plan Administrator and selection of a successor Plan Administrator, (iii)
reporting by, termination of, and accounting by Reorganized MAWS and the
Plan Administrator, and (iv) release of the Plan Administrator from its
duties;
Q. Hear and determine disputes with respect to the compensation
of the (i) Reorganized MAWS' professional advisors, (ii) the Plan
Administrator and its professional advisors, and (iii) the Plan Committee,
its members, and its professional advisors;
R. Hear and determine such other matters as may be provided in
the Confirmation Order or as may be authorized under provisions of the
Bankruptcy Code; and
S. Enter final decrees closing the Chapter 11 Cases.
ARTICLE XII.
EFFECTS OF CONFIRMATION
A. Binding Effect
The Plan shall be binding upon and inure to the benefit of the
Debtors, all present and former holders of Claims and Interests, and their
respective successors and assigns, including, but not limited to,
Reorganized MAWS.
B. Waiver Of Claims; Covenant Not To Sue
Effective as of the Confirmation Date, but subject to the
occurrence of the Consummation Date, and except as otherwise provided in
the Plan or the Confirmation Order, (i) all Persons who have held, hold, or
may hold Claims against or Interests in the Debtors and (ii) the Debtors
shall be deemed to have forever waived and covenanted with each of the
Debtors, the Estate(s), Reorganized MAWS, and the Identified Officers and
Directors (collectively, the "Released Parties"), to waive and not to (a)
sue, or otherwise seek any recovery from the Released Parties or their
property, whether for tort, fraud, contract, violations of federal or state
securities laws, or otherwise, based upon any act or occurrence or failure
to act taken or occurring before the Consummation Date arising out of the
business or affairs of the Debtors, or (b) assert against any of the
Released Parties or their property any Claim, obligation, right, cause of
action and liability which any such holder of a Claim against or Interest
in the Debtors may be entitled to assert, whether known or unknown,
foreseen or unforeseen, existing or hereafter arising, based in whole or in
part upon any act or omission, transactions, or occurrence taking place on
or before the Consummation Date in any way relating to the Debtors, these
Chapter 11 Cases, or this Plan; provided, however, that nothing contained
in this Plan or the Confirmation Order shall release, or be deemed to
release, any non-Debtor third parties from the causes of action (i)
retained by Reorganized MAWS or (ii) being pursued in the Securities
Actions as of June 20, 1997.
C. Exculpation And Limitation Of Liability
Neither the Debtors nor the Creditors' 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, the
Debtors' Chapter 11 Cases, 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 or
gross negligence, 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, no holder of
a Claim or Interest, no other party in interest, none of their respective
agents, employees, representatives, financial advisors, attorneys, or
affiliates, and no successors or assigns of the foregoing, shall have any
right of action against the Debtors, the Estate(s), Reorganized MAWS, the
Creditors' 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, the
Debtors' Chapter 11 Cases, 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 or
gross negligence.
D. Injunction
Except as otherwise provided in the Plan, the Confirmation
Order shall provide, among other things, that from and after the
Confirmation Date, all Persons who have held, hold, or may hold Claims
against or Interests in the Debtors are permanently enjoined from taking
any of the following actions against the Debtors, the Estate(s),
Reorganized MAWS, the Plan Administrator, or any of their property on
account of any such Claims or Interests: (i) commencing or continuing, in
any manner or in any place, any action or other proceeding; (ii) enforcing,
attaching, collecting or recovering in any manner any judgment, award,
decree or order; (iii) creating, perfecting or enforcing any lien or
encumbrance; (iv) asserting a setoff, right of subrogation or recoupment of
any kind against any debt, liability or obligation due to the Debtors; and
(v) commencing or continuing, in any manner or in any place, any action
that does not comply with or is inconsistent with the provisions of the
Plan; provided, however, that nothing contained herein shall preclude such
persons from exercising their rights pursuant to and consistent with the
terms of this Plan.
E. Termination Of Subordination Rights; Settlement Of Related Claims
And Controversies
1. All Claims of the Senior Note Holders and Subordinated Note
Holders against the Debtors and all rights and claims between or among the
Senior Note Holders and Subordinated Note Holders relating in any manner
whatsoever to claimed subordination rights, "make-whole" rights, rights to
post-petition and default interest, or similar rights, if any
(collectively, "Subordination-Related Rights"), shall be deemed satisfied
by the distributions under the Plan to holders of such Claims (i.e.,
holders of Senior Note Claims and Subordinated Note Claims) and such rights
shall be deemed waived, released, discharged, and terminated as of the
Consummation Date, and all actions related to the enforcement of such
Subordination-Related Rights shall be permanently enjoined. Distributions
under the Plan shall not be subject to levy, garnishment, attachment, or
like legal process by any holder of a Claim, including, but not limited to,
holders of Senior Note Claims and Subordinated Note Claims, by reason of
any claimed Subordination-Related Rights or otherwise, so that each holder
of a Claim shall have and receive the benefit of the distributions in the
manner set forth in the Plan.
2. Pursuant to Fed. R. Bankr. P. 9019 and in consideration for
the distributions and other benefits provided under the Plan, the
provisions of this Article XII.E shall constitute a good faith compromise
and settlement of all claims or controversies relating to the termination
of all contractual, legal and equitable Subordination-Related Rights that
any holder of a Claim, including, but not limited to, a holder of a Senior
Note Claim or Subordinated Note Claim, may have with respect to any Allowed
Claim, or any distribution to be made on account of an Allowed Claim. The
entry of the Confirmation Order shall constitute the Bankruptcy Court's
approval of the compromise or settlement of all such claims or
controversies, including, without limitation, the compromise and settlement
embodied in the Plan's treatment of Allowed Senior Note Claims and Allowed
Subordinated Note Claims, as described in Article III.C.2 above, and the
Bankruptcy Court's finding that such compromises and settlements are fair,
equitable, and reasonable, and in the best interests of the Debtors, their
Estates, and all Claim holders, including affected holders of Senior Note
Claims and holders of Subordinated Note Claims.
F. Continuation of ADR
Notwithstanding Confirmation of the Plan, the holder of any
unliquidated Damage Claim must first exhaust the remedies in the ADR before
such holder may pursue its Damage Claim in an appropriate forum.
ARTICLE XIII.
COMPROMISES AND SETTLEMENTS
Pursuant to Fed. R. Bankr. P. 9019(a), the Debtors may
compromise and settle various Claims (a) against them and (b) that they
have against other Persons. The Debtors expressly reserve the right (with
Bankruptcy Court approval, following appropriate notice and opportunity for
a hearing) to compromise and settle Claims against them and Claims that
they may have against other Persons up to and including the Consummation
Date. After the Consummation Date, such right shall pass to Reorganized
MAWS, pursuant to Article IV.B of the Plan.
ARTICLE XIV.
MISCELLANEOUS PROVISIONS
A. Bar Dates For Certain Claims
1. Administrative Claims
The Confirmation Order will establish an Administrative Claims
Bar Date for filing Administrative Claims (except for Professional Fees and
the expenses of the members of the Creditors' Committee), which date will
be 45 days after the Confirmation Date. Holders of asserted Administrative
Claims, except for Professional Fees and the expenses of the members of the
Creditors' Committee, not paid prior to the Confirmation Date submit proofs
of Claim on or before such Administrative Claims Bar Date or forever be
barred from doing so. 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. The Debtors, or
Reorganized MAWS, as the case may be, shall have 45 days (or such longer
period as may be allowed by order of the Bankruptcy Court) 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.
2. Professional Fee Claims; Substantial Contribution Claims
All requests for compensation or reimbursement of Professional
Fees pursuant to sections 327, 328, 330, 331, 503(b) or 1103 of the
Bankruptcy Code for services rendered to the Debtors prior to the
Consummation Date (including requests under section 503(b)(4) of the
Bankruptcy Code by any Professional or other entity for making a
substantial contribution in the Chapter 11 Cases) shall file and serve on
Reorganized MAWS and counsel for Reorganized MAWS an application for final
allowance of compensation and reimbursement of expenses no later than 45
days after the Consummation Date, unless otherwise ordered by the
Bankruptcy Court. Objections to applications of such Professionals or other
entities for compensation or reimbursement of expenses must be filed and
served on Reorganized MAWS, counsel for Reorganized MAWS, and the
requesting Professional or other entity no later than 45 days (or such
longer period as may be allowed by order of the Bankruptcy Court) after
the date on which the applicable application for compensation or
reimbursement was served.
B. Payment Of Statutory Fees
All fees payable by the Subsidiaries under 28 U.S.C. ss. 1930,
as determined by the Bankruptcy Court at the Confirmation Hearing pursuant
to section 1128 of the Bankruptcy Code, shall be paid on or before the
Consummation Date, and neither the Debtors, their Estates, Reorganized
MAWS, nor the Plan Administrator shall thereafter be liable for the payment
of any additional fees under 28 U.S.C. ss. 1930, other than with respect to
MAWS' Chapter 11 Case.
C. Revocation, Withdrawal Or Non-Consummation
The Debtors reserve the right to revoke or withdraw the Plan as
to any or all of the Debtors prior to the Confirmation Date and to file
subsequent plans of reorganization. If the Debtors revoke or withdraw the
Plan as to any or all of the Debtors, or if Confirmation or Consummation as
to any or all of the Debtors does not occur, then, with respect to such
Debtors, (a) the Plan shall be null and void in all respects, (b) 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, and (c) nothing contained in the Plan shall (i) constitute a
waiver or release of any Claims by or against, or any Interests in, such
Debtors or any other Person, (ii) prejudice in any manner the rights of
such Debtors or any other Person, or (iii) constitute an admission of any
sort by the Debtors or any other Person.
D. Severability Of Plan Provisions
If, prior to Confirmation, any term or provision of the Plan is
held by the Bankruptcy Court to be invalid, void or unenforceable, the
Bankruptcy Court, at the request of the Debtors, shall have the power to
alter and interpret such term or provision to make it valid or enforceable
to the maximum extent practicable, consistent with the original purpose of
the term or provision held to be invalid, void or unenforceable, and such
term or provision shall then be applicable as altered or interpreted.
Notwithstanding any such holding, alteration or interpretation, the
remainder of the terms and provisions of the Plan shall remain in full
force and effect and shall in no way be affected, impaired or invalidated
by such holding, alteration or interpretation. The Confirmation Order shall
constitute a judicial determination and shall provide that each term and
provision of the Plan, as it may have been altered or interpreted in
accordance with the foregoing, is valid and enforceable pursuant to its
terms.
E. Successors And Assigns
The rights, benefits and obligations of any entity named or
referred to in the Plan shall be binding on, and shall inure to the benefit
of, any heir, executor, administrator, successor or assign of such entity.
F. Service Of Documents
1. Any pleading, notice or other document required or permitted
to be provided to the Debtors 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:
MID-AMERICAN WASTE SYSTEMS, INC.
1006 Walnut Street
P.O. Box 156
Canal Winchester, Ohio 43110
Attn: Mr. Gene A. Meredith
with copies to:
SKADDEN, ARPS, SLATE, MEAGHER & FLOM LLP
919 Third Avenue
New York, New York 10022-3897
Attn: Alesia Ranney-Marinelli, Esq.
-and-
P.O. Box 636
One Rodney Square
Wilmington, Delaware 19899-0636
Attn: Anthony W. Clark, Esq.
2. Any pleading, notice or other document required or permitted
to be provided to Reorganized MAWS or the Plan Administrator 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:
_________________________________________
_________________________________________
_________________________________________
Attn:____________________________________
with copies to:
PLAN COMMITTEE OF REORGANIZED MAWS
c/o Paul, Weiss, Rifkind, Wharton & Garrison
1285 Avenue of the Americas
New York, New York 10019
(212) 373-3000
Attn: Alan W. Kornberg, Esq,
G. Term Of Injunctions Or Stays
Unless otherwise provided herein, in the Confirmation Order, or
in any other order of the Bankruptcy Court, all injunctions or stays
provided for in the Chapter 11 Cases 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 all property of the Estate(s) of
Reorganized MAWS and the other Debtors has been distributed and Reorganized
MAWS has been dissolved.
H. Consummation Of Plan
The Debtors intend to request that the Confirmation Order
include (a) a finding by the Bankruptcy Court that Fed. R. Civ. P. 62(a)
shall not apply to the Confirmation Order and (b) the Bankruptcy Court's
authorization for the Debtors to consummate the Plan immediately after
entry of the Confirmation Order.
I. Governing Law
Unless a rule of law or procedure is supplied by federal law,
including the Bankruptcy Code and Bankruptcy Rules, (i) the construction
and implementation of the Plan and any agreements, documents, and
instruments executed in connection with the Plan and (ii) corporate
governance matters shall be governed by the laws of the State of Delaware,
without giving effect to the principles of conflicts of law thereof.
Dated: Wilmington, Delaware
June 20, 1997
MID-AMERICAN WASTE SYSTEMS, INC., et al.,
Debtors-in-Possession
By: /s/ Gene A. Meredith
Name: Gene A. Meredith
Title: President and Chief Executive Officer
of Mid-American Waste Systems, Inc.
and the Subsidiaries
SKADDEN, ARPS, SLATE, MEAGHER & FLOM LLP
Attorneys for Mid-American Waste Systems, Inc., et al.,
Debtors-in-Possession
By: /s/ Alesia Ranney-Marinelli
Alesia Ranney-Marinelli (ID #700)
Lawrence V. Gelber
919 Third Avenue
New York, New York 10022-3897
(212) 735-3000
-and-
Anthony W. Clark (ID #2051)
P.O. Box 636
One Rodney Square
Wilmington, Delaware 19899
(302) 651-3000
EXHIBIT A
TO
JOINT LIQUIDATING PLAN OF
REORGANIZATION OF MID-AMERICAN
WASTE SYSTEMS, INC. AND SUBSIDIARIES
PLAN ADMINISTRATOR AGREEMENT
Exhibit A
THIS DOCUMENT IS SUBJECT TO MODIFICATION AND AMENDMENT PRIOR
TO COMPLETION AS PROVIDED IN ARTICLE X OF THE PLAN.
PLAN ADMINISTRATOR AGREEMENT
BY AND AMONG
MID-AMERICAN WASTE SYSTEMS, INC.,
FAIRFIELD SANITARY LANDFILL, INC.,
JOHNSON DISPOSAL, INC.,
MID-AMERICAN WASTE SYSTEMS OF OHIO, INC.,
MID-AMERICAN WASTE SYSTEMS OF CUYAHOGA, INC.
MOUND LANDFILL, INC.,
TRIANGLE LANDFILL, INC.,
UNITED WASTE SYSTEMS, INC.,
B & L SANITATION, INC.,
H & D EXCAVATING, INC.,
MID-AMERICAN WASTE SYSTEMS OF INDIANA, INC.,
CENTERPOINT LANDFILL, INC.,
MID-AMERICAN WASTE SYSTEMS OF ILLINOIS, INC.,
DAUBS LAND FILL, INC.,
K/C RECLAMATION, INC.,
MID-AMERICAN WASTE SYSTEMS OF PENNSYLVANIA, INC.,
RESOURCE CONSERVATION CORP.,
LOCAL SANITATION SERVICE, INC.,
PLAINS MANAGEMENT, INC.,
NATIONAL WASTE AND ENERGY CORPORATION,
MID-AMERICAN WASTE SYSTEMS OF HARRISON, INC.,
MID-AMERICAN WASTE SYSTEMS OF WEST VIRGINIA, INC.,
SPEEDWAY GRADING CORP., INC.,
MID-AMERICAN WASTE SYSTEMS OF SOUTH CAROLINA, INC.,
NORTHWESTERN DISPOSAL CO.,
MID-AMERICAN WASTE SYSTEMS OF NEW YORK, INC.,
MID-AMERICAN WASTE SYSTEMS OF NEW MEXICO, INC.,
MID-AMERICAN WASTE SYSTEMS OF COLORADO, INC.,
MID-AMERICAN WASTE SYSTEMS OF FLORIDA, INC.,
MID-AMERICAN WASTE SYSTEMS OF GEORGIA, INC., AND
NEWCORP ENVIRONMENTAL, INC.
AND
[XYZ]
DATED AS OF SEPTEMBER ___, 1997
TABLE OF CONTENTS
Page
ARTICLE I
XYZ'S ACCEPTANCE OF POSITIONS
AND OBLIGATION TO PAY CLAIMS
Section 1.1 Acceptance . . . . . . . . . . . . . . . . 2
Section 1.2 Payment of Claims . . . . . . . . . . . . . 2
ARTICLE II
OBLIGATIONS OF THE PLAN ADMINISTRATOR
Section 2.1 Establishment and Maintenance of Accounts,
Reserves, and Escrows . . . . . . . . . 2
Section 2.2 Disputed Claims Reserve . . . . . . . . . 3
Section 2.3 Administrative Claims Reserve . . . . . . 4
Section 2.4 L/C Bank Contingent Claims Reserve . . . . 5
Section 2.5 Operating Reserve . . . . . . . . . . . . 6
Section 2.6 Unclaimed Distributions . . . . . . . . . 7
Section 2.7 Distributions . . . . . . . . . . . . . . 7
Section 2.8 De Minimis Distributions . . . . . . . . . 9
Section 2.9 Conversion of Assets to Cash . . . . . . . 9
Section 2.10 Transactions with Related Persons . . . . 9
Section 2.11 Investment of Cash . . . . . . . . . . . . 9
Section 2.12 Treatment of Accounts. . . . . . . . . . . 10
Section 2.13 Use of Assets. . . . . . . . . . . . . . . 10
Section 2.14 Books, Records, and Tax Returns . . . . . 10
Section 2.15 Reports to the Bankruptcy Court . . . . . 10
Section 2.16 No Other Duties . . . . . . . . . . . . . 11
ARTICLE III
POWERS AND RIGHTS OF THE PLAN ADMINISTRATOR
Section 3.1 Powers of the Plan Administrator . . . . . 11
Section 3.2 Authority to Object to Claims and Interests
and to Settle Disputed Claims . . . . . 13
ARTICLE IV
THE PLAN ADMINISTRATOR
Section 4.1 Resignation . . . . . . . . . . . . . . . . 14
Section 4.2 Removal . . . . . . . . . . . . . . . . . . 14
Section 4.3 Appointment of Successor Plan Administrator 14
Section 4.4 Continuity . . . . . . . . . . . . . . . . 15
Section 4.5 Compensation . . . . . . . . . . . . . . . 15
Section 4.6 Standard of Care; Indemnification;
Exculpation . . . . . . . . . . . . . . 15
Section 4.7 Reliance by Plan Administrator . . . . . . 16
Section 4.8 Reliance by Persons Dealing with the
Plan Administrator . . . . . . . . . . . 17
ARTICLE V
TERMINATION
Section 5.1 Termination . . . . . . . . . . . . . . . . 17
Section 5.2 Other Obligations of the Plan Administrator
upon Termination . . . . . . . . . . . . 17
ARTICLE VI
MISCELLANEOUS PROVISIONS
Section 6.1 Descriptive Headings . . . . . . . . . . . 17
Section 6.2 Amendment and Waiver . . . . . . . . . . . 17
Section 6.3 Governing Law . . . . . . . . . . . . . . . 18
Section 6.4 Counterparts; Effectiveness . . . . . . . . 18
Section 6.5 Severability; Validity . . . . . . . . . . 18
Section 6.6 Notices . . . . . . . . . . . . . . . . . . 18
Section 6.7 Relationship to Plan . . . . . . . . . . . 18
Section 6.8 Retention of Jurisdiction . . . . . . . . . 19
ARTICLE VII
DEFINITIONS
Section 7.1 Defined Terms . . . . . . . . . . . . . . . 19
PLAN ADMINISTRATOR AGREEMENT
PREAMBLE
This Plan Administrator Agreement (the "Agreement") is
made this ____ day of September, 1997, by and among Mid-American
Waste Systems, Inc., a Delaware corporation ("MAWS"), and each of
its subsidiaries and affiliates set forth on the signature pages
hereto (the "Subsidiaries" and, together with MAWS, the
"Debtors"), as debtors and debtors-in-possession, and [TO BE NAMED
BY CREDITORS' COMMITTEE] ("XYZ") (the "Plan Administrator").
Capitalized terms used herein and not otherwise defined shall have
the meanings ascribed to them in the Joint Liquidating Plan of
Reorganization of Mid-American Waste Systems, Inc. and
Subsidiaries, dated June 20, 1997, as the same may from time to
time be amended (the "Plan"), filed by the Debtors.
RECITALS
WHEREAS, on January 21, 1997, each of the Debtors filed
a voluntary petition for relief under Chapter 11 of the United
States Bankruptcy Code, 11 U.S.C. SECTIONSECTION 101-1330, as amended
(the "Bankruptcy Code"), in the United States Bankruptcy Court for
the District of Delaware (the "Bankruptcy Court");
WHEREAS, on June 20, 1997, the Debtors filed the Plan
with the Bankruptcy Court; and
WHEREAS, on September ___, 1997, the Bankruptcy Court
confirmed the Plan; and
WHEREAS, pursuant to, and upon the Consummation Date of,
the Plan, the Debtors' Estates will be substantively consolidated
and the Subsidiaries will be merged with and into MAWS (MAWS and
the Subsidiaries which have been merged into it being referred to
as "Reorganized MAWS" on and after the Consummation Date); and
WHEREAS, the rights, powers, and duties of Reorganized
MAWS under the Plan shall be exercised by a plan administrator in
his capacity as the sole shareholder, sole officer, and sole
director of Reorganized MAWS (the "Plan Administrator");
NOW, THEREFORE, in consideration of the foregoing and
the covenants and agreements set forth herein, the parties hereto
agree as follows:
ARTICLE I
XYZ'S ACCEPTANCE OF POSITIONS
AND OBLIGATION TO PAY CLAIMS
Section 1.1 Acceptance. XYZ (a) accepts employment as
the Plan Administrator and accepts appointment as the sole share-
holder, sole officer, and sole director of Reorganized MAWS and
(b) agrees to observe and perform all duties and obligations
imposed upon the Plan Administrator (as plan administrator, sole
shareholder, sole officer, and sole director of Reorganized MAWS)
under this Agreement, the Plan, orders of the Bankruptcy Court,
and applicable law.
Section 1.2 Payment of Claims. XYZ, solely in [his/
her/its] capacity as the Plan Administrator, agrees to cause
Reorganized MAWS to pay all Allowed Claims in accordance with the
terms and conditions of the Plan, this Agreement, and orders of
the Bankruptcy Court.
ARTICLE II
OBLIGATIONS OF THE PLAN ADMINISTRATOR
Section 2.1 Establishment and Maintenance of Accounts,
Reserves, and Escrows.
(a) Initial Establishment of Accounts and Reserves.
On the Consummation Date or as soon thereafter as practicable, the
Plan Administrator shall establish the following accounts and
reserves:
(i) General Account(s): One or more general
accounts (the "General Account(s)"), (A) into which shall be
deposited all funds not required or permitted to be deposited into
any other account, Reserve, or Escrow described in or contemplated
by this Agreement, and (B) from which shall be made all
distributions ("General Distributions") (1) on account of Claims
that were Allowed Claims on the Consummation Date and (2) other
than Initial Distributions on account of Claims (other than Class
5 L/C Bank Contingent Claims) that become Allowed Claims after the
Consummation Date; provided, however, that if there are
insufficient funds in any of the Reserves or accounts (excluding
the Escrows referred to in Section 2.1(b) below) to pay operating
expenses or Allowed Claims which should have been paid from such
Reserves or accounts (an "Underfunded Reserve/Account"), then
General Distributions from the General Account shall cease and
funds in the General Account shall be paid into such Underfunded
Reserve/Account until it is no longer underfunded, at which time
General Distributions may commence again on the next Periodic
Distribution Date.
(ii) Disputed Claims Reserve: An account,
designated as a "disputed claims reserve," as described more fully
in Section 2.2 below (the "Disputed Claims Reserve").
(iii) Administrative Claims Reserve: An
account, designated as an "administrative claims reserve," as
described more fully in Section 2.3 below (the "Administrative
Claims Reserve").
(iii) L/C Bank Contingent Claims Reserve: An
account, designated as an "l/c bank contingent claims reserve," as
described more fully in Section 2.4 below (the "L/C Bank
Contingent Claims Reserve").
(iv) Operating Reserve: An account,
designated as an "operating reserve," as described more fully in
Section 2.5 below (the "Operating Reserve").
(b) Maintenance of Escrows. On and after the
Consummation Date, the Plan Administrator shall maintain in
existence the following escrows and funds arrangements previously
established by the Debtors ("Escrows") pursuant to the Escrow
Orders, until such time as the Bankruptcy Court authorizes
disposition of the funds dealt with in such Escrow Orders: (1)
Huntington Banks, Account No. 04895116969 (the "ERC Escrow") and
(2) Huntington Banks, Account No. 04895116956 (the "Palladino
Group Escrow). Funds in the Escrows shall be distributed in
accordance with subsequent orders of the Bankruptcy Court. To the
extent that such subsequent orders do not specify the precise
disposition of the funds in the Escrow, any portion of such Escrow
funds not addressed in such subsequent Bankruptcy Court order
shall be distributed first to any Underfunded Reserve/Account (but
only to the extent of any underfunding) and next to the General
Account(s).
(c) Subsequent Establishment of Accounts, Reserves,
and Escrows. On or after the Consummation Date, the Plan
Administrator (i) shall establish and maintain an Unclaimed
Distribution Reserve in accordance with Section 2.6 of this
Agreement and such additional accounts, reserves, and escrows as
may be required by applicable law or by order of a court of
competent jurisdiction and (ii) may establish and maintain such
additional accounts, reserves, and escrows as [he/she/it] deems
necessary or desirable to carry out the provisions of the Plan and
this Agreement.
Section 2.2 Disputed Claims Reserve.
(a) On the Consummation Date or as soon thereafter
as practicable, the Plan Administrator shall establish the
Disputed Claims Reserve by reserving an amount of the Estate(s)'
Cash equal to the sum of (i) the Reserve Amounts and (ii) with
respect to Disputed Claims as to which no Reserve Amount has been
established, seventy percent (70%) of the Estimated Amounts of all
such Disputed Claims (other than Disputed Administrative Claims,
Disputed Priority Tax Claims, Disputed Other Priority Claims and
Class 5 L/C Bank Contingent Claims). In the event that no Reserve
Amount or Estimated Amount has been determined for a particular
Disputed Claim entitled to be paid from the Disputed Claims
Reserve, the Plan Administrator shall reserve for such Disputed
Claim an amount of the Estate(s)' Cash equal to 70% of the Face
Amount of such Disputed Claim.
(b) On each Periodic Distribution Date, the Plan
Administrator shall determine the amount of Cash required to
adequately maintain the Disputed Claims Reserve on and after such
date and maintain a reserve of Cash in such amount. If, and to
the extent that, after making and giving effect to the
determination referred to in the immediately preceding sentence
and the distributions described in Section 2.7(b)(i) below, the
Plan Administrator, in consultation with the Plan Committee,
determines that the Disputed Claims Reserve (i) contains Cash in
an amount in excess of the amount then required to adequately
maintain the Disputed Claims Reserve, the Plan Administrator shall
transfer such surplus Cash, first, to any Underfunded
Reserve/Account (but only to the extent of any underfunding), and
next, to the General Account(s), or (ii) does not contain Cash in
an amount sufficient to adequately maintain the Disputed Claims
Reserve, then the Plan Administrator shall transfer Cash, first,
from any overfunded Reserve or account, and next, from the General
Account(s), until the deficit in the Disputed Claims Reserve is
eliminated. No General Distributions shall be made from the
General Account(s) while there is a deficit in the Disputed Claims
Reserve.
(c) After a Final Order has been entered, or other
final resolution has been reached, with respect to any given
Disputed Claim for which Cash was reserved in the Disputed Claims
Reserve, the balance, if any, of Cash remaining in the Disputed
Claims Reserve on account of such Disputed Claim after making any
Initial Distribution to which the holder of such Claim may have
become entitled by virtue of such Final Order or other final
resolution shall be transferred, first, to any Underfunded
Reserve/Account (but only to the extent of any underfunding), and
next, to the General Account(s).
Section 2.3 Administrative Claims Reserve.
(a) On the Consummation Date or as soon thereafter
as practicable, the Plan Administrator shall establish the
Administrative Claims Reserve by reserving an amount of the
Estate(s)' Cash equal to the sum of (i) the aggregate Face Amount
of all Disputed Administrative Claims, Disputed Priority Tax
Claims, and Disputed Other Priority Claims that have Face Amounts,
plus (ii) the Reserve Amount or the Estimated Amount of all such
Disputed Administrative Claims, Disputed Priority Tax Claims, or
Disputed Other Priority Claims that do not have Face Amounts.
(b) On each Periodic Distribution Date, the Plan
Administrator shall determine the amount of Cash required to
adequately maintain the Administrative Claims Reserve on and after
such date and maintain a reserve of Cash in such amount. If, and
to the extent that, after making and giving effect to the
determination referred to in the immediately preceding sentence
and the distributions described in Section 2.7(b)(ii) below, the
Plan Administrator, in consultation with the Plan Committee,
determines that the Administrative Claims Reserve (i) contains
Cash in an amount in excess of the amount then required to
adequately maintain the Administrative Claims Reserve, the Plan
Administrator shall transfer such surplus Cash, first, to any
Underfunded Reserve/Account (but only to the extent of any
underfunding), and next, to the General Account(s), or (ii) does
not contain Cash in an amount sufficient to adequately maintain
the Administrative Claims Reserve, then the Plan Administrator
shall transfer Cash, first, from any overfunded Reserve or
account, and next, from the General Account(s), until the deficit
in the Administrative Claims Reserve is eliminated. No General
Distributions shall be made from the General Account(s) while
there is a deficit in the Administrative Claims Reserve.
(c) After a Final Order has been entered, or other
final resolution has been reached, with respect to any given
Disputed Claim for which Cash was reserved in the Administrative
Claims Reserve, the balance, if any, of Cash remaining in the
Administrative Claims Reserve on account of such Disputed Claim
after making any Initial Distribution to which the holder of such
Claim may have become entitled by virtue of such Final Order or
other final resolution shall be transferred, first, to any
Underfunded Reserve/Account (but only to the extent of any
underfunding), and next, to the General Account(s).
Section 2.4 L/C Bank Contingent Claims Reserve.
(a) On the Consummation Date or as soon thereafter
as practicable, the Plan Administrator shall establish the L/C
Bank Contingent Claims Reserve by reserving an amount of the
Estate(s)' Cash equal to 103% of the Face Amount of all Class 5
L/C Bank Contingent Claims.
(b) On each Periodic Distribution Date, the Plan
Administrator shall determine the amount of Cash required to
adequately maintain the L/C Bank Contingent Claims Reserve on and
after such date and maintain a reserve of Cash in such amount.
If, and to the extent that, after making and giving effect to the
determination referred to in the immediately preceding sentence
and the distributions described in Section 2.7(b)(iii) below, the
Plan Administrator, in consultation with the Plan Committee,
determines that the L/C Bank Contingent Claims Reserve (i)
contains Cash in an amount in excess of the amount then required
to adequately maintain the L/C Bank Contingent Claims Reserve, the
Plan Administrator shall transfer such surplus Cash, first, to any
Underfunded Reserve/Account (but only to the extent of any
underfunding), and next, to the General Account(s), or (ii) does
not contain Cash in an amount sufficient to adequately maintain
the L/C Bank Contingent Claims Reserve, then the Plan
Administrator shall transfer Cash, first, from any overfunded
Reserve or account, and next, from the General Account(s), until
the deficit in the L/C Bank Contingent Claims Reserve is
eliminated. No General Distributions shall be made from the
General Account(s) while there is a deficit in the L/C Bank
Contingent Claims Reserve.
(c) After a Final Order has been entered, or other
final resolution has been reached, with respect to any given L/C
Bank Contingent Claim for which Cash was reserved in the L/C Bank
Contingent Claims Reserve, the balance, if any, of the Cash
remaining in the L/C Bank Contingent Claims Reserve on account of
such L/C Bank Contingent Claim after making any distribution to
which the holder of such Claim may have become entitled by virtue
of such Final Order or other final resolution shall be
transferred, first, to any Underfunded Reserve/Account (but only
to the extent of any underfunding), and next, to the General
Account(s).
Section 2.5 Operating Reserve.
(a) On the Consummation Date or as soon thereafter
as practicable, the Plan Administrator shall establish the
Operating Reserve by reserving that amount of the Estate(s)' Cash
necessary to meet Reorganized MAWS' obligations (other than Claims
whose treatment is prescribed in Article III of the Plan) and to
fund the expenses of the Plan Administrator and Reorganized MAWS.
(b) On each Periodic Distribution Date, the Plan
Administrator shall determine the amount of Cash required to
adequately maintain the Operating Reserve on and after such date
and maintain a reserve of Cash in such amount. If, and to the
extent that, after making and giving effect to the determination
referred to in the immediately preceding sentence, the Plan
Administrator, in consultation with the Plan Committee, determines
that the Operating Reserve contains (i) Cash in excess of the
amount required to adequately maintain the Operating Reserve, the
Plan Administrator shall transfer such surplus Cash, first, to any
Underfunded Reserve/Account (but only to the extent of any
underfunding), and next, to the General Account(s), or (ii) does
not contain Cash in an amount sufficient to adequately maintain
the Operating Reserve, then the Plan Administrator shall transfer
Cash, first, from any overfunded Reserve or account, and next,
from the General Account(s), until the deficit in the Operating
Reserve is eliminated. No distributions shall be made from any
Reserve or account on account of any unsecured Allowed Claim while
there is a deficit in the Operating Reserve.
Section 2.6 Unclaimed Distributions Reserve. If any
Person entitled to a distribution under the Plan cannot be
located, such Person's distribution (an "Unclaimed Distribution")
shall be set aside or, in the case of a Cash distribution,
deposited in a segregated, interest bearing account, designated as
an "unclaimed distribution reserve" (the "Unclaimed Distribution
Reserve"), for the benefit of such Person and similarly situated
Persons. If such Person is located within three years of the
Consummation Date, the distribution shall be made to such Person
from the Unclaimed Distribution Reserve, together with any
interest actually earned thereon, on the next Periodic
Distribution Date. If such Person does not claim his distribution
within three years of the Consummation Date, such Person's
distribution shall be transferred, first, to any Underfunded
Reserve/Account (but only to the extent of any underfunding), and
next, to the General Account(s), in each case free and clear of
any claim to the distribution by such Person, who shall be deemed
to have waived such claim; provided, however, that nothing
contained in this Agreement or the Plan shall require the Plan
Administrator or Reorganized MAWS to attempt to locate any such
Person.
Section 2.7 Distributions to Holders of Allowed Claims.
(a) Initial Distributions. On the Distribution
Date the Plan Administrator shall, pursuant to the provisions of
Articles III, VI, and VIII of the Plan, cause Reorganized MAWS to
make a distribution of Available Cash (i) from the General Account
to each holder of an Allowed Administrative Claim, Allowed
Priority Tax Claim, Allowed Other Priority Claim, Allowed
Convenience Claim, Allowed Secured Claim, or Allowed Unsecured
Claim as of the Consummation Date, (ii) from the L/C Bank
Contingent Claims Reserve to each holder of a Class 5 L/C Bank
Contingent Claim that has first become a noncontingent,
liquidated, and undisputed Allowed Claim after the Consummation
Date but before the Record Date with respect to the Distribution
Date, and (iii) from the appropriate Reserve or Escrow to each
holder of an Administrative Claim or a Disputed Claim that first
becomes a noncontingent, liquidated, and undisputed Allowed Claim
after the Consummation Date but before the Record Date with
respect to the Distribution Date; provided, however, that the
Creditors' Committee or the Plan Committee may direct the Plan
Administrator to make an Initial Distribution to holders of
Allowed Senior Note Claims on a Business Day that is prior to the
Distribution date but at least one (1) Business Day after the
Consummation Date.
(b) Periodic Distributions. The Plan Administrator
shall make additional periodic distributions from the appropriate
Reserve, Escrow, or account to holders of Allowed Claims when and
as required under the Plan and this Agreement, as more fully set
forth below. Specifically, on each Periodic Distribution Date the
Plan Administrator, pursuant to the provisions of Articles III,
VI, and VIII of the Plan, shall cause Reorganized MAWS to:
(i) make a distribution of Cash from the
Disputed Claims Reserve to each holder of a Disputed Claim (other
than a Disputed Claim entitled to be paid from the Administrative
Claims Reserve, a Class 5 L/C Bank Contingent Claim, or a Disputed
Claim whose resolution and payment are subject to an Escrow and
Escrow Order, none of which are entitled to be paid from funds in
the Disputed Claims Reserve) that has become an Allowed Claim
since the Record Date with respect to the Distribution Date or the
Record Date with respect to the immediately preceding Periodic
Distribution Date, as the case may be, in an amount to be
determined in accordance with the terms of the Plan plus interest
calculated by multiplying (A) the amount of the Initial
Distribution distributed to such holder on such Periodic
Distribution Date times (B) the difference of (1) the then current
rate of interest on a 30-day Treasury Bill minus (2) 150 basis
points times (C) the number of days in the Disallowance Period
divided by 365;
(ii) make a distribution of Cash from the
Administrative Claims Reserve to each holder of a Disputed Claim
that has become an Allowed Administrative Claim, Allowed Priority
Tax Claim, or Allowed Other Priority Claim since the Record Date
with respect to the Distribution Date or the Record Date with
respect to the immediately preceding Periodic Distribution Date,
as the case may be, in an amount equal to the allowed amount of
such Allowed Claim plus interest calculated by multiplying (A) the
allowed amount of such newly Allowed Claim times (B) the
difference of (1) the then current rate of interest on a 30-day
Treasury Bill minus (2) 150 basis points times (C) the number of
days in the Disallowance Period divided by 365;
(iii) make a distribution of Cash from the L/C
Bank Contingent Claims Reserve to each holder of a L/C Bank
Contingent Claim that has become a noncontingent, liquidated and
undisputed Claim since the Record Date with respect to the
Distribution Date or the Record Date with respect to the
immediately preceding Periodic Distribution Date, as the case may
be, in an amount equal to that portion of the L/C Bank Contingent
Claim that has become noncontingent, liquidated and undisputed
during such time period;
(iv) make a distribution of Available Cash
from the General Account to each holder of an Allowed Claim not
required to be paid from the Disputed Claims Reserve,
Administrative Claims Reserve, L/C Bank Contingent Claims Reserve,
Operating Reserve, Unclaimed Distribution Reserve, an Escrow, or
any other reserve or escrow established from time to time
hereunder, under the Plan, or pursuant to order of the Bankruptcy
Court.
Section 2.8 De Minimis Distributions. Notwithstanding
any other provision of this Agreement, the Plan Administrator
shall have no obligation to make a distribution on account of an
Allowed Claim from the Disputed Claims Reserve, the Administrative
Claims Reserve, the Unclaimed Distributions Reserve, or the
General Account(s) (a) to any holder of an Allowed Claim (other
than a Class 5 L/C Bank Contingent Claim) if the aggregate amount
of all distributions authorized to be made from all such Reserves
listed above and the General Account(s) on the Periodic
Distribution Date in question is less than $250,000 or (b) to a
specific holder of an Allowed Claim if the amount to be
distributed to that holder on the Distribution Date or Periodic
Distribution Date in question (i) does not constitute a final
distribution to such holder and (ii) is less than $50.00.
Section 2.9 Conversion of Assets to Cash. The Plan
Administrator shall sell or otherwise dispose of, and liquidate or
convert into Cash, any non-Cash assets of the Estate(s) in a
manner compatible with the best interests of the holders of
Allowed Claims.
Section 2.10 Transactions with Related Persons. Not-
withstanding any other provisions of this Agreement, the Plan
Administrator shall not knowingly, directly or indirectly, sell or
otherwise transfer all or any part of the assets of the Estate(s)
to, or contract with, (a) any employee or agent (acting in their
individual capacities) of the Plan Administrator or (b) any Person
of which any employee or agent of the Plan Administrator is an
affiliate by reason of being a trustee, director, officer,
partner, or direct or indirect beneficial owner of five percent or
more of the outstanding capital stock, shares, or other equity
interest of such Persons unless, in each such case, after full
disclosure of such interest or affiliation, such transaction is
approved by the Plan Committee and the Plan Committee determines
that the terms of such transaction are fair and reasonable to
Reorganized MAWS and no less favorable to Reorganized MAWS than
terms available for a comparable transaction with unrelated
Persons.
Section 2.11 Investment of Cash. The Plan
Administrator shall invest the Estate(s)' Cash, including the Cash
in the Reserve Funds, in (a) direct obligations of the United
States of America or obligations of any agency or instrumentality
thereof that are backed by the full faith and credit of the United
States of America; (b) money market deposit accounts, checking
accounts, savings accounts, or certificates of deposit, or other
time deposit accounts that are issued by a commercial bank or
savings institution organized under the laws of the United States
of America or any state thereof; or (c) any other investments that
may be permissible under (i) section 345 of the Bankruptcy Code or
(ii) any order of the Bankruptcy Court entered in the Debtors'
Chapter 11 cases. Such investments shall mature in such amounts
and at such times as the Plan Administrator, in the Plan
Administrator's sole discretion, shall deem appropriate to provide
funds when needed to transfer funds or make payments in accordance
with the Plan and this Agreement. The interest or other income
earned on the investments of the Cash in any given Reserve,
General Account, Escrow, or other reserve, account, or escrow
established pursuant to this Agreement, the Plan, or any order of
the Bankruptcy Court shall constitute a part of such reserve,
account or escrow unless and until transferred or distributed
pursuant to the terms of the Plan, this Agreement, or order of the
Bankruptcy Court.
Section 2.12 Treatment of Accounts. For purposes of
this Agreement, unless otherwise ordered by the Bankruptcy Court
in an Escrow Order or other order, the Plan Administrator may pool
for investment purposes any funds which may or which are required
to be segregated or placed into separate Reserves, Escrows, or
accounts under the Plan or this Agreement; provided, however, that
the Plan Administrator shall treat such funds as segregated
accounts in his books and records. In addition, notwithstanding
any requirement that distributions hereunder to any holder of an
Allowed Claim on the Distribution Date or any Periodic
Distribution Date be made from a specified Reserve, Escrow, or
account, disbursements may be made as a single aggregate to such
holder of an Allowed Claim; provided, however, that the Plan
Administrator shall treat the funds so distributed as having been
distributed from the appropriate Reserve or account in the Plan
Administrator's books and records.
Section 2.13 Use of Assets. All Cash or other property
held or collected by the Plan Administrator shall be used solely
for the purposes contemplated by the Plan or this Agreement.
Section 2.14 Books, Records, and Tax Returns. The Plan
Administrator shall maintain books and records and prepare and
file such tax forms and returns as are required to be filed by
Reorganized MAWS under applicable law.
Section 2.15 Reports to the Bankruptcy Court. Within
fifteen Business Days after each Periodic Distribution Date, the
Plan Administrator shall file with the Bankruptcy Court and
deliver to each member of the Plan Committee a report covering the
period since the Distribution Date or the immediately preceding
Periodic Distribution Date, as the case may be, (a) itemizing the
receipt and disposition of all funds by the Plan Administrator
(including all payments in respect of professional fees and
expenses), (b) listing or summarizing all unresolved or
outstanding Disputed Claims, Disputed Administrative Claims,
Disputed Priority Tax Claims, Disputed Other Priority Claims, and
L/C Bank Contingent Claims, (c) describing the status of any
pending objection or other litigation with respect to the
unresolved Disputed Claims, Disputed Administrative Claims,
Disputed Priority Tax Claims, Disputed Other Priority Claims, and
L/C Bank Contingent Claims, (d) setting forth the amounts (if any)
of any overfunding or underfunding of any Reserve and the
transfer(s) proposed to be made to eliminate such overfunding or
underfunding, and (e) listing the Estate(s)' non-Cash assets
remaining to be liquidated.
Section 2.16 No Other Duties. Other than the duties
and obligations of the Plan Administrator specifically set forth
in this Agreement or under the Plan, the Plan Administrator shall
have no duties or obligations of any kind or nature with respect
to its employment or position as such.
ARTICLE III
POWERS AND RIGHTS OF THE PLAN ADMINISTRATOR
Section 3.1 Powers of the Plan Administrator. The Plan
Administrator shall have the following specific powers in addition
to any powers conferred upon the Plan Administrator by any other
section or provision of this Agreement or the Plan; provided,
however, that the enumeration of the following powers shall not be
considered in any way to limit or control the power of the Plan
Administrator to act as specifically authorized by any other
section or provision of this Agreement; provided further, however,
that the Plan Administrator, as the sole officer and director of
Reorganized MAWS, shall act for Reorganized MAWS and exercise such
powers in a fiduciary capacity as applicable to a board of
directors:
(a) To exercise all power and authority that may be
exercised, and take all proceedings and acts that may be taken, by
any officer, director, or shareholder of Reorganized MAWS,
including, without limitation, the amendment of the certificate of
incorporation and by-laws of Reorganized MAWS and the dissolution
of Reorganized MAWS; provided, however, that the Plan
Administrator shall not amend the certificate of incorporation of
Reorganized MAWS to change the fundamental purpose of the
corporation without first obtaining an order of the Bankruptcy
Court after notice to the Plan Committee.
(b) To determine the nature and amount of the
consideration to be received with respect to the sale or other
disposition of, or the grant of interests in, the Estate(s)' non-
Cash assets.
(c) To make or cause to be made distribution of
Cash or other property in accordance with the terms of the Plan,
this Agreement, the Escrow Orders, and other orders of the
Bankruptcy Court.
(d) To litigate, settle, or otherwise resolve all
Disputed Claims in accordance with the terms and conditions set
forth in Section 3.2 of this Agreement.
(e) To seek (i) estimation of contingent or
unliquidated Claims under Section 502 of the Bankruptcy Code and
(ii) determination of tax liability under Section 505 of the
Bankruptcy Code.
(f) To prosecute (i) avoidance actions under
Sections 544, 545, 547, 548, and 553 of the Bankruptcy Code and
(ii) turnover actions under Sections 542 and 543 of the Bankruptcy
Code.
(g) To evaluate, prosecute, settle, dismiss or
otherwise dispose of the Litigation Claims, including, but not
limited to, through implementation of any alternative dispute
resolution process approved by the Bankruptcy Court.
(h) To establish, fund, and/or administer the
Reserves, the General Account(s), the Escrows, and such other
reserves, accounts, and escrows as may be authorized by this
Agreement, the Plan, or order of the Bankruptcy Court.
(i) To elect, appoint, engage, retain, employ, and
compensate any Persons (including Persons formerly employed by the
Debtors prior to the Consummation Date) as agents,
representatives, employees, or independent contractors (including,
without limitation, investment advisors, accountants, attorneys-
at-law, managers, appraisers, and brokers) in one or more
capacities, to pay compensation approved by the Plan Committee
from the Operating Reserve for services in as many capacities as
such Person may be so elected, appointed, engaged, retained, or
employed, and to prescribe the titles, powers and duties, terms of
service, and other terms and conditions of the election,
appointment, engagement, retention, or employment of such Persons.
(j) To obtain all reasonably necessary insurance
coverage for itself, its agents, representatives, employees or
independent contractors, and Reorganized MAWS, including, but not
limited to, coverage with respect to (i) any property that is or
may in the future become the property of Reorganized MAWS and (ii)
the liabilities, duties, and obligations of the Plan Administrator
and its agents, representatives, employees or independent
contractors and under this Agreement (in the form of an errors and
omissions policy or otherwise), the latter of which insurance
coverage may, at the sole option of the Plan Administrator, remain
in effect for a reasonable period (not to exceed seven years)
after the termination of this Agreement.
(k) To do and perform any and all acts necessary or
appropriate for the conservation and protection of the assets of
the Estates and Reorganized MAWS, including acts or things
necessary or appropriate to maintain assets held pending sale or
other disposition thereof or distribution thereof.
(l) To institute or defend actions or declaratory
judgments or other actions and to take such other action as the
Plan Administrator may deem necessary or desirable to enforce any
instruments, contracts, agreements, causes of action, or rights
relating to or forming a part of the Estate(s)' or Reorganized
MAWS' assets; provided, however, that the Plan Administrator shall
consult with the Plan Committee with respect to the Estates' or
Reorganized MAWS' defense in any adversary proceeding instituted
against the Estates or Reorganized MAWS.
(m) To do all other acts and things not
inconsistent with the provisions of the Plan and this Agreement
that the Plan Administrator deems reasonably necessary or
desirable with respect to administering the Plan and this
Agreement.
Section 3.2 Authority to Object to Claims and Interests
and to Settle Disputed Claims.
(a) The Plan Administrator shall be authorized to
object to any Claims or Interests filed against any of the
Debtors' Estates.
(b) Subject to the terms of Sections 3.2(c) and (d)
below, the Plan Administrator shall be authorized to settle all
Disputed Claims without notice to any Person, including the Plan
Committee.
(c) If the Plan Administrator proposes to settle a
Disputed Claim and the Face Amount of such Disputed Claim is more
than $50,000 but less than $500,000, the Plan Administrator shall
provide the Plan Committee with written notice describing the
proposed settlement and the reasons why the Plan Administrator
believes the proposed settlement to be in the best interest of the
holders of Allowed Claims and advising the Plan Committee that the
Plan Administrator will enter into the proposed settlement unless
the Plan Administrator receives written notice from the Plan
Committee objecting to the proposed settlement within five
Business Days after such notice by the Plan Administrator. If the
Plan Administrator receives a timely written objection from the
Plan Committee, then (i) if the Plan Committee withdraws for any
reason its objection to such settlement, the Plan Administrator
may enter into the proposed settlement without further notice and
a hearing or entry of an order of the Bankruptcy Court or (ii) if
the Plan Committee does not withdraw its objection, the Plan
Administrator shall have the option of (A) foregoing entry into
the settlement agreement that is the subject of the Plan
Committee's objection, (B) modifying the terms of the settlement
agreement in a way that results in the Plan Committee withdrawing
its objection, or (C) seeking an order of the Bankruptcy Court
authorizing the Plan Administrator to enter into the settlement
agreement over the Plan Committee's objection.
(d) With respect to Disputed Claims that have a
Face Amount of more than $500,000, the Plan Administrator shall be
authorized to settle such Disputed Claims only with Bankruptcy
Court approval following notice to the Plan Committee and the
holder of the Disputed Claim.
ARTICLE IV
THE PLAN ADMINISTRATOR
Section 4.1 Resignation. The Plan Administrator may
resign by giving not less than ninety days' prior written notice
thereof to the Plan Committee. Such resignation, which shall be
applicable to the Plan Administrator in its capacity as such and
in its capacity as the sole officer and director of Reorganized
MAWS, shall become effective on the later of (a) the day specified
in such notice or (b) the appointment and Bankruptcy Court
approval of a successor Plan Administrator in accordance with
Section 4.3 hereof.
Section 4.2 Removal. At any time upon the request of
any party in interest, the Bankruptcy Court may remove the Plan
Administrator for cause. Unless the Bankruptcy Court orders
immediate removal, the Plan Administrator shall continue to serve
until the a successor Plan Administrator is appointed, and such
appointment becomes effective, in accordance with Section 4.3
hereof.
Section 4.3 Appointment of Successor Plan
Administrator. In the event of a vacancy by reason of the death
or immediate removal of the Plan Administrator or prospective
vacancy by reason of resignation or removal, the Plan Committee
shall appoint a successor Plan Administrator to become and serve
as the sole shareholder, sole officer and sole director of
Reorganized MAWS, which appointment shall be effective upon the
approval of the Bankruptcy Court after a hearing before the
Bankruptcy Court on not less than twenty days' notice to such
Persons as the Bankruptcy Court may direct or, if the Bankruptcy
Court refuses to so direct, to all holders of Claims as of a date
no more than 90 days prior to the hearing date. Every successor
Plan Administrator appointed hereunder shall execute, acknowledge,
and deliver to the Bankruptcy Court and the retiring Plan
Administrator, if any, an instrument accepting such appointment
subject to the terms and provisions hereof. The successor Plan
Administrator, without any further act, shall (a) become vested
with all the rights, powers, and duties of the Plan Administrator
and (b) become the sole shareholder, sole officer, and sole
director of Reorganized MAWS; provided, however, that no Plan
Administrator shall be liable for the acts or omissions of any
prior or later Plan Administrator.
Section 4.4 Continuity. Unless otherwise ordered by
the Bankruptcy Court, the death, resignation, or removal of the
Plan Administrator shall not operate to terminate any agency or
employment created by this Agreement or invalidate any action
theretofore taken by the Plan Administrator. In the event of the
death or immediate removal of the Plan Administrator, ownership of
the sole share of Reorganized MAWS' common stock held by the Plan
Administrator shall pass to [INSERT NAME OF PLAN ADMINISTRATOR'S
COMPANY], to be held by [COMPANY] until a successor Plan
Administrator is approved by the Bankruptcy Court. In the event
of the resignation or removal of the Plan Administrator, such Plan
Administrator shall (a) execute and deliver by the effective date
of resignation or removal such documents, instruments, and other
writings as may be reasonably requested by the Plan Committee or
the Bankruptcy Court to effect the termination of the Plan
Administrator's capacity under this Agreement, including, but not
limited to, the Plan Administrator's capacity as the sole
shareholder, officer, and director of Reorganized MAWS, and (b)
assist and cooperate in effecting the assumption of such Plan
Administrator's obligations and functions by the successor Plan
Administrator. If for any reason the Plan Administrator fails to
execute the documents described in section (a) of the preceding
sentence, the Plan Committee shall be authorized to obtain an
order of the Bankruptcy Court effecting such termination of such
Plan Administrator's capacity under this Agreement.
Section 4.5 Compensation. The Plan Administrator shall
be entitled to receive as compensation for services performed in
connection with this Agreement $______ per [ ] and
reimbursement for reasonable out-of-pocket expenses incurred in
connection with performing the duties hereunder. The Plan
Administrator shall provide to the Plan Committee monthly bills
for services performed. Compensation and expenses to be paid or
reimbursed to the Plan Administrator as provided herein shall be
paid from the Operating Reserve. In the event the Plan Committee
objects to the compensation being sought, the matter shall be
presented to the Bankruptcy Court for determination. Upon the
request of any party in interest or the Plan Administrator, the
Bankruptcy Court, after notice and a hearing, may, with the
consent of the Plan Administrator, alter the amount, terms, or
conditions of the Plan Administrator's compensation. Any
successor Plan Administrator shall receive such reasonable
compensation from the Operating Reserve for service as the Plan
Administrator as may be approved by the Bankruptcy Court and
reimbursement from the Operating Reserve for expenses reasonably
incurred in performing the duties of the Plan Administrator.
Section 4.6 Standard of Care; Indemnification;
Exculpation. Reorganized MAWS and the Estate(s) shall, to the
fullest extent permitted by the laws of the State of Delaware,
indemnify and hold harmless the Plan Administrator (in its
capacity as such and as officer and director of Reorganized MAWS)
and the Plan Administrator's and Reorganized MAWS' agents,
representatives, professionals, and employees (collectively, the
"Indemnified Parties"), from and against and in respect to any and
all liabilities, losses, damages, claims, costs and expenses,
including, but not limited to attorneys' fees arising out of or
due to their actions or omissions, or consequences of such actions
or omissions, with respect to Reorganized MAWS and the Estate(s)
or the implementation or administration of the Plan and this
Agreement, if the Indemnified Parties acted in good faith and in a
manner reasonably believed to be in or not opposed to the best
interests of Reorganized MAWS and the Estate(s), and, with respect
to any criminal action or proceeding, had no reasonable cause to
believe its conduct was unlawful. To the extent Reorganized MAWS
and the Estate(s) indemnify and hold harmless the Indemnified
Parties as provided above, the legal fees and related costs
incurred by counsel to the Plan Administrator in monitoring and
participating in the defense of such claims giving rise to the
right of indemnification shall be paid out of the Operating
Reserve. The provisions of this Section 4.6 shall remain
available to and be binding upon any former Plan Administrator or
the estate of any decedent Plan Administrator and shall survive
the termination of this Agreement. The Plan Administrator shall
not be obligated to give any bond or surety or other security for
the performance of any of the Plan Administrator's duties.
Section 4.7 Reliance by Plan Administrator. The Plan
Administrator may rely, and shall be fully protected in acting or
refraining from acting if it relies, upon any resolution,
statement, certificate, instrument, opinion, report, notice,
request, consent, order, or other instrument or document that the
Plan Administrator reasonably believes to be genuine and to have
been signed or presented by the proper party or parties or, in the
case of cables, telecopies, and telexes, to have been sent by the
proper party or parties, and the Plan Administrator may
conclusively rely as to the truth of the statements and
correctness of the opinions expressed therein. The Plan
Administrator may consult with counsel and other professionals
with respect to matters in their area of expertise, and any
opinion of counsel shall be full and complete authorization and
protection in respect of any action taken or not taken by the Plan
Administrator. The Plan Administrator shall be entitled to rely
upon the advice of such professionals in acting or failing to act,
and shall not be liable for any act taken or not taken in reliance
thereon. The Plan Administrator shall have the right at any time
to seek and rely upon instructions from the Bankruptcy Court
concerning this Agreement, the Plan, or any other document
executed in connection therewith, and the Plan Administrator shall
be entitled to rely upon such instructions in acting or failing to
act and shall not be liable for any act taken or not taken in
reliance thereon.
Section 4.8 Reliance by Persons Dealing with the Plan
Administrator. In the absence of actual knowledge to the
contrary, any Person dealing with Reorganized MAWS and the
Estate(s) shall be entitled to rely on the authority of the Plan
Administrator to act on behalf of the Estates and Reorganized
MAWS, and shall have no obligation to inquire into the existence
of such authority.
ARTICLE V
TERMINATION
Section 5.1 Termination. This Agreement shall
terminate upon the later of (i) thirty days after the exhaustion
of the assets of the Estate(s) and Reorganized MAWS and (ii) the
filing of a certificate of termination with the Bankruptcy Court,
signed by the Plan Administrator and the Chairman of the Plan
Committee, which certificate shall not be filed until all
distributions required to be made pursuant to the Plan and this
Agreement have been made.
Section 5.2 Other Obligations of the Plan Administrator
upon Termination. Prior to filing a certificate of termination,
the Plan Administrator shall (a) provide for the retention and
storage of the books, records, and files that shall have been
delivered to or created by the Plan Administrator until such time
as all such books, records, and files are no longer required to be
retained under applicable law and (b) file a certificate informing
the Bankruptcy Court of the location at which such books, records,
and files are being stored. Except as otherwise specifically
provided herein, after the termination of this Agreement pursuant
to Section 5.1 above, the Plan Administrator shall have no further
duties or obligations hereunder.
ARTICLE VI
MISCELLANEOUS PROVISIONS
Section 6.1 Descriptive Headings. The headings
contained in this Agreement are for reference purposes only and
shall not affect in any way the meaning or interpretation of this
Agreement.
Section 6.2 Amendment and Waiver. This Agreement may
not be amended except by an instrument executed (i) the Debtors
and XYZ on or before the Consummation Date and (ii) by the Plan
Committee, Reorganized MAWS, and the Plan Administrator following
the Consummation Date.
Section 6.3 Governing Law. This Agreement shall be
governed by and construed in accordance with the laws of the State
of Delaware without regard to the rules of conflict of laws of the
State of Delaware or any other jurisdiction.
Section 6.4 Counterparts; Effectiveness. This
Agreement may be executed in two or more counterparts, each of
which shall be deemed to be an original but all of which shall
constitute one and the same agreement. This Agreement shall
become effective when each party hereto shall have received
counterparts thereof signed by all the other parties hereto.
Section 6.5 Severability; Validity. If any provision
of this Agreement or the application thereof to any Person or
circumstance is held invalid or unenforceable, the remainder of
this Agreement, and the application of such provision to other
Persons or circumstances, shall not be affected thereby, and to
such end, the provisions of this Agreement are agreed to be
severable.
Section 6.6 Notices. Any notice or other communication
hereunder shall be in writing and shall be deemed given upon (a)
confirmation of receipt of a facsimile transmission, (b) confirmed
delivery by a standard overnight carrier or when delivered by
hand, or (c) the expiration of five Business Days after the day
when mailed by registered or certified mail (postage prepaid,
return receipt requested), addressed to the respective parties at
the following addresses (or such other address for a party as
shall be specified by like notice):
(a) If to the Plan Administrator or to Reorganized
MAWS, to
[ ]
[ ]
[ ]
(b) If to the Plan Committee, to
[ ]
[ ]
[ ]
Section 6.7 Relationship to Plan. The principal
purpose of this Agreement is to aid in the implementation of the
Plan and, therefore, this Agreement incorporates and is subject to
the provisions of the Plan. To that end, the Plan Administrator
shall have full power and authority to take any action consistent
with the purposes and provisions of the Plan. In the event that
the provisions of this Agreement are found to be inconsistent with
the provisions of the Plan, the provisions of the Plan shall
control; provided, however, that provisions of this Agreement
adopted by amendment and approved by the Bankruptcy Court
following substantial consummation (as such term is used in
Section 1127(b) of the Bankruptcy Code) shall control over
provisions of the Plan.
Section 6.8 Retention of Jurisdiction. As provided in
Article XI of the Plan, the Bankruptcy Court shall retain
jurisdiction over the Estate(s) and Reorganized MAWS to the
fullest extent permitted by law, including, but not limited to,
for the purposes of interpreting and implementing the provisions
of this Agreement.
ARTICLE VII
DEFINITIONS
Section 7.1 Defined Terms. As used herein, the terms
below shall have the following meaning:
"Administrative Claims Reserve" has the meaning set
forth in Section 2.1(a)(iii) hereof.
"Agreement" has the meaning set forth in the Preamble.
"Allowed Claim " has the meaning set forth in Article
I.B.1.4 of the Plan.
"Bankruptcy Code" has the meaning set forth in the
Recitals.
"Bankruptcy Court" has the meaning set forth in the
Recitals.
"Business Day" has the meaning set forth in Article
I.B.1.19 of the Plan.
"Claim" has the meaning set forth in Article I.B.1.29 of
the Plan.
"Consummation Date" has the meaning set forth in Article
I.B.1.35 of the Plan.
"Debtors" has the meaning set forth in the Preamble.
"Disallowance Period" has the meaning set forth in
Article VIII.E of the Plan.
"Disallowed Claim " has the meaning set forth in Article
I.B.1.45 of the Plan.
"Disputed Claims Reserve" has the meaning set forth in
Section 2.1(a)(ii) hereof.
"Distribution Date" has the meaning set forth in Article
I.B.1.50 of the Plan.
"Escrow(s)" has the meaning set forth in Section 2.1(b)
hereof.
"Escrow Order(s)" has the meaning set forth in Article
I.B.1.60 of the Plan.
"Estate(s)" has the meaning set forth in Article
I.B.1.61 of the Plan.
"Estimated Amount" has the meaning set forth in Article
VIII.D of the Plan.
"Face Amount" has the meaning set forth in Article
I.B.1.63 of the Plan.
"General Account(s)" has the meaning set forth in
Section 2.1(a)(i) hereof.
"General Distributions" has the meaning set forth in
Section 2.1(a)(i) hereof.
"Initial Distribution" means, with respect to an Allowed
Claim, the first distribution of Cash made on account of such
Allowed Claim to the holder thereof.
"Indemnified Parties" has the meaning set forth in
Section 4.6 hereof.
"L/C Bank Contingent Claims Reserve" has the meaning set
forth in Section 2.1(a)(iii) hereof.
"Litigation Claims" has the meaning set forth in Article
I.B.1.85 of the Plan.
"Operating Reserve" has the meaning set forth in Section
2.1(a)(iv) hereof.
"Periodic Distribution Date" has the meaning set forth
in Article I.B.1.120 of the Plan.
"Plan" has the meaning set forth in the Preamble.
"Plan Administrator" has the meaning set forth in the
Recitals.
"Plan Committee" has the meaning set forth in Article
I.B.1.129 of the Plan.
"Record Date" means a Business Day that is not less than
one (1) Business Day or more than five (5) Business Days before a
Distribution Date or Periodic Distribution Date.
"Reorganized MAWS" has the meaning set forth in the
Recitals.
"Reserve Amount" has the meaning set forth in Article
VIII.D of the Plan.
"Reserves" has the meaning set forth in Article
I.B.1.140 of the Plan.
"Subsidiaries" has the meaning set forth in the
Preamble.
"Unclaimed Distribution(s)" has the meaning set forth in
Section 2.6 hereof.
"Unclaimed Distribution Reserve" has the meaning set
forth in Section 2.6 hereof.
"Underfunded Reserve/Account" has the meaning set forth
in Section 2.1(a)(i) hereof.
IN WITNESS WHEREOF, the parties have either executed and
acknowledged this Agreement or caused it to be executed and
acknowledged on their behalf by their duly authorized officers as
of the date first above written.
MID-AMERICAN WASTE SYSTEMS, INC.
By:_____________________________________
Name: Gene A. Meredith
Title: President
FAIRFIELD SANITARY LANDFILL, INC.
By:_____________________________________
Name: Gene A. Meredith
Title: President
JOHNSON DISPOSAL, INC.
By:_____________________________________
Name: Gene A. Meredith
Title: President
MID-AMERICAN WASTE SYSTEMS OF OHIO, INC.
By:_____________________________________
Name: Gene A. Meredith
Title: President
MID-AMERICAN WASTE SYSTEMS OF CUYAHOGA, INC.
By:_____________________________________
Name: Gene A. Meredith
Title: President
MOUND LANDFILL, INC.
By:_____________________________________
Name: Gene A. Meredith
Title: President
TRIANGLE LANDFILL, INC.
By:_____________________________________
Name: Gene A. Meredith
Title: President
UNITED WASTE SYSTEMS, INC.
By_____________________________________
Name: Gene A. Meredith
Title: President
B & L SANITATION, INC.
By:_____________________________________
Name: Gene A. Meredith
Title: President
H & D EXCAVATING, INC.
By:_____________________________________
Name: Gene A. Meredith
Title: President
MID-AMERICAN WASTE SYSTEMS OF INDIANA, INC.
By:_____________________________________
Name: Gene A. Meredith
Title: President
CENTERPOINT LANDFILL, INC.
By:_____________________________________
Name: Gene A. Meredith
Title: President
MID-AMERICAN WASTE SYSTEMS OF ILLINOIS, INC.
By:_____________________________________
Name: Gene A. Meredith
Title: President
DAUBS LAND FILL, INC.
By:_____________________________________
Name: Gene A. Meredith
Title: President
K/C RECLAMATION, INC.
By:_____________________________________
Name: Gene A. Meredith
Title: President
MID-AMERICAN WASTE SYSTEMS OF
PENNSYLVANIA, INC.
By:_____________________________________
Name: Gene A. Meredith
Title: President
RESOURCE CONSERVATION CORP.
By:_____________________________________
Name: Gene A. Meredith
Title: President
LOCAL SANITATION SERVICE, INC.
By:_____________________________________
Name: Gene A. Meredith
Title: President
PLAINS MANAGEMENT, INC.
By:_____________________________________
Name: Gene A. Meredith
Title: President
NATIONAL WASTE AND ENERGY CORPORATION
By:_____________________________________
Name: Gene A. Meredith
Title: President
MID-AMERICAN WASTE SYSTEMS OF HARRISON, INC.
By:_____________________________________
Name: Gene A. Meredith
Title: President
MID-AMERICAN WASTE SYSTEMS OF WEST
VIRGINIA, INC.
By:_____________________________________
Name: Gene A. Meredith
Title: President
MID-AMERICAN WASTE SYSTEMS OF GEORGIA, INC.
By:_____________________________________
Name: Gene A. Meredith
Title: President
SPEEDWAY GRADING CORP., INC.
By:_____________________________________
Name: Gene A. Meredith
Title: President
MID-AMERICAN WASTE SYSTEMS OF FLORIDA, INC.
By:_____________________________________
Name: Gene A. Meredith
Title: President
MID-AMERICAN WASTE SYSTEMS OF SOUTH
CAROLINA, INC.
By:_____________________________________
Name: Gene A. Meredith
Title: President
NORTHWESTERN DISPOSAL CO.
By:_____________________________________
Name: Gene A. Meredith
Title: President
MID-AMERICAN WASTE SYSTEMS OF COLORADO, INC.
By:_____________________________________
Name: Gene A. Meredith
Title: President
MID-AMERICAN WASTE MANAGEMENT SYSTEMS OF
NEW YORK, INC.
By:_____________________________________
Name: Gene A. Meredith
Title: President
MID-AMERICAN WASTE SYSTEMS OF NEW MEXICO, INC.
By_____________________________________
Name: Gene A. Meredith
Title: President
NEWCORP ENVIRONMENTAL, INC.
By:_____________________________________
Name: Gene A. Meredith
Title: President
[INSERT NAME OF PLAN ADMINISTRATOR]
By:_____________________________________
Name:
Title:
EXHIBIT B
TO
JOINT LIQUIDATING PLAN OF
REORGANIZATION OF MID-AMERICAN
WASTE SYSTEMS, INC. AND SUBSIDIARIES
SCHEDULE OF EXECUTORY CONTRACTS AND
UNEXPIRED LEASES TO BE ASSUMED AND ASSIGNED
Exhibit B
Schedule of Executory Contracts and
Unexpired Leases to be Assumed and Assigned
(Intentionally Left Blank)
EXHIBIT C
TO
JOINT LIQUIDATING PLAN OF
REORGANIZATION OF MID-AMERICAN
WASTE SYSTEMS, INC. AND SUBSIDIARIES
SCHEDULE OF CAUSES OF ACTION TO BE
RETAINED BY REORGANIZED MAWS
Exhibit C
Schedule of Causes of Action to
be Retained by Reorganized MAWS
The following is a non-exhaustive list of claims or causes of
actions that the Debtors hold or may hold either in pending or potential
litigation. The Debtors reserve their right to modify this list to add or
delete parties or causes of action, but disclaim any obligation to do so.
In addition to the possible causes of action and claims listed below, the
Debtors have or may have causes of action, claims, or rights against
contractors, subcontractors, suppliers and others with whom they formerly
dealt in the ordinary course of their businesses (the "Ordinary Course
Claims"). The Debtors and Reorganized MAWS reserve their right to enforce,
sue on, settle or compromise (or decline to do any of the foregoing) the
Ordinary Course Claims, as well as the claims and causes of action listed
below, and all other claims and causes of action. The Debtors and
Reorganized MAWS also have or may have, and are retaining, various claims
or causes of action arising under or pursuant to their insurance policies,
and all rights arising under, relating to, or in connection with such
policies are expressly reserved and retained.
Pending Litigations
All claims, counterclaims, rights or causes of action, suits or
judgments that the Debtors have or may have in the following litigations
1. Warren E. Gardner, et al. v. Speedway Grading Corp., et al.
2. Antoinette Morocco, et al. v. National Waste and Energy
Corporation, et al.
3. Computerized Freight Limited v. Mid-American Waste Systems,
Inc. and National Waste and Energy Corporation
4. Mid-American Waste Systems, Inc. v. The Commonwealth of
Pennsylvania
5. Mid-American Waste Systems of Florida v. The City of
Jacksonville, et al.
6. Betty Ann C. Russell v. Mid-American Waste Systems of Georgia,
Inc.
7. National City Bank of Pennsylvania v. National Waste and Energy
Corporation
8. James A. Palladino, et al. v. Mid-American Waste Systems of
Ohio, Inc., et al.
9. Sugar Hill Investment Association, Inc., et al. v. The City of
Sugar Hill Georgia, et al.
10. Mid-American Waste Systems, Inc., et al. v. Environmental
Network Corporation
11. William B. Thomas, Robert S. Thomas v. Don Daubs, et al.
12. A&M Carting, Inc., et al., v. The Township of Babylon, et al.
13. Daniel John, Jr. v. Mid-American Waste Systems, Inc. and
AgOrganic, Inc.
14. Dwayne Hickman v. Mid-American Waste Systems of Pennsylvania,
Inc.
Potential Causes of Action
1. All claims, causes or rights of action, suits, or proceedings,
whether in law or in equity, whether known or unknown
(collectively, "Rights of Action"), against any former (as of
June 20, 1997) officer, director, employee, agent, accountant,
or auditor of any of the Debtors for acts taken or not taken in
their capacity as such and all Rights of Action against any
Persons who, as of June 20, 1997, have been named as a
defendant in any of the Securities Actions.
2 All claims, causes or rights of action, suits, or proceedings,
whether in law or in equity, whether known or unknown, arising
out of or in any way related to the asset purchase agreement,
dated as of January 21, 1997, as subsequently amended, and
related Company Disclosure Letter and Purchaser Disclosure
Letter, between certain of the Debtors as sellers, and USA
Waste and its designated acquisition subsidiaries, as
purchasers.
3. All claims, causes or rights of action, suits, or proceedings,
whether in law or in equity, whether known or unknown, arising
under sections 544, 545, 547, 548, and 553 of the Bankruptcy
Code (other than those that could be asserted against holders
of trade claims assumed by USA Waste pursuant to the Asset
Purchase Agreement).
3. All claims, causes or rights of action, suits, or proceedings,
whether in law or in equity, whether known or unknown, against
Global Waste Co.
EXHIBIT D
TO
JOINT LIQUIDATING PLAN OF
REORGANIZATION OF MID-AMERICAN
WASTE SYSTEMS, INC. AND SUBSIDIARIES
IDENTIFIED OFFICERS AND DIRECTORS
Exhibit D
Identified Officers and Directors*
Resignation
Name Position(s) Held Start Date Date
Gene A. Meredith Director; President; February 1996 N/A
Chief Executive Officer;
Subsidiary Director
Donald H. Barry Secretary/Treasurer; November 1996 N/A
Chief Financial
Officer; Subsidiary
Director
Thomas A. Brown Director March 1991 N/A
Ben H. Love Director May 1993 N/A
J. Grant Troja Director May 1994 N/A
Richard J. Puricelli Director October 1995 N/A
Martin L. Garcia Director October 1995 N/A
Dennis W. Marchetti Vice President April 1990 March 1997
Hilary Plauche Vice President May 1991 March 1997
Alan B. Howald Vice President March 1993 N/A
- --------------
* Neither inclusion in this Exhibit D nor anything else contained in the
Plan (or any agreement or other document executed in connection with
the Plan) releases or purports to release any officer or director from
his or her liability, if any, in connection with any pending
Securities Action in which such officer or director has been named as
a defendant as of the date of the Plan.
EXHIBIT E
TO
JOINT LIQUIDATING PLAN OF
REORGANIZATION OF MID-AMERICAN
WASTE SYSTEMS, INC. AND SUBSIDIARIES
SUBSIDIARIES OF MAWS
Exhibit E
Subsidiaries of MAWS
Legal Name of Debtor D/B/A Case Number
Mid-American Waste Systems, Inc. 97-104
Mid-American Waste Systems
of Colorado, Inc. Pueblo Disposal; Arapahoe
Resource Recovery 97-105
National Waste and Energy
Corporation Valley Landfill 97-106
Mid-American Waste Systems
of Florida, Inc. Pinecrest Landfill 97-107
Mid-American Waste Systems
of Georgia, Inc. Gwinnett Speedway Hauling
Company 97-108
Newcorp Environmental, Inc. 97-110
Speedway Grading Corporation Speedway Landfill 97-111
Daubs Land Fill, Inc. 97-112
K/C Reclamation, Inc. 97-113
Mid-American Waste Systems
of Illinois, Inc. Daubs Disposal 97-114
B&L Sanitation, Inc. North Wells Landfill 97-115
Mid-American Waste Systems
of Indiana, Inc. Acme Waste Systems; Gary
Sanitary Landfill 97-116
Centerpoint Landfill, Inc. 97-117
H&D Excavating, Inc. Jay County Landfill;
South Wells Landfill 97-118
Local Sanitation Service, Inc. 97-119
Plains Management, Inc. 97-120
Mid-American Waste Systems
of New Mexico, Inc. Tri-Sect Safe Waste 97-121
Mid-American Waste Systems
of New York, Inc. 97-122
Fairfield Sanitary Landfill, Inc. 97-123
Johnson Disposal, Inc. Johnson Transfer &
Recycling Center 97-124
Mid-American Waste Systems
of Cuyahoga, Inc. Cuyahoga Regional Sanitary
Landfill; Fairfield Sanitary 97-125
Landfill, Inc.
Mid-American Waste Systems
of Ohio, Inc. Mound Disposal Company;
Mound Transfer Station; 97-126
Sanitary Commercial Services;
Northern Ohio Waste Systems;
Redland Transfer Station
Wellston Landfill;
Gallia County Landfill
Mound Landfill, Inc. 97-127
Triangle Landfill, Inc. 97-128
United Waste Systems, Inc. 97-129
Mid-American Waste Systems
of Pennsylvania, Inc. Deep Valley Disposal; Sabatini
Transfer Station; 97-130
Tri-Valley Waste Systems;
Tri-Valley Transfer Station
Resource Conservation Corp. 97-131
Mid-American Waste Systems
of South Carolina, Inc. Lee County Regional Recycling
and Disposal Facility 97-132
Mid-American Waste Systems
of Harrison, Inc. Meadowfill Landfill 97-133
Mid-American Waste Systems
of West Virginia, Inc. Mid-American Waste, Inc.;
Northwestern Disposal of 97-134
West Virginia
Northwestern Disposal Co. 97-135
EXHIBIT 99.2
THIS IS NOT A SOLICITATION OF ACCEPTANCE OR REJECTION OF THE PLAN.
ACCEPTANCES OR REJECTIONS MAY NOT BE SOLICITED UNTIL A DISCLOSURE STATEMENT
HAS BEEN APPROVED BY THE COURT. THIS DISCLOSURE STATEMENT IS BEING
SUBMITTED FOR APPROVAL BUT HAS NOT BEEN APPROVED BY THE BANKRUPTCY COURT.
UNITED STATES BANKRUPTCY COURT
DISTRICT OF DELAWARE
- - - - - - - - - - - - - - - - - - -x
In re : Jointly Administered
: Chapter 11 Case
MID-AMERICAN WASTE SYSTEMS, : Nos. 97-104 (PJW) through 97-108 (PJW)
INC., et al. : and 97-110 (PJW) through 97-135 (PJW)
:
Debtors. :
- - - - - - - - - - - - - - - - - - -x
DISCLOSURE STATEMENT WITH RESPECT TO
JOINT LIQUIDATING PLAN OF REORGANIZATION OF
MID-AMERICAN WASTE SYSTEMS, INC. AND SUBSIDIARIES
SKADDEN, ARPS, SLATE, MEAGHER & FLOM LLP
Alesia Ranney-Marinelli
Lawrence V. Gelber
919 Third Avenue
New York, New York 10022-3897
(212) 735-3000
-and-
Anthony W. Clark
P.O. Box 636
One Rodney Square
Wilmington, Delaware 19899-0636
(302) 651-3000
Attorneys for Mid-American
Waste Systems, Inc., et al.,
Debtors-in-Possession
Dated: Wilmington, Delaware
June 20, 1997
EXECUTIVE SUMMARY
Mid-American Waste Systems, Inc. ("MAWS") and its 30 subsidiaries
listed on Exhibit E to the Plan (the "Subsidiaries", and together with
MAWS, the "Debtors") filed petitions for relief under Chapter 11 of the
United States Bankruptcy Code on January 21, 1997. On June 20, 1997, the
Debtors filed a joint liquidating plan of reorganization (the "Plan"),
which sets forth how Claims against and Interests in the Debtors will be
treated. This Disclosure Statement describes certain aspects of the Plan,
the Debtors' former operations, significant events occurring in the
Debtors' Chapter 11 cases and related matters. This Executive Summary is
intended solely as a summary of the distribution provisions of the Plan and
certain matters related to the Debtors' former business. FOR A COMPLETE
UNDERSTANDING OF THE PLAN, YOU SHOULD READ THE DISCLOSURE STATEMENT, THE
PLAN, AND THE EXHIBITS AND SCHEDULES THERETO IN THEIR ENTIRETY. Capitalized
terms used in this Executive Summary and not otherwise defined herein have
the meanings ascribed to them in the Disclosure Statement and the Plan.
A. SUMMARY OF THE PLAN
The Plan provides for the liquidation of the Debtors' remaining
assets and the distribution of the proceeds, together with the net proceeds
of the asset sale to USA Waste, to creditors in order of their relative
priority of distribution under the Bankruptcy Code. Holders of Equity
Securities Claims; Debt Securities Claims; Fines, Penalties, and Punitive
Damages Claims; and Intercompany Claims will receive nothing under the
Plan. All Equity Securities will be cancelled and holders of Equity
Securities Interests will neither receive nor retain any property under the
Plan. The Plan contemplates and is predicated upon entry of an order
substantively consolidating the Debtors' Chapter 11 Cases and Estates.
Absent substantive consolidation, the Plan cannot be confirmed or
consummated. The Plan further contemplates that upon consummation, the
Subsidiaries will be merged with and into MAWS, which shall remain in
existence for the limited purpose of implementing the Plan and making
distributions to creditors as provided in the Plan. A Plan Administrator
selected by the Creditors' Committee and approved by the Bankruptcy Court
will hold title to the sole share of common stock to be issued by
Reorganized MAWS and will serve as the sole officer and sole director of
Reorganized MAWS. The Plan Administrator will be responsible for
implementing and administering the Plan in accordance with the Plan, the
terms of the Plan Administrator Agreement and applicable law.
Under the Plan, Claims against and Interests in the Debtors are
divided into Classes. Certain unclassified Claims, including Administrative
Claims and Priority Tax Claims, will receive payment in full in Cash once
their Claims become Allowed Claims. (An "Allowed Claim" is one which (i) is
non-contingent and liquidated in amount, (ii) either is undisputed by the
Debtors and Reorganized MAWS or has been finally resolved by settlement or
court order, and (iii) which is evidenced by either a timely proof of claim
or inclusion in the Debtors' schedules.) All other Claims and all Interests
are divided into 9 classes and will receive the distributions and
recoveries (if any) described in the table below.
The table summarizes the classification and treatment under the Plan
of the principal pre-petition Claims against and Interests in the Debtors.
The classification and treatment for all Classes are described in more
detail in Section IV.B of this Disclosure Statement entitled "Summary of
the Plan -- Certain Matters Regarding Classification and Treatment of
Claims and Interests." This summary is qualified in its entirety by
reference to the provisions of the Plan, a copy of which is attached hereto
as Exhibit A, and the balance of this Disclosure Statement.
The amounts listed in this summary under the heading "Estimated
Allowed Amount" are based on the Debtors' books and records as of the date
of this Disclosure Statement and proofs of claim filed against the Debtors
as of June 4, 1997. There can be no assurance that these estimates are
correct, and actual Allowed Amounts may be significantly different from the
estimates below. The amounts listed under the heading "Estimated Recovery"
are based on the Estimated Allowed Amounts, as estimated by the accountants
for the Debtors and the financial advisors for Creditors' Committee, and
anticipated amounts of Cash available for distribution. These amounts are
not precise. The Debtors and their accountants caution you that the actual
recoveries by the Debtors' creditors, particularly creditors holding Class
4 Unsecured Claims in Groups 4-B and 4-C, may vary materially from the
estimates below.
The actual recoveries under the Plan by the Debtors' creditors will
be dependent upon a variety of factors, including, but not limited to,
whether, and in what amount, contingent claims against the Debtors become
non-contingent and fixed; whether, and to what extent, Disputed Claims are
resolved in favor of the Debtors rather than the claimants; whether
Litigation Claims generally are resolved in favor of the Debtors or the
plaintiffs; and numerous other factors related to the ultimate disposition
of the disputed, contingent, and unliquidated claims that have been or may
be asserted against the Debtors. Further, as of the date of this Disclosure
Statement, the Debtors do not have complete information to use in trying to
determine with any degree of certainty the actual recoveries that creditors
should expect to receive under the Plan. For example, under the Bankruptcy
Code, governmental units are given 180 days from the date of entry of the
order for relief (in these Chapter 11 Cases, until July 21, 1997) to file
proofs of claim. While the Debtors have no reason to expect that any
extraordinary Priority Tax Claims, environmental Claims, or other Claims
will be asserted against them by governmental units, there can be no
assurances as to the aggregate amount of Claims that will be asserted by
governmental units until the governmental unit Claims bar date has passed.
Thus, it is possible that creditors' actual recoveries could be
significantly and adversely affected by the assertion and allowance of such
Claims.
CLASS DESCRIPTION TREATMENT UNDER THE PLAN
- ----------------- ------------------------
Class 1 -- Other O UNIMPAIRED
Priority Claims
(if any)
Estimated Allowed O A holder of an Allowed Class 1 Other Priority
Amount: $575,000 Claim shall receive (i) Cash equal to the
amount of such Allowed Class 1 Other
Priority Claim or (ii) such other treatment
as to which the Debtors or Reorganized MAWS
and such holder shall have agreed upon in
writing.
O Estimated Recovery: 100%.
Class 2 -- Convenience O UNIMPAIRED
Claims
Estimated Allowed O A holder of an Allowed Class 2 Convenience
Amount: Unknown -- Claim shall receive Cash equal to the amount
will depend upon of such Allowed Class 2 Convenience Claim
elections made by (which cannot exceed $2,000.00).
creditors
O Estimated Recovery: 100%.
Class 3 -- Secured O IMPAIRED
Claims
Estimated Allowed O A holder of an Allowed Class 3 Secured Claim,
Amount: $10,400,000 including a holder entitled to make, and
making, the Secured Claim Election, shall
either (i) receive Cash equal to the amount
of such Allowed Secured Claim (if such
holder does not make or is not entitled to
make the Secured Claim Election), (ii) the
Secured Claim Election Amount (if such
holder is entitled to make and does make the
Secured Claim Election), or (iii) such other
treatment as specified in the Plan or as to
which the Debtors or Reorganized MAWS and
such holder shall have agreed upon in
writing. To determine their treatment under
the Plan and their entitlement to make the
Secured Claim Election, holders of Class 3
Secured Claims should consult Section IV.B
of the Disclosure Statement entitled
"Summary of Plan -- Certain Matters
Regarding Classification and Treatment of
Claims and Interests."
O Estimated Recovery: 100%.
Class 4 -- Unsecured O IMPAIRED
Claims
Estimated Allowed O A holder of an Allowed Class 4 Unsecured
Amount: Claim shall receive its Pro Rata share of the
Group 4-A: $ 69,000,000 Initial and Periodic Distribution Amounts
Group 4-B: $208,000,000 Applicable to the Class 4 Group in which such
Group 4-C: $ 37,500,000 holder's Allowed Class 4 Unsecured Claim is
classified. Class 4 is divided into three
Groups, all of which contain only Unsecured
Claims, in order to give effect to a
settlement of certain disputes and claims
which holders of Group 4-A Claims have
against holders of Group 4-B Claims. The
Plan reallocates distributions from Group
4-B to Group 4-A as part of that settlement.
O Estimated Recovery: (by Group)
Group 4-A (Senior Note Claims and
L/C Bank Non-Contingent Claims ): 100%
Series A Notes - $31,210,000 (111% of
the principal amount outstanding as of
the Petition Date) plus per diem
interest on any unpaid balance of such
amount, from and after August 30, 1997
through the date of payment in full, at
the default rate of interest set forth
in the Senior Note Agreement.
Series B Notes - $44,680,000 (113% of
the principal amount outstanding as of
the Petition Date) plus per diem
interest on any unpaid balance of such
amount, from and after August 30, 1997
through the date of payment in full, at
the default rate of interest set forth
in the Senior Note Agreement.
L/C Bank Non-Contingent Claims - 100% of
the aggregate amount of all Letters of
Credit that have been drawn on (to the
extent of the draws) on or before the
Consummation Date plus accrued interest
on such amounts through the Distribution
Date and the contractual non-default
rate.
Group 4-B (Subordinated Note Claims): 32-42%
Group 4-C (General Unsecured Claims): 52-60%
Class 5 -- L/C Bank O IMPAIRED
Contingent Claims
0 A holder of a Class 5 L/C Bank Contingent
Estimated Allowed Claim shall receive Cash from the L/C Bank
Amount: Unknown -- Contingent Claims Reserve in an amount equal
will depend upon draw to that portion of the L/C Bank Contingent
downs of outstanding Claim that has become non-contingent,
Letters of Credit liquidated, and undisputed after the
Consummation Date, as set forth in the Plan
Administrator Agreement.
O Estimated Recovery: 100%
Class 6 -- Fines, O IMPAIRED
Penalties, and
Punitive Damages Claims O A holder of a Class 6 Fines, Penalties and
Punitive Damages Claim shall not be entitled
to, and shall not, receive or retain any
property or interest in property on account
of such Claim.
O Estimated Recovery: 0%
Class 7 -- Securities O IMPAIRED
Claims
(Debt Securities O A holder of a Class 7 Debt Securities Claim
Claims and Equity or Equity Securities Claim shall not be
Securities Claims) entitled to, and shall not, receive or
retain any property or interest in property
on account of such Claim.
O Estimated Recovery:
Debt Securities Claims: 0%.
Equity Securities Claims: 0%
Class 8 -- Intercompany O IMPAIRED
Claims
O A holder of a Class 8 Intercompany Claim
shall not be entitled to, and shall not,
receive or retain any property or interest
in property on account of such Claim. These
claims will be eliminated when the Debtors'
Estates are substantively consolidated.
O Estimated Recovery: 0%.
Class 9 -- Equity O IMPAIRED
Securities Interests
O A holder of a Class 9 Equity Securities
Interest shall not be entitled to, and shall
not, receive or retain any property or
interest in property on account of such
Interest.
O Estimated Recovery: 0%.
On March 7, 1997, the Bankruptcy Court granted the Debtors' motion,
dated January 21, 1997, for approval of, inter alia, the sale to USA Waste
Services, Inc. and its acquisition subsidiaries of substantially all of the
Debtors' assets and the assumption by USA Waste of certain of the Debtors'
contracts, trade claims, environmental and other liabilities pursuant to
sections 105(a), 363(b), and 365 of the Bankruptcy Code. The sale,
assumption and assignment were deemed for all purposes to have closed at
12:01 a.m. on April 1, 1997. The Debtors will use the net proceeds of
approximately $__________ from the USA Waste sale, their existing Cash
balances and deposits, and Cash derived from the liquidation of their
remaining non-Cash assets to fund the cash payments required by the Plan.
After careful review of the estimated recoveries in a Chapter 11
liquidation scenario and a Chapter 7 liquidation scenario, the Debtors have
concluded that the recovery to creditors will be maximized by completing
the liquidation of the Debtors under Chapter 11 of the Bankruptcy Code and
making distributions pursuant to the Plan. The Debtors believe that their
Estates have value that would not be fully realized by creditors in a
Chapter 7 liquidation primarily due to (i) the difficulties a Chapter 7
trustee would encounter in (a) collecting certain accounts receivable and
cash balances previously deposited by the Debtors with various
municipalities, governmental authorities and bonding companies and (b)
resolving disputed, contingent and unliquidated claims, (ii) the additional
administrative expenses that would be incurred in a Chapter 7 liquidation,
and (iii) the significant delay in distributions that would occur if the
Debtors' Chapter 11 Cases were converted to cases under Chapter 7.
According to the liquidation analysis prepared by the Debtors and their
accountants, the Debtors' Estates are worth more to their creditors
(particularly to those in Class 4-B) if the Debtors' liquidation is
completed, and distributions are made, under Chapter 11 pursuant to the
Plan.
DISCLAIMER
ALL CREDITORS AND INTEREST HOLDERS ARE ADVISED AND ENCOURAGED TO READ
THIS DISCLOSURE STATEMENT AND THE PLAN IN THEIR ENTIRETY. PLAN SUMMARIES
AND STATEMENTS MADE IN THIS DISCLOSURE STATEMENT, INCLUDING THE PRECEDING
EXECUTIVE SUMMARY, ARE QUALIFIED IN THEIR ENTIRETY BY REFERENCE TO THE
PLAN, THE EXHIBITS ANNEXED TO THE PLAN, AND THIS DISCLOSURE STATEMENT AS A
WHOLE. THE STATEMENTS CONTAINED IN THIS DISCLOSURE STATEMENT ARE MADE ONLY
AS OF THE DATE HEREOF, AND THERE CAN BE NO ASSURANCE THAT THE STATEMENTS
CONTAINED HEREIN WILL BE CORRECT AT ANY TIME AFTER THE DATE HEREOF.
THIS DISCLOSURE STATEMENT HAS BEEN PREPARED IN ACCORDANCE WITH
SECTION 1125 OF THE BANKRUPTCY CODE AND RULE 3016(c) OF THE FEDERAL RULES
OF BANKRUPTCY PROCEDURE AND NOT IN ACCORDANCE WITH FEDERAL OR STATE
SECURITIES LAWS. THIS DISCLOSURE STATEMENT HAS NEITHER BEEN APPROVED NOR
DISAPPROVED BY THE SECURITIES AND EXCHANGE COMMISSION (THE "SEC"), NOR HAS
THE SEC PASSED UPON THE ACCURACY OR ADEQUACY OF THE STATEMENTS CONTAINED
HEREIN. THIS DISCLOSURE STATEMENT WAS PREPARED TO PROVIDE HOLDERS OF CLAIMS
AGAINST AND INTERESTS IN THE DEBTORS WITH "ADEQUATE INFORMATION" (AS
DEFINED IN THE BANKRUPTCY CODE) SO THAT THEY CAN MAKE AN INFORMED JUDGMENT
ABOUT THE PLAN. PERSONS OR ENTITIES TRADING IN, OR OTHERWISE PURCHASING,
SELLING, OR TRANSFERRING, SECURITIES OF THE DEBTORS SHOULD NOT RELY UPON
THIS DISCLOSURE STATEMENT FOR SUCH PURPOSES AND SHOULD EVALUATE THIS
DISCLOSURE STATEMENT AND THE PLAN IN LIGHT OF THE PURPOSE FOR WHICH THEY
WERE PREPARED.
AS TO CONTESTED MATTERS, ADVERSARY PROCEEDINGS, AND OTHER ACTIONS OR
THREATENED ACTIONS, THIS DISCLOSURE STATEMENT SHALL NOT CONSTITUTE OR BE
CONSTRUED AS AN ADMISSION OF ANY FACT OR LIABILITY, STIPULATION, OR WAIVER,
BUT RATHER AS A STATEMENT MADE IN SETTLEMENT NEGOTIATIONS.
THE INFORMATION CONTAINED IN THIS DISCLOSURE STATEMENT IS INCLUDED
HEREIN FOR PURPOSES OF SOLICITING ACCEPTANCES OF THE PLAN AND MAY NOT BE
RELIED UPON FOR ANY PURPOSE OTHER THAN TO MAKE A JUDGMENT WITH RESPECT TO,
AND DETERMINE HOW TO VOTE ON, THE PLAN.
THE DISCLOSURE STATEMENT SHALL NOT BE ADMISSIBLE IN ANY NONBANKRUPTCY
PROCEEDING INVOLVING THE DEBTORS OR ANY OTHER PARTY, NOR SHALL IT BE
CONSTRUED TO BE CONCLUSIVE ADVICE ON THE TAX, SECURITIES, OR OTHER LEGAL
EFFECTS OF THE LIQUIDATION OR PLAN AS TO HOLDERS OF CLAIMS AGAINST, OR
INTERESTS IN, THE DEBTORS.
TABLE OF CONTENTS
Page
I. INTRODUCTION...................................................... 1
A. Definitions................................................... 1
B. Notice To Holders Of Claims And Interests..................... 1
C. Solicitation Package.......................................... 2
D. Voting Procedures, Ballots, And Voting Deadline (For
Holders Of Claims In Classes 3, 4, And 5)................... 2
E. Confirmation Hearing And Deadline For Objections To
Confirmation................................................ 3
II. CERTAIN EVENTS LEADING TO THE COMMENCEMENT
OF THE DEBTORS' CHAPTER 11 CASES.................................. 4
A. Origin and Growth of MAWS..................................... 4
B. Capital Structure of the Debtors.............................. 5
1. Financing Prior to Initial Public Offering................ 5
2. Public Offerings of Equity................................ 5
3. Senior Notes.............................................. 5
4. Revenue Bonds............................................. 5
5. May 1994 Debt Refinancing--New Credit Facility and
Subordinated Notes...................................... 6
C. Extraordinary Charges and Defaults Incurred in 1995........... 6
D. Management Change and Decision to Restructure - 1995
Proxy Contest............................................... 7
E. 1996 Operations............................................... 7
F. Bonding Obligations........................................... 7
G. Determination to Sell the Assets and the Business............. 8
H. Marketing Efforts Leading to the Asset Sale................... 8
III. THE CHAPTER 11 CASES.............................................. 8
A. Parties In Interest; Advisors................................. 9
1. Advisors to the Debtors................................... 9
2. The Creditors' Committee And Its Advisors................. 9
B. Asset Sale.................................................... 9
C. Significant Court Orders...................................... 10
IV. SUMMARY OF THE PLAN............................................... 11
A. Overall Structure Of The Plan................................. 12
B. Certain Matters Regarding Classification and Treatment
of Claims and Interests....................................... 12
1. Unclassified Claims....................................... 12
2. Unimpaired Classes Of Claims ............................. 13
3. Impaired Classes of Claims................................ 13
4. Impaired Class of Interests............................... 25
C. Means for Implementation of the Plan.......................... 26
1. Substantive Consolidation................................. 26
2. Merger Of Subsidiaries Into MAWS.......................... 29
3. The Plan Administrator.................................... 29
4. Creditors' Committee And Plan Committee................... 30
5. No Revesting Of Assets.................................... 31
6. Distributions............................................. 31
7. Resolution of Disputed, Contingent, and Unliquidated
Claims.................................................. 32
8. Miscellaneous............................................. 34
D. Bar Dates For Certain Claims.................................. 38
1. Administrative Claims..................................... 38
2. Professional Fee Claims; Substantial Contribution
Claims.................................................. 38
E. Modifications and Amendments.................................. 38
F. Retention of Jurisdiction..................................... 39
V. CONFIRMATION OF THE PLAN.......................................... 39
A. Voting Requirements........................................... 39
B. Confirmation without Acceptance of All Impaired Classes
"Cramdown".................................................. 40
C. Best Interests Test........................................... 41
D. Chapter 7 Liquidation Analysis................................ 41
1. Assumptions............................................... 42
2. Distributions; Absolute Priority.......................... 43
3. Conclusion................................................ 43
E. Conditions To Confirmation.................................... 43
F. Conditions To Consummation Date............................... 44
G. Waiver Of Conditions.......................................... 44
H. Alternatives if the Plan is Not Consummated................... 44
VI. CERTAIN FEDERAL INCOME TAX CONSIDERATIONS......................... 44
A. Federal Income Tax Consequences to the Debtors................ 45
1. Asset Dispositions........................................ 45
2. Cancellation of Indebtedness Income....................... 45
3. Utilization of NOLs....................................... 46
4. Alternative Minimum Tax................................... 46
B. Federal Income Tax Consequences to Holders of Claims.......... 46
C. Information Reporting and Backup Withholding.................. 47
VII. VOTING REQUIREMENTS............................................... 47
A. Special Note For Holder of Securities......................... 47
1. Beneficial Owners......................................... 47
2. Brokerage Firm, Banks, And Other Nominees................. 48
B. Fiduciaries And Other Representatives......................... 48
C. Parties In Interest Entitled To Vote.......................... 49
D. Classes Impaired Under The Plan............................... 49
VIII. ADDITIONAL INFORMATION............................................ 49
IX. CONFIRMATION HEARING; OBJECTIONS TO
CONFIRMATION; RECOMMENDATION ..................................... 50
A. Hearing On And Objections To Confirmation..................... 50
1. Confirmation Hearing...................................... 50
2. Date Set For Filing Objections To Confirmation............ 50
B. Recommendation................................................ 51
I. INTRODUCTION
Mid-American Waste Systems, Inc. ("MAWS") and its 30 subsidiaries
listed on Exhibit E to the Plan (the "Subsidiaries" and, together with
MAWS, the "Debtors") hereby transmit this disclosure statement (the
"Disclosure Statement") pursuant to section 1125 of the United States
Bankruptcy Code (the "Bankruptcy Code"), for use in the solicitation of
votes on their joint liquidating plan of reorganization, filed with the
United States Bankruptcy Court for the District of Delaware (the
"Bankruptcy Court") on June 20, 1997 (the "Plan"). A copy of the Plan is
annexed to this Disclosure Statement as Exhibit A.
This Disclosure Statement sets forth certain information regarding
the Debtors' pre-petition history and significant events that have occurred
during the Debtors' Chapter 11 Cases. This Disclosure Statement also
describes the Plan, alternatives to the Plan, effects of confirmation of
the Plan, and the manner in which distributions will be made under the
Plan. In addition, this Disclosure Statement discusses the confirmation
process and the voting procedures that holders of Claims in impaired
Classes must follow for their votes to be counted.
FOR A DESCRIPTION OF THE PLAN AS IT RELATES TO HOLDERS OF CLAIMS
AGAINST THE DEBTORS, PLEASE SEE SECTION IV - "SUMMARY OF THE PLAN."
THIS DISCLOSURE STATEMENT CONTAINS SUMMARIES OF CERTAIN PROVISIONS OF
THE PLAN, STATUTORY PROVISIONS, DOCUMENTS RELATED TO THE PLAN, EVENTS IN
THE DEBTORS' CHAPTER 11 CASES, AND FINANCIAL INFORMATION. ALTHOUGH THE
DEBTORS BELIEVE THAT THE PLAN AND RELATED DOCUMENT SUMMARIES ARE FAIR AND
ACCURATE, SUCH SUMMARIES ARE QUALIFIED TO THE EXTENT THAT THEY DO NOT SET
FORTH THE ENTIRE TEXT OF SUCH DOCUMENTS OR STATUTORY PROVISIONS. FACTUAL
INFORMATION CONTAINED IN THIS DISCLOSURE STATEMENT HAS BEEN PROVIDED BY THE
DEBTORS' MANAGEMENT, EXCEPT WHERE OTHERWISE SPECIFICALLY NOTED. THE DEBTORS
ARE UNABLE TO WARRANT OR REPRESENT THAT THE INFORMATION CONTAINED HEREIN,
INCLUDING THE FINANCIAL INFORMATION, IS WITHOUT ANY INACCURACY OR OMISSION.
NOTHING CONTAINED HEREIN SHALL CONSTITUTE AN ADMISSION OF ANY FACT OR
LIABILITY BY ANY PARTY, BE ADMISSIBLE IN ANY NONBANKRUPTCY PROCEEDING
INVOLVING THE DEBTORS OR ANY OTHER PARTY, OR BE DEEMED CONCLUSIVE ADVICE ON
THE TAX OR OTHER LEGAL EFFECTS OF THE DEBTORS' LIQUIDATION OR PLAN AS TO
HOLDERS OF CLAIMS OR INTERESTS. YOU SHOULD CONSULT YOUR PERSONAL COUNSEL OR
TAX ADVISOR ON ANY QUESTIONS OR CONCERNS REGARDING TAX OR OTHER LEGAL
CONSEQUENCES OF THE PLAN.
A. DEFINITIONS
Unless otherwise defined, capitalized terms used in this Disclosure
Statement have the meanings ascribed to them in the Plan.
B. NOTICE TO HOLDERS OF CLAIMS AND INTERESTS
This Disclosure Statement is being transmitted to (i) those holders
of Impaired Claims against the Debtors who are entitled to vote to accept
or reject the Plan, (ii) holders of Unimpaired Claims against the Debtors,
who are conclusively presumed to have accepted the Plan and hence are not
entitled to vote thereon, and (iii) holders of certain Claims against or
Interests in the Debtors who will receive or retain no distribution or
property under the Plan and, therefore, are presumed to have rejected the
Plan and hence are not entitled to vote thereon. The primary purpose of
this Disclosure Statement is to provide those creditors voting on the Plan
with adequate information so that they can make a reasonably informed
decision with respect to the Plan prior to exercising their right to vote
to accept or to reject the Plan.
On July ___, 1997, the Bankruptcy Court approved this Disclosure
Statement as containing information of a kind and in sufficient detail
adequate to enable the holders of Claims against the Debtors to make an
informed judgment about the Plan. THE BANKRUPTCY COURT'S APPROVAL OF THIS
DISCLOSURE STATEMENT CONSTITUTES NEITHER A GUARANTY OF THE ACCURACY OR
COMPLETENESS OF THE INFORMATION CONTAINED HEREIN, NOR AN ENDORSEMENT OF THE
PLAN BY THE BANKRUPTCY COURT.
WHEN AND IF CONFIRMED BY THE BANKRUPTCY COURT, THE PLAN WILL BIND ALL
HOLDERS OF CLAIMS AGAINST AND INTERESTS IN THE DEBTORS, WHETHER OR NOT THEY
ARE ENTITLED TO VOTE OR DID VOTE ON THE PLAN AND WHETHER OR NOT THEY
RECEIVE OR RETAIN ANY DISTRIBUTIONS OR PROPERTY UNDER THE PLAN. THUS, YOU
ARE ENCOURAGED TO READ THIS DISCLOSURE STATEMENT CAREFULLY. IN PARTICULAR,
HOLDERS OF IMPAIRED CLAIMS WHO ARE ENTITLED TO VOTE ON THE PLAN ARE
ENCOURAGED TO READ THIS DISCLOSURE STATEMENT, THE PLAN, AND THE EXHIBITS TO
THE PLAN CAREFULLY AND IN THEIR ENTIRETY BEFORE VOTING TO ACCEPT OR TO
REJECT THE PLAN. This Disclosure Statement contains important information
about the Plan, the liquidation and distribution of the Debtors' assets,
considerations pertinent to acceptance or rejection of the Plan, and
developments concerning the Chapter 11 Cases.
THIS DISCLOSURE STATEMENT IS THE ONLY DOCUMENT AUTHORIZED BY THE
BANKRUPTCY COURT TO BE USED IN CONNECTION WITH THE SOLICITATION OF VOTES ON
THE PLAN. No solicitation of votes may be made until distribution of this
Disclosure Statement, and no person has been authorized to distribute any
information concerning the Debtors other than the information contained
herein.
C. SOLICITATION PACKAGE
Accompanying this Disclosure Statement are copies of (i) the Plan
(Exhibit A); (ii) the notice of, among other things, the time for
submitting Ballots to accept or reject the plan, the date, time and place
of the hearing to consider confirmation of the Plan and related matters,
and the time for filing objections to confirmation of the Plan (the
"Confirmation Hearing Notice"); and (iii) for creditors whose Claims are
impaired and who are entitled to vote on the Plan, one or more Ballots (and
return envelopes) to be used in voting to accept or to reject the Plan. If
you did not receive a Ballot in your package and believe that you should
have, please contact the voting agent named below at the address or
telephone number set forth in the next subsection.
D. VOTING PROCEDURES, BALLOTS, AND VOTING DEADLINE (FOR HOLDERS
OF CLAIMS IN CLASSES 3, 4, AND 5)
After carefully reviewing the Plan, this Disclosure Statement, and
the detailed instructions accompanying your Ballot, please (i) indicate
your acceptance or rejection of the Plan by checking the appropriate box on
the enclosed Ballot and (ii) if applicable, make a Convenience Claim
election or a Secured Claim Election. Please complete and sign your
original Ballot (copies will not be accepted) and return it in the envelope
provided so that it is RECEIVED by the Voting Deadline (as defined below).
Please note that if you are in Class 4-A or 4-B and hold the Debt
Securities evidencing your Claim through a broker or other financial
intermediary, you must return your ballot to such broker or financial
intermediary sufficiently in advance of the Voting Deadline so as to permit
such broker or financial intermediary to fill out and return a master
ballot by the Voting Deadline.
Each Ballot has been coded to reflect the Class of Claims it
represents. Accordingly, in voting to accept or reject the Plan, you must
use only the coded Ballot or Ballots sent to you with this Disclosure
Statement. If you believe you received the wrong Ballot, please contact the
voting agent named below at the address or telephone number set forth in
the next subsection.
IN ORDER FOR YOUR VOTE TO BE COUNTED, YOUR BALLOT MUST BE PROPERLY
COMPLETED AS SET FORTH ABOVE AND IN ACCORDANCE WITH THE VOTING INSTRUCTIONS
ACCOMPANYING THE BALLOT AND RECEIVED NO LATER THAN SEPTEMBER 3, 1997 AT
4:00 P.M. EASTERN DAYLIGHT TIME (THE "VOTING DEADLINE") BY DONLIN, RECANO &
CO., INC. (THE "VOTING AGENT"). DO NOT RETURN DEBT INSTRUMENTS WITH YOUR
BALLOT.
If you have any questions about the procedure for voting your Claim
or with respect to the packet of materials that you have received, please
contact the Voting Agent at the following address and phone number:
Donlin, Recano & Co., Inc.
419 Park Avenue South
Suite 1206
New York, New York 10016
(212) 481-1411
If you wish to obtain, at your own expense unless otherwise
specifically required by Fed. R. Bank. P. 3017(d), an additional copy of
the Plan, this Disclosure Statement, or any exhibits to such documents,
please contact the Voting Agent.
E. CONFIRMATION HEARING AND DEADLINE FOR OBJECTIONS TO CONFIRMATION
Pursuant to section 1128 of the Bankruptcy Code and Fed. R. Bank. P.
3017(c), the Bankruptcy Court has scheduled a hearing on confirmation of
the Plan (the "Confirmation Hearing") to commence on September 17, 1997 at
9:30 a.m. Eastern Daylight Time, or as soon thereafter as counsel may be
heard, before the Honorable Peter J. Walsh, United States Bankruptcy Judge,
in the United States Bankruptcy Court, Marine Midland Plaza, 824 Market
Street, 6th Floor, Wilmington, Delaware 19801. The Bankruptcy Court has
directed that objections, if any, to confirmation of the Plan must be filed
with the clerk of the Bankruptcy Court and served so that they are RECEIVED
on or before September 3, 1997, at 4:00 p.m. Eastern Daylight Time by:
Counsel for the Debtors
Skadden, Arps, Slate, Meagher & Flom LLP
919 Third Avenue
New York, New York 10022-3897
Attn: Alesia Ranney-Marinelli, Esq.
- and -
One Rodney Square
P.O. Box 636
Wilmington, Delaware 19899-0636
Attn: Anthony W. Clark, Esq.
United States Trustee
The Office of the United States Trustee
601 Walnut Street
Curtis Center, Suite 950-W
Philadelphia, Pennsylvania 19106
Attn: Maria Giannirakis, Esq.
Counsel for the Creditors' Committee
Paul, Weiss, Rifkind, Wharton & Garrison
1285 Avenue of the Americas
New York, New York 10019-6064
Attn: Alan W. Kornberg, Esq.
- and -
Potter, Anderson & Corroon
350 Delaware Trust Building
P.O. Box 951
Wilmington, Delaware 19899-0951
Attn: Laurie Selber Silverstein, Esq.
The Confirmation Hearing may be adjourned from time to time by the
Bankruptcy Court without further notice except for the announcement of the
adjournment date made at the Confirmation Hearing or at any subsequent
adjourned Confirmation Hearing.
THE PLAN HAS THE SUPPORT OF THE CREDITORS' COMMITTEE AND THE DEBTORS.
II. CERTAIN EVENTS LEADING TO THE COMMENCEMENT
OF THE DEBTORS' CHAPTER 11 CASES
A. ORIGIN AND GROWTH OF MAWS
MAWS was formed in December 1985 to acquire, consolidate and operate
targeted independent non-hazardous solid waste collection operations and
landfills. MAWS commenced operations in January 1986 with the acquisition
of two waste collection companies and, over time, its collection services
expanded through the acquisition of more than 125 additional independent
collection operations, transfer stations, and "tuck-in acquisitions" (i.e.,
acquisitions of pre-existing collection services in regional markets served
by MAWS or the Subsidiaries). The operating companies acquired or developed
by MAWS are, with the exception of Northwestern Disposal Co., direct
wholly-owned subsidiaries of MAWS. Northwestern Disposal Co. is a
wholly-owned subsidiary of Mid-American Waste Systems of West Virginia,
Inc., which, in turn, is a wholly-owned subsidiary of MAWS. MAWS conducted
its business operations together with those of its Subsidiaries on a
consolidated basis.
The Debtors' landfill operations began with MAWS' acquisition of its
first solid waste landfill site in February 1987. Once they had acquired
a base of waste collection operations, the Debtors continued their strategy
of becoming an integrated solid waste management business by (i) acquiring
and developing landfills and transfer stations in selected markets and
(ii) acquiring regional landfills together with collection operations in
the regions served by such landfills. During the early 1990's, the Debtors
expanded aggressively. In 1991, they acquired 43 collection and landfill
operations for the aggregate purchase price of $117,340,000. In 1992, they
acquired an additional eight collection and landfill operations for
$32,675,000, while at the same time seeking to benefit from economies of
scale through the divestiture of collection operations whose waste streams
were not integrated into the Debtors' own landfill sites. By 1992, the
height of the Debtors' expansion of their landfill operations, the Debtors'
owned and operated 18 landfills, had one more under construction, and
operated an additional four landfills for third party owners. By the end of
fiscal year 1995, however, the Debtors owned only 14 landfills, and
operated only one landfill for a third party owner.
B. CAPITAL STRUCTURE OF THE DEBTORS
1. Financing Prior to Initial Public Offering
As noted above, from their inception, the Debtors implemented a
strategy of rapid business expansion. Prior to MAWS' initial public
offering in May 1990, MAWS funded its acquisition program primarily through
six private placements of equity and debt securities, which raised an
aggregate of $38,399,000, and borrowings under its revolving credit
facility. In addition, in August 1989, National Waste and Energy
Corporation entered into an installment sale agreement and related
documents with respect to the issuance by the Westmoreland County
Industrial Development Authority of $20,500,000 of 9.75% first mortgage
revenue bonds (the "Westmoreland County Bonds") to finance the acquisition,
expansion, equipping and renovation of, and collateralized by a mortgage
on, the Valley Landfill in Westmoreland County, Pennsylvania. The
Westmoreland County Bonds were paid in full as part of the USA Waste
transaction.
2. Public Offerings of Equity
During 1989, in preparation for MAWS' initial public offering of
stock, its shareholders approved a reorganization by which MAWS' state of
incorporation was changed from Ohio to Delaware and each outstanding share
of its no par value common stock was converted into two shares of $1.00 par
value common stock. MAWS' new certificate of incorporation originally
provided for an authorized capital of 2,000,000 shares of preferred stock,
par value $1.00, and 20,000,000 shares of common stock, par value $1.00,
and was amended in 1990 to provide for an authorized capital of 50,000,000
shares of common stock, par value $1.00. In May, 1990, MAWS completed its
initial public offering of 3,431,344 shares of common stock. The net
proceeds of the offering were $75,257,000, which were used to repay notes
payable, term debt, and capitalized leases, with the remainder being used
for working capital.
After MAWS went public, the Debtors continued to pursue their
expansion program, spending approximately $180 million on acquisitions in
fiscal years 1990 through 1992. The Debtors financed these acquisitions
with a combination of internally generated cash flow, bank credit
facilities, public and private offerings of debt securities, and additional
public offerings of equity.
3. Senior Notes
In May of 1992, the Debtors issued $45,000,000 of 9.08% Senior Notes
due May 1, 2002, and $40,000,000 of 8.70% Senior Notes due May 1, 1999. Two
years later, in May, 1994, the Senior Notes were amended to provide for (a)
a 0.15% per annum interest rate increase to 9.23% and 8.85%, respectively,
(b) the change of the interest payment date from semi-annually to
quarterly, and (c) the modification of certain covenants to conform to the
new unsecured bank credit agreement.
4. Revenue Bonds
The Debtors also financed certain landfill acquisition and expansion
programs through the issuance of industrial revenue bonds. For example, in
October, 1992, MAWS entered into a loan agreement and related documents
with respect to the issuance by the Ohio Water Development Authority of
$14,775,000 of 7.75% development revenue bonds (the "Ohio Revenue Bonds"),
used to finance the construction of, and collateralized by a mortgage on,
the Debtors' Canal Winchester, Ohio transfer station/recycling facility.
Approximately seven months later, in May 1993, the Debtors entered into
various agreements with respect to the issuance by the Westmoreland County
Industrial Development Authority of $24,400,000 of 4.375% guaranteed
variable rate revenue bonds (the "Pennsylvania Revenue Bonds"), credit
enhanced by an irrevocable direct draw letter of credit issued by ABN AMRO
Bank, N.V. concurrently with the bonds to finance the expansion of the
Debtors' Valley Landfill. Finally, in October, 1993, Mid-American Waste
Systems of South Carolina, Inc. entered into a note agreement and related
documents with respect to the issuance by Lee County, South Carolina of
$14,000,000 of 7% guaranteed industrial development revenue bonds (the "Lee
County Revenue Bonds"), guaranteed by MAWS to finance the initial phase of
the development of the Lee County Regional Landfill and Recycling Facility.
These revenue bonds were either paid off (in the case of the Lee County
Revenue Bonds) or assumed by USA Waste (in the case of the Ohio Revenue
Bonds and the Pennsylvania Revenue Bonds) as part of the sale of
substantially all of the Debtors' assets to USA Waste. (See Section III.B -
"The Chapter 11 Cases -- Asset Sale").
5. May 1994 Debt Refinancing--New Credit Facility and Subordinated
Notes
Beginning in September of 1993, the Debtors could no longer comply
with certain covenants under their bank credit agreements, Senior Notes
agreements, and revenue bond agreements. This led to negotiations with
their lenders that resulted in a comprehensive debt refinancing under
which, among other things, the Debtors obtained extended waivers of their
covenant defaults. During May of 1994, MAWS concurrently entered into a new
$75,000,000 unsecured credit agreement with NatWest Bank N.A., The First
National Bank of Boston, and Bank One, Columbus N.A, completed the offering
of $175,000,000 of 12.25% Senior Subordinated Notes (the "Subordinated
Notes"), and amended the terms of the Senior Notes to conform to the new
credit facility. The Subordinated Notes offering yielded approximately
$168,800,000 of net proceeds, which the Debtors used to repay $165,762,000
of certain notes payable and term obligations. The remaining net proceeds
were used for working capital purposes.
Notwithstanding the May 1994 debt refinancing, the Debtors remained
unable to achieve ongoing compliance with the provisions of their
principal debt instruments, and, after incurring a net loss of $182,558,000
in 1995 (primarily attributable to extraordinary charges in respect of the
termination of projects in San Diego, California, Jacksonville, Florida,
Gary, Indiana, and Atlanta, Georgia), were again in default.
C. EXTRAORDINARY CHARGES AND DEFAULTS INCURRED IN 1995
In the year ended December 31, 1995, MAWS recorded extraordinary
charges in the aggregate amount of $198,200,000, resulting in a net
operating loss of $182,558,000. Operating expenses increased from
$76,940,000 in 1994 to $96,550,000 in 1995, resulting in extraordinary
additional operating expenses of approximately $20,000,000, primarily
attributable to increased closure accruals of $19,958,000 for additional
landfill closure, postclosure and remediation liabilities recorded during
1995. Amortization and depreciation expenses increased from $29,306,000 in
1994 to $73,467,000 in 1995, resulting in extraordinary additional
amortization and depreciation expenses of approximately $44,000,000. The
increase was primarily due to $42,503,000 in write-downs of three existing
landfill sites--Cuyahoga (Cleveland) Ohio, and the RCC and Deep Valley
sites in Pennsylvania--to figures reflecting their impaired value. Interest
expense increased from $20,380,000 in 1994 to $29,705,000 in 1995,
resulting in additional interest expenses of approximately $9,000,000. This
increase was accounted for by (i) $6,314,000 in interest that could no
longer be capitalized due to termination of certain projects and (ii)
increases in interest rates on notes payable and term obligations. Finally,
the Debtors' other expenses increased from $2,682,000 in 1994 to
$134,622,000 in 1995, resulting in extraordinary additional other expenses
of approximately $132,000,000. This increase resulted from (a) $87,800,000
in losses due to the closure of the Debtors' San Diego, California,
Jacksonville, Florida, Sugar Hill, Georgia, and certain other smaller
landfill development projects; (b) $18,452,000 in losses realized upon the
disposition of three landfills and various transfer stations and
miscellaneous assets; (c) an estimated loss of $10,760,000 for the 1996
disposition of the Debtors' Atlanta operations; (d) $15,771,000 in
write-down losses due to the premature termination of the Debtors' Gary,
Indiana municipal contract; and (e) a balance of approximately $1,800,000
in losses from the write-down of other assets held for sale, and severance
costs in connection with their Atlanta Divestiture.
The combination of the extraordinary expenses discussed above,
pricing pressures, and decreasing margins in the Debtors' operations
produced a 1995 net operating loss of $182,558,000. By December 31, 1995,
the Debtors had violated net worth covenants with various of their
institutional lenders. In February 1996, they failed to make a $4,800,000
payment to their senior lenders. In addition, the $10,700,000 interest
payment due on February 11, 1996 to the Subordinated Notes was not made.
D. MANAGEMENT CHANGE AND DECISION TO RESTRUCTURE - 1995 PROXY CONTEST
In 1995, as a result of a proxy contest initiated by John L.
Kemmerer, III, the holder of 3,089,300 shares of MAWS' common stock, and a
director of MAWS prior to 1993, the 1995 shareholders meeting originally
scheduled for May 18 was adjourned due to the lack of a quorum. Under the
terms of an agreement dated September 28, 1995, Messrs. Kemmerer and White
agreed to support the slate of ten directors set forth in the Proxy
Statement dated October 5, 1995. As a result, at a special meeting in lieu
of the annual meeting of stockholders held on November 1,1995, Messrs. Gene
A. Meredith, Martin L. Garcia, and Richard J. Puricelli, all of whom were
previously unaffiliated with the Debtors, became directors of MAWS.
E. 1996 OPERATIONS
For the year ending December 31, 1996, the Debtors had a net
operating loss of $305,760,997 on consolidated revenues of $122,660,383. As
discussed above, the Debtors' highly leveraged capital structure precluded
development of any new landfills; thus, the Debtors sold or wrote off all
investments in development landfill projects. The Debtors also offered for
sale various integrated landfill and collection operations in order to
raise cash for purposes of debt reduction and, in March 1996, sold their
Atlanta, Georgia operations for approximately $52 million, which they used
to repay certain debt obligations and to meet working capital requirements.
Also in 1996, in connection with their ongoing restructuring efforts,
the Debtors re-evaluated the carrying value of their operating assets for
impairment and the adequacy of their accruals for closure and post-closure
costs associated with both their operating and closed landfills. As a
result of this re-evaluation, the Debtors incurred significant additional
charges for asset impairment, asset write-downs, and additional closure
accruals, recording charges in the aggregate amount of $266,000,000
($186,000,000 for asset impairment, $70,000,000 for additional closure and
post-closure costs, $2,100,000 for operating losses on an airplane,
$2,300,000 for loss on Cleveland, Ohio contract, $2,000,000 for loss on
obsolete equipment, and a $3,600,000 increase in insurance accrual to
actuarial balance) in 1996.
F. BONDING OBLIGATIONS
The Debtors' precarious financial situation was exacerbated by the
fact that they required bonds to compete for municipal contracts, which
accounted for a significant portion of the Debtors' revenues. Thus, the
Debtors ordinarily were required to post a performance bond (usually
renewable on an annual basis) or bank letter of credit at the time of
execution of a municipal residential collection contract. As of December
31, 1996, the Debtors had posted approximately $28,600,000 of performance
bonds for these contracts. The ability to obtain new letters of credit and
performance bonds, and more importantly to renew performance bonds for
existing projects, was critical not only for obtaining, but also for
retaining, business. Access to surety bonds and letters of credit was also
necessary to enable the Debtors to secure their obligations to close
their landfills in accordance with environmental regulations. As of
December 31, 1996, the Debtors had provided letters of credit totalling
$7,797,000 and surety bonds totalling $55,950,000 to secure closure and
post-closure obligations. Additionally, the Debtors have provided letters
of credit totalling $10,809,500 as security to their insurance carrier and
bonding company. Because the Debtors had no further borrowing capacity
under the Credit Agreement for letters of credit (or otherwise), they were
required to support all closure, post-closure, or other standby
obligations by cash-collateralization. From September 30, 1995 to the
Petition Date, the Debtors were required to cash collateralize
approximately $14,945,000 of such obligations. The Debtors' financial
position made it impossible to obtain or renew necessary surety bonds or
performance bonds without cash-collateralization, and their cash flow
problems made it unlikely that they could continue to cash-collateralize
their bonds.
G. DETERMINATION TO SELL THE ASSETS AND THE BUSINESS
By the end of 1995, the Debtors had determined that they could not
meet their continuing debt obligations by access to the public or private
debt or equity markets or through an equity investment by a strategic
investor. Thus, they began to explore various out-of-court and bankruptcy
restructuring alternatives as the means to effectuate a recapitalization
that would permit their continued existence. The Debtors concluded,
however, that the way to maximize value -- indeed, the only alternative
available, aside from a piecemeal liquidation under distress sale
circumstances -- was to sell substantially all of the Debtors' assets (the
"Assets") and business operations (the "Business") pursuant to section
363(b) of the Bankruptcy Code, in order to insure an orderly and equitable
sale procedure and distribution of the proceeds.
H. MARKETING EFFORTS LEADING TO THE ASSET SALE
The Debtors retained Donaldson, Lufkin & Jenrette ("DLJ") as their
exclusive financial advisor in early 1996. After consultation, and in
cooperation, with the Debtors' management, DLJ targeted the most likely and
qualified acquirors for the Debtors or their Assets, a process facilitated
by DLJ's institutional knowledge of, and familiarity with, the Debtors,
acquired in connection with DLJ's previous attempt to market the Debtors to
potential strategic purchasers in late 1994 and early 1995. During the
first two weeks of May 1996, DLJ prepared a confidential information
memorandum to be used by DLJ and the Debtors for the marketing process (the
"Information Memorandum"), and assembled certain additional relevant and
material information regarding the Assets and the Business in a room at
MAWS' corporate headquarters in Canal Winchester, Ohio (the "Data Room").
DLJ next contacted eleven (11) potential strategic acquirors and two
(2) potential financial acquirors, all of whom had been identified by the
Debtors and DLJ as possibly being interested in such a transaction. Of the
thirteen parties contacted, twelve, including USA Waste, executed
confidentiality agreements and were provided copies of the Information
Memorandum and invited to visit MAWS' headquarters to meet with management
and review the information in the Data Room.
Six of the twelve parties that executed confidentiality agreements
(including USA Waste) followed up on these invitations, and during May and
June 1996 continued their due diligence investigations of the Debtors'
assets and business by visiting MAWS' headquarters, where they met with
management and reviewed the information in the Data Room. Each was invited
by DLJ on behalf of the Debtors to submit, and by early July 1996 had
submitted, a formal proposal to acquire the assets and business of the
Debtors. After evaluating the terms of each of the six proposals, MAWS'
board of directors recommended that the Debtors and DLJ further pursue the
proposals submitted by USA Waste and by Laidlaw Waste Systems ("Laidlaw").
Soon thereafter, however, Laidlaw withdrew its offer because it had entered
into negotiations regarding the sale of its own waste disposal and
collection business to another entity.
Following the completion of USA Waste's review of the Debtors' assets
and business and further lengthy and intense negotiations regarding the
terms of a sale, certain of the Debtors (the "Seller Debtors") and USA
Waste and its designated acquisition subsidiaries ultimately entered into a
purchase agreement and related Company Disclosure Letter (together, the
"Purchase Agreement") dated as of January 21, 1997. The purchase agreement,
as amended, was approved by the Bankruptcy Court on March 7, 1997, and the
transactions contemplated by it were consummated on April 1, 1997.
III. THE CHAPTER 11 CASES
The Debtors filed their petitions for reorganization relief under
Chapter 11 of the Bankruptcy Code on January 21, 1997 (the "Petition
Date"). Following commencement of the Chapter 11 Cases, all actions and
proceedings against the Debtors and all acts to obtain any property of the
Debtors' Estates were automatically stayed under section 362 of the
Bankruptcy Code. As more fully discussed below, the Debtors retained
certain advisors to assist in their Chapter 11 Cases, and the United States
Trustee appointed an official committee of unsecured creditors, which also
has retained advisors to facilitate its participation in the Chapter 11
Cases. Also described below are some of the important events that have
occurred to date during the Chapter 11 Cases.
A. PARTIES IN INTEREST; ADVISORS
The parties described below have been major parties in interest or
advisors to them in the Chapter 11 Cases to date.
1. Advisors to the Debtors
The Debtors retained Skadden, Arps, Slate, Meagher & Flom LLP to act
as general counsel in these Chapter 11 Cases. In addition, the Debtors
retained Young, Conaway, Stargatt & Taylor as counsel in the Chapter 11
Cases in connection with, among other things, certain matters in which
Skadden, Arps has or may have a conflict. The Debtors have also retained
Deloitte & Touche, LLP as their accountants. The Debtors have consulted
with these advisors on various aspects of their business, financial
restructuring, and operations as debtors-in-possession in the Chapter 11
Cases. The Debtors also retained (a) various law firms in the United States
to act as ordinary course professionals on the Debtors' behalf in discrete
legal matters as well as (b) various other consultants and experts (e.g.,
appraisers, accountants) to handle certain of the Debtors' business-
related matters.
2. The Creditors' Committee And Its Advisors
The Creditors' Committee originally appointed by the United States
Trustee on February 4, 1997, in these cases was comprised of: Bankers Trust
Company, as Indenture Trustee; General Motors Salaried Pension Plan, c/o
W.R. Huff Asset Management Co., L.L.C.; Merrill Lynch Corporate Bond Fund,
Inc.-High Income Portfolio; Fleet Bank, N.A.; Federated High Income Bond
Fund, Inc., c/o Federated Advisors; Albert Fried & Company, LLC; The First
National Bank of Boston; Iron City Express; and Mellon Bank, F.S.B., as
Indenture Trustee. Subsequent to February 4, 1997, three (3) members of the
original Committee -- Mellon Bank, F.S.B., Iron City Express, and Merrill
Lynch Corporate Bond Fund, Inc. -- resigned, and the United States Trustee
has not replaced them. The Creditors' Committee has, with approval of the
Bankruptcy Court, employed and retained Paul, Weiss, Rifkind, Wharton &
Garrison and Potter, Anderson & Corroon as its counsel and Chanin and
Company as its financial advisors.
B. ASSET SALE
On the Petition Date, the Debtors filed a motion for approval of,
among other things, the sale of substantially all of their operating assets
and business (the "Asset Sale") to USA Waste (the "Sale Motion") pursuant
to the purchase agreement that had been negotiated with USA Waste prior to
the Petition Date. The Debtors also filed a motion for approval of their
proposed sale and overbid procedures, including notice of the Sale Motion,
and certain expense reimbursement and termination fee provisions contained
in the Purchase Agreement. The Bankruptcy Court entered an order (the
"Overbid Procedures Order") on the Petition Date approving the Debtors'
sale procedures. Pursuant to that order, the Debtors provided notice of the
proposed Asset Sale to all creditors, as well as to various parties who
previously had expressed an interest in purchasing the assets and business
of the Debtors.
The original purchase price with USA Waste was $180 million, half of
which could be paid, at USA Waste's option, in the form of USA Waste common
stock. Accordingly, the transaction could have yielded as little as $41
million in cash, with the remainder of the consideration made up of stock
and assumption of specified liabilities.
In accordance with the Bankruptcy Court's Overbid Procedures Order,
on February 24, 1997, Superior Services, Inc. ("Superior") submitted an
initial overbid for the Debtors' assets and business (the "Initial
Overbid"). The Initial Overbid provided for a purchase price of
$181,000,001, subject to the same purchase price adjustment set forth in
the Debtors' purchase agreement with USA Waste. A portion of Superior's
consideration, $65 million, was to be paid in Superior's common stock, with
the remainder consisting of cash and assumption of the same liabilities
proposed to be assumed by USA Waste. In addition, Superior agreed to
provide the Debtors with sufficient additional cash to pay USA Waste the
expense reimbursement and termination fee contemplated by the Debtors'
contract with USA Waste and approved by the Bankruptcy Court in the Overbid
Procedures Order.
After careful review of the Initial Overbid, MAWS' board of directors
determined that the Initial Overbid constituted a bona fide proposal and a
qualifying overbid. Thereafter, on February 26, 1997, the Debtors, with the
assistance of the Creditors' Committee, conducted an auction of the
Debtors' business and assets. Following more than seven (7) hours of heated
bidding, USA Waste emerged the victor, having submitted the highest and
best offer. USA Waste's prevailing bid was $201 million, subject to a
purchase price adjustment, comprised of up to $49 million in assumption of
specified revenue bond liabilities and $152 million in cash, the common
stock component already having been removed by USA Waste.
On March 7, 1997, the Bankruptcy Court held a hearing to consider the
proposed Asset Sale, at which all objections were resolved consensually or
overruled by the Bankruptcy Court. At the conclusion of the hearing, the
Bankruptcy Court authorized the Asset Sale and, in connection therewith,
the assumption and assignment to USA Waste of more than 11,000 executory
contracts and unexpired leases and the assumption by USA Waste of specified
liabilities. The Bankruptcy Court found, among other things, that (i) the
prompt consummation of the Asset Sale was necessary and in the best
interests of the Debtors and their Estates, (ii) USA Waste's offer and the
terms of the modified purchase agreement between the Debtors and USA Waste
were the best available, and (iii) the agreement with USA Waste was the
result of extensive marketing efforts by the Debtors. The Asset Sale was
consummated on April 1, 1997, and, pursuant to agreement of the parties,
the closing of the Asset Sale was effective for all purposes as of 12:01
a.m. Eastern Standard Time on April 1, 1997. After payment of approximately
$_______ in closing costs and $_______ in post-closing adjustments, the
Debtors retain approximately $________ of net sale proceeds for
distribution to creditors under the Plan.
C. SIGNIFICANT COURT ORDERS
Although the Debtors continue as debtors-in-possession, they may not
engage in transactions outside the ordinary course of business without
permission of the Bankruptcy Court, following notice and opportunity for a
hearing as provided for in the Bankruptcy Code and Bankruptcy Rules. Since
the Petition Date, in addition to the Overbid Procedures Order and the
order approving the Asset Sale, the Debtors have sought and obtained
certain orders from the Bankruptcy Court that were of particular importance
in the pre-April 1, 1997 operation of the Debtors' business and the
post-April 1, 1997 efforts to wind-up the Debtors' affairs. Included among
such orders are those authorizing:
-- maintenance of the Debtors' existing bank accounts, continued use
of existing business forms, continued use of existing cash
management system, without interruption and in the usual and
ordinary course;
-- payment to employees of accrued pre-petition wages, bonuses, and
commissions on their regularly scheduled post-petition pay dates,
permission for employees to use pre-petition vacation time, payment
of employees' pre-petition reimbursable employee business expenses,
payment of employees' accrued prepetition contributions to employee
benefit plans, and the continuation of employee benefit plans
post-petition;
-- implementation of an employee retention program to ensure the
continued services of qualified management and personnel;
-- payment of certain pre-petition fuel taxes;
-- incurrence of post-petition secured debt to procure new and
replacement performance bonds;
-- payment of certain pre-petition tax obligations;
-- entry into a trust agreement to provide financial assurance of
closure and post-closure obligations with respect to Local
Sanitation Services Landfill;
-- retention of legal counsel, accountants, appraisers, and
consultants to perform certain services on the Debtors' behalf;
-- assumption of Gene A. Meredith's employment contract;
-- renewal of the Debtors' insurance coverage;
-- sales of certain residential real properties;
-- an extension of the Debtors' exclusive periods to file and solicit
acceptances of a reorganization plan;
-- the compromise and settlement of certain small property damage
claims;
-- establishment of a bar date for filing proofs of claim; and
-- the extension of the time for the Debtors to assume or reject
unexpired leases of nonresidential real property through and
including the date of entry of an order confirming a plan of
reorganization in the Chapter 11 Cases.
IV. SUMMARY OF THE PLAN
THIS SECTION PROVIDES A SUMMARY OF THE STRUCTURE AND MEANS FOR
IMPLEMENTATION OF THE PLAN, AND OF THE CLASSIFICATION AND TREATMENT OF
CLAIMS AND INTERESTS UNDER THE PLAN, AND IS QUALIFIED IN ITS ENTIRETY BY
REFERENCE TO THE PLAN, WHICH IS ATTACHED TO THIS DISCLOSURE STATEMENT AS
EXHIBIT A.
THE STATEMENTS CONTAINED IN THIS DISCLOSURE STATEMENT INCLUDE
SUMMARIES OF THE PROVISIONS CONTAINED IN THE PLAN AND IN DOCUMENTS REFERRED
TO THEREIN. THE STATEMENTS CONTAINED IN THIS DISCLOSURE STATEMENT DO NOT
PURPORT TO BE PRECISE OR COMPLETE STATEMENTS OF ALL THE TERMS AND
PROVISIONS OF THE PLAN OR DOCUMENTS REFERRED TO THEREIN, AND REFERENCE IS
MADE TO THE PLAN AND TO SUCH DOCUMENTS FOR THE FULL AND COMPLETE STATEMENTS
OF SUCH TERMS AND PROVISIONS.
THE PLAN ITSELF AND THE DOCUMENTS REFERRED TO THEREIN CONTROL THE
ACTUAL TREATMENT OF CLAIMS AGAINST AND INTERESTS IN THE DEBTORS UNDER THE
PLAN AND WILL, UPON THE CONSUMMATION DATE, BE BINDING UPON ALL HOLDERS OF
CLAIMS AGAINST AND INTERESTS IN THE DEBTORS AND THEIR ESTATES, REORGANIZED
MAWS, THE PLAN ADMINISTRATOR AND OTHER PARTIES IN INTEREST. IN THE EVENT OF
ANY CONFLICT BETWEEN THIS DISCLOSURE STATEMENT, ON THE ONE HAND, AND THE
PLAN, THE PLAN ADMINISTRATOR AGREEMENT OR ANY OTHER OPERATIVE DOCUMENT, ON
THE OTHER HAND, THE TERMS OF THE PLAN, THE PLAN ADMINISTRATOR AGREEMENT,
AND SUCH OTHER OPERATIVE DOCUMENT ARE CONTROLLING.
A. OVERALL STRUCTURE OF THE PLAN
Soon after consummating the Asset Sale to USA Waste, the Debtors
focused on formulating a liquidating reorganization plan that would enable
them to make distributions to holders of Allowed Claims as soon as
practicable. The Debtors and the Creditors' Committee believe that the Plan
provides the best and promptest possible recovery to the Debtors' Claim
holders.
Under the Plan, Claims against and Interests in the Debtors are
divided into different Classes. If the Plan is confirmed by the Bankruptcy
Court and consummated, on the Distribution Date, and at certain times
thereafter as Claims are resolved, liquidated or otherwise allowed, the
Debtors will distribute Cash in respect of certain Classes of Claims as
provided in the Plan. The Classes of Claims against and Interests in the
Debtors created under the Plan, the treatment of those Classes under the
Plan, and distributions to be made under the Plan are described below.
B. CERTAIN MATTERS REGARDING CLASSIFICATION AND TREATMENT OF CLAIMS AND
INTERESTS
1. Unclassified Claims
a. Administrative Claims (Unimpaired)
The Plan provides that Administrative Claims, if any, are unimpaired.
Administrative Claims consist of the costs and expenses of administration
of these Chapter 11 Cases. They include, among other things, the cost of
operating the Debtors' business since the Petition Date and the outstanding
unpaid fees and expenses of the professionals retained by the Debtors and
the Creditors' Committee in these Chapter 11 Cases. All payments to
professionals in connection with these Chapter 11 Cases for compensation
and reimbursement of expenses and all payments to reimburse expenses of
members of the Creditors' Committee will be made in accordance with the
procedures established by the Bankruptcy Code and the Bankruptcy Rules and
are subject to approval of the Bankruptcy Court as being reasonable.
Subject to the requirements of Article XIV.A of the Plan, on, or as
soon as reasonably practicable after, the later of the Distribution Date or
the first Periodic Distribution Date after the date an Administrative Claim
becomes an Allowed Administrative Claim, the holder of such Allowed
Administrative Claim will receive in full satisfaction, settlement, and
release of and in exchange for such Allowed Administrative Claim (i) Cash
equal to the unpaid portion of such Allowed Administrative Claim or (ii)
such other treatment as to which the Debtors or Reorganized MAWS and such
holder will have agreed upon in writing; provided, however, that Allowed
Administrative Claims with respect to liabilities incurred by the Debtors
in the ordinary course of business during the Chapter 11 Cases will be paid
in the ordinary course of business in accordance with the terms and
conditions of any agreements relating thereto.
b. Priority Tax Claims (Unimpaired)
The Plan provides that Priority Tax Claims, if any, are unimpaired.
Under the Plan, on, or as soon as reasonably practicable after, the later
of the Distribution Date or the first Periodic Distribution Date after the
date a Priority Tax Claim becomes an Allowed Priority Tax Claim, the holder
of such Allowed Priority Tax Claim will receive in full satisfaction,
settlement, and release of and in exchange for such Allowed Priority Tax
Claim (i) Cash equal to the amount of such Allowed Priority Tax Claim or
(ii) such other treatment as to which the Debtors or Reorganized MAWS and
such holder will have agreed upon in writing; provided, however, that any
Claim or demand for payment of a penalty (other than a penalty of the type
specified in section 507(a)(8)(G) of the Bankruptcy Code) is disallowed
under the Plan, and the holder of an Allowed Priority Tax Claim will not be
permitted to assess or attempt to collect such penalty from the Debtors,
their Estates, Reorganized MAWS, the Plan Administrator, or their property.
2. Unimpaired Classes Of Claims
a. Class 1: Other Priority Claims
Other Priority Claims include Claims, other than Administrative
Claims and Priority Tax Claims, that are entitled to priority under section
507(a) of the Bankruptcy Code, such as unsecured Claims for accrued
employee compensation, including vacation, severance, and sick-leave pay,
earned within 90 days before the Petition Date, to the extent of $4,000 per
employee, and contributions to employee benefit plans arising from services
rendered within the 180-day period preceding the Petition Date, but only
for such plans to the extent of the number of employees covered by such
plans multiplied by $4,000, less the aggregate amount paid to such
employees for accrued employee compensation. Under the Plan, on, or as soon
as reasonably practicable after, the later of the Distribution Date or the
first Periodic Distribution Date after the date an Other Priority Claim
becomes an Allowed Other Priority Claim, the holder of such Allowed Other
Priority Claim will receive in full satisfaction, settlement, and release
of and in exchange for such Allowed Other Priority Claim (i) Cash equal to
the amount of such Allowed Other Priority Claim or (ii) such other
treatment as to which the Debtors or Reorganized MAWS and such holder will
have agreed upon in writing.
b. Class 2: Convenience Claims
A Convenience Claim is a Claim that would otherwise be classified as
a Class 4 Unsecured Claim, other than a Claim arising out of or in
connection with the ownership of Senior Notes or Subordinated Notes, that
is $2,000 or less, or more than $2,000 if the holder of that Claim has
elected, on a timely cast Ballot, to accept $2,000 in Cash in full
satisfaction, discharge, and release of such Claim. By making the
Convenience Claim election, the holder of an Allowed Class 4 Unsecured
Claim in Group 4-C in an amount greater than $2,000 may elect to reduce the
amount of such holder's Allowed Claim to $2,000 and receive treatment as an
Allowed Class 2 Convenience Claim in the amount of $2,000. This election
will be deemed a waiver of the right to collect, and a release of the
Debtors and their Estates, Reorganized MAWS, the Plan Administrator, and
their property from, any and all liability with respect to all Claim
amounts in excess of $2,000.
Pursuant to the Plan, on, or as soon as reasonably practicable after,
the later of the Distribution Date or the first Periodic Distribution Date
after the date such Convenience Claim becomes an Allowed Convenience Claim,
the holder of an Allowed Convenience Claim will receive in full
satisfaction, settlement, and release of and in exchange for such Allowed
Convenience Claim Cash equal to the amount of such Allowed Convenience
Claim.
3. Impaired Classes of Claims
a. Class 3: Secured Claims
Each holder of a Class 3 Secured Claim will be treated as a separate
class under the Plan, and each holder of an Allowed Secured Claim will
receive the treatment set forth below. Unless the holder of a Class 3
Secured Claim is eligible to make and has timely made a Secured Claim
Election, the Bankruptcy Court will determine the value of the collateral
securing each Class 3 Secured Claim and, to the extent, if any, that the
value of the collateral securing a Class 3 Secured Claim (other than a
Class 3.10 L/C Bank Secured Claim) is less than the total amount of such
Claim, the difference will be treated as a Class 4 Unsecured Claim in Group
4-C. The Debtors and Reorganized MAWS reserve all rights to challenge the
validity, nature and perfection of, and to avoid pursuant to the provisions
of the Bankruptcy Code and other applicable law, any purported liens and
security interests.
As described in Article III.C of the Plan, certain holders of Class 3
Secured Claims are entitled to make the Secured Claim Election. The Secured
Claim Election means the election made by a holder of a Class 3 Secured
Claim to accept an amount in Cash equal to the Secured Claim Election
Amount (as set forth in Article III.C of the Plan) in full satisfaction and
release of all its Claims (secured and unsecured) in all Classes against
each of the Debtors and their Estates, Reorganized MAWS, the Plan
Administrator, and their property. The Secured Claim Election, however, is
made only if the holder of the Class 3 Secured Claim votes to accept the
Plan and releases each of the Debtors and their Estates, Reorganized MAWS,
the Plan Administrator, and their property from all Claims in all Classes,
in each case by checking the appropriate box on a timely cast Ballot. If
the holder of the Class 3 Secured Claim is eligible to make and does make a
timely Secured Claim Election, such holder will receive the treatment set
forth below and will be deemed to have withdrawn all proofs of Claim filed
by such holder against any of the Debtors or their Estates. Unless
otherwise specifically stated in the Plan, holders of Class 3 Secured
Claims are not eligible to make the Secured Claim Election.
i. Class 3.01: Barr Secured Claims
Class 3.01 consists of all Claims, directly or indirectly arising
from or under, or relating in any way to, the Barr Note, and secured by the
Barr Collateral, but only to the extent of the value (if any) of the Barr
Collateral. As of the Petition Date $26,669.76 in principal and interest
was outstanding under the Barr Note.
Under the Plan, the holder of the Barr Secured Claim is eligible to
make the Secured Claim Election. If the Secured Claim Election is properly
made, the holder of the Barr Secured Claim will receive $26,669.76 in Cash
(or such other amount as the holder of the Barr Secured Claim and
Reorganized MAWS mutually agree upon) on the Distribution Date in full
satisfaction, settlement, and release of all of its Claims (secured,
unsecured, fixed, contingent, liquidated, unliquidated, disputed and
undisputed) in all Classes, whether for principal, interest, expenses, fees
or damages, against each of the Debtors, Reorganized MAWS, the Plan
Administrator and their property. If the Secured Claim Election is properly
made, this will be the only amount that the holder of the Barr Secured
Claim will receive under the Plan on account of any of its Claims arising
directly or indirectly from or under, or relating in any way to, the Barr
Note, the Barr Collateral and the transactions relating to them. To make
the Secured Claim Election and receive the $26,669.76 referred to above,
the holder of the Barr Secured Claim must (i) vote to accept the Plan, (ii)
check the Secured Claim Election and release box on the Ballot, and (iii)
timely return a properly executed Ballot to the Voting Agent by the Voting
Deadline as described in Section I.D of this Disclosure Statement.
If the holder of the Barr Secured Claim does not make the Secured
Claim Election, then on, or as soon as reasonably practicable after, the
later of the Distribution Date or the first Periodic Distribution Date
after the date such Barr Secured Claim becomes an Allowed Barr Secured
Claim, the holder of an Allowed Barr Secured Claim will receive in full
satisfaction, settlement, and release of and in exchange for such Allowed
Barr Secured Claim (a) Cash equal to the amount of such Allowed Barr
Secured Claim or (b) such other treatment as to which the Debtors or
Reorganized MAWS and such holder will have agreed upon in writing. The
amount of the Allowed Barr Secured Claim will depend not only on the amount
of the Claim and the specific provisions of the Barr Note and related
documents, but also on the value (if any) of the Barr Collateral and on
whether the holder of the Barr Secured Claim has a valid, perfected and
unavoidable lien against the Barr Collateral. For example, if the lien
against the Barr Collateral is unperfected or voidable under the provisions
of applicable state law or the Bankruptcy Code, then the Allowed Barr
Secured Claim will be zero, and the holder of the Barr Claim will be
treated as the holder of a Class 4 Unsecured Claim in Group 4-C. Similarly,
if the value of the Barr Collateral is less than the amount of the Barr
Claim, the difference will be treated as a Class 4 Unsecured Claim in Group
4-C.
ii. Class 3.02: Campbell Secured Claims
Class 3.02 consists of all Claims directly or indirectly arising from
or under, or relating in any way to, the Campbell Note, and secured by the
Campbell Collateral, but only to the extent of the value (if any) of the
Campbell Collateral. As of the Petition Date, $152,348.52 in principal and
interest was outstanding under the Campbell Note.
Under to the Plan, the holder of the Campbell Secured Claim is
eligible to make the Secured Claim Election. If the Secured Claim Election
is properly made, the holder of the Campbell Secured Claim will receive
$152,348.52 in Cash (or such other amount as the holder of the Campbell
Secured Claim and Reorganized MAWS mutually agree upon) on the Distribution
Date in full satisfaction, settlement, and release of all of its Claims
(secured, unsecured, fixed, contingent, liquidated, unliquidated, disputed
and undisputed) in all Classes, whether for principal, interest, expenses,
fees, or damages, against each of the Debtors, Reorganized MAWS, the Plan
Administrator and their property. If the Secured Claim Election is properly
made, this will be the only amount that the holder of the Campbell Secured
Claim will receive under the Plan on account of any of its Claims arising
directly or indirectly from or under, or relating in any way to, the
Campbell Note, the Campbell Collateral and the transactions relating to
them. To make the Secured Claim Election and receive the $152,348.52
referred to above, the holder of the Campbell Secured Claim must (i) vote
to accept the Plan, (ii) check the Secured Claim Election and release box
on the Ballot, and (iii) timely return a properly executed Ballot to the
Voting Agent by the Voting Deadline as described in Section I.D of this
Disclosure Statement.
If the Holder of the Campbell Claim does not make the Secured Claim
Election, then on, or as soon as reasonably practicable after, the later of
the Distribution Date or the first Periodic Distribution Date after the
date such Campbell Secured Claim becomes an Allowed Campbell Secured Claim,
the holder of an Allowed Campbell Secured Claim will receive in full
satisfaction, settlement, and release of and in exchange for such Allowed
Campbell Secured Claim (a) Cash equal to the amount of such Allowed
Campbell Secured Claim or (b) such other treatment as to which the Debtors
or Reorganized MAWS and such holder will have agreed upon in writing. The
amount of the Allowed Campbell Secured Claim will depend not only on the
amount of the Claim and the specific provisions of the Campbell Note and
related documents, but also on the value (if any) of the Campbell
Collateral and on whether the holder of the Campbell Secured Claim has a
valid, perfected and unavoidable lien against the Campbell Collateral. For
example, if the lien against the Campbell Collateral is unperfected or
voidable under the provisions of applicable state law or the Bankruptcy
Code, then the Allowed Campbell Secured Claim will be zero, and the holder
of the Campbell Secured Claim will be treated as the holder of a Class 4
Unsecured Claim in Group 4-C. Similarly, if the value of the Campbell
Collateral is less than the amount of the Campbell Claim, the difference
will be treated as a Class 4 Unsecured Claim in Group 4-C.
iii. Class 3.03: Caterpillar Secured Claims
Class 3.03 consists of all Claims, directly or indirectly arising
from or under, or relating in any way to, the Caterpillar Contract and the
Caterpillar Lease, and secured by the Caterpillar Collateral, but only to
the extent of the value (if any) of the Caterpillar Collateral. As of the
Petition Date, $57,329.08 was due and owing under the Caterpillar Lease.
Under the Plan, the holder of the Caterpillar Secured Claim is
eligible to make the Secured Claim Election. If the Secured Claim Election
is properly made, the holder of the Caterpillar Secured Claim will receive
$57,329.08 in Cash (or such other amount as the holder of the Caterpillar
Secured Claim and Reorganized MAWS mutually agree upon) on the Distribution
Date in full satisfaction, settlement, and release of all of its Claims
(secured, unsecured, fixed, contingent, liquidated, unliquidated, disputed
and undisputed) in all Classes, whether for principal, interest, expenses,
fees, or damages, against each of the Debtors, Reorganized MAWS, the Plan
Administrator and their property. If the Secured Claim Election is properly
made, this will be the only amount that the holder of the Caterpillar
Secured Claim will receive under the Plan on account of any of its Claims
arising directly or indirectly from or under, or relating in any way to,
the Caterpillar Lease and Caterpillar Contract, the Caterpillar Collateral
and the transactions relating to them. To make the Secured Claim Election
and receive the $57,329.08 referred to above, the holder of the Caterpillar
Secured Claim must (i) vote to accept the Plan, (ii) check the Secured
Claim Election and release box on the Ballot, and (iii) timely return a
properly executed Ballot to the Voting Agent by the Voting Deadline as
described in Section I.D of this Disclosure Statement.
If the holder of the Caterpillar Secured Claim does not make the
Secured Claim Election, then on, or as soon as reasonably practicable
after, the later of the Distribution Date or the first Periodic
Distribution Date after the date such Caterpillar Secured Claim becomes an
Allowed Caterpillar Secured Claim, the holder of an Allowed Caterpillar
Secured Claim will receive in full satisfaction, settlement, and release of
and in exchange for such Allowed Caterpillar Secured Claim (a) Cash equal
to the amount of such Allowed Caterpillar Secured Claim or (b) such other
treatment as to which the Debtors or Reorganized MAWS and such holder will
have agreed upon in writing. The amount of the Allowed Caterpillar Secured
Claim will depend not only on the amount of the Claim and the specific
provisions of the Caterpillar Lease, Caterpillar Contract, and related
documents, but also on the value (if any) of the Caterpillar Collateral and
on whether the holder of the Caterpillar Secured Claim has a valid,
perfected and unavoidable lien against the Caterpillar Collateral. For
example, if the lien against the Caterpillar Collateral is unperfected or
voidable under the provisions of applicable state law or the Bankruptcy
Code, then the Allowed Caterpillar Secured Claim will be zero, and the
holder of the Caterpillar Claim will be treated as the holder of a Class 4
Unsecured Claim in Group 4-C. Similarly, if the value of the Caterpillar
Collateral is less than the amount of the Caterpillar Claim, the difference
will be treated as a Class 4 Unsecured Claim in Group 4-C.
iv. Class 3.04: Elmore Secured Claims
Class 3.04 consists of all Claims, directly or indirectly arising
from or under, or relating in any way to, the Elmore Note, and secured by
the Elmore Collateral, but only to the extent of the value (if any) of the
Elmore Collateral. As of the Petition Date $96,768.52 in principal and
interest was outstanding under the Elmore Note.
Under the Plan, the holder of the Elmore Secured Claim is eligible to
make the Secured Claim Election. If the Secured Claim Election is properly
made, the holder of the Elmore Secured Claim will receive $96,768.52 in
Cash (or such other amount as the holder of the Elmore Secured Claim and
Reorganized MAWS mutually agree upon) on the Distribution Date in full
satisfaction, settlement, and release of all of its Claims (secured,
unsecured, fixed, contingent, liquidated, unliquidated, disputed and
undisputed) in all Classes, whether for principal, interest, expenses,
fees, or damages, against each of the Debtors, Reorganized MAWS, the Plan
Administrator and their property. If the Secured Claim Election is properly
made, this will be the only amount that the holder of the Elmore Secured
Claim will receive under the Plan on account of any of its Claims arising
directly or indirectly from or under, or relating in any way to, the Elmore
Note, the Elmore Collateral and the transactions relating to them. To make
the Secured Claim Election and receive the $96,768.52 referred to above,
the holder of the Elmore Secured Claim must (i) vote to accept the Plan,
(ii) check the Secured Claim Election and release box on the Ballot, and
(iii) timely return a properly executed Ballot to the Voting Agent by the
Voting Deadline as described in Section I.D of this Disclosure Statement.
If the holder of the Elmore Secured Claim does not make the Secured
Claim Election, then on, or as soon as reasonably practicable after, the
later of the Distribution Date or the first Periodic Distribution Date
after the date such Elmore Secured Claim becomes an Allowed Elmore Secured
Claim, the holder of an Allowed Elmore Secured Claim will receive in full
satisfaction, settlement, and release of and in exchange for such Allowed
Elmore Secured Claim (a) Cash equal to the amount of such Allowed Elmore
Secured Claim or (b) such other treatment as to which the Debtors or
Reorganized MAWS and such holder will have agreed upon in writing. The
amount of the Allowed Elmore Secured Claim will depend not only on the
amount of the Claim and the specific provisions of the Elmore Note and
related documents, but also on the value (if any) of the Elmore Collateral
and on whether the holder of the Elmore Secured Claim has a valid,
perfected and unavoidable lien against the Elmore Collateral. For example,
if the lien against the Elmore Collateral is unperfected or voidable under
the provisions of applicable state law or the Bankruptcy Code, then the
Allowed Elmore Secured Claim will be zero, and the holder of the Elmore
Claim will be treated as the holder of a Class 4 Unsecured Claim in Group
4-C. Similarly, if the value of the Elmore Collateral is less than the
amount of the Elmore Claim, the difference will be treated as a Class 4
Unsecured Claim in Group 4-C.
v. Class 3.05: Arnold Secured Claims
Class 3.05 consists of all Claims, directly or indirectly arising
from or under, or relating in any way to, the Arnold Notes, and secured by
the Arnold Collateral, but only to the extent of the value (if any) of the
Arnold Collateral. As of the Petition Date, $356,276.59 in principal and
interest was outstanding under the Arnold Notes.
On, or as soon as reasonably practicable after, the later of the
Distribution Date or the first Periodic Distribution Date after the date
such Arnold Secured Claim becomes an Allowed Arnold Secured Claim, the
holder of an Allowed Arnold Secured Claim will receive in full
satisfaction, settlement, and release of and in exchange for such Allowed
Arnold Secured Claim (a) Cash equal to the amount of such Allowed Arnold
Secured Claim or (b) such other treatment as to which the Debtors or
Reorganized MAWS and such holder will have agreed upon in writing. The
amount of the Allowed Arnold Secured Claim will depend not only on the
amount of the Claim and the specific provisions of the Arnold Notes and
related documents, but also on the value (if any) of the Arnold Collateral
and on whether the holder of the Arnold Secured Claim has a valid,
perfected and unavoidable lien against the Arnold Collateral. For example,
if the lien against the Arnold Collateral is unperfected or voidable under
the provisions of applicable state law or the Bankruptcy Code, then the
Allowed Arnold Secured Claim will be zero, and the holder of the Arnold
Claim will be treated as the holder of a Class 4 Unsecured Claim in Group
4-C. Similarly, if the value of the Arnold Collateral is less than the
amount of the Arnold Secured Claim, the difference will be treated as a
Class 4 Unsecured Claim in Group 4-C.
vi. Class 3.06: Mellon Secured Claims
Class 3.06 consists of all Claims, directly or indirectly arising
from or under, or relating in any way to, the Mellon Lease, and secured by
the Mellon Collateral, but only to the extent of the value (if any) of the
Mellon Collateral. As of the Petition Date, $427,628.60 was due and owing
under the Mellon Lease.
On, or as soon as reasonably practicable after, the later of (i) the
Distribution Date or (ii) the first Periodic Distribution Date after the
date such Mellon Secured Claim becomes an Allowed Mellon Secured Claim, the
holder of an Allowed Mellon Secured Claim shall receive in full
satisfaction, settlement, and release of and in exchange for such Allowed
Mellon Secured Claim (a) Cash equal to the amount of such Allowed Mellon
Secured Claim, which shall be deemed to be $85,525.72 or (b) such other
treatment as to which the Debtors or Reorganized MAWS and such holder shall
have agreed upon in writing. The balance of Mellon's Allowed Claims arising
under the Mellon Lease shall be treated as Class 4 Unsecured Claims in
Group 4-C.
vii. Class 3.07: Orix Secured Claims
Class 3.07 consists of all Claims, directly or indirectly arising
from or under, or relating in any way to, the Orix Lease, and secured by
the Orix Collateral, but only to the extent of the value (if any) of the
Orix Collateral. As of the Petition Date, $56,233.15 was outstanding under
the Orix Lease.
Under the Plan, the holder of the Orix Secured Claim is eligible to
make the Secured Claim Election. If the Secured Claim Election is properly
made, the holder of the Orix Secured Claim will receive $56,233.15 in Cash
(or such other amount as the holder of the Orix Secured Claim and
Reorganized MAWS mutually agree upon) on the Distribution Date in full
satisfaction, settlement, and release of all of its Claims (secured,
unsecured, fixed, contingent, liquidated, unliquidated, disputed and
undisputed) in all Classes, whether for principal, interest, expenses,
fees, or damages, against each of the Debtors, Reorganized MAWS, the Plan
Administrator and their property. If the Secured Claim Election is properly
made, this will be the only amount that the holder of the Orix Secured
Claim will receive under the Plan on account of any of its Claims arising
directly or indirectly from or under, or relating in any way to, the Orix
Lease, the Orix Collateral and the transactions relating to them. To make
the Secured Claim Election and receive the $56,233.15 referred to above,
the holder of the Orix Secured Claim must (i) vote to accept the Plan, (ii)
check the Secured Claim Election and release box on the Ballot, and (iii)
timely return a properly executed Ballot to the Voting Agent by the Voting
Deadline as described in Section I.D of this Disclosure Statement.
If the holder of the Orix Secured Claim does not make the Secured
Claim Election, then on, or as soon as reasonably practicable after, the
later of the Distribution Date or the first Periodic Distribution Date
after the date such Orix Secured Claim becomes an Allowed Orix Secured
Claim, the holder of an Allowed Orix Secured Claim will receive in full
satisfaction, settlement, and release of and in exchange for such Allowed
Orix Secured Claim (a) Cash equal to the amount of such Allowed Orix
Secured Claim or (b) such other treatment as to which the Debtors or
Reorganized MAWS and such holder will have agreed upon in writing. The
amount of the Allowed Orix Secured Claim will depend not only on the amount
of the Claim and the specific provisions of the Orix Lease and related
documents, but also on the value (if any) of the Orix Collateral and on
whether the holder of the Orix Secured Claim has a valid, perfected and
unavoidable lien against the Orix Collateral. For example, if the lien
against the Orix Collateral is unperfected or voidable under the provisions
of applicable state law or the Bankruptcy Code, then the Allowed Orix
Secured Claim will be zero, and the holder of the Orix Claim will be
treated as the holder of a Class 4 Unsecured Claim in Group 4-C. Similarly,
if the value of the Orix Collateral is less than the amount of the Orix
Claim, the difference will be treated as a Class 4 Unsecured Claim in Group
4-C.
viii. Class 3.08: Palladino Group Secured Claims
Class 3.08 consists of all Claims, if any, of the Palladino Group,
directly or indirectly arising from or under, or relating in any way to,
the asset purchase agreement, dated December 20, 1991, by and among MAWS,
MAWS of Cuyahoga, MAWS of Ohio, and the Palladino Group, and all agreements
and other documents relating thereto, but only to the extent of the value
(if any) of any collateral held by or granted to the Palladino Group to
secure such Claims.
On, or as soon as reasonably practicable after, the later of the
Distribution Date or the first Periodic Distribution Date after the date
such Palladino Group Secured Claim becomes an Allowed Palladino Group
Secured Claim, the holder of an Allowed Palladino Group Secured Claim will
receive in full satisfaction, settlement, and release of and in exchange
for such Allowed Palladino Group Secured Claim (a) Cash equal to the value,
if any, of the collateral, if any, securing the Palladino Group Secured
Claim or (b) such other treatment as to which the Debtors or Reorganized
MAWS and such holder will have agreed upon in writing; provided, however,
that in no event will the amount of the Palladino Group Secured Claim
exceed the balance of the Palladino Group Escrow.
ix. Class 3.09: National Union Secured Claims
Class 3.09 consists of all Claims secured by the National Union
Collateral, directly or indirectly arising from or under, or relating in
any way to, the National Union surety bonds issued by National Union to
secure a Debtor's landfill closure or post-closure obligations, but only to
the extent of the value (if any) of the National Union Collateral. The
National Union Collateral consists of the funds on deposit at Chase Bank,
Account No. 323029485, in the amount of $3,029,457.13 as of June 1, 1997.
On, or as soon as reasonably practicable after, the later of the
Distribution Date or the first Periodic Distribution Date after the date
such National Union Secured Claim becomes an Allowed National Union Secured
Claim, the holder of an Allowed National Union Secured Claim will receive
in full satisfaction, settlement, and release of and in exchange for such
Allowed National Union Secured Claim (a) Cash equal to the amount of such
Allowed National Union Secured Claim or (b) such other treatment as to
which the Debtors or Reorganized MAWS and such holder will have agreed upon
in writing.
x. Class 3.10: L/C Bank Secured Claims
Class 3.10 consists of all Claims secured by the L/C Bank Collateral,
directly or indirectly arising from or under, or relating in any way to
Letters of Credit that have become undisputed, non-contingent, liquidated
Claims on or before the Consummation Date. The L/C Bank Collateral consists
of the funds on deposit with Fleet Bank, Capital Markets Group, Account No.
M1D10XM71, in the amount of $1,093,206.45 as of June 1, 1997.
On, or as soon as reasonably practicable after, the Distribution
Date, the holder of an Allowed L/C Bank Secured Claim will receive in full
satisfaction, settlement, and release of and in exchange for such Allowed
L/C Bank Secured Claim (a) Cash equal to the amount of such Allowed L/C
Bank Secured Claim or (b) such other treatment as to which the Debtors or
Reorganized MAWS and such holder will have agreed upon in writing. To the
extent, if any, that the value of the L/C Bank Collateral is less than the
total amount of all L/C Bank Claims that have become Allowed Claims on or
before the Consummation Date, the difference shall be treated as an Allowed
Class 4 Unsecured Claim in Group 4-A.
xi. Class 3.11: Reliance Secured Claims
Class 3.11 consists of all Claims secured by the Reliance Collateral,
directly or indirectly arising from or under, or relating in any way to any
performance bond issued by Reliance to secure an obligation of a Debtor
arising under, related to, or in connection with the Debtors' municipal
waste disposal contracts or otherwise, but only to the extent of the value
(if any) of the Reliance Collateral. The Reliance Collateral consists of
the funds on deposit at Corestates Bank, Account No. 07610702, in the
amount of $3,920,656.00 as of June 16, 1997.
On, or as soon as reasonably practicable after, the later of the
Distribution Date or the first Periodic Distribution Date after the date
such Reliance Secured Claim becomes an Allowed Reliance Secured Claim, the
holder of an Allowed Reliance Secured Claim will receive in full
satisfaction, settlement, and release of and in exchange for such Allowed
Reliance Secured Claim (a) Cash equal to the amount of such Allowed
Reliance Secured Claim or (b) such other treatment as to which the Debtors
or Reorganized MAWS and such holder will have agreed upon in writing.
xii. Class 3.12: Illinois EPA Secured Claims
Class 3.12 consists of all Claims secured by the Illinois EPA
Collateral, directly or indirectly arising from or under, or relating in
any way to, the Debtors' landfill closure or post-closure obligations in
the State of Illinois, but only to the extent of the value (if any) of the
Illinois EPA Collateral. The Illinois EPA Collateral consists of the funds
on deposit at Key Trust Company of Ohio, N.A., Account No. 32847100, in the
amount of $1,323,217.17 as of June 1, 1997.
On, or as soon as reasonably practicable after, the later of the
Distribution Date or the first Periodic Distribution Date after the date
such Illinois EPA Secured Claim becomes an Allowed Illinois EPA Secured
Claim, the holder of an Allowed Illinois EPA Secured Claim will receive in
full satisfaction, settlement, and release of and in exchange for such
Allowed Illinois EPA Secured Claim (a) Cash equal to the amount of such
Allowed Illinois EPA Secured Claim or (b) such other treatment as to which
the Debtors or Reorganized MAWS and such holder will have agreed upon in
writing.
xiii. Class 3.13: Ohio EPA Secured Claims
Class 3.13 consists of all Claims secured by the Ohio EPA Collateral,
directly or indirectly arising from or under, or relating in any way to,
the Debtors' landfill closure or post-closure obligations in the State of
Ohio, but only to the extent of the value (if any) of the Ohio EPA
Collateral. The Ohio EPA Collateral is the funds on deposit at Key Bank,
Account No. 20-20-208-0332560, in the amount of $12,640,245.35 as of June
1, 1997.
On, or as soon as reasonably practicable after, the later of the
Distribution Date or the first Periodic Distribution Date after the date
such Ohio EPA Secured Claim becomes an Allowed Ohio EPA Secured Claim, the
holder of an Allowed Ohio EPA Secured Claim will receive in full
satisfaction, settlement, and release of and in exchange for such Allowed
Ohio EPA Secured Claim (a) Cash equal to the amount of such Allowed Ohio
EPA Secured Claim or (b) such other treatment as to which the Debtors or
Reorganized MAWS and such holder will have agreed upon in writing.
xiv. Class 3.14: Pennsylvania DEP Secured Claims
Class 3.14 consists of all Claims secured by the Pennsylvania DEP
Collateral, directly or indirectly arising from or under, or relating in
any way to, the Debtors' landfill closure or post-closure obligations in
the Commonwealth of Pennsylvania, but only to the extent of the value (if
any) of the Pennsylvania DEP Collateral. The Pennsylvania DEP Collateral
consists of the cashier's checks (a) in the amount of $951,147.90 drawn on
Key Bank and (b) in the amount of $1,069,757.94 drawn on Bank One, Columbus
N.A., and held at the Pennsylvania Department of Environmental Resources,
121 South Highland Mall, Pittsburgh, Pennsylvania.
On, or as soon as reasonably practicable after, the later of the
Distribution Date or the first Periodic Distribution Date after the date
such Pennsylvania DEP Secured Claim becomes an Allowed Pennsylvania DEP
Secured Claim, the holder of an Allowed Pennsylvania DEP Secured Claim will
receive in full satisfaction, settlement, and release of and in exchange
for such Allowed Pennsylvania DEP Secured Claim (a) Cash equal to the
amount of such Allowed Pennsylvania DEP Secured Claim or (b) such other
treatment as to which the Debtors or Reorganized MAWS and such holder will
have agreed upon in writing.
xv. Class 3.15: USF&G Secured Claims
Class 3.15 consists of all Claims secured by the USF&G Collateral,
directly or indirectly arising from or under, or relating in any way to the
surety bonds issued by USF&G to secure a Debtor's landfill closure or post-
closure obligations, but only to the extent of the value (if any) of the
USF&G Collateral. The USF&G Collateral consists of the funds held by Van
American Insurance Company as service manager/agent for USF&G, and on
deposit at PNC Bank, account No. 80-80-004-5864964, Sub-Account No. 300043,
in the amount of $5,110,464.25 as of June 1, 1997.
On, or as soon as reasonably practicable after, the later of the
Distribution Date or the first Periodic Distribution Date after the date
such USF&G Secured Claim becomes an Allowed USF&G Secured Claim, the holder
of an Allowed USF&G Secured Claim will receive in full satisfaction,
settlement, and release of and in exchange for such Allowed USF&G Secured
Claim (a) Cash equal to the amount of such Allowed USF&G Secured Claim or
(b) such other treatment as to which the Debtors or Reorganized MAWS and
such holder will have agreed upon in writing.
xvi. Class 3.16: INA Secured Claims
Class 3.16 consists of all Claims secured by the INA Collateral
directly or indirectly arising from or under, or relating in any way to,
the INA Agreements, to the extent of the value (if any) of the INA
Collateral. The INA Collateral consists of the funds on deposit with INA in
a Paid Loss Deposit Fund, in the amount of $205,100 as of May 23, 1997.
On, or as soon as reasonably practicable after, the later of the
Distribution Date or the first Periodic Distribution Date after the date
such INA Secured Claim becomes an Allowed INA Secured Claim, the holder of
an Allowed INA Secured Claim will receive in full satisfaction, settlement,
and release of and in exchange for such Allowed INA Secured Claim (a) Cash
equal to the amount of such Allowed INA Secured Claim or (b) such other
treatment as to which the Debtors or Reorganized MAWS and such holder shall
have agreed upon in writing.
xvii. Class 3.17: West Virginia DEP Secured Claims
Class 3.17 consists of all Claims, secured by the West Virginia DEP
Collateral, directly or indirectly arising from or under, or relating in
any way to, the Debtors' landfill closure or post-closure obligations in
the State of West Virginia, but only to the extent of the value (if any) of
the West Virginia DEP Collateral. The West Virginia DEP Collateral is the
cashier's check in the amount of $312,000.00 held by the West Virginia DEP
and secured by funds on deposit in Wesbanco Bank, Account Nos.
045-100-0000010832, 046-100-0000022629, 001-100-0000103046, and
040-100-0000004027.
On, or as soon as reasonably practicable after, the later of the
Distribution Date or the first Periodic Distribution Date after the date
such West Virginia DEP Secured Claim becomes an Allowed West Virginia DEP
Secured Claim, the holder of an Allowed West Virginia DEP Secured Claim
will receive in full satisfaction, settlement, and release of and in
exchange for such Allowed West Virginia DEP Secured Claim (a) Cash equal to
the amount of such Allowed West Virginia DEP Secured Claim or (b) such
other treatment as to which the Debtors or Reorganized MAWS and such holder
will have agreed upon in writing.
xviii. Class 3.18: ERC Secured Claims
Class 3.18 consists of all Claims, if any, of ERC, directly or
indirectly arising from or under, or relating in any way to, the ERC
Contract, but only to the extent of the value (if any) of any collateral
held by or granted to ERC to secure such Claims.
On, or as soon as reasonably practicable after, the later of the
Distribution Date or the first Periodic Distribution Date after the date
such ERC Claim becomes an Allowed ERC Secured Claim, the holder of an
Allowed ERC Secured Claim will receive in full satisfaction, settlement,
and release of and in exchange for such Allowed ERC Secured Claim (a) Cash
equal to the value, if any, of the collateral, if any, securing the ERC
Secured Claim or (b) such other treatment as to which the Debtors or
Reorganized MAWS and such holder will have agreed upon in writing;
provided, however, that in no event will the amount of the ERC Secured
Claim exceed the balance of the ERC Escrow.
xix. Class 3.19: Other Secured Claims
Class 3.19 consists of all Secured Claims against a Debtor other than
the Secured Claims included in Classes 3.01 through 3.18, but only to the
extent of the value (if any) of any collateral held by or granted to a
holder of a Secured Claim to secure such Claim.
On, or as soon as reasonably practicable after, the later of the
Distribution Date or the first Periodic Distribution Date after the date
such Other Secured Claim becomes an Allowed Other Secured Claim, the holder
of an Allowed Other Secured Claim will receive in full satisfaction,
settlement, and release of and in exchange for such Allowed Other Secured
Claim (a) Cash equal to the amount of such Allowed Other Secured Claim or
(b) such other treatment as to which the Debtors or Reorganized MAWS and
such holder will have agreed upon in writing.
b. Class 4: Unsecured Claims
Class 4 consists of all unsecured claims that are not classified
elsewhere in the Plan. The Class 4 Unsecured Claims have been divided into
separate groups in the Plan for descriptive purposes only. Together, all of
the groups of Unsecured Claims included in Class 4 make up a single Class
of Claims for all other purposes under the Plan and the Bankruptcy Code,
including, without limitation, voting on and receiving distributions from
the Debtors under, the Plan.
i. Group 4-A
Group 4-A consists of (A) all Claims of a Senior Note Holder arising
from, under, or as a result of the Senior Notes and (B) all L/C Bank
Non-Contingent Claims arising from, under, or as a result of a draw down
occurring prior to the Consummation Date on a Letter of Credit issued under
the Credit Agreement. In the case of the Senior Note Holders, the
distributions and other provisions described in Article III.C.2.a of the
Plan give effect to, and are in settlement of a dispute with the
Subordinated Note Holders with respect to, certain contractual
subordination, "make-whole" and similar provisions (including, but not
limited to, provisions relating to the payment of post-petition interest
and default rate interest) contained in the Senior Note Agreement and the
Subordinated Note Indenture. In the case of the L/C Bank Non-Contingent
Claims, the distributions set forth in Article III.C.2.a of the Plan give
effect to certain contractual subordination provisions contained in the
Subordinated Note Indenture.
On, or as soon as reasonably practicable after, the later of (i) the
Distribution Date or (ii) the first Periodic Distribution Date after the
date such Unsecured Claim becomes an Allowed Unsecured Claim, the holder of
an Allowed Unsecured Claim in Group 4-A will receive its Pro Rata share of
the Initial Group 4-A Distribution Amount. On each ensuing Periodic
Distribution Date, each holder of an Allowed Unsecured Claim in Group 4-A
will receive its Pro Rata share of the Periodic Group 4-A Distribution
Amount, but only until such time as the holders Allowed Unsecured Claims in
Group 4-A have received the full amount of the Subordination Redistribution
Amount and other amounts to which they are entitled under the Plan. On the
Distribution Date, each of Weil, Gotshal & Manges LLP, Richards, Layton &
Finger, and Arthur Andersen LLP, attorneys and financial advisors for
certain Senior Note Holders, shall be paid their reasonable fees and
expenses, in an amount not to exceed $100,000 in the aggregate (including
the application of any retainer previously paid by the Debtors), for
services rendered and disbursements incurred in connection with the Chapter
11 Cases, and such amount shall be deducted from the Initial and Periodic
Group 4-B Distribution Amounts until paid in full. Fee applications need
not be filed for such fees and expenses, and Bankruptcy Court approval
shall not be required, unless the aggregate sought exceeds $100,000.
The Initial Group 4-A Distribution Amount is the amount of Cash to be
distributed to all holders of Allowed Group 4-A Claims on the Distribution
Date. It is calculated as the sum of the Pro Rata share of Available Cash
allocated to holders of Allowed Class 4 Unsecured Claims in Group 4-A plus
the Subordination Redistribution Amount. If the Pro Rata share of available
Cash allocated to holders of Allowed Class 4 Unsecured Claims in Group 4-B
on the Distribution Date is less than or equal to the Subordination
Redistribution Amount, then (i) the Initial Group 4-A Distribution Amount
will equal the Pro Rata share of Available Cash allocated to holders of
Allowed Class 4 Unsecured Claims in Group 4-A on the Distribution Date plus
the Pro Rata share of Available Cash allocated to holders of Allowed Class
4 Unsecured Claims in Group 4-B on the Distribution Date, and (ii) the
unpaid balance of the Subordination Redistribution Amount will be deducted
from Periodic Group 4-B Distribution Amounts and added to Periodic Group
4-A Distribution Amounts until such Subordination Redistribution Amount has
been paid in full. The Subordination Redistribution Amount is the portion
of Group 4-B's allocation of Available Cash that is redistributed to
holders of Allowed Claims in Group 4-A to give effect to, and in
satisfaction of claims between holders of Allowed Claims in Group 4-A and
Group 4-B arising from, the contractual subordination, "make whole,"
default interest, post-petition interest, and other similar provisions set
forth in the Senior Note Agreement, the Subordinated Note Indenture, and
the Credit Agreement. If the initial distribution to the holders of Allowed
Senior Note Claims occurs on or before August 29, 1997, then the
Subordination Redistribution Amount will equal that amount of Cash which,
when combined with the Pro Rata share of Available Cash allocated to
holders of Allowed Class 4 Unsecured Claims in Group 4-A, yields the
following distributions: (a) to the holders of 8.85% Senior Notes, an
aggregate distribution of $31,210,000, which equals 111% of the principal
amount outstanding as of the Petition Date under the terms of the 8.85%
Senior Notes (such $31,211,000 being referred to as the "8.85 Base
Amount"); (b) to the holders of 9.23% Senior Notes, an aggregate
distribution of $44,680,000, which equals 113% of the principal amount
outstanding as of the Petition Date under the terms of the 9.23% Senior
Notes (such $44,680,000 being referred to as the "9.23 Base Amount"); and
(c) to the holders of L/C Bank Non-Contingent Claims, a distribution equal
to the sum of (i) the aggregate amount of all L/C's which have been drawn
on (but only to the extent of such draws) on or before the Consummation
Date plus (ii) accrued interest on such drawn amount through the
Distribution Date at the non-default rate of interest specified in the
Credit Agreement. If the initial distribution to the holders of Allowed
Senior Note Claims occurs after August 29, 1997, then the Subordination
Redistribution Amount will equal that amount of Cash which, when combined
with the Pro Rata share of Available Cash allocated to holders of Allowed
Class 4 Unsecured Claims in Group 4-A, yields the following distributions:
(a) to the holders of 8.85% Senior Notes, an aggregate distribution equal
to the 8.85 Base Amount plus per diem interest computed at the default rate
set forth in the Senior Note Agreement on any unpaid balance of the 8.85
Base amount from August 30, 1997 through the date that the 8.85 Base Amount
becomes paid in full; (b) to the holders of 9.23% Senior Notes, an
aggregate distribution equal to the 9.23 Base Amount plus per diem interest
computed at the default rate set forth in the Senior Note Agreement on any
unpaid balance of the 9.23 Base amount from August 30, 1997 through the
date that the 9.23 Base Amount becomes paid in full; and (c) to the holders
of L/C Bank Non-Contingent Claims, a distribution equal to the sum of (i)
the aggregate amount of all L/C's which have been drawn on (but only to the
extent of such draws) on or before the Consummation Date plus (ii) accrued
interest on such drawn amount through the Distribution Date at the
non-default rate of interest specified in the Credit Agreement.
In the event the Pro Rata share of Available Cash allocated to
holders of Allowed Class 4 Unsecured Claims in Group 4-B on the
Distribution Date is less than or equal to the Subordination Redistribution
Amount, then the Initial Group 4-A Distribution Amount will equal the Pro
Rata share of Available Cash allocated to holders of Allowed Class 4
Unsecured Claims in Group 4-A on the Distribution Date plus the Pro Rata
share of Available Cash allocated to holders of Allowed Class 4 Unsecured
Claims in Group 4-B on the Distribution Date, and the unpaid balance of the
Subordination Redistribution Amount (i.e., the difference between the
Subordination Redistribution Amount and the Pro Rata share of Available
Cash allocated to holders of Allowed Class 4 Unsecured Claims in Group 4-B)
on the Distribution Date will be deducted from Periodic Group 4-B
Distribution Amounts and added to Periodic Group 4-A Distribution Amounts
until such Subordination Redistribution Amount has been paid in full.
ii. Group 4-B
Group 4-B consists of all Claims of a Subordinated Note Holder
arising under or as a result of the Subordinated Notes, including, but not
limited to, any guarantees thereof. The distributions and other provisions
described in Article III.C.2.b of the Plan give effect to, and are in
settlement of a dispute with the Senior Note Holders with respect to,
certain contractual subordination, "make-whole" and similar provisions
(including, but not limited to, provisions relating to the payment of
post-petition interest and default rate interest) contained in the Senior
Note Agreement and the Subordinated Note Indenture.
On, or as soon as reasonably practicable after, the later of the
Distribution Date or the first Periodic Distribution Date after the date
such Unsecured Claim in Group 4-B becomes an Allowed Unsecured Claim, the
holder of an Allowed Unsecured Claim in Group 4-B will receive its Pro Rata
share of the Initial Group 4-B Distribution Amount. On each ensuing
Periodic Distribution Date, each holder of an Allowed Unsecured Claim in
Group 4-B will receive its Pro Rata share of the Periodic Group 4-B
Distribution Amount.
The Initial Group 4-B Distribution Amount is the amount of Cash to be
distributed to all holders of Allowed Group 4-B Claims on the Distribution
Date. It is calculated as the Pro Rata share of Available Cash allocated to
holders of Allowed Class 4 Unsecured Claims in Group 4-B minus the
Subordination Redistribution Amount. If the Pro Rata share of Available
Cash allocated to holders of Allowed Class 4 Unsecured Claims in Group 4-B
on the Distribution Date is less than or equal to the Subordination
Redistribution Amount, then (i) the Initial Group 4-B Distribution Amount
shall be zero, (ii) the Pro Rata share of Available Cash allocated to
holders of Allowed Class 4 Unsecured Claims in Group 4-B on the
Distribution Date shall become part of the Initial Group 4-A Distribution
Amount as provided for in clause (b) of Article I.B.1.73 of the Plan, and
(iii) the unpaid balance of the Subordination Redistribution Amount (i.e.,
the difference between the Subordination Redistribution Amount and the Pro
Rata share of Available Cash allocated to holders of Allowed Class 4
Unsecured Claims in Group 4-B on the Distribution Date) shall be deducted
from Periodic Group 4-B Distribution Amounts and added to Periodic Group
4-A Distribution Amounts until such Subordination Redistribution Amount has
been paid in full.
iii. Group 4-C
Group 4-C consists of all Claims that are not Administrative Claims;
Priority Tax Claims; Class 1 Other Priority Claims; Class 2 Convenience
Claims; Class 3 Secured Claims; Class 4 Group 4-A Senior Note Claims and
L/C Bank Non-Contingent Claims; Class 4 - Group 4-B Subordinated Note
Claims; Class 5 L/C Bank Contingent Claims; Class 6 Fines, Penalties, and
Punitive Damages Claims; Class 7 Securities Claims; or Class 8 Intercompany
Claims.
On, or as soon as reasonably practicable after, the later of the
Distribution Date or the first Periodic Distribution Date after the date
such Unsecured Claim in Group 4-C becomes an Allowed Unsecured Claim, the
holder of an Allowed Unsecured Claim in Group 4-C will receive its Pro Rata
share of the Initial Group 4-C Distribution Amount. On each ensuing
Periodic Distribution Date, each holder of an Allowed Unsecured Claim in
Group 4-C will receive its Pro Rata share of the Periodic Group 4-C
Distribution Amount.
The Initial Group 4-C Distribution Amount is the amount of Cash to be
distributed to all holders of Allowed Group 4-C Claims on the Distribution
Date. It will be calculated as the Pro Rata share of Available Cash
allocated to holders of Allowed Class 4 Unsecured Claims in Group 4-C.
c. Class 5: L/C Bank Contingent Claims
Class 5 consists of all contingent Claims of an L/C Bank arising
under Letters of Credit that are outstanding on the Consummation Date, but
only to the extent of the undrawn balance of such Letters of Credit as of
the Consummation Date.
If, and to the extent that, any Letters of Credit remain outstanding
and undrawn on the Consummation Date, the Debtors or Reorganized MAWS, as
the case may be, will establish an L/C Bank Contingent Claims Reserve for
the benefit of the L/C Banks by reserving an amount of Cash equal to 103%
of the Face Amount of all Class 5 L/C Bank Contingent Claims (i.e., the
Face Amount of all outstanding and undrawn Letters of Credit). On, or as
soon as reasonably practicable after, the Distribution Date or the first
Periodic Distribution Date after the date any such L/C Bank Contingent
Claim becomes a non-contingent, liquidated and undisputed Claim, the holder
of such Claim will receive a distribution of Cash from the L/C Bank
Contingent Claims Reserve in an amount equal to that portion of the L/C
Bank Contingent Claim that has become non-contingent, liquidated and
undisputed since the Consummation Date, the record date with respect to the
Distribution Date or the record date with respect to the immediately
preceding Periodic Distribution Date, as the case may be. Upon the
expiration or cancellation of each outstanding and undrawn Letter of
Credit, funds shall be released from the L/C Bank Contingent Claims Reserve
in an amount equal to the face amount of such expired or cancelled undrawn
Letter of Credit and applied in accordance with the provisions of the Plan
Administrator Agreement.
d. Class 6: Fines, Penalties, and Punitive Damages Claims
Class 6 consists of all Claims against any Debtor for any fine,
penalty, or forfeiture, or for multiple, exemplary, or punitive damages
(other than a penalty of the type specified in section 507(a)(8)(G) of the
Bankruptcy Code), to the extent that such fines, penalties, or forfeitures,
or damages, are not compensation for actual pecuniary loss suffered by the
holder of such Claim. The holders, if any, of Class 6 Fines, Penalties, and
Punitive Damages Claims will not be entitled to, and will not, receive or
retain any property or interest in property on account of such Claims.
Pursuant to section 1126(g) of the Bankruptcy Code, Class 6 is deemed
to reject the Plan because the holders of Claims in Class 6 will not
receive or retain any property or interest in property under the Plan. The
Bankruptcy Court may confirm the Plan notwithstanding the rejection by
Class 6, provided that the Plan does not "discriminate unfairly" and is
"fair and equitable." See Section V.B - "Confirmation of the Plan
Confirmation Without Acceptance of All Impaired Classes 'Cramdown'." The
Debtors believe the Plan does not "discriminate unfairly" and is "fair and
equitable" to Class 6.
e. Class 7: Securities Claims
Class 7 consists of all Claims against any Debtor arising from the
rescission of a purchase or sale of a security of any Debtor, including,
but not limited to, Old Common And Other Stock, Old Options, Old Warrants,
Senior Notes, Subordinated Notes, all other debt instruments and any and
all other rights to acquire Equity Securities of the Debtors, for damages
arising from the purchase or sale of such a security, or for reimbursement,
contribution or indemnification allowed under section 502 of the Bankruptcy
Code on account of such Claim, including, without limitation, a Claim with
respect to the actions pending against the Debtors, or their current or
former officers and directors in which Securities Claims are asserted,
including the Securities Actions.
i. Class 7.01: Debt Securities Claims
Class 7.01 consists of all Securities Claims arising from, under, or
in any way related to, a Debt Security. The holders of Class 7.01 Debt
Securities Claims will not be entitled to, and will not, receive or retain
any property or interest in property on account of such Claims.
ii. Class 7.02: Equity Securities Claims
Class 7.02 consists of all Securities Claims arising from, under, or
in any way related to an Equity Security. The holders of Class 7.02 Equity
Securities Claims will not be entitled to, and will not, receive or retain
any property or interest in property on account of such Claims.
Pursuant to section 1126(g) of the Bankruptcy Code, Class 7 is deemed
to reject the Plan because the holders of Claims in Class 7 will not
receive or retain any property or interest in property under the Plan. The
Bankruptcy Court may confirm the Plan notwithstanding the rejection by
Class 7, provided that the Plan does not "discriminate unfairly" and is
"fair and equitable." See Section V.B - "Confirmation of the Plan
Confirmation Without Acceptance of All Impaired Classes 'Cramdown'." The
Debtors believe the Plan does not "discriminate unfairly" and is "fair and
equitable" to Class 7.
f. Class 8: Intercompany Claims
Class 8 consists of all Claims held by a Debtor against another
Debtor, including, without limitation, (a) any account reflecting
intercompany book entries by one Debtor with respect to any other Debtor,
(b) any Claim not reflected in such book entries that is held by a Debtor,
and (c) any derivative Claim asserted by or on behalf of one Debtor against
another.
In connection with, and as a result of, the substantive consolidation
of the Debtors' Estates and Chapter 11 Cases, on the Confirmation Date or
such other date as may be set by a Final Order of the Bankruptcy Court, but
subject to the occurrence of the Consummation Date, all Intercompany Claims
shall be eliminated and the holders of Class 8 Intercompany Claims shall
not be entitled to, and shall not, receive or retain any property or
interest in property on account of such Claims. The Debtors have consented
to this treatment by filing the Plan.
4. Impaired Class of Interests
Class 9: Equity Securities
Class 9 consists of all Interests directly or indirectly arising
from, under, or in any way relating to, any of the Equity Securities. The
Equity Securities and Interests being cancelled under the Plan include, but
are not limited to, stock of or other ownership interests in MAWS; stock of
or other ownership interests in the Subsidiaries; options or warrants to
purchase or acquire such stock and other ownership interests in MAWS or the
Subsidiaries; and contracts or other agreements that provide for payment
for goods, services, or property in the form of stock or other ownership
interests in MAWS or any of the Subsidiaries.
In connection with, and as a result of, the substantive consolidation
of the Debtors' Estates and Chapter 11 Cases, on the Confirmation Date or
such other date as may be set by a Final Order of the Bankruptcy Court, but
subject to the occurrence of the Consummation Date, all Subsidiary
Interests will be eliminated. On the Consummation Date, the Equity
Securities (including Subsidiary Interests) will be canceled and the
holders of Equity Securities Interests (including Subsidiary Interests)
will not be entitled to, and will not, receive or retain any property or
interest in property on account of such Equity Securities Interests.
Pursuant to section 1126(g) of the Bankruptcy Code, Class 9 is deemed
to reject the Plan because the holders of Interests in Class 9 will not
receive or retain any property or interest in property under the Plan. The
Bankruptcy Court may confirm the Plan notwithstanding the rejection by
Class 9, provided that the Plan does not "discriminate unfairly" and is
"fair and equitable." See Section V.B - "Confirmation of the Plan
Confirmation Without Acceptance of All Impaired Classes 'Cramdown'." The
Debtors believe the Plan does not "discriminate unfairly" and is "fair and
equitable" to Class 9.
C. MEANS FOR IMPLEMENTATION OF THE PLAN
1. Substantive Consolidation
a. Substantive Consolidation of the Debtors' Estates
The Plan contemplates and is predicated upon entry of an order
substantively consolidating the Debtors' Estates and Chapter 11 Cases for
purposes of all actions associated with confirmation and consummation of
the Plan. On the Confirmation Date or such other date as may be set by an
order of the Bankruptcy Court, but subject to the occurrence of the
Consummation Date, (i) all Intercompany Claims by, between, and among the
Debtors will be eliminated, (ii) all assets and liabilities of the
Subsidiaries will be merged or treated as if they were merged with the
assets and liabilities of MAWS, (iii) any obligation of a Debtor and all
guarantees thereof by one or more of the other Debtors will be deemed to be
one obligation of MAWS, (iv) the Subsidiary Interests will be cancelled,
and (v) each Claim filed or to be filed against any Debtor will be deemed
filed only against MAWS and will be deemed a single Claim against and a
single obligation of MAWS. On the Confirmation Date, and in accordance with
the terms of the Plan and the consolidation of the assets and liabilities
of the Debtors, all Claims based upon guarantees of collection, payment, or
performance made by the Debtors as to the obligations of another Debtor
will be released and of no further force and effect.
Unless the Bankruptcy Court has approved the substantive
consolidation of the Chapter 11 Cases by a prior order, the Plan will serve
as, and will be deemed to be, a motion for entry of an order substantively
consolidating the Debtors' Chapter 11 Cases. If no objection to substantive
consolidation is timely filed and served by any holder of an Impaired Claim
affected by the Plan on or before five (5) days prior the Voting Deadline
or such other date as may be established by the Bankruptcy Court, the
Substantive Consolidation Order (which may be the Confirmation Order) may
be entered by the Bankruptcy Court. If any such objections are timely filed
and served, a hearing with respect to the substantive consolidation of the
Chapter 11 Cases and the objections thereto will be scheduled by the
Bankruptcy Court, which hearing may, but is not required to, coincide with
the Confirmation Hearing.
b. Discussion of Substantive Consolidation
i. General Description
Substantive consolidation of the estates of multiple debtors in a
bankruptcy case effectively combines the assets and liabilities of the
multiple debtors and treats them as if they belonged to a single merged
entity. The nature and effect of consolidation closely resemble a corporate
merger and usually result in "pooling the assets of, and claims against,
the [consolidating] entities; satisfying liabilities from the resulting
common fund; eliminating inter-company claims; and combining the creditors
of the [consolidating] companies for purposes of voting on reorganization
plans." In re Augie/Restivo Baking Co., 860 F.2d 515, 518 (2d Cir. 1988).
There is no statutory authority specifically authorizing substantive
consolidation. The authority of a bankruptcy court to order substantive
consolidation is derived from its general equitable powers under section
105(a) of the Bankruptcy Code, which provides that the court may issue
orders necessary to carry out the provisions of the Bankruptcy Code. In re
DRW Property Co. 82, 54 B.R. 489, 494 (Bankr. N.D. Tex. 1985). Nor are
there statutorily prescribed standards for substantive consolidation.
Instead, judicially developed standards control whether substantive
consolidation should be granted in any given case.
ii. Legal Standards for Substantive Consolidation
The propriety of substantive consolidation must be made on a
case-by-case basis. E.g., FDIC v. Colonial Realty Co., 966 F.2d 57 (2d Cir.
1992). In deciding whether or not to consolidate, a number of earlier cases
relied on the presence or absence of certain "elements" that are similar to
factors relevant to piercing the corporate veil under applicable state law.
E.g., In re Gulfco Inv. Corp., 593 F.2d 921 (10th Cir. 1979). More recent
cases, however, while not ignoring these elements, have applied a less
mechanical approach. Thus, for example, the Second Circuit Court of
Appeals, in In re Augie/Restivo, concluded that the extensive list of
elements and factors frequently cited and relied upon by other courts in
determining the propriety of substantive consolidation are "merely variants
on two critical factors," namely, "(1) whether creditors dealt with the
entities as a single economic unit and 'did not rely on their separate
identity in extending credit, . . . ' or (ii) whether the affairs of the
debtors are so entangled that consolidation will benefit all creditors. . .
" 860 F.2d at 518. More recently, the Eleventh Circuit, in Eastgroup
Properties v. Southern Motel Assoc., Ltd., 935 F.2d 245 (11th Cir. 1991),
viewed those elements and factors "as examples of information that may be
useful to courts charged with deciding whether there is substantial
identity between the entities to be consolidated and whether consolidation
is necessary to avoid some harm or to realize some benefit." Id. at 250.
Under the Eastgroup test, a proponent of substantive consolidation must
show that there is substantial identity between the entities to be
consolidated and that consolidation is necessary to avoid some harm or
realize some benefit. Once the proponent makes this showing, a presumption
arises that creditors have not relied solely on the credit of one of the
entities involved, and the burden shifts to an objecting creditor to show
that (i) it has relied on the separate credit of one of the entities to be
consolidated and (ii) it will be prejudiced by substantive consolidation.
Eastgroup, 935 F.2d at 251; Reider v. FDIC (In re Reider), 31 F.3d 1102,
1108 (11th Cir. 1994).
Regardless of which of the "two similar but not identical tests . . .
for assessing the propriety of substantive consolidation in the corporate
context" is applied, In re Reider, 31 F.3d at 1107, the "elements"
enumerated in the earlier cases remain relevant, but not necessarily
dispositive, as to whether substantive consolidation should be granted.
These elements include:
o the degree of difficulty in segregating and
ascertaining the individual assets and liabilities of
the entities to be consolidated;
o the presence or absence of consolidated financial
statements among the entities to be consolidated;
o the likelihood that consolidation of the different
entities into one entity at a single physical location
would prove profitable to the debtor;
o the commingling of assets and business functions among
the entities to be consolidated;
o the unity of interests and ownership among the various
entities;
o the existence of parent and intercorporate guarantees
on loans to the various entities; and
o the transfer of assets to and from the various
entities without formal observance of corporate
formalities.
In re Vecco Constr. Indus., 4 B.R. 407, 410 (Bankr. E.D. Va. 1980).
iii. Factual Basis for and Result of a Substantive
Consolidation of the Debtors' Estates
The facts and circumstances surrounding the historical business
operations of MAWS and the Subsidiaries support substantive consolidation
in these Chapter 11 Cases. Thus, for example, MAWS and the Subsidiaries
historically have issued consolidated financial statements and filed
consolidated tax returns. Each of the Subsidiaries, with the exception of
Northwestern Disposal Co., is a direct wholly-owned subsidiary of MAWS and
Northwestern Disposal Co. is wholly-owned by Mid-American Waste Systems of
West Virginia, Inc., which, in turn, is wholly owned by MAWS. At all times
since MAW's inception, MAWS and its Subsidiaries have had common officers
and directors; they have always shared key employees and outside
professionals, including, but not limited to, employees of MAWS who
performed human resources, accounts receivable/payable, legal, and risk
management services for the benefit of all the Debtors and accounting
firms, law firms, engineers, and consultants who rendered services to all
of the Debtors.
Historically, the Debtors have shared more than just employees and
professionals. In particular, for many years the Debtors have shared a
centralized cash management system. Under this system, virtually all cash
was centralized within MAWS and funds were moved into and through MAWS on
an "as needed" basis to meet the short and long term cash requirements of
all of the Debtors. Thus, monies were regularly moved from one entity to
another as required -- often for repayment by one Debtor of a loan or other
obligation incurred by a another Debtor. As an outgrowth of this
consolidated cash management system, intercompany loans routinely were made
by and between MAWS and the Subsidiaries (and by and between the
Subsidiaries themselves) in the ordinary course of the Debtors' business.
The Debtors' books and records, however, do not accurately reflect
the movement of cash between the various entities. Nor do they constitute a
reliable source of information regarding the Debtors' intercompany
accounts. Indeed, the amounts showing on the Debtors' books and records as
payable and receivable between the various entities do not reflect the
balances that would exist if transactions between the Debtors had been
appropriately recorded for purposes of separate company reporting and the
differences in many cases is material. Due to the volume of transactions
(tens of thousands) between MAWS and the Subsidiaries and the significant
passage of time (several years), it would be extraordinarily time consuming
and prohibitively expensive for the Debtors to determine on an Estate by
Estate basis the adjustments needed to reasonably approximate intercompany
balances. Even then, there can be no assurance that the end product would
provide fair approximations of such balances due to (a) numerous
uncertainties with respect to available historical knowledge and supporting
documentation and (b) complexities such as extensive acquisition and
disposition activity by the Debtors.
2. Merger Of Subsidiaries Into MAWS
On the Consummation Date or as soon thereafter as practicable, (a)
the members of the board of directors of each of the Subsidiaries will be
deemed to have resigned, (b) subject to any limitations imposed by the
terms of the Asset Purchase Agreement, each of the Subsidiaries will be
merged with and into MAWS, and (c) the Chapter 11 Cases of the Subsidiaries
will be closed, following which any and all proceedings that could have
been brought or otherwise commenced in the Chapter 11 Case of any
Subsidiary will be brought or otherwise commenced in MAWS' Chapter 11 Case.
3. The Plan Administrator
From and after the Consummation Date, [TO BE NAMED BY COMMITTEE] or
such other Person as may be designated by the Creditors' Committee prior to
the Confirmation Date, will serve as the Plan Administrator pursuant to the
Plan Administrator Agreement and the Plan, until death, resignation or
discharge and the appointment of a successor Plan Administrator in
accordance with the Plan Administrator Agreement. Reorganized MAWS will
retain and have all the rights, powers and duties necessary to carry out
its responsibilities under the Plan. Such rights, powers and duties, which
will be exercisable by the Plan Administrator on behalf of Reorganized MAWS
pursuant to the Plan and the Plan Administrator Agreement, are more fully
set forth in Article IV.F of the Plan.
The Plan Administrator will be compensated from an Operating Reserve
established and maintained by Reorganized MAWS to fund its ongoing
operating expenses. Any professionals retained by the Plan Administrator to
assist the Plan Administrator with the implementation of the Plan will be
entitled to reasonable compensation for services rendered and reimbursement
of expenses incurred. The payment of the fees and expenses of the Plan
Administrator and its retained professionals will be made in the ordinary
course of business and will not be subject to the approval of the
Bankruptcy Court, but will be subject to review by the Plan Committee.
Reorganized MAWS will indemnify and hold harmless the Plan
Administrator and its professionals, or any duly designated agent or
representative thereof (in its capacity as such), from and against and in
respect to any and all liabilities, losses, damages, claims, costs and
expenses, including, but not limited to attorneys' fees arising out of or
due to their actions or omissions, or consequences of such actions or
omissions, other than as a result of their willful misconduct or gross
negligence, with respect to Reorganized MAWS or the implementation or
administration of the Plan. To the extent Reorganized MAWS indemnifies and
holds harmless the Plan Administrator and its professionals, or any duly
designated agent or representative thereof (in its capacity as such), as
provided above, the legal fees and related costs incurred by counsel to the
Plan Administrator in monitoring and participating in the defense of such
claims giving rise to the right of indemnification will be paid out of the
Operating Reserve. The Plan Administrator will be authorized to obtain, on
behalf of Reorganized MAWS, appropriate insurance for itself, its agents
and its employees, including, but not limited to, general liability and
officer and director liability insurance, which may include a reasonable
run-off endorsement.
From and after the Consummation Date, as more fully set forth in the
Plan, Reorganized MAWS and the Plan Administrator will be authorized to
object to Claims or Interests filed against any of the Debtors' Estates.
They also will be authorized, pursuant to Fed. R. Bankr. P. 9019(b) and
section 105(a) of the Bankruptcy Code, to compromise and settle Disputed
Claims. If the Face Amount of the Disputed Claim is less than $50,000, the
Plan Administrator may settle the Disputed Claim without notice to any
party. If the Face Amount is more than $50,000 but less than $500,000, the
Plan Administrator must provide notice of the proposed settlement to the
Plan Committee. If the Plan Committee objects to the proposed settlement of
such a Disputed Claim and does not withdraw its objection, then the Plan
Administrator must obtain Bankruptcy Court approval of the proposed
settlement. Court approval also must be obtained for settlements of
Disputed Claims with a Face Amount in excess of $500,000.
4. Creditors' Committee And Plan Committee
The Creditors' Committee will continue in existence until the
Consummation Date, at which time it will be dissolved and its members will
be released from all their duties, responsibilities and obligations in
connection with the Chapter 11 Cases or the Plan and its implementation.
The retention or employment of the Creditors' Committee's attorneys,
accountants, and other agents, also will terminate on that date. All
expenses of Creditors' Committee members and the fees and expenses of their
professionals through the Consummation Date will be paid in accordance with
the terms and conditions of the Professional Fee Order.
On the Consummation Date, the Plan Committee will be formed and
constituted. The Plan Committee will consist of three Creditors' Committee
members who will be appointed by the Creditors' Committee and whose
identities will be disclosed to the Bankruptcy Court. If no one is willing
to serve on the Plan Committee or there shall have been no Plan Committee
members for a period of thirty (30) consecutive days, then the Plan
Administrator may, during such vacancy and thereafter, ignore any
references in the Plan, the Plan Administrator Agreement, or the
Confirmation Order to a Plan Committee, and all references to the Plan
Committee's ongoing duties and rights in the Plan, the Plan Administrator
Agreement, and the Confirmation Order will be null and void. The
responsibilities of the Plan Committee are set forth in Article IV of the
Plan. The members of the Plan Committee will serve without compensation for
their performance of services as members of the Plan Committee, but they
will be entitled to reimbursement of reasonable expenses by Reorganized
MAWS.
The Plan Committee will have the right to retain the services of
attorneys, accountants, and other agents which, in the discretion of the
Plan Committee, are necessary to assist the Plan Committee in the
performance of its duties. The fees and expenses of such professionals will
be paid by Reorganized MAWS from the Operating Reserve upon the monthly
submission of bills to the Plan Administrator and the Plan Committee. The
payment of the fees and expenses of the Plan Committee's retained
professionals will be made in the ordinary course of business and will not
be subject to the approval of the Bankruptcy Court.
Neither the Plan Committee, nor any of its members, designees, or
professionals, nor any duly designated agent or representative of the Plan
Committee, or their respective employees, will be liable for the act or
omission of any other member, designee, agent, or representative of the
Plan Committee, nor will any member be liable for any act or omission taken
or omitted to be taken in its capacity as a member of the Plan Committee,
other than acts or omissions resulting from such member's willful
misconduct or gross negligence. The Plan Committee may, in connection with
the performance of its functions, and in its sole and absolute discretion,
consult with counsel, accountants and its agents, and will not be liable
for any act taken, omitted to be taken, or suffered to be done in
accordance with advice or opinions rendered by such professionals.
Notwithstanding such authority, the Plan Committee will be under no
obligation to consult with counsel, accountants or agents, and its
determination to not do so will not result in the imposition of liability
on the Plan Committee, or its members and/or designees, unless such
determination is based on willful misconduct or gross negligence.
Reorganized MAWS will indemnify and hold harmless the Plan Committee and
its members, designees, and professionals, and any duly designated agent or
representative thereof (in its capacity as such), from and against and in
respect to any and all liabilities, losses, damages, claims, costs and
expenses, including, but not limited to attorneys' fees arising out of or
due to their actions or omissions, or consequences of such actions or
omissions, other than as a result of their willful misconduct or gross
negligence, with respect to Reorganized MAWS or the implementation or
administration of the Plan. To the extent Reorganized MAWS indemnifies and
holds harmless the Plan Committee and its members, designees, or
professionals, or any duly designated agent or representative thereof (in
its capacity as such), as provided above, the legal fees and related costs
incurred by counsel to the Plan Committee in monitoring and participating
in the defense of such claims giving rise to the right of indemnification
will be paid out of the Operating Reserve.
5. No Revesting Of Assets
The Debtors in these Chapter 11 Cases are not reorganizing; they are
liquidating. Thus, the assets of the Debtors are being administered for the
benefit of holders of Allowed Claims against the Debtors and will not be
used in any ongoing business enterprise. Additionally, the Debtors most
likely will not receive a discharge by virtue of confirmation of the Plan
because section 1141(d)(3) of the Bankruptcy Code provides that
confirmation of a plan of a corporate debtor does not discharge such debtor
if (i) the plan provides for the liquidation of all or substantially all of
the property of the estate and (ii) the debtor does not engage in business
after confirmation of the plan. Accordingly, it is important that,
following confirmation of the Plan, the Debtors' assets remain subject to
the jurisdiction and protection of the Bankruptcy Court. For that reason,
the property of the Debtors' Estates will not be vested in the Debtors on
or following the Confirmation Date or the Consummation Date, but will
remain property of the Estate(s) and continue to be subject to the
jurisdiction of the Bankruptcy Court following confirmation of the Plan
until distributed to holders of Allowed Claims in accordance with the
provisions of the Plan and Confirmation Order. From and after the
Consummation Date, all such property will be distributed in accordance with
the provisions of the Plan and the Confirmation Order.
6. Distributions
a. Cancellation Of Existing Securities And Agreements
On the Consummation Date, except as otherwise provided in the Plan,
(i) the Existing Securities and any other note, bond, indenture, or other
instrument or document evidencing or creating any indebtedness or
obligation of any of the Debtors will be canceled and (ii) the obligations
of the Debtors under any agreements, indentures or certificates of
designations governing the Existing Securities and any other note, bond,
indenture or other instrument or document evidencing or creating any
indebtedness or obligation of a Debtor, will be released. Notwithstanding
the foregoing, each indenture or other agreement that governs the rights of
the holder of a Claim and that is administered by an indenture trustee, an
agent, or a servicer will continue in effect for the sole and limited
purposes of (i) allowing such indenture trustee, agent, or servicer to make
the distributions required to be made pursuant to the Plan on account of
such Claims, and (ii) permitting such indenture trustee, agent, or servicer
to maintain any rights or liens it may have for fees, costs and expenses
under such indenture or other agreement; provided, however, that the
provisions of clause (ii) of this paragraph will not affect the release of
the Debtors' liabilities under the Plan and the Confirmation Order or
result in any expense or liability to the Debtors or Reorganized MAWS.
Reorganized MAWS will not have any obligations to any indenture trustee,
agent or servicer (or to any Disbursing Agent replacing such indenture
trustee, agent or servicer) for any fees, costs or expenses. The Plan,
however, does not preclude any indenture trustee, agent or servicer (or any
Disbursing Agent replacing such indenture trustee, agent or servicer) from
being paid or reimbursed for pre-petition and post-petition fees, costs and
expenses from the initial or periodic distributions to holders of Claims
governed by such indenture or agreement in accordance with the provisions
set forth therein.
b. Surrender Of Cancelled Debt Instruments Or Securities
On or before the Distribution Date, or as soon thereafter as
practicable, each holder of an instrument evidencing a Claim on account of
Debt Securities (a "Certificate") must surrender such Certificate to the
Plan Administrator or Reorganized MAWS or, with respect to indebtedness
that is governed by an indenture or other agreement, the respective
indenture trustee, agent, or servicer, as the case may be, and such
Certificate will be cancelled. No distribution of property hereunder will
be made to or on behalf of any such holder unless and until such
Certificate is received by the Plan Administrator or Reorganized MAWS or
the respective indenture trustee, agent, or servicer, as the case may be,
or the unavailability of such Certificate is reasonably established to the
satisfaction of the Plan Administrator or Reorganized MAWS or the
respective indenture trustee, agent, or servicer, as the case may be. Any
holder who fails to surrender or cause to be surrendered his Certificate or
fails to execute and deliver an affidavit of loss and indemnity reasonably
satisfactory to the Plan Administrator or Reorganized MAWS or the
respective indenture trustee, agent, or servicer, as the case may be, prior
to the fifth (5th) anniversary of the Confirmation Date, will be deemed to
have forfeited all rights and Claims in respect of such Certificate and
will not participate in any distribution under the Plan, and all property
in respect of such forfeited distribution, including interest accrued
thereon, will revert to Reorganized MAWS notwithstanding any federal or
state escheat laws to the contrary and will be distributed in accordance
with the terms of the Plan.
c. Sources Of Cash For Plan Distributions
Except as otherwise provided in the Plan or the Confirmation Order,
all Cash necessary for Reorganized MAWS and the Plan Administrator to make
payments pursuant to the Plan will be obtained from the Debtors' cash
balances and the liquidation of the Debtors' remaining non-Cash assets, if
any. Cash payments to be made pursuant to the Plan will be made by
Reorganized MAWS (or any successor thereto) or, if the Disbursing Agent is
an entity other than Reorganized MAWS, the Disbursing Agent.
7. Resolution of Disputed, Contingent, and Unliquidated Claims
a. Objection Deadline; Prosecution Of Objections
The Debtors or Reorganized MAWS, as the case may be, will be allowed
up to 120 days after the Consummation Date (unless extended by an order of
the Bankruptcy Court) to 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. Nothing contained in the Plan, however, will
limit Reorganized MAWS' right to object to Claims, if any, filed or amended
more than 120 days after the Consummation Date. Subject to the limitations
set forth in the Plan Administrator Agreement and Article IV.F of the Plan,
and the oversight of the Plan Committee, Reorganized MAWS and the Plan
Administrator will be authorized to resolve all Disputed Claims by
withdrawing or settling such objections thereto, or by litigating to
judgment the validity, nature, and/or amount thereof in the Bankruptcy
Court or such other court having jurisdiction.
b. No Distributions Pending Allowance
No payments or distributions will 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. Escrows; Reserves; Accounts
Reorganized MAWS will (i) continue to hold in escrow all amounts
previously escrowed pursuant to an order of the Bankruptcy Court in
accordance with the terms and conditions of such order, (ii) on the
Consummation Date or as soon thereafter as practicable, establish and fund
the Operating Reserve, Administrative Claims Reserve, Disputed Claims
Reserve, L/C Bank Contingent Claims Reserve and such other reserves or
escrows as are permitted under the terms of the Plan Administrator
Agreement in accordance with the terms of the Plan Administrator Agreement,
and (iii) establish various bank and other accounts. In general, the
purpose of the reserves is to ensure that sufficient Cash is set aside (i)
to pay in full the anticipated expenses, costs, post-consummation taxes and
fees associated with consummating and completing distributions under the
Plan, including the costs and fees associated with the Plan Administrator,
the Plan Committee and Reorganized MAWS, (ii) to pay in full Disputed
Administrative Claims, Disputed Priority Tax Claims, and Disputed Other
Priority Claims that eventually become Allowed Claims, (iii) to pay in full
all L/C Bank Contingent Claims that become non-contingent, undisputed and
liquidated Claims following the Consummation Date, and (iv) to pay holders
of Disputed Claims in Classes 3 and 4 the amounts to which they are
entitled under the Plan if, as and when their Disputed Claims become
Allowed Claims. Reorganized MAWS also is authorized to establish a reserve
for unclaimed distributions, the purpose of which is to protect, for a
three-year period, holders of Claims who have failed to collect their
distributions.
d. Reserve Amount; Estimation Amount
i. Disputed Claims Reserve
As noted above, on the Consummation Date, or as soon thereafter as
practicable, Reorganized MAWS must establish and fund the Disputed Claims
Reserve, into which Reorganized MAWS must deposit an amount of Cash equal
to the sum of the Reserve Amounts and 70% of the Estimated Amounts of all
Disputed Claims other than those covered by the Administrative Claims
Reserve or the L/C Bank Contingent Claims Reserve. If no Reserve Amount or
Estimated Amount has been determined and reserved for a particular Disputed
Claim, Cash in an amount equal to 70% of the amount actually claimed in a
timely-filed proof claim by the holder of the Disputed Claim in question
must initially be reserved in the Disputed Claim Reserve. "Estimated
Amounts" refers to the Bankruptcy Court's estimation of the amount (if any)
of a Disputed Claim, while "Reserve Amount" refers to the amount (if any)
that the Bankruptcy Court determines should be set aside in a reserve with
respect to a given Disputed Claim.
ii. Administrative Claims Reserve
As noted above, on the Consummation Date, or as soon thereafter as
practicable, Reorganized MAWS must establish and fund with Cash the
Administrative Claims Reserve for the benefit of the holders of Disputed
Administrative Claims. The initial amount of the Administrative Claims
Reserve will equal the sum of the Face Amounts of all Disputed
Administrative Claims, Disputed Priority Tax Claims, and Disputed Other
Priority Claims plus the Reserve Amount or the Estimated Amount of all such
Disputed Claims having no Face Amount.
iii. L/C Bank Contingent Claims Reserve
As noted above, on the Consummation Date, or as soon thereafter as
practicable, Reorganized MAWS must establish and fund with Cash the L/C
Bank Contingent Claims Reserve for contingent L/C Bank Contingent Claims.
The initial amount of the L/C Bank Contingent Claims Reserve must equal
103% the Face Amount of all Class 5 L/C Bank Contingent Claims.
e. Distributions After Allowance
Reorganized MAWS will make payments and distributions from the
appropriate Reserves to the holder of any (i) Disputed Administrative
Claim, Disputed Priority Tax Claim, Disputed Other Priority Claim, or
Disputed Claim that has become an Allowed Claim or (ii) L/C Bank Contingent
Claim that has become an undisputed, non-contingent, and liquidated Claim,
on the first Periodic Distribution Date following the date that all or part
of such Disputed Administrative Claim, Disputed Priority Tax Claim,
Disputed Other Priority Claim, or Disputed Claim becomes an Allowed Claim
or such L/C Bank Contingent Claim becomes an undisputed, non-contingent,
and liquidated Claim. All payments and distributions to holders of Allowed
Claims from the accounts, Reserves, and Escrows will be made in accordance
with the provisions of the Plan governing the class of Claims to which the
holder of such Allowed Claim belongs and pursuant to the terms of Section
2.7 of the Plan Administrator Agreement. Holders of Disputed Administrative
Claims, Disputed Priority Tax Claims, Disputed Other Priority Claims, and
Disputed Claims (other than (i) Class 5 L/C Bank Contingent Claims and (ii)
Disputed Claims whose resolution and payment is subject to an Escrow Order)
that ultimately become Allowed Claims will also be entitled to receive
interest for the Period between the Distribution Date and the date of the
initial distribution on account of such Claim (the "Disallowance Period"),
calculated by multiplying (A) the initial amount distributed to such holder
on the Periodic Distribution Date in question times (B) the difference of
(1) the then current rate of interest on a 30-day Treasury Bill minus (2)
150 basis points times (C) the number of days in the Disallowance Period
divided by 365.
f. Release from Reserves
Funds can be released from or added to the Reserves under certain
circumstances specified in the Plan Administrator Agreement. Thus, for
example, on each Periodic Distribution Date, the Plan Administrator is
required to determine the amount of Cash required to adequately maintain
each Reserve. If, in consultation with the Plan Committee, the Plan
Administrator determines that a given Reserve is overfunded, the Plan
Administrator must transfer any excess Cash in the overfunded Reserve to
any Reserve that may be underfunded or, if all Reserves are adequately
funded, to the General Account(s), at which time it becomes available for
distribution to holders of Allowed Class 4 Claims. If, on the other hand,
the Plan Administrator, in consultation with the Plan Committee, determines
that a given Reserve is underfunded, Cash must be transferred to the
underfunded Reserve from any overfunded Reserves or, if there are no
overfunded Reserves, from the General Account(s) until the underfunding is
eliminated. No distributions to holders of Allowed Claims in Class 4 can be
made while any Reserve is underfunded.
Funds can also be transferred out of the Administrative Claims
Reserve, the Disputed Claims Reserve and the L/C Bank Contingent Claims
Reserve as Disputed Claims and contingent L/C Bank Contingent Claims are
resolved. Once a Disputed Claim has been finally resolved (by settlement or
Final Order of the Bankruptcy Court), the Cash in the appropriate Reserve
attributable to that Disputed Claim is used (1) first, to make any initial
distribution to which the holder of the Claim may be entitled by virtue of
the resolution of its Claim, (2) second, to eliminate underfunding in any
underfunded Reserve(s), and (3) third, to fund the General Account(s), at
which time it becomes available for distribution to holders of Allowed
Class 4 Claims.
Funds can also be released from the appropriate Reserve if the
Bankruptcy Court determines a Reserve Amount or Estimated Amount for a
given Disputed Claim that would warrant a reserve lower than the one
originally established with respect to such Claim.
8. Miscellaneous
a. Record Date For Distributions
At the close of business on the Record Date, the transfer ledgers for
the Debt Securities will be closed, and there will be no further changes in
the record holders of the Debt Securities. Reorganized MAWS will have no
obligation to recognize any transfer of such Debt Securities occurring
after the Record Date and will be entitled instead to recognize and deal
for all purposes hereunder with only those record holders stated on the
transfer ledgers as of the close of business on the Record Date.
b. Distributions By Reorganized MAWS
Reorganized MAWS will make all distributions of Cash required to be
distributed under the applicable provisions of the Plan. Reorganized MAWS
may employ or contract with other entities to assist in or make the
distributions required by the Plan. Notwithstanding any other provision of
the Plan, Reorganized MAWS will not be required to make distributions or
payments of fractions of dollars. Whenever any payment of a fraction of a
dollar under the Plan would otherwise be called for, the actual payment
made will reflect a rounding of such fraction to the nearest whole dollar
(up or down), with half dollars being rounded down. Neither Reorganized
MAWS nor any third-party Disbursing Agent will make any payment of less
than fifty dollars ($50.00) with respect to any individual Claim unless
such payment constitutes a final distribution to the holder of such Claim.
c. Delivery Of Distributions And Undeliverable Or
Unclaimed Distributions
Distributions to holders of Allowed Claims will be made at the
addresses set forth in the Schedules or other records of the Debtors or
Reorganized MAWS at the time of the distribution. If the distribution to
any holder of an Allowed Claim is returned to the Disbursing Agent as
undeliverable, no further distributions will be made to such holder unless
and until the Disbursing Agent is notified in writing of such holder's
then-current address. Undeliverable distributions will remain in the
possession of the Disbursing Agent pursuant to Article VI.D of the Plan
until such time as a distribution becomes deliverable. Undeliverable Cash
will be held in an Unclaimed Distribution Reserve for the benefit of the
potential claimants of such funds, and will be accounted for separately. On
each Periodic Distribution Date, Reorganized MAWS will make all
distributions that have become deliverable since the Distribution Date or
the immediately preceding Periodic Distribution Date, as the case may be,
together with any interest actually earned thereon. Any holder of an
Allowed Claim that does not assert a claim pursuant to the Plan for an
undeliverable distribution within three (3) years after the Consummation
Date will be deemed to have forfeited its claim for such undeliverable
distribution and will be forever barred and enjoined from asserting any
such claim for an undeliverable distribution against the Debtors,
Reorganized MAWS, the Plan Administrator, or their property. In such cases,
any Cash or other property held for distribution on account of such claims
for undeliverable distributions will become the property of Reorganized
MAWS free of any restrictions thereon and will be distributed in accordance
with the terms of the Plan and the Plan Administrator Agreement. Nothing
contained in the Plan or the Plan Administrator Agreement will require
Reorganized MAWS or any Disbursing Agent, including, but not limited to,
the Plan Administrator, to attempt to locate any holder of an Allowed
Claim.
d. Executory Contracts and Unexpired Leases
Except as otherwise provided in the Plan, or in any contract,
instrument, release, or other agreement or document entered into in
connection with the Plan, each of the executory contracts and unexpired
leases to which any Debtor is a party, to the extent such contracts or
leases are executory contracts or unexpired leases, will be rejected by the
applicable Debtor on the Confirmation Date, unless such contract or lease
(i) previously (a) has been assumed or rejected by the Debtors (including,
but not limited to, those executory contracts or unexpired leases assumed
by the Debtors and assigned to USA Waste) or (b) shall have expired or
terminated pursuant to its own terms (including, but not limited to, the
employment agreements between MAWS and Alan B. Howald, Dennis W. Marchetti,
Kent Adkins, R.J. Roberts, and Hilary Plauche which have been terminated by
their terms) or (ii) is listed on the schedule of assumed contracts and
leases annexed to the Plan as Exhibit B; provided, however, that neither
the inclusion by the Debtors of a contract or lease on Exhibit B to the
Plan nor anything contained in Article VII.A of the Plan or this Disclosure
Statement constitutes an admission by any Debtor that such contract or
lease is an executory contract or unexpired lease or that any Debtor or its
successors and assigns have any liability thereunder. The Confirmation
Order will constitute an order of the Bankruptcy Court approving the
rejections described in Article VII.A of the Plan, pursuant to section 365
of the Bankruptcy Code, as of the Confirmation Date.
If the rejection of an executory contract or unexpired lease pursuant
to Article VII.A of the Plan gives rise to a Claim by the other party or
parties to such contract or lease, such Claim will be forever barred and
will not be enforceable against the applicable Debtor or its Estate,
Reorganized MAWS, or their respective successors or properties unless a
proof of Claim is filed and served on Reorganized MAWS and counsel for
Reorganized MAWS within 40 days after service of a notice of entry of the
Confirmation Order or such other date as prescribed by the Bankruptcy
Court.
Any monetary amounts by which each executory contract and unexpired
lease, if any, to be assumed under the Plan may be in default will be
satisfied, under section 365(b)(1) of the Bankruptcy Code, by cure payments
to be made on the Distribution Date. In the event of a dispute regarding
matter pertaining to assumption or assignment, the Debtors or Reorganized
MAWS will make such cure payments following the entry of a Final Order
resolving the dispute and approving the assumption and, as the case may be,
assignment, as more fully set forth in the Plan. The Confirmation Order
will constitute an order of the Bankruptcy Court approving the assumptions
(and assignments, as the case may be), if any, described in Article VII.C
of the Plan, pursuant to section 365 of the Bankruptcy Code, as of the
Confirmation Date.
e. Preservation Of Rights Of Action; Settlement of
Litigation Claims
Except as otherwise provided in the Plan, the Confirmation Order, or
in any document, instrument, release, or other agreement entered into in
connection with the Plan, in accordance with section 1123(b) of the
Bankruptcy Code, the Estate(s) will retain the Litigation Claims described
in Exhibit C to the Plan. Reorganized MAWS may, in consultation with the
Plan Committee, enforce, sue on, settle or compromise (or decline to do any
of the foregoing) any or all of the Litigation Claims. The failure of the
Debtors to list a claim, right of action, suit, or proceeding on Exhibit C
to the Plan does not constitute a waiver or release by the Debtors of such
claim, right of action, suit, or proceeding, and Reorganized MAWS has
retained the right to pursue additional Claims, rights of action, suits or
proceedings.
In addition, at any time after the Confirmation Date and before the
Consummation Date, notwithstanding anything in the Plan to the contrary,
the Debtors, in consultation with the Creditors' Committee, may settle some
or all of the Litigation Claims with the approval of the Bankruptcy Court
pursuant to Fed. R. Bankr. P. 9019.
f. ADR
The Debtors have requested or will request that the Bankruptcy Court
establish the ADR for the liquidation and payment of Damage Claims. The ADR
will be implemented prior to the Confirmation Date, but will continue after
the Confirmation Date and the Consummation Date. The Debtors anticipate
that, pursuant to the ADR, each Damage Claim will be subjected to a process
designed to produce a settlement with respect to such Damage Claim. If
unsuccessful, the holder of the Damage Claim would then be entitled to
obtain relief from the Bankruptcy Court to pursue the Damage Claim in an
appropriate forum, which may include the Bankruptcy Court if so requested
by Reorganized MAWS.
g. Interest On Claims
Unless otherwise specifically provided for in the Plan or
Confirmation Order, or required by applicable bankruptcy law, and subject
to the provisions of the Article VI.B of the Plan, post-petition interest
will not accrue or be paid on any Claims, and no holder of a Claim will be
entitled to interest accruing on or after the Petition Date on any Claim.
Interest will, however, be paid on the initial distribution with respect to
Disputed Claims (other than Class 5 L/C Bank Contingent Claims and Disputed
Claims whose resolution and payment is subject to an Escrow Order) for the
period from the Distribution Date to the date of the initial distribution
on such Claim (the "Disallowance Period") at a rate of interest equal to
(1) the initial amount distributed to such holder times (2) the difference
between (A) the then current rate of interest on a 30-day Treasury Bill
minus (B) 150 basis points times (3) the number of days in the Disallowance
Period divided by 365.
h. Effects of Confirmation
i. Waiver of Claims; Covenant Not To Sue
Effective as of the Confirmation Date, but subject to the occurrence
of the Consummation Date, and except as otherwise provided in the Plan or
the Confirmation Order, (i) all Persons who have held, hold, or may hold
Claims against or Interests in the Debtors and (ii) the Debtors, shall be
deemed to have forever waived and covenanted with each of the Debtors, the
Estate(s), Reorganized MAWS, and the Identified Officers and Directors
(collectively, the "Released Parties"), to waive and not to (i) sue, or
otherwise seek any recovery from the Released Parties or their property,
whether for tort, fraud, contract, violations of federal or state
securities laws, or otherwise, based upon any act or occurrence or failure
to act taken or occurring before the Consummation Date arising out of the
business or affairs of the Debtors, or (ii) assert against any of the
Released Parties or their property any Claim, obligation, right, cause of
action and liability which any such holder of a Claim against or Interest
in the Debtors may be entitled to assert, whether known or unknown,
foreseen or unforeseen, existing or hereafter arising, based in whole or in
part upon any act or omission, transactions, or occurrence taking place on
or before the Consummation Date in any way relating to the Debtors, these
Chapter 11 Cases, or the Plan; provided, however, that nothing contained in
the Plan or the Confirmation Order shall release, or be deemed to release,
any non-Debtor third parties from the causes of action (i) retained by
Reorganized MAWS or (ii) being pursued in the Securities Actions as of June
20, 1997.
ii. Exculpation and Limitation on Liability
Neither the Debtors nor the Creditors' Committee, nor any of their
respective present or former members, officers, directors, employees,
advisors, attorneys, or agents, will 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, the
Debtors' Chapter 11 Cases, 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 or
gross negligence, 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 the Plan, no holder of a Claim
or Interest, no other party in interest, none of their respective agents,
employees, representatives, financial advisors, attorneys, or affiliates,
and no successors or assigns of the foregoing, will have any right of
action against the Debtors, the Estate(s), Reorganized MAWS, the Creditors'
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, the Debtors'
Chapter 11 Cases, 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 or gross
negligence.
iii. Injunction
Except as otherwise provided in the Plan, the Confirmation Order will
provide, among other things, that from and after the Confirmation Date, all
Persons who have held, hold, or may hold Claims against or Interests in the
Debtors are permanently enjoined from taking actions against the Debtors,
the Estate(s), Reorganized MAWS, the Plan Administrator, or any of their
property on account of any such Claims or Interests, all as more fully set
forth in Article XII.D of the Plan. The purpose of this injunction is to
ensure that Reorganized MAWS' assets are distributed in an orderly fashion
in accordance with the procedures and distributive scheme set forth in the
Plan and the Plan Administrator Agreement.
i. Termination Of Subordination Rights; Settlement Of
Related Claims And Controversies
All Claims of the Senior Note Holders and Subordinated Note Holders
against the Debtors and all rights and claims between or among the Senior
Note Holders and Subordinated Note Holders relating in any manner
whatsoever to claimed subordination, "make-whole" or similar rights,
including the rights to receive default rate interest and post-petition
interest (if any), will be deemed satisfied by the distributions under the
Plan to holders of such Claims (i.e., holders of Senior Note Claims and
Subordinated Note Claims) and such rights will be deemed waived, released,
discharged, and terminated as of the Consummation Date, and all actions
related to the enforcement of such rights will be permanently enjoined.
Distributions under the Plan will not be subject to levy, garnishment,
attachment, or like legal process by any holder of a Claim, including, but
not limited to, holders of Senior Note Claims and Subordinated Note Claims,
by reason of any claimed subordination rights or otherwise, so that each
holder of a Claim will have and receive the benefit of the distributions in
the manner set forth in the Plan.
Pursuant to Fed. R. Bankr. P. 9019 and in consideration for the
distributions and other benefits provided under the Plan, the provisions of
Article XII.E of the Plan will constitute a good faith compromise and
settlement of all claims or controversies relating to the termination of
all contractual, legal and equitable subordination, "make-whole" or
similar rights (including rights, if any, to receive post-petition or
default interest) that any holder of a Claim, including, but not limited
to, a holder of a Senior Note Claim or Subordinated Note Claim, may have
with respect to any Allowed Claim, or any distribution to be made on
account of an Allowed Claim. The entry of the Confirmation Order will
constitute the Bankruptcy Court's approval of the compromise or settlement
of all such claims or controversies, including, without limitation, the
compromise and settlement embodied in the Plan's treatment of Allowed
Senior Note Claims, Allowed L/C Bank Claims, and Allowed Subordinated Note
Claims, as described in Article III.C.2 of the Plan, and the Bankruptcy
Court's finding that such compromises and settlements are fair, equitable,
and reasonable, and in the best interests of the Debtors, their Estates,
and all affected Claim holders, including holders of Senior Note Claims and
holders of Subordinated Note Claims.
D. BAR DATES FOR CERTAIN CLAIMS
1. Administrative Claims
The Confirmation Order will establish an Administrative Claims Bar
Date for filing Administrative Claims (except for Professional Fees and the
expenses of the members of the Creditors' Committee), which date will be 45
days after the Confirmation Date. Holders of asserted Administrative
Claims, except for Professional Fees and the expenses of the members of the
Creditors' Committee, not paid prior to the Confirmation Date must submit
proofs of Claim on or before such Administrative Claims Bar Date or be
forever barred from doing so. 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. The Debtors,
or Reorganized MAWS, as the case may be, will have 45 days (or such longer
period as the Bankruptcy Court may allow) 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.
2. Professional Fee Claims; Substantial Contribution Claims
All parties requesting compensation or reimbursement of Professional
Fees pursuant to sections 327, 328, 330, 331, 503(b) or 1103 of the
Bankruptcy Code for services rendered to the Debtors prior to the
Consummation Date (including requests under section 503(b)(4) of the
Bankruptcy Code by any Professional or other entity for making a
substantial contribution in the Chapter 11 Cases) must file and serve on
Reorganized MAWS and counsel for Reorganized MAWS an application for final
allowance of compensation and reimbursement of expenses no later than 45
days after the Consummation Date, unless otherwise ordered by the
Bankruptcy Court. Objections to applications of such Professionals or other
entities for compensation or reimbursement of expenses must be filed and
served on Reorganized MAWS, counsel for Reorganized MAWS, and the
requesting Professional or other entity no later than 45 days (or such
longer period as the Bankruptcy Court may allow) after the date on which
the applicable application for compensation or reimbursement was served.
E. MODIFICATIONS AND AMENDMENTS
The Debtors 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, the Debtors 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
Federal Rules of Bankruptcy Procedure or order of the Bankruptcy Court.
F. RETENTION OF JURISDICTION
Under sections 105(a) and 1142 of the Bankruptcy Code, and
notwithstanding entry of the Confirmation Order and occurrence of the
Consummation Date, the Bankruptcy Court will, to the fullest extent
permitted by law, retain exclusive jurisdiction over all matters arising
out of, and related to, the Chapter 11 Cases and the Plan, as more fully
set forth in the Plan.
V. CONFIRMATION OF THE PLAN
The Bankruptcy Court may confirm the Plan only if it determines that
the Plan complies with the technical requirements of Chapter 11, including,
among other things, that (a) the Plan has properly classified Claims and
Interests, (b) the Plan complies with applicable provisions of the
Bankruptcy Code, (c) the Debtors have complied with applicable provisions
of the Bankruptcy Code, (d) the Debtors have proposed the Plan in good
faith and not by any means forbidden by law, (e) disclosure of "adequate
information" as required by section 1125 of the Bankruptcy Code has been
made, (f) the Plan has been accepted by the requisite votes of all classes
of creditors (except to the extent that "cramdown" is available under
section 1129(b) of the Bankruptcy Code), (g) the Plan is in the "best
interests" of all holders of Claims or Interests in an Impaired Class (see
Section V.C. below), (h) all fees and expenses payable under 28 U.S.C. ss.
1930, as determined by the Bankruptcy Court at the Confirmation Hearing,
have been paid or the Plan provides for the payment of such fees on the
Consummation Date, and (i) the Plan provides for the continuation after the
Consummation Date of all retiree benefits, as defined in section 1114 of
the Bankruptcy Code, at the level established at any time prior to
Confirmation pursuant to sections 1114(e)(1)(B) or 1114(g) of the
Bankruptcy Code, for the duration of the period that the Debtors have
obligated themselves to provide such benefits.
A. VOTING REQUIREMENTS
Under the Bankruptcy Code, only Classes of Claims and Interests that
are "impaired" (as that term is defined in section 1124 of the Bankruptcy
Code) under the Plan are entitled to vote to accept or reject the Plan. A
Class is impaired if the legal, equitable or contractual rights to which
the holders of Claims or Interests are entitled are modified, other than by
curing defaults and reinstating the debt. Pursuant to sections 1126(f) and
(g) of the Bankruptcy Code, Classes of Claims and Interests that are not
impaired are conclusively presumed to have accepted the Plan and are not
entitled to vote on the Plan, and Classes of Claims and Interests whose
holders will receive or retain no property under the Plan are deemed to
have rejected the Plan and are not entitled to vote on the Plan. The
classification of Claims and Interests is summarized, together with
notations as to whether each Class of Claims or Interests is Impaired or
Unimpaired, under the caption "Summary of the Plan -- Certain Matters
Regarding Classification and Treatment of Claims and Interests." Additional
information regarding voting is contained in the instructions accompanying
the Ballots.
This Disclosure Statement and the appropriate Ballot are being
distributed to all holders of Claims who are entitled to vote on the Plan.
There is a separate Ballot designated for each Class of Claims in order to
facilitate vote tabulation; however, all Ballots are substantially similar
in form and substance and the term "Ballot" is used without intended
reference to the Ballot of any specific Class of Claims.
Each Impaired Class of Claims that will (or may) receive or retain
property or any interest in property under the Plan is entitled to vote to
accept or reject the Plan. Ballots will be cast and tabulated on a
consolidated basis, in accordance with the expected substantive
consolidation of the Debtors' Chapter 11 Cases. Each Unimpaired Class of
Claims is deemed to have accepted the Plan and is not entitled to vote to
accept or reject the Plan. Because holders of Class 6 Fines, Penalties, and
Punitive Damages Claims, Class 7 Securities Claims, Class 8 Intercompany
Claims, and Class 9 Equity Securities are not entitled to receive or retain
any property under the Plan, Classes 6, 7, 8, and 9 are presumed to have
rejected the Plan and, therefore, are not entitled to vote on the Plan.
An Impaired Class of Claims will have accepted the Plan if (a) the
holders (other than any holder designated under section 1126(e) of the
Bankruptcy Code) of at least two-thirds in amount of the Allowed Claims
actually voting in such Class have voted to accept the Plan and (b) the
holders (other than any holder designated under section 1126(e) of the
Bankruptcy Code) of more than one-half in number of the Allowed Claims
actually voting in such Class have voted to accept the Plan.
B. CONFIRMATION WITHOUT ACCEPTANCE OF ALL IMPAIRED CLASSES "CRAMDOWN"
The Debtors will request Confirmation of the Plan, as it may be
modified from time to time, under section 1129(b) of the Bankruptcy Code,
and they have reserved the right to modify the Plan to the extent, if any,
that Confirmation pursuant to section 1129(b) of the Bankruptcy Code
requires modification.
Section 1129(b) of the Bankruptcy Code provides that a plan can be
confirmed even if it is not accepted by all impaired classes of Claims and
Interests, as long as at least one impaired Class of Claims has accepted
it. The Bankruptcy Court may confirm the Plan notwithstanding the rejection
of an Impaired Class of Claims or Interests if the Plan "does not
discriminate unfairly" and is "fair and equitable" as to each Impaired
Class that has rejected, or is deemed to have rejected, the Plan.
A plan does not discriminate unfairly within the meaning of the
Bankruptcy Code if a rejecting Impaired class is treated equally with
respect to other classes of equal rank. A plan is fair and equitable as to
a class of secured claims that rejects such plan if, among other things,
the plan provides (a) (i) that the holders of claims in the rejecting class
retain the liens securing those claims, whether the property subject to
those liens is retained by the debtor or transferred to another entity, to
the extent of the allowed amount of such claims and (ii) that each holder
of a claim of such class receives on account of that claim deferred cash
payments totalling at least the allowed amount of that claim, of a value,
as of the effective date of the plan, of at least the value of the holder's
interest in the estate's interest in such property; (b) for the sale,
subject to section 363(k) of the Bankruptcy Code, of any property that is
subject to the liens securing the claims included in the rejecting class,
free and clear of the liens, with the liens to attach to the proceeds of
the sale, and the treatment of the liens on proceeds under clause (a) or
(c) of this subparagraph; or (c) for the realization by such holders of the
indubitable equivalent of such claims.
A plan is fair and equitable as to a class of unsecured claims that
rejects a plan, if, among other things, the plan provides (a) that each
holder of a claim in the rejecting class will receive or retain on account
of that claim property that has a value, as of the effective date of the
plan, equal to the allowed amount of such claim; or (b) that no holder of a
claim or interest that is junior to the claims of such rejecting class will
receive or retain under the Plan any property on account of such junior
claim or interest.
A plan is fair and equitable as to a class of equity interests that
rejects a plan if the plan provides (a) that each holder of an interest
included in the rejecting class receive or retain on account of that
interest property that has a value, as of the effective date of the plan,
equal to the greatest of the allowed amount of any fixed liquidation
preference to which such holder is entitled, any fixed redemption price to
which such holder is entitled, or the value of such interest; or (b) that
no holder of an interest that is junior to the interest of such rejecting
class will receive or retain under the Plan any property on account of such
junior interest.
As described above, holders of Claims and Interests in Classes 6, 7,
8 and 9 will not receive or retain property under the Plan on account of
their Claims and Interests in such Classes. Accordingly, under section
1126(g) of the Bankruptcy Code, such classes are presumed to have rejected
the Plan. The Debtors (a) intend to request confirmation of the Plan under
section 1129(b) of the Bankruptcy Code notwithstanding the deemed rejection
of the Plan by Classes 6, 7, 8 and 9 and (b) reserve the right to seek
confirmation of the Plan under section 1129(b) of the Bankruptcy Code
notwithstanding the rejection of the Plan by other classes of Claims.
The Debtors believe that the Plan may be confirmed pursuant to the
above-described "cramdown" provisions, over the dissent of certain Classes
of Claims and Interests, in view of the treatment proposed for such
Classes. The Debtors believe that the treatment under the Plan of the
holders of Claims and Interests in Classes 6, 7, 8 and 9 will satisfy the
"fair and equitable" test since, although no distribution will be made in
respect of Claims and Interests in such Classes and, as a result, such
Classes will be deemed to have rejected the Plan, no Class junior to such
non-accepting Classes will receive or retain any property under the Plan.
In addition, the Debtors do not believe that the Plan unfairly
discriminates against any dissenting Class because all dissenting Classes
of equal rank are treated equally under the Plan.
C. BEST INTERESTS TEST
Under section 1129(a)(7) of the Bankruptcy Code (the so-called "Best
Interests Test"), to confirm the Plan the Bankruptcy Court must determine
that, with respect to each impaired Class of Claims or Interests, each
holder of an impaired Claim or Interest in such Class either (i) has
accepted the plan or (ii) will receive or retain property of a value, as of
the effective date of the Plan, not less than the amount that such holder
would receive or retain on account of such Claim or Interest if the Debtors
were liquidated under Chapter 7 of the Bankruptcy Code. Accordingly, the
Debtors and their advisors have considered the effect that conversion of
the Chapter 11 Cases to Chapter 7 would have on distributions to various
Classes of Claims and Interests. The comparison of recoveries for Impaired
Classes indicates that recoveries under the Plan are at least equal to, and
in some cases better than, those expected in a liquidation under Chapter 7,
therefore satisfying the Best Interests Test. See "-- Chapter 7 Liquidation
Analysis."
D. CHAPTER 7 LIQUIDATION ANALYSIS
As noted above, the Debtors believe that under the Plan all holders
of Impaired Claims and Impaired Interests will receive property with a
value not less than the value such holder would receive in a liquidation of
the Debtors under Chapter 7 of the Bankruptcy Code. To estimate the likely
returns to holders of Claims and Interests in a Chapter 7 liquidation, the
Debtors determined the amount of liquidation proceeds that would be
available for distribution to, and the allocation of such proceeds among,
the Classes of Claims and Interests based on their relative priority. In
conducting this analysis, the Debtors were assisted by Deloitte & Touche,
LLP, accountants and financial advisors to the Debtors.
The relative priority of distribution of liquidation proceeds with
respect to any Claim or Interest depends on (i) its status as secured,
priority unsecured or nonpriority unsecured and (ii) its relative
subordination (including both contractual subordination, e.g., as is
provided for in the Subordinated Notes and statutory subordination, e.g.,
as is required with respect to the Class 7 Securities Claims by section
510(b) of the Bankruptcy Code. In view of the expected substantive
consolidation of the Debtors' Estates, a consolidated liquidation analysis
is appropriate.
In general, liquidation proceeds would be allocated in the following
priority: (i) first, to the Claims of secured creditors to the extent of
the value of their collateral; (ii) second, to the costs, fees and expenses
of the liquidation, as well as other administrative expenses of the
Debtors' Chapter 7 cases, including tax liabilities incurred in the Chapter
7 cases; (iii) third, to the unpaid Administrative Claims of the Debtors'
Chapter 11 Cases; (iv) fourth, to Priority Tax Claims and other Claims
entitled to priority in payment under section 507 of the Bankruptcy Code;
and (v) fifth, to Unsecured Claims. Here, the allocation of the liquidation
proceeds to holders of Allowed Unsecured Claims must also give effect to
the (1) contractual subordination of the Claims of Subordinated Note
Holders to the Allowed Claims of the Senior Note Holders and the L/C Banks
(which is authorized under section 510(a) of the Bankruptcy Code) and (2)
the statutorily mandated subordination of the Class 7 Securities Claims
pursuant to section 510(b) of the Bankruptcy Code. As described more fully
below, the Debtors' management estimates that, based on the priorities
outlined above, it is highly unlikely that the proceeds remaining after
satisfaction of all Administrative Claims, Priority Tax Claims, Other
Priority Claims, and Secured Claims would be sufficient to satisfy all
Unsecured Claims.
In reaching this conclusion, the Debtors and their advisors made a
number of assumptions, which are set forth below, and estimates regarding
anticipated differences in expenses, fees, asset recoveries, claims
litigation and settlements, recoveries on rates, deposits and escrows, and
total claims filed that could occur if the Debtors' Chapter 11 Cases were
converted to Chapter 7 liquidation.
These estimates and assumptions are inherently subject to significant
uncertainties and contingencies, many of which would be beyond the control
of the Debtors. Accordingly, there can be no assurance as to values that
would actually be realized in a Chapter 7 liquidation, nor can there be any
assurance that a Bankruptcy Court would accept the Debtors' conclusions or
concur with such assumptions in making its determinations under section
1129(a)(7) of the Bankruptcy Code.
1. Assumptions
The following general assumptions were used in formulating the
liquidation analysis:
a. Under section 704 of the Bankruptcy Code, a Chapter 7
trustee is required to, among other things, collect and convert the
property of the debtor's estate to cash and close the estate as
expeditiously as is compatible with the best interests of the parties in
interest. Solely for purposes of preparing this liquidation analysis, it is
assumed that the Debtors' Chapter 11 Cases would be converted to Chapter 7
liquidation cases on September 30, 1997, the anticipated Consummation Date
of the Plan.
b. In addition to the expenses of the Chapter 11 Cases, there
would be certain actual and contingent liabilities and expenses for which
provision would be required in a Chapter 7 liquidation before distributions
could be made to creditors, including the compensation of a bankruptcy
trustee, as well as compensation of counsel and of other professionals
retained by such trustee, asset disposition expenses, applicable taxes,
litigation costs and all unpaid Administrative Claims incurred by the
Debtors during the Chapter 11 Cases that are Allowed in the Chapter 7
cases. For the reasons outlined in subparagraph (c) below, the Debtors
assumed that the fees and expenses of a trustee and its professionals would
materially exceed the fees and expenses expected to be incurred for the
Plan Administrator and its professionals.
c. On average, the Debtors assumed that Disputed Claims would
be settled for higher amounts and accounts receivable would be collected at
lower rates in a Chapter 7 liquidation, primarily because (i) the Chapter 7
trustee would lack the institutional knowledge of the facts and
circumstances underlying such Claims, (ii) no current employees would be
available to assist the trustee in obtaining such knowledge, and (iii) the
Plan Committee, and the knowledge its members have developed during the
pendency of the Chapter 11 Cases, would not be available to the trustee, as
it would to the Plan Administrator. Additionally, because a Chapter 7
trustee is statutorily obligated to act more expeditiously than Reorganized
MAWS is in closing the estate, there could be additional pressure on a
Chapter 7 trustee to settle, rather than litigate, various Claims and
lawsuits on terms less favorable than Reorganized MAWS or the Plan
Administrator could achieve.
d. On average, a Chapter 7, trustee would be less successful in
obtaining the prompt return of millions of dollars in deposits and escrows,
and realizing on the Debtors' remaining non-Cash assets (including tax
refunds and adjustments from USA Waste) primarily for the reasons set forth
in subparagraph (c) above.
e. Initial distributions in a Chapter 7 liquidation scenario
would not be made until approximately 6 months after conversion of the
Cases to Chapter 7, resulting in significant additional accrual of
post-petition interest on the Senior Notes, to the detriment of holders of
the Subordinated Notes in Class 4-B.
2. Distributions; Absolute Priority
Under a Chapter 7 liquidation, all secured claims are required to be
satisfied from the proceeds of the collateral securing such claims before
any such proceeds would be distributed to any other creditors. The Debtors'
liquidation analysis assumes the application of the rule of absolute
priority of distributions with respect to the remaining proceeds of the
Debtors, as well as application of contractual and statutory subordination.
Under that scenario, no junior creditor receives any distribution until all
senior creditors are paid in full. To the extent that proceeds remain after
satisfaction of all Secured Claims, the proceeds would first be distributed
to the holders of Administrative Claims, Priority Tax Claims and Other
Priority Claims, with the balance being made available to satisfy, first,
other nonpriority, unsecured Claims and, last, Interests. Pursuant to
section 510(a) of the Bankruptcy Code, the subordination agreements between
holders of Class 4 Group 4-B Claims (Subordinated Notes) and holders of
Claims in Class 4 Group 4-A (Senior Note Claims and L/C Bank Contingent
Claims) would be enforceable, and holders of Claims in Class 4 Group 4-A
would be entitled to be paid in full in accordance with the terms of their
agreements before holders of Subordinated Notes would be entitled to
receive and retain any distribution. Claims in Class 7 would be statutorily
subordinated. Based on the liquidation assumptions of the Debtors'
management, the Debtors believe that the liquidation and distribution of
the Debtors' assets in a Chapter 7 Case would (i) be sufficient to fully
pay all Secured Claims, Administrative Claims, Priority Tax Claims, Other
Priority Claims, Senior Note Claims, and L/C Bank Contingent Claims (as is
true under the Plan), (ii) be insufficient to afford a distribution to
holders of Fines, Penalties and Punitive Damages Claims, Securities Claims,
Intercompany Claims, and Equity Securities Interests (as is true under the
Plan), and (iii) afford holders of Subordinated Notes Claims and General
Unsecured Claims a smaller distribution then they will receive under the
Plan.
3. Conclusion
In summary, the Debtors believe that a Chapter 7 liquidation of the
Debtors would result in a substantial diminution in the value to be
realized by the holders of certain Claims and delay in making distributions
to all Classes of Claims entitled to a distribution. The Debtors believe
that the holders of Unsecured Claims in Class 4 Group 4-B in particular
would receive significantly less value in a liquidation of the Debtors
under Chapter 7 of the Bankruptcy Code. The Debtors also believe that
holders of Claims in Class 4 Group 4-C also would receive less in Chapter 7
than under the Plan. Finally, the Debtors believe that holders of Claims
and Interests in other Classes would fare the same in a Chapter 7
liquidation as under the Plan. Consequently, the Debtors believe that the
Plan satisfies the requirements of section 1129(a)(7) of the Bankruptcy
Code.
E. CONDITIONS TO CONFIRMATION
The following are conditions precedent to confirmation of the Plan:
1. The Bankruptcy Court must have entered an order approving the
Disclosure Statement with respect to the Plan as containing adequate
information within the meaning of section 1125 of the Bankruptcy Code.
2. The Substantive Consolidation Order, which may be the Confirmation
Order, must be in form and substance reasonably acceptable to the Debtors
and the Creditors' Committee and must been entered by the Bankruptcy Court
prior to or contemporaneously with the Confirmation Order.
F. CONDITIONS TO CONSUMMATION DATE
The following are conditions precedent to the occurrence of the
Consummation Date, each of which may be satisfied or waived in accordance
with Article IX.C of the Plan:
1. The Confirmation Date must have occurred and the Confirmation
Order, in form and substance reasonably acceptable to the Debtors and the
Creditors' Committee, confirming the Plan, as the same may have been
modified, must have been entered and must, among other things, provide
that:
a. the Debtors, Reorganized MAWS, the Plan Committee, and the
Plan Administrator are authorized and directed to take all actions
necessary or appropriate to enter into, implement and consummate the
instruments, releases, and other agreements or documents created in
connection with the Plan;
b. the provisions of the Confirmation Order are nonseverable
and mutually dependent;
c. all executory contracts or unexpired leases assumed and
assigned by the Debtors during the Chapter 11 Cases or under the Plan will
remain in full force and effect for the benefit of the assignee(s) thereof,
notwithstanding any provision in such contract or lease (including those
described in sections 365(b)(2) and (f) of the Bankruptcy Code) that
prohibits such assignment or transfer or that enables, permits or requires
termination of such contract or lease; and
d. the waivers, exculpations, and injunctions described in
Article XII of the Plan are approved.
2. The Plan Administrator Agreement must have been executed and be in
full force and effect.
3. The Confirmation Order shall have become a Final Order.
G. WAIVER OF CONDITIONS
The conditions set forth in Articles IX.A and IX.B of the Plan,
except that set forth in Article IX.A.1 with respect to entry of an order
approving the Disclosure Statement, can be waived in whole or in part by
the Debtors, with the consent of the Creditors' Committee, without further
notice or a hearing.
H. ALTERNATIVES IF THE PLAN IS NOT CONSUMMATED
Since the Debtors have no ongoing operations, the alternatives to the
Plan are very limited and not likely to benefit creditors. Although the
Debtors could theoretically file a new plan of reorganization, the most
likely result if the Plan is not confirmed and consummated is that the
Chapter 11 Cases will be converted to cases under Chapter 7 of the
Bankruptcy Code. The Debtors believe that conversion of these Chapter 11
Cases to Chapter 7 would result in (1) significant delay in distributions
to all creditors who would have received a distribution under the Plan and
(2) diminished recoveries for certain classes of creditors, particularly
holders of Class 4 Claims in Group 4-B and, to a lesser extent, holders of
Class 4 Claims in Group 4-C.
VI. CERTAIN FEDERAL INCOME TAX CONSIDERATIONS
THE FOLLOWING DISCUSSION SUMMARIZES CERTAIN OF THE SIGNIFICANT
FEDERAL INCOME TAX CONSEQUENCES OF THE TRANSACTIONS PROPOSED IN THE PLAN TO
THE DEBTORS AND TO THE HOLDERS OF CLAIMS. THIS DISCUSSION IS PROVIDED FOR
INFORMATIONAL PURPOSES ONLY AND IS BASED ON THE INTERNAL REVENUE CODE OF
1986, AS AMENDED (THE "TAX CODE"), THE TREASURY REGULATIONS PROMULGATED
THEREUNDER, JUDICIAL AUTHORITY AND CURRENT ADMINISTRATIVE RULINGS AND
PRACTICE, ALL OF WHICH ARE SUBJECT TO CHANGE, POSSIBLY WITH RETROACTIVE
EFFECT. THE SUMMARY DOES NOT ADDRESS ALL ASPECTS OF FEDERAL INCOME TAXATION
THAT MAY BE RELEVANT TO A PARTICULAR HOLDER OF A CLAIM IN LIGHT OF ITS
INDIVIDUAL INVESTMENT CIRCUMSTANCES OR TO CERTAIN TYPES OF HOLDERS OF
CLAIMS SUBJECT TO SPECIAL TREATMENT UNDER THE TAX CODE, SUCH AS FOREIGNERS,
FINANCIAL INSTITUTIONS, BROKER-DEALERS, LIFE INSURANCE COMPANIES AND
TAX-EXEMPT ORGANIZATIONS. IT ALSO DOES NOT DISCUSS ANY ASPECTS OF STATE,
LOCAL, OR FOREIGN TAXATION. IN ADDITION, A SUBSTANTIAL AMOUNT OF TIME MAY
ELAPSE BETWEEN THE CONFIRMATION DATE AND THE RECEIPT OF A FINAL
DISTRIBUTION UNDER THE PLAN. EVENTS SUBSEQUENT TO THE DATE OF THIS
DISCLOSURE STATEMENT, SUCH AS THE ENACTMENT OF ADDITIONAL TAX LEGISLATION,
COURT DECISIONS OR ADMINISTRATIVE CHANGES, COULD AFFECT THE FEDERAL INCOME
TAX CONSEQUENCES OF THE PLAN AND THE TRANSACTIONS CONTEMPLATED THEREUNDER.
NO RULING WILL BE SOUGHT FROM THE INTERNAL REVENUE SERVICE (THE "SERVICE")
WITH RESPECT TO ANY OF THE TAX ASPECTS OF THE PLAN AND NO OPINION OF
COUNSEL HAS HERETOFORE BEEN OBTAINED BY THE DEBTORS WITH RESPECT THERETO.
ACCORDINGLY, EACH HOLDER OF A CLAIM IS STRONGLY URGED TO CONSULT WITH HIS
OWN TAX ADVISOR REGARDING THE FEDERAL, STATE, LOCAL AND FOREIGN TAX
CONSEQUENCES OF THE PLAN.
A. FEDERAL INCOME TAX CONSEQUENCES TO THE DEBTORS
1. Asset Dispositions
On April 1, 1997, the Debtors sold substantially all of their assets
to USA Waste pursuant to the Asset Purchase Agreement. This transaction
will result in a significant net gain to the Debtors, but the Debtors
believe, based on preliminary computations, that net operating loss
carryovers ("NOLs") and other deductions available for regular federal
income tax purposes will be more than sufficient to offset all of such
gain. However, as discussed below under "Alternative Minimum Tax", it is
likely that the Debtors will have to pay at least 2% federal income tax on
their taxable income prior to reduction for NOLs.
2. Cancellation of Indebtedness Income
In general, the Debtors will realize cancellation of indebtedness
("COD") income to the extent that a creditor receives an amount of
consideration in respect of its Claim that is less than the amount of such
Claim. For this purpose, the amount of consideration received by a creditor
in exchange for its Claim will equal the amount of Cash received by such
creditor. Because debts that arise prior to confirmation of a liquidating
chapter 11 plan are not formally discharged under the Bankruptcy Code, it
is uncertain when such debts, if not paid in full, would be treated as
discharged for federal income tax purposes. If the Debtors are treated as
realizing COD income, however, such income however, should be excluded
under Section 108(a) of the Tax Code. If the Debtors exclude COD income
under Section 108(a) of the Tax Code, under Section 108(b) of the Tax Code,
the Debtors will be required to reduce their NOLs and certain other tax
attributes by the amount of COD not included in taxable income. Such
reduction occurs, however, only as of the beginning of the taxable year
following the year of the discharge. To the extent that the Debtors' NOLs
are used to offset gain from asset dispositions in the 1997 taxable year,
such NOLs would not be subject to reduction as a consequence of any
exclusion of COD. If the COD exclusion were to exceed the amount of the
Debtors' remaining NOLs, then the Debtors would be required to reduce the
tax basis of their remaining assets, if any, by the amount of such excess,
but such reduction in tax basis should be limited to the excess of the
aggregate tax basis of the Debtors' assets immediately after the discharge
over the aggregate of the liabilities of the Debtors immediately after the
discharge. If the remaining COD exclusion were to exceed the amount of tax
basis and other tax attributes available to be reduced, such remaining COD
would still be excluded from income.
3. Utilization of NOLs
Although the Debtors will recognize income in connection with the
sale of substantially all of their assets, the Debtors believe that they
will have sufficient available NOLs and/or current year losses to offset
such income (subject to a possible federal alternative minimum tax). In
addition, the Debtors believe that any remaining NOLs not utilized to
offset income recognized in connection with such asset sale should be
available to offset any income recognized to the Debtors after the
Confirmation Date. However, there is no assurance that the Service would
not take a contrary position. In particular, given the lack of
authoritative guidance as to the survival and utilization of NOLs in the
context of a liquidating Chapter 11 plan and under the particular facts and
circumstances of the Debtors' cases, there is a risk that the Debtors' NOLs
and any losses incurred through the end of the taxable year in which the
Plan is confirmed would not be available to offset any income recognized by
the Debtors in future taxable years.
4. Alternative Minimum Tax
Alternative minimum tax ("AMT") must be paid by a corporation when
and to the extent that its liability for AMT exceeds its regular tax
liability. AMT is equal to 20% of alternative minimum tax income ("AMTI")
less certain allowable credits. AMTI generally equals regular taxable
income, increased or decreased by certain adjustments and preference
items. However, only 90% of AMTI can be offset with AMT NOLs. AMT
liability, regardless of the amount of available AMT NOLs, will be at
least 20% of the 10% of AMTI that cannot be offset with AMT NOL carryovers.
Therefore, despite the Debtors' substantial NOLs, it is likely that the
Debtors will have to pay at least 2% federal income tax on their taxable
income prior to reduction for NOLs.
B. FEDERAL INCOME TAX CONSEQUENCES TO HOLDERS OF CLAIMS
The federal income tax consequences of the Plan to holders of Claims
will depend, among other things, on the origin of the Claim, whether the
holder reports income on the accrual or cash method of accounting, and
whether the holder has taken a bad debt deduction with respect to its
Claim. The Plan provides that certain holders of Claims may receive Cash in
exchange for their Claims. Generally, a holder of Claim who receives Cash
will be required to recognize ordinary income to the extent that the amount
received is attributable to interest that has been accrued while in its
hands (to the extent not previously taken into income by such holder of a
Claim). In addition, a holder of a Claim who receives Cash pursuant to the
Plan in exchange for his Claim generally should recognize gain or loss
equal to the difference, if any, between the amount of such Cash (other
than the portion thereof attributable to accrued interest) and the holder's
adjusted tax basis in the Claim. The character of any gain or loss
recognized by a holder of a Claim as capital or ordinary gain or loss and,
in the case of capital gain or loss, as short-term or long-term, will
depend on a number of factors, including, but not limited to: (i) the
nature of origin of the Claim; (ii) the tax status of the holder of the
Claim; (iii) whether the holder is a financial institution; (iv) whether
the Claim is a capital asset in the hands of the holder; (v) whether the
Claim has been held for more than one year; and (vi) the extent to which
the holder previously claimed a loss or bad debt deduction.
In addition, a substantial amount of time may elapse between the
Confirmation Date and the receipt by holders of Claims of a final
distribution under the Plan. Both the timing and the ultimate amount of the
final distribution are uncertain. Accordingly, the delay in the receipt of
final distribution may defer the recognition of a loss to holders of
Claims. Holders of Claims should consult their own tax advisors to
determine the federal income tax consequences to them of the receipt of
distributions under the Plan.
C. INFORMATION REPORTING AND BACKUP WITHHOLDING
Under the backup withholding rules of the Tax Code, holders of Claims
may be subject to backup withholding at the rate of 31 percent with
respect to payments made pursuant to the Plan unless such holder (i) is a
corporation or comes within certain other exempt categories and, when
required, demonstrates this fact, or (ii) provides a correct taxpayer
identification number and certifies under penalties of perjury that the
taxpayer identification number is correct and that it is not subject to
backup withholding due to a failure to report all dividends and interest.
Any amount withheld under these rules will be credited against the holder's
federal income tax liability. Holders of Claims may be required to
establish an exemption from backup withholding or to make arrangements with
respect to the payment thereof.
THE FOREGOING IS INTENDED ONLY AS A SUMMARY OF CERTAIN FEDERAL INCOME
TAX ASPECTS OF THE PLAN AND IS NOT A SUBSTITUTE FOR CAREFUL TAX PLANNING
WITH A TAX PROFESSIONAL. THE FEDERAL, STATE, LOCAL, AND FOREIGN TAX
CONSEQUENCES OF THE PLAN ARE COMPLEX AND, IN MANY AREAS, UNCERTAIN.
ACCORDINGLY, EACH HOLDER OF A CLAIM IS STRONGLY URGED TO CONSULT HIS OWN
TAX ADVISOR.
VII. VOTING REQUIREMENTS
On July __, 1997, the Bankruptcy Court entered an order (the
"Procedures Order"), among other things, approving this Disclosure
Statement, setting voting procedures, scheduling the hearing on
confirmation of the Plan, and approving the notice of the confirmation
hearing and certain related matters (the "Confirmation Hearing Notice"). A
copy of the Confirmation Hearing Notice is enclosed with this Disclosure
Statement. It sets forth in detail, among other things, procedures
governing voting deadlines and objection deadlines. The Confirmation
Hearing Notice and the instructions attached to the Ballot, if any,
accompanying this Disclosure Statement should be read in connection with
this section of this Disclosure Statement.
If you have any questions about the Voting procedure for voting your
Claim or the packet of material you received, please contact the Voting
Agent:
Donlin, Recano & Co., Inc.
419 Park Avenue South, Suite 1206
New York, New York 10016
(212) 481-1411
If you wish to obtain an additional copy of the Plan, this Disclosure
Statement, or any exhibits to such documents, at your own expense, unless
otherwise specifically required by Fed. R. Bankr. P. 3017(d), please
contact the Voting Agent.
A. SPECIAL NOTE FOR HOLDER OF SECURITIES
The record date for determining which holders of public securities of
the Debtors (the "Securities") are entitled to vote on the Plan is July __,
1997. The indenture trustees, agents, or servicers, as the case may be, for
the Securities will not vote on behalf of the holders of such Securities.
Holders must submit their own Ballots.
1. Beneficial Owners
a. Any beneficial owner holding Securities as record holder in
it own name should vote on the Plan by completing and signing the enclosed
Ballot and returning it directly to the Voting Agent on or before the
Voting Deadline using the enclosed self-addressed, stamped envelope.
b. Any beneficial owner holding Securities in "street name"
through a brokerage firm, bank, trust company, or other nominee should vote
on the Plan by one of the following two methods:
i. Complete and sign the enclosed beneficial owner
Ballot. Return the Ballot to your nominee as promptly as possible and in
sufficient time to allow such nominee to process the Ballot and return it
to the Voting Agent by the Voting Deadline. If no self-addressed, stamped
envelope was enclosed for this purpose, contact the Voting Agent for
instructions; or
ii. Complete and sign the Pre-Validated Ballot (as
defined below) provided to you by your bank, brokerage firm, trust company
or other nominee. Return the Pre-Validated Ballot to the Voting Agent by
the Voting Deadline using the return envelope provided in the Solicitation
Package.
Any Ballot returned to a nominee by a beneficial owner will not be
counted for purposes of acceptance or rejection of the Plan until such
nominee properly completes and delivers to the Voting Agent a master ballot
(the "Master Ballot") that reflects the vote of such beneficial owner.
If any beneficial owner owns Securities through more than one broker,
bank, or other nominee, such beneficial owner may receive multiple mailings
containing the Ballots. Each such beneficial owner should execute a
separate Ballot for each block of Securities that it holds through any
particular nominee and return each Ballot to the respective nominee in the
return envelope provided therewith. Beneficial owners who execute multiple
Ballots with respect to Securities held through more than one nominee must
indicate on each Ballot the names of ALL such other nominees and the
additional amounts of such Securities so held and voted. If a beneficial
owner holds a portion of the Securities through a nominee and another
portion as a record holder, such owner should follow the procedures
described in subparagraph (1) (a) above to vote the portion held of record
and the procedures described in subparagraph (1) (b) above to vote the
portion held through a nominee or nominees.
2. Brokerage Firm, Banks, And Other Nominees
An entity (other than a beneficial owner) which is the registered
holder of Securities should vote on behalf of the beneficial owners of such
Securities by (i) immediately distributing a copy of the Disclosure
Statement and accompanying materials, all appropriate Ballots, and
self-addressed return envelopes to all beneficial owners for whom it holds
such Securities, (ii) collecting completed Ballots from its beneficial
owners, and (iii) completing a Master Ballot compiling the votes and other
information from the Ballots so collected, and (iv) transmitting such
Master Ballot to the Voting Agent on or before the Voting Deadline. Such
entity may also pre-validate a ballot by completing all information to be
entered on the Ballot (the "Pre-Validated Ballot") and forwarding the
Pre-Validated Ballot to the beneficial owner for voting. A proxy
intermediary acting on behalf of a brokerage firm or bank may follow the
procedures outlined in the preceding sentence to vote on behalf of such
party.
B. FIDUCIARIES AND OTHER REPRESENTATIVES
If a Ballot is signed by a trustee, executor, administrator,
guardian, attorney-in-fact, officer of a corporation, or another acting in
a fiduciary or representative capacity, such person should indicate such
capacity when signing and, unless otherwise determined by the Debtors, must
submit proper evidence satisfactory to the Debtors of authority to so act.
Authorized signatories should submit separate Ballots for each beneficial
owner for whom they are voting.
UNLESS THE BALLOT OR MASTER BALLOT BEING FURNISHED IS TIMELY
SUBMITTED TO THE VOTING AGENT ON OR PRIOR TO THE VOTING DEADLINE, SUCH
BALLOT WILL NOT BE COUNTED.
C. PARTIES IN INTEREST ENTITLED TO VOTE
Under section 1124 of the Bankruptcy Code, a class of claims or
interests is deemed to be "impaired" under a plan unless (i) the plan
leaves unaltered the legal, equitable, and contractual rights to which such
claim or interest entitles the holder thereof or (ii) notwithstanding any
legal right to an accelerated payment of such claim or interest, the plan
cures all existing defaults (other than defaults resulting from the
occurrence of events of bankruptcy) and reinstates the maturity of such
claim or interest as it existed before the default.
In general, a holder of a claim or interest may vote to accept or to
reject a plan if (i) the claim or interest is "allowed," which means
generally that no party in interest has objected to such claim or interest,
and (ii) the claim or interest is impaired by the Plan. If, however, the
holder of an impaired claim or interest will not receive or retain any
distribution under the plan in respect of such claim or interest, the
Bankruptcy Code deems such holder to have rejected the plan, and,
accordingly, holders of such claims and interests do not actually vote on
the Plan. If a claim or interest is not impaired by the Plan, the
Bankruptcy Code deems the holder of such claim or interest to have accepted
the plan and, accordingly, holders of such claims and interests do not
actually vote on the Plan.
Any Claim as to which an objection has been timely filed and has not
been withdrawn or dismissed is not entitled to vote, unless the Bankruptcy
Court, pursuant to Fed. R. Bankr. P. 3018(a), upon application of the
holder of the Claim with respect to which there has been objection,
temporarily allows the Claim in an amount that the Bankruptcy Court deems
proper for the purpose of accepting or rejecting the Plan. The procedures
for seeking such temporary allowance are set forth in the Procedures Order.
The Procedures Order also sets forth assumptions and procedures for
tabulating Ballots that are not completed fully or correctly.
A vote may be disregarded if the Bankruptcy Court determines,
pursuant to section 1126(e) of the Bankruptcy Code, that it was not
solicited or procured in good faith or in accordance with the provisions of
the Bankruptcy Code.
D. CLASSES IMPAIRED UNDER THE PLAN
The following Classes of Claims are Impaired under the Plan and are
entitled to vote on the Plan. Class 3 Secured Claims; Class 4 Unsecured
Claims; and Class 5 L/C Bank Contingent Claims.
Class 6 Fines, Penalties and Punitive Damages Claims, Class 7
Securities Claims, Class 8 Intercompany Claims, and Class 9 Equity
Securities will not receive or retain any distribution or property under
the Plan on account of their Claims or Interests. Accordingly, they are
presumed, under section 1126(g) of the Bankruptcy Code, to have rejected
the Plan, and they are therefore not entitled to vote to accept or reject
the Plan.
All other Classes of Claims are not impaired under the Plan, are
deemed, under section 1126(f) of the Bankruptcy Code, to have accepted the
Plan, and accordingly are not entitled to vote to accept or reject the
Plan. Acceptances of the Plan are being solicited only from those who hold
Claims in an Impaired Class whose members will (or may) receive a
distribution under the Plan.
VIII. ADDITIONAL INFORMATION
The statements contained herein concerning the provisions of any
document are only summaries and are not necessarily complete. Thus, parties
interested in a particular provision of a document should read the document
itself. Each such statement is qualified in its entirety by such reference
to the actual document. All of the Exhibits to the Plan and this Disclosure
Statement and other pleadings and orders relating to the Debtors' Chapter
11 Cases are available for inspection during regular business hours (8:00
a.m. to 4:00 p.m. weekdays' (except legal holidays) at the Office of the
Clerk of the Court, United States Bankruptcy Court for the District of
Delaware, Marine Midland Plaza, 824 Market Street, 5th Floor, Wilmington,
Delaware 19801.
IX. CONFIRMATION HEARING; OBJECTIONS TO
CONFIRMATION; RECOMMENDATION
This Disclosure Statement was approved by the Bankruptcy Court after
notice and a hearing. The Bankruptcy Court has determined that this
Disclosure Statement contains information adequate to permit holders of
Claims to make an informed judgment about the Plan. Such approval, however,
does not mean that the Bankruptcy Court recommends either acceptance or
rejection of the Plan.
A. HEARING ON AND OBJECTIONS TO CONFIRMATION
1. Confirmation Hearing
The hearing on confirmation of the Plan has been scheduled to
commence on September 17, 1997, at 9:30 a.m., Eastern Daylight Time, or as
soon thereafter as counsel may be heard, before the Honorable Peter J.
Walsh, in the United States Bankruptcy Court, Marine Midland Plaza, 824
Market Street, 6th Floor, Wilmington, Delaware 19801. The Confirmation
Hearing may be adjourned from time to time by announcing such adjournment
in open court or otherwise, all without further notice to parties in
interest, and the Plan may be modified by the Debtors pursuant to section
1127 of the Bankruptcy Code prior to, during, or as a result of that
hearing, without further notice to parties in interest.
2. Date Set For Filing Objections To Confirmation
Objections, if any, to confirmation of the Plan must be filed with
the Bankruptcy Court and received by the parties listed in the Confirmation
Hearing Notice no later than 4:00 p.m., Eastern Daylight Time, on September
3, 1997. A copy of the Confirmation Hearing Notice is enclosed with this
Disclosure Statement.
B. RECOMMENDATION
THE DEBTORS AND THE CREDITORS' COMMITTEE BELIEVE THAT THE
CONFIRMATION OF THE PLAN IS IN THE BEST INTERESTS OF THE DEBTORS, THEIR
ESTATES, AND THEIR CREDITORS. The Plan provides for an equitable and early
distribution to creditors. The Debtors believe that any alternative to
confirmation of the Plan, such as liquidation under Chapter 7 or attempts
by another party in interest to file a plan, could result in significant
delays, litigation, and costs, as well as a reduction in the distributions
to holders of certain Classes of Claims, particularly those in Class 4
Group 4-B (Subordinated Note Claims), and delays in making distributions to
all creditors. FOR THESE REASONS, THE DEBTORS URGE YOU TO RETURN YOUR
BALLOT AND VOTE TO ACCEPT THE PLAN.
Dated: Wilmington, Delaware
June 20, 1997
MID-AMERICAN WASTE SYSTEMS, INC., et al.,
Debtors-in-Possession
By:_________________________________________
Name: Gene A. Meredith
Title: President and Chief Executive Officer
of Mid-American Waste Systems, Inc.
and the Subsidiaries
SKADDEN, ARPS, SLATE, MEAGHER & FLOM LLP
Attorneys for Mid-American Waste Systems,
Inc., et al.,
Debtors-in-Possession
By:______________________________________
Alesia Ranney-Marinelli (ID #700)
Lawrence V. Gelber
919 Third Avenue
New York, New York 10022-3897
(212) 735-3000
-and-
Anthony W. Clark (ID #2051)
P.O. Box 636
One Rodney Square
Wilmington, Delaware 19899
(302) 651-3000
EXHIBIT A
JOINT LIQUIDATING PLAN OF
REORGANIZATION OF MID-AMERICAN
WASTE SYSTEMS, INC. AND SUBSIDIARIES
