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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
December 20, 1997
Date of Report (Date of earliest event reported)
Princeton American Corporation
(Exact name of registrant as specified in its charter)
Nevada 0-5141 22-1848644
(State or other jurisdiction (Commission (IRS Employer
of incorporation) File Number) Identification No.)
300 W. Clarendon, Suite 210, Phoenix, Arizona 85013
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (602) 274-4939
N/A
(Former name or former address, if changed since last report.)
ITEM 1. CHANGES IN CONTROL OF REGISTRANT. N/A
ITEM 2. ACQUISITION OR DISPOSITION OF ASSETS. N/A
ITEM 3. BANKRUPTCY OR RECEIVERSHIP.
On December 20, 1997, the Joint Plan of Reorganization for the
Company became effective. The Company had been in Chapter 11 reorganization
since December 11, 1996, in the United States Bankruptcy Court for the District
of Arizona, Case No. 96-13675 PHX JMM. The plan was filed by the Chapter 11
Trustee Roger W. Brown and William C. Taylor, and was confirmed by the
Bankruptcy Court on November 20, 1997. A secured creditor has filed a motion for
reconsideration of the confirmation order, but the order has not been stayed so
the plan became effective according to its terms notwithstanding that motion,
but subject to any later ruling on that motion. A copy of the plan is attached
hereto as Exhibit 1.
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Under the plan, the company's new board of directors consists of
William Taylor, Roderick W. Mckinnon III and Scott E. Bird, Jr.
The plan provides that existing stock interests of the common stock
holders of the company shall be retained, provided that the stockholder filed a
timely proof of interest or held less than 10,000 shares. The stockholdings of
shareholders who held more than 10,000 shares and failed to file a timely and
proper proof of interest will be eliminated, pursuant to the Court's order
establishing the September 17, 1997, deadline for filing proofs of interest.
However, many stockholders did not receive timely notice of the necessity to
file proofs of interest, so proofs of interest that were filed late but promptly
after such notice was received will likely be allowed. Within the next 60 days
the Company intends to determine what stockholdings should be upheld, file
objections to those for which no proper proof of interest was timely filed, and
ultimately issue new certificates to stockholders holding valid interests as of
the November 20 confirmation date.
The plan also provides that (a) all preferred stock is converted to
common stock; (b) all claims based on warrants and options are to be satisfied
in common stock; (c) certain claims shall be subordinated to the priority of
common stock (and one creditor has tentatively been allowed a $250,000 claim
that, if upheld, will be satisfied by an issuance of common stock of that value
based on the percentage ownership such stock would represent of the fair market
value of the estate's assets); (d) the claim of William C. Taylor is allowed and
satisfied by an issuance of common stock representing forty percent (40%) of the
total of all stock that will remain outstanding after the plan is effective and
fully implemented; and (e) the subsidiaries 4808 Corporation and 88
Redevelopment Corporation are merged into the corporation.
The schedules filed by the corporation's prior management reflected
a total of 18,443,586 common shares outstanding, but information received from
the corporation's stock transfer agent, American Stock Transfer, reflects that
there may be as many as 26 million shares outstanding.
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For information on the assets and liabilities of the company as of
the date of the order of confirmation, see the disclosure statement that was
filed with the bankruptcy court, attached hereto as Exhibit 2.
ITEM 4. CHANGES IN REGISTRANT'S CERTIFYING ACCOUNTANT.
The company is in the process of selecting a new certifying accountant.
ITEM 5. OTHER EVENTS. N/A
ITEM 6. RESIGNATIONS OF REGISTRANT'S DIRECTORS.
As a result of confirmation of the plan, the current directors, Dale
E. Eyman, David S. Smith and Michael B. Mooney, will be replaced by William
Taylor, Roderick W. Mckinnon III and Scott E. Bird, Jr., effective as of the
December 20, 1997 effective date of the plan.
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS.
The plan of reorganization is attached hereto as Exhibit 1 and the
disclosure statement is attached hereto as Exhibit 2. Once new management is in
place pursuant to the plan, it will engage new accountants to prepare financial
statements to come into compliance with SEC reporting obligations within the
first quarter of 1998, pursuant to Plan Paragraph 3.9.
ITEM 8. CHANGE IN FISCAL YEAR.
The plan does not change the company's fiscal year.
ITEM 9. SALES OF EQUITY SECURITIES PURSUANT TO REGULATION S.
Testimony submitted in the bankruptcy case reveals that the company sold a
substantial number of equity securities pursuant to Regulation S, and this may
account for the difference in number of shares of common stock believed to be
outstanding as referred to in Item 3 above. The plan proponents, however, do not
have sufficient information about such sales to comply with this reporting
requirement.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
Princeton American Corporation
Date: 12/23/97 By /s/ Roger W. Brown
------------ -------------------------------------
Roger W. Brown, Trustee (Signature)
Roger W. Brown
--------------
(Print Name)
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COPY
OF
ORIGINAL FILED ON THIS DATE
NOV. 19, 1997
KEVIN E. O'BRIEN
CLERK U.S. BANKRUPTCY
COURT. DIST. OF AZ
Exhibit 1
IN THE UNITED STATES BANKRUPTCY COURT
DISTRICT OF ARIZONA
In Re: )
) Chapter 11
Princeton American Corporation, )
) Case No. 96-13675 PHX JMM
Debtor, )
) ORDER CONFIRMING
EID: 22-1848644 ) JOINT PLAN OF
) REORGANIZATION
)
The the Court having found in its Memorandum Decision Containing Findings
of Fact and Conclusions of Law dated November 10, 1997 that the requirements for
confirmation set forth in 11 U.S.C. Section 1129(a) and (b) have been satisfied
with respect to the Joint Plan of Reorganization filed by Trustee Roger W. Brown
and William C. Taylor on August 28, 1997, as modified by the modification dated
October 16, 1997 and as further modified by the modification dated November 14,
1997 (collectively the "Joint Plan"),
IT IS ORDERED that the Joint Plan is confirmed. A copy of the Joint Plan
with the modifications incorporated is attached.
Dated this 19th day of November, 1997.
JAMES M. MARLAR
---------------
Hon. James M. Marlar
U.S. Bankruptcy Judge
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LEWIS AND ROCA LLP
40 North Central Avenue
Phoenix, Arizona 85004-4429
Facsimile (602) 262-5747
Telephone (602) 262-5311
Gerald K. Smith (001428)
Randolph J. Haines (005440)
Attorneys for William Taylor
UNITED STATES BANKRUPTCY COURT
DISTRICT OF ARIZONA
In re: )
) No. 96-13675 PHX JMM
PRINCETON AMERICAN CORPORATION, )
) Chapter 11
Debtor. )
) TRUSTEE'S AND TAYLOR'S JOINT
EID: 22-1848644 ) PLAN OF REORGANIZATION
)
)
Trustee Roger W. Brown ("Trustee") and creditor and equity security
holder William C. Taylor ("Taylor") submit the following Joint Plan of
Reorganization for Princeton American Corporation ("Debtor"). This Joint Plan
was originally dated August 28, 1997, and incorporates the modifications dated
October 16, 1997 and November 14, 1997.
ARTICLE I
DEFINITIONS
Terms used in this Plan have the meanings specified in the
Bankruptcy Code or Rules unless the context clearly otherwise requires or one of
the following definitions applies:
1.1 ADMINISTRATIVE EXPENSE CLAIM: Any cost or expense of administration
incurred in connection with this chapter 11 case after the filing of the
petition commencing this case and before the Confirmation Date, including: (1)
the actual, necessary costs and expenses of preserving Debtor's estate pursuant
to Code Section 503(b); (2) claims for compensation for legal and other
professional services and costs and expenses pursuant to Code Sections 330
and 503(b), as allowed by the Bankruptcy Court; and (3) fees and charges
assessed against Debtor's estate pursuant to 28 U.S.C. Section 1930.
1.2 ALLOWED: A claim (other than an Administrative Claim) is Allowed when
(a) it is scheduled by Debtor as undisputed and no objection is filed by the
Objection Bar Date; (b) a proper proof of claim is filed by the Claims Bar Date
and no objection is filed by the Objection Bar Date; or (c) allowed by entry of
the Court's Final Order. As to an Administrative Expense Claim, "Allowed" means
approved by Final Order, after notice and hearing as required by the Code, of an
application for payment of an Administrative Expense Claim filed by the deadline
established by the Court, but not including any Administrative Claim which may
have previously been paid.
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1.3 ASSETS: All of the property of Debtor's estate as defined in Code
Section 541, all property of the Debtor's subsidiaries that are merged into the
Debtor pursuant to this Plan, and all property recovered or brought into the
estate pursuant to Code Section 550.
1.4 BAR DATE: The dates established by Court order by which all proofs of
claim and proofs of interests must be filed (except for claims arising from the
rejection of executory contracts or leases and claims arising from recoveries
pursuant to Code Section 550) in order to become Allowed and participate in
distributions pursuant to this Plan (except as otherwise provided in paragraph
5.9).
1.5 BIOSOME: Biosome Products, Inc., a subsidiary of the Debtor in which
the Debtor owns 80% of the equity interest, engaged in the personal care
products industry.
1.6 CHINO VALLEY LAND: Approximately five (5) acres of raw land located in
Chino Valley, Yavapai County, Arizona, owned by the Debtor.
1.7 CHINO VALLEY RECEIVABLE: Two notes receivable of approximately $46,000
payable to the Debtor.
1.8 CODE OR BANKRUPTCY CODE: Title 11 of the United States Code, as
amended, and related provisions.
1.9 COMMITTEE: The Official Unsecured Creditors' Committee appointed in
this Case pursuant to Code Section 1102(a).
1.10 CONFIRMATION: The Court's entry of an order confirming this Plan in
accordance with the Code.
1.11 CONFIRMATION DATE: The date on which the Confirmation Order is
entered on the Court's docket.
1.12 CONFIRMATION ORDER: The Court's appealable order confirming the Plan
pursuant to Code Section 1129.
1.13 COURT OR BANKRUPTCY COURT: The United States Bankruptcy Court for the
District of Arizona.
1.14 DEBTOR: Princeton American Corporation.
1.15 DISPUTED CLAIMS AND DISPUTED INTERESTS: Any claim or interest as to
which an objection is filed by the Objection Bar Date and which is not resolved
by entry of the Court's Final Order.
1.16 EFFECTIVE DATE: Thirty (30) days after entry of the Confirmation
Order.
1.17 88 REDEVELOPMENT: A Nevada corporation that is a wholly owned
subsidiary of the Debtor and that owns the office building and other
improvements located at 2222 E. Camelback Road, Phoenix, Arizona.
1.18 FINAL ORDER: An order, judgment, ruling, or other decree issued by
the Court which order, judgment, or other decree has not been reversed, stayed,
modified, or amended, and as to which (1) the time to appeal or to seek review,
rehearing, or certiorari has expired and as to which no appeal or petition for
review, rehearing, or certiorari is pending or has been timely filed; or, (2)
any appeal that has been or may be taken or any petition for certiorari that
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has been or may be filed has been resolved by the highest court to which the
order or judgment was appealed or from which certiorari was sought.
1.19 4808 CORPORATION: A Nevada corporation that is a wholly owned
subsidiary of the Debtor and that owns the office building and other
improvements located at 4808 N. 22d St., Phoenix, Arizona.
1.20 4808 N. 22D ST.: An office building located at 4808 N. 22d St.,
Phoenix, Arizona, owned by the Debtor's wholly owned subsidiary 4808
Corporation.
1.21 GSK: GSK Products, Inc., a subsidiary of the Debtor in which the
Debtor owns 50% of the equity interest, engaged in the personal care product
industry.
1.22 INTERESTS: Equity ownership interests held by virtue of ownership of
Debtor's stock.
1.23 INTERIM MANAGER: The manager of the Reorganized Debtor pursuant to
paragraph 7.3 of the Plan, from the Confirmation Date until the Board of
Directors meets and appoints officers for the Reorganized Debtor.
1.24 JOINT PLAN: This Plan of Reorganization, jointly proposed by Taylor
and Trustee, as it may be modified.
1.25 LONE MOUNTAIN: An approximate 4.2 acre parcel of undeveloped real
property located at the northwest corner of Scottsdale Road and Lone Mountain,
Maricopa County, Arizona, owned by the Debtor.
1.26 MINCO: Minco American Corporation, a predecessor in interest to the
Debtor, which continues to exist as a corporation whose shareholders are also
shareholders of the Debtor.
1.27 OBJECTION BAR DATE: The date established by Court order by which all
objections to claims (either proofs of claim or claims as scheduled) must be
filed in order for the claim not to be deemed an Allowed Claim for purposes of
distribution.
1.28 PETITION DATE: December 11, 1996, the date of the filing of the
petition initiating this bankruptcy case.
1.29 PLAN: This Plan of Reorganization, as it may be modified.
1.30 PLAN PROPONENTS: Trustee and Taylor.
1.31 PRINWEST: Prinwest Corporation, a wholly owned subsidiary of the
Debtor that owned a warehouse that was sold prepetition.
1.32 REORGANIZED DEBTOR: The Debtor after the Effective Date.
1.33 SATURN RESOURCES: Saturn Resources, Inc., a Nevada corporation that
was a wholly owned subsidiary of the Debtor prepetition but whose stock was
conveyed to David Smith prepetition, and that owns 74 lots in Peoria, Arizona
that are selling to Miller Mobile Homes for $9,200 per lot.
1.34 SUBSTANTIAL CONSUMMATION: For purposes of 11 U.S.C. Section 1127(b),
substantial consummation shall occur upon commencement of distributions to Class
9 general unsecured creditors.
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1.35 TAYLOR: William C. Taylor, a creditor and equity security holder of
the Debtor.
1.36 TRUSTEE: The Chapter 11 Trustee appointed and serving pursuant to
Code Section 1104, Roger W. Brown.
1.37 2222 E. CAMELBACK ROAD: An office building located at 2222 E.
Camelback Road, Phoenix, Arizona, owed by the Debtor's wholly owned subsidiary
88 Redevelopment.
ARTICLE II
CLASSIFICATION OF CLAIMS AND INTERESTS
All Allowed Claims and Interests are placed in the following classes:
2.1 CLASS 1 - ADMINISTRATIVE EXPENSE CLAIMS. All claims filed pursuant to
Code Section 503(B).
2.2 CLASS 2 - PRIORITY WAGE CLAIMS: All claims for wages, salaries or
commissions as defined in Section 507(a)(3) of the Code.
2.3 CLASS 3 - PRIORITY EMPLOYEE BENEFIT CLAIMS: All claims of employees
for contributions to an employee benefit plan as defined in Section 507(a)(4) of
the Code.
2.4 CLASS 4 - PRIORITY TAX CLAIMS: All unsecured claims of governmental
units for taxes as defined in Section 507(a)(8) of the Code.
2.5 CLASS 5 - PROPERTY TAX CLAIMS: All claims for ad valorem taxes owed to
any governmental unit, secured by any Asset.
2.6 CLASS 6 - VANDERFORD SECURED CLAIM that is secured by a first deed of
trust on 2222 E. Camelback Road and a second deed of trust on 4808 N. 22d St.
2.7 CLASS 7 - DBK SECURED CLAIM that is secured by a first deed of trust
on 4808 N. 22d St.
2.8 CLASS 8 - ADMINISTRATIVE CONVENIENCE CLASS: All unsecured claims that
are less than Five Thousand Dollars ($5,000), or the holders of which elect to
reduce their claims to $5,000 and waive any claim for any balance.
2.9 CLASS 9 - GENERAL UNSECURED CLAIMS: All unsecured claims that are not
otherwise classified.
2.10 CLASS 10 - INTERCOMPANY CLAIMS: All unsecured claims of the Debtors'
subsidiaries that are being merged into the Debtor pursuant to this Plan.
2.11 CLASS 11 - PREFERRED STOCK: All equity Interests represented by
preferred stock in the Debtor.
2.12 CLASS 12 - COMMON STOCK: All equity Interests represented by common
stock in the Debtor, all equity interests convertible into common stock of the
Debtor including warrants and options, and all claims subordinated to the level
of Interests pursuant to Code Sections 510(b) or (c).
2.13 CLASS 13 - TAYLOR CLAIMS: All claims held by Taylor.
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2.14 AUTOMATIC ELIMINATION OF UNOCCUPIED CLASSES. In the event any of the
designated classes does not contain at least one Allowed Claim or Interest, such
class shall automatically be deemed eliminated from this Plan.
ARTICLE III
PAYMENT OF ADMINISTRATIVE EXPENSE CLAIMS
All Allowed Administrative Expense Claims shall be paid, in cash, on
the later of the Effective Date, when due in accordance with the ordinary
business terms governing the payment of such claims, when Allowed, or at such
time and on such terms as may be agreed to by the claimant and the Reorganized
Debtor. All fees payable under 28 U.S.C. Section 1930 that have not been paid as
of the Confirmation Date shall be paid on the Effective Date.
ARTICLE IV
DESIGNATION AND TREATMENT OF UNIMPAIRED CLASSES
Classes 1, 2, 3 and 4 are unimpaired, and all Allowed Claims in such
classes shall be paid in full, in cash on the Effective Date or when Allowed,
whichever is later. Pursuant to Code Section 1126(f), all holders of claims in
such classes are conclusively presumed to have accepted the Plan so the holders
of such claims will not be permitted to vote.
ARTICLE V
DESIGNATION AND TREATMENT OF IMPAIRED CLASSES
5.1 IMPAIRED CLASSES GENERALLY. Classes 5 through 12 are impaired.
5.2 CLASS 5 SECURED TAX CLAIMS. The holders of Allowed Secured Tax Claims
in Class 5 shall retain their liens and will be paid the Allowed amount of their
claims, together with interest in an amount and at a rate determined by the
Court to satisfy Code Section 1129(b)(2)(A)(i)(II), six (6) months after the
Effective Date.
5.3 CLASS 6 SECURED CLAIMS. The holder of the Allowed Secured Claim in
Class 6 (Vanderford) will retain its liens and will be paid in monthly
installments commencing on the first day of the first full month that is at
least thirty (30) days after the Effective Date, with the amount of each
installment calculated on a thirty (30) year amortization with interest at a
rate determined by the Court to satisfy Code Section 1129(b)(2)(A)(i)(II), with
the full balance due on the seventh (7th) anniversary of the Effective Date.
5.4 CLASS 7 SECURED CLAIMS. The holder of the Allowed Secured Claim in
Class 7 (DBK) is impaired because the reorganized Debtor will become owner of
its collateral and the obligor on its obligation, without DBK's consent, but DBK
shall retain its lien and be paid by the Reorganized Debtor in accordance with
the terms of its note and deed of trust.
5.5 CLASS 8 ADMINISTRATIVE CONVENIENCE CLASS. All Class 8 Allowed Claims
shall be paid in full, in cash, thirty (30) days after the Effective Date.
5.6 CLASS 9 GENERAL UNSECURED CLAIMS. All Class 9 Allowed Unsecured Claims
shall be paid in full, in cash, by the first anniversary of the Effective Date,
together with interest at a per annum rate of eight percent (8%), or such other
rate as the Court may determine is required by Code Section 1129(b)(2)(B)(i),
accrued on the unpaid balance from the Effective Date until the date of payment.
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5.7 CLASS 10 INTERCOMPANY DEBT CLAIMS. All intercompany claims shall be
eliminated, shall receive no distribution under the Plan and be discharged as of
the Effective Date.
5.8 CLASS 11 PREFERRED STOCK INTERESTS. All Allowed Class 11 Preferred
Stock Interests shall receive common stock of the Debtor, at the rate of one
share of common stock for each share of preferred stock interest that is
Allowed, and the preferred stock shall be extinguished as of the Effective Date.
5.9 CLASS 12 COMMON STOCK INTERESTS. All Allowed Class 12 Common Stock
Interests shall retain their common stock and otherwise receive no distribution
under this Plan. Notwithstanding the failure of a holder of common stock to file
a proper proof of interest by the Bar Date, the Interests of all holders of
10,000 shares or less of Debtor's common stock (according to the records of
American Stock Transfer as of the date of the order approving the disclosure
statement for this Plan) shall be Allowed absent specific objection to such
Interest and entry of a Final Order disallowing such Interest. The Interest of
any holder of more than 10,000 shares of Debtor's common stock (according to the
records of American Stock Transfer as of the date of the order approving the
disclosure statement for this Plan) shall be Allowed in the amount of 10,000
shares if such holder files a ballot on this Plan making such election, absent
specific objection to such Interest and entry of a Final Order disallowing such
Interest. All Allowed Claims that have been subordinated to Class 12 pursuant to
Code Sections 510(b) or (c) shall receive common stock having a value
equal to the amount of the Allowed Claim based upon the percentage ownership
that such stock represents of the net equity value of the Debtor's assets as of
the Effective Date, as determined by the Court. All Allowed Claims and Interests
based on warrants, options or other similar rights shall receive common stock
having a value equal to the value of the Allowed Claim or Interest, based upon
the percentage ownership that such stock represents of the net equity value of
the Debtor's assets as of the Effective Date, as determined by the Court.
5.10 CLASS 13 TAYLOR CLAIMS. All Class 13 Claims shall be satisfied by an
issuance of a number of shares of common stock that represent forty percent
(40%) of the total of all of the Debtor's common stock that will be outstanding
after the Effective Date (after taking into account the stock held by the
holders of Class 11 Interests, the stock held by the holders of Class 12
interests, the stock held by holders of claims that are subordinated to Class
12, the stock issued to holders of Allowed Interests based upon warrants,
options or similar rights, and the stock issued in satisfaction of the Class 13
claims). Such stock (and any dividends issued in respect of such stock) shall be
held in escrow by the Trustee, and shall not be transferrable, assignable or
redeemable, until all Class 8 and Class 9 Allowed Claims have been paid in full
as provided by this Plan, provided, however, that Taylor shall have and may
exercise all voting and other shareholder rights and powers represented by such
stock while it is held in escrow. When all Allowed Class 8 and Class 9 claims
have been paid as provided by this Plan, the stock held in escrow shall be
delivered to Taylor by the Trustee. In the event of material default in this
Plan relating to the satisfaction of the Class 8 and Class 9 claims, such stock
shall be distributed by the Trustee to the holders of unsatisfied Allowed Class
8 and Class 9 claims in amounts equal to the unsatisfied portion of such Allowed
Claims, based upon the percentage ownership that such stock represents of the
net equity value of the Debtor's assets as of the date of distribution, as
determined by the Court.
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ARTICLE VI
TREATMENT OF EXECUTORY CONTRACTS
6.1 GROUND LEASES ASSUMED. Upon the Effective Date, the ground leases on
4808 N. 22d St. and 2222 E. Camelback Road shall be assumed by the Reorganized
Debtor.
6.2 CONTRACTS NOT ASSUMED REJECTED. Upon the Effective Date, all executory
contracts and unexpired leases that have not been assumed shall be deemed
rejected.
6.3 SALE OR ASSIGNMENT OF ASSUMED CONTRACTS OR LEASES. Any executory
contracts or leases that are assumed may be sold or assigned by the Reorganized
Debtor pursuant to Article VIII below, any such sale or assignment being deemed
pursuant to Code Section 365(f).
6.4 CLAIMS ARISING FROM REJECTION. Any claim arising out of Debtor's
rejection of an executory contract or unexpired lease must be filed within 30
days after notice of entry of the order authorizing rejection or, if no such
separate order was entered and the rejection is pursuant to this Plan, within 30
days after the Confirmation Date.
ARTICLE VII
IMPLEMENTATION OF PLAN
7.1 OVERVIEW. All unsecured claims that are Allowed (and not subordinated)
shall be paid in full, in cash, within one year after the Effective Date, either
out of (a) the Reorganized Debtor's operating income, (b) capital contributed as
a result of a merger of the Reorganized Debtor with another entity, or (c) sale
or refinancing of one or more of the assets of the Reorganized Debtor, including
but not limited to one of the office buildings. All common stock interests shall
be retained. Some insiders' claims will be satisfied, to the extent Allowed, by
an issuance of common stock.
7.2 MERGER OF WHOLLY OWNED SUBSIDIARIES. Effective as of the Confirmation
Date, the Debtor's wholly owned subsidiaries 4808 Corporation and 88
Redevelopment shall be merged into the Debtor and their Assets shall be deemed
to be Assets of the Debtor's estate as defined in Code Section 541. All claims
secured by those Assets shall be deemed to be claims in this Bankruptcy Case as
defined in Code Section 101(5). All of the Debtor's other subsidiaries will
remain as separate subsidiaries.
7.3 OPERATION OF DEBTOR AFTER CONFIRMATION. As of the Confirmation Date,
all Assets and property of the Debtor's estate shall be revested in the
Reorganized Debtor pursuant to Code Section 1141(b). The Trustee shall serve as
Interim Manager of the Reorganized Debtor to maintain the status quo until the
Reorganized Debtor's Board of Directors meets to appoint new management, which
shall occur within thirty (30) days of the Effective Date. The Trustee's
compensation, both prior to the Effective Date and thereafter, shall be subject
to Court approval pursuant to 11 U.S.C. Section 330.
Upon the Effective Date, the Reorganized Debtor's Board of Directors
shall consist of Taylor, Roderick W. McKinnon III and Scott E. Bird, Jr., whose
terms shall expire on the first anniversary of the Effective Date. The new Board
shall meet as soon as practicable after the Effective Date to appoint new
officers and other management for the Reorganized Debtor. Neither of the Plan
Proponents has any contracts, agreements or understandings as to whom the Board
might appoint. Management salaries and director compensation shall not exceed a
total of $100,000.
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The Reorganized Debtor shall come current on all reporting
requirements of the Securities and Exchange Commission within ninety (90) days
of the Effective Date.
A stockholders' meeting shall be held within one year of the
Effective Date, at which the stockholders shall be provided the opportunity to
vote for the Reorganized Debtor's board of directors, to adopt or amend the
bylaws, and to handle such other business as may properly come before an annual
shareholders' meeting.
7.4 MERGER CONSIDERATIONS. The Reorganized Debtor shall actively pursue
merger opportunities, with merger partners who can provide additional capital
and/or business to the merged entity and who can increase the market and
tradability of the Reorganized Debtor's stock. All merger proposals that are
deemed worthy of consideration by any of the members of the Reorganized Debtor's
Board of Directors shall be submitted both to the shareholders and to the Court
for approval or disapproval. Upon request of the Joint Proponents, this Plan may
be modified pursuant to Code Section 1127(b) prior to Substantial Consummation
to facilitate any merger that may be approved by the shareholders or by the
Court.
7.5 SURRENDER AND CANCELLATION OF DEBT INSTRUMENTS AND SECURITY. No holder
of a promissory note, bond, payment guaranty, warrant, stock option, preferred
stock or other transferable instrument (collectively "instrument") shall receive
any distribution under the Plan until such instrument has been surrendered to,
or satisfactory evidence that the instrument is lost has been provided to, the
Debtor or Reorganized Debtor. Any holder of such an instrument who fails to
surrender such instrument or provide satisfactory evidence of loss thereof
within thirty (30) days after the Effective Date shall be deemed to have no
further claim against or Interest in the Reorganized Debtor and shall receive no
distribution under the Plan.
7.6 DE MINIMIS DISTRIBUTIONS. Notwithstanding anything to the contrary
herein, no distributions of cash shall be made hereunder in an amount less than
$10.00
ARTICLE VIII
EFFECT OF CONFIRMATION
8.1 MODIFICATION OR WITHDRAWAL. This Plan may be withdrawn at any time
prior to the Effective Date by either Plan Proponent. Pursuant to Code Section
1127(a), this Plan may be modified by the Plan Proponents at any time prior to
the Confirmation Date by the filing of a modification with the Court. Pursuant
to Code Section 1127(b), this Plan may be modified by the Plan Proponents at any
time prior to the Effective Date upon the Court's approval of such modification
after notice and hearing. In addition, before or after the Effective Date, the
Plan Proponents may modify this Plan with Court approval, on such notice as the
Court may deem necessary, so long as the modification does not materially and
adversely affect the interests of creditors and interest holders to remedy any
defect, omission or scrivener's error, reconcile any inconsistencies, or to
implement the terms, purposes and intent of this Plan. This Plan may be modified
by the Joint Proponents after the Effective Date, and prior to Substantial
Consummation, in accordance with Code Section 1127(b), particularly for the
purposes specified in paragraph 7.4 above. This Plan may not be modified by any
person or entity other than the Plan Proponents. No withdrawal or modification
of the Plan shall create any liability for either of the Plan Proponents or any
attorney, accountant or other agent or employee of either of the Plan
Proponents.
8.2 RETENTION AND RELEASE OF CLAIMS. Pursuant to Code Section 1141(b) and
except as otherwise provided in this Plan, the Reorganized Debtor shall retain
and may enforce after the Effective Date any and all claims of Debtor and the
Trustee, including but not
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limited to actions assertable pursuant to Code Sections 362, 365, 502,
506(c), 510, 542, 544, 547, 548, 549, 550, 551, 552 and 553 except claims
assigned, sold, waived, relinquished or released in accordance with the Plan.
8.3 REVESTING. Except as provided for in the Plan or in the Confirmation
Order, on the Effective Date Reorganized Debtor shall be revested with all of
the property of its estate free and clear of all claims, liens, charges and
other interests of creditors arising prior to the Petition Date. Upon the
Effective Date the Reorganized Debtor shall operate its business free of any
restrictions other than as set forth in this Plan.
8.4 DISCHARGE. Except as otherwise provided in the Plan or in the
Confirmation Order, the Confirmation Order acts as a discharge, effective as of
the Effective Date, of any and all debts of Debtor that arose at any time before
the entry of the Confirmation Order, including, but not limited to, all
principal and any and all interest accrued thereon, pursuant to Code Section
1141(d)(1). The discharge of Debtor shall be effective as to each claim,
regardless of whether a proof of claim thereof was filed, whether the claim is
an Allowed Claim or whether the holder thereof votes to accept the Plan.
ARTICLE IX
RETENTION OF JURISDICTION
Notwithstanding confirmation of this Plan, the Bankruptcy Court
shall retain jurisdiction for the following purposes:
9.1 CLAIMS AND INTERESTS. Determination of the allowability of claims and
interests upon objection to such claims by Debtor, the Reorganized Debtor, the
Trustee, either Plan Proponent or by any creditor, and estimation of Disputed
Claims and Disputed Interests.
9.2 ADMINISTRATIVE CLAIMS. Determination of requests for payment of claims
entitled to priority under Code Section 507(a)(1), including compensation of
parties entitled thereto.
9.3 DISPUTES. Resolution of controversies and disputes regarding the
interpretation or enforcement of the terms of the Plan, any of the instruments
issued under the Plan or any other documentation evidencing the terms of the
Plan.
9.4 IMPLEMENTATION. Implementation of the provisions of the Plan and entry
of orders in aid of confirmation of the Plan, including, without limitation,
consideration and approval or disapproval or any proposed merger in accordance
with paragraph 7.4 above.
9.5 ADVERSARY PROCEEDINGS. Litigation of adversary proceedings and
retained Debtor's and Trustee's Claims brought or pursued by the Reorganized
Debtor.
9
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9.6 FINAL DECREE. Entry of a final decree closing Debtor's case.
DATED this 14th day of November, 1997.
By /s/ , ATTORNEY
----------------------------------
Roger W. Brown, Trustee
Plan Proponent
By /s/ William C. Taylor
----------------------------------
William C. Taylor
Plan Proponent
10
<PAGE> 1
EXHIBIT 2
LEWIS AND ROCA LLP
40 North Central Avenue
Phoenix, Arizona 85004-4429
Facsimile (602) 262-5747
Telephone (602) 262-5311
Gerald K. Smith (001428)
Randolph J. Haines (005440)
Attorneys for William Taylor
UNITED STATES BANKRUPTCY COURT
DISTRICT OF ARIZONA
In re: )
) No. 96-13675 PHX JMM
PRINCETON AMERICAN )
CORPORATION, ) Chapter 11
)
Debtor. ) DISCLOSURE STATEMENT RE
) TRUSTEE'S AND TAYLOR'S JOINT
EID: 22-1848644 ) PLAN OF REORGANIZATION
)
___________________________)
Trustee Roger W. Brown ("Trustee") and creditor and equity
security holder William C. Taylor ("Taylor") (collectively "Plan Proponents")
submit the following Disclosure Statement in connection with their Joint Plan of
Reorganization for Princeton American Corporation ("Debtor"):
ARTICLE I
INTRODUCTION AND DISCLAIMER
1.1 INTRODUCTION AND SUMMARY OF PLAN.
Taylor and the Trustee have prepared and filed a Plan of
Reorganization ("Plan") for the Debtor in this case. Taylor and the Trustee are
disseminating this Disclosure Statement to holders of claims against the Debtors
and stockholders in the Debtor for the purpose of soliciting acceptance of this
Plan.
The Plan provides for all stockholders to retain their stock
(except holders of preferred stock, which will be converted to common), and for
all unsecured creditors to be paid the full amount of their Allowed Claims, in
cash, within one year of the Effective Date of the Plan. The Reorganized Debtor
will retain its two office buildings, and the debt secured by one of them will
be modified to terms more favorable to the Debtor. The Reorganized Debtor will
operate the buildings, and will pay unsecured claims out of operating income,
out of the proceeds of the sale or refinancing of one of the buildings, or out
of capital contributed by a merger partner. The Reorganized Debtor intends to
seek a merger with an entity who can
<PAGE> 2
supply capital and additional business opportunities, as well as take advantage
of the Debtor's approximate $15 million Net Operating Losses.
The confirmation process will also include a number of other
important steps. The Debtor's wholly owned subsidiaries, 4808 Corporation and 88
Redevelopment Corporation, will be merged into the Debtor. This will not only
simplify the corporate structure but also permit the restructuring of the debt
secured by the Debtor's subsidiary's office building located at 2222 E.
Camelback Rd.. This is important because that debt bears interest at an above
market rate of 15% and is fully due in December, 1999. Under the Plan, that
interest can be reduced to a market rate of approximately 8% and paid on a
thirty year amortization, with a balloon in seven years.
All existing equity holders will have been required to file
proofs of interest that explain how they acquired their stock. Equity holders
who fail to file a proper and timely proof of interest will have their stock
canceled, provided, however, that the interests of holders of record of less
than 10,000 shares will have those interests automatically allowed,
notwithstanding a failure to file a timely proof of interest, absent specific
objection to such interest. Holders of more than 10,000 shares who failed to
file a proper or timely proof of interest may elect to have their interests
allowed in the amount of 10,000 shares by so indicating on their ballots
submitted in connection with the Plan. Any party in interest (including the
Trustee, Taylor, or any other creditor or stockholder) may object to the
stockholdings of anyone who did not validly obtain their stock or whose stock
issuance is void under corporate law, or the Trustee may file fraudulent
conveyance actions against stockholders who did not pay fair value for their
stock. It is probable that the Trustee may object to stockholdings of insiders,
reducing the total number of shares of stock outstanding as of the confirmation
date.
The Trustee has the ability prior to confirmation to pursue
fraudulent conveyance actions against insiders or anyone else who received
company assets without paying fair value for them. Any of those actions that
have not been resolved as of the date of confirmation will be vested in the
Reorganized Debtor and may be pursued by it after confirmation. This also
applies to any payments or transfers that were not made for proper corporate
purposes. These recovery actions could constitute valuable assets.
Taylor and the Trustee believe that the company can be
reorganized without the infusion of outside capital. This Plan therefore
preserves the maximum value for both the valid, existing stockholders and for
creditors. It will also result in a very clean balance sheet that would permit
the company to raise new capital to the extent needed after the reorganization.
Finally, it is intended to preserve the company's substantial ($15 million) Net
Operating Losses, which are valuable tax attributes. Even after confirmation,
however, the Reorganized Debtor will actively seek a merger, and any merger
proposal worthy of
2
<PAGE> 3
consideration will be submitted to shareholders and the Court, together with an
independent report and recommendation from the company's financial advisor, at
any time until a year after the Effective Date. The Court will retain
jurisdiction to approve or disapprove of any such merger proposal, and to
approve any modifications to this Plan that are proposed by the Joint Proponents
to facilitate such a merger.
Taylor and the Trustee believe this Disclosure Statement
contains the information that is material, important and necessary for the
creditors and stockholders to arrive at an informed decision in exercising their
vote for acceptance of the Plan. A copy of the Plan is attached as Exhibit 1 to
this Disclosure Statement.
The United States Bankruptcy Court for the District of Arizona
(the "Court") has set a hearing on confirmation of the Plan for October 30,
1997, at 1:00 p.m., before Judge Marlar in Court Room No. 3, United States
Bankruptcy Court, 2929 North Central Avenue, Phoenix, Arizona. Creditors and
stockholders may vote on the Plan by filling out the accompanying forms of
ballot and mailing them by October 20, 1997, the original to the Court and the
copy to Taylor's counsel, Randolph J. Haines, Lewis and Roca, in the enclosed
pre-addressed envelopes.
As a creditor or stockholder, your acceptance is important.
For a class of creditors to accept the Plan, at least two-thirds in amount of
the Allowed Claims in the class and more than one-half in number of the Allowed
Claims of such class that actually vote must accept the Plan. For a class of
stockholders to accept the Plan, at least two-thirds of the Allowed Interests in
the class that actually vote must accept the Plan. Failure to vote on the Plan
constitutes neither an acceptance nor a rejection of the Plan.
1.2 DISCLAIMERS.
NO REPRESENTATIONS CONCERNING THE DEBTORS OR THE PLAN ARE
AUTHORIZED OTHER THAN AS SET FORTH HEREIN. YOU SHOULD NOT RELY ON ANY
REPRESENTATIONS OR INDUCEMENTS TO ACCEPT THE PLAN OTHER THAN THOSE CONTAINED
HEREIN.
NO ACCOUNTANT HAS REVIEWED OR APPROVED THE INFORMATION
CONTAINED HEREIN. MUCH OF THE INFORMATION CONTAINED HEREIN WAS DERIVED FROM THE
DEBTOR OR THE DEBTOR'S RECORDS AND HAS NOT BEEN VERIFIED BY INDEPENDENT SOURCES.
TAYLOR AND THE TRUSTEE ARE UNABLE TO WARRANT OR REPRESENT THAT THE INFORMATION
CONTAINED HEREIN IS WITHOUT ANY INACCURACY ALTHOUGH ALL SUCH INFORMATION IS
ACCURATE TO THE BEST OF THEIR KNOWLEDGE, INFORMATION, AND BELIEF.
THE COURT HAS NOT VERIFIED THE ACCURACY OF THE INFORMATION
CONTAINED HEREIN. THE COURT'S APPROVAL OF THE
3
<PAGE> 4
DISCLOSURE STATEMENT DOES NOT IMPLY THAT THE COURT ENDORSES OR APPROVES THE
PLAN, BUT ONLY THAT IF THE INFORMATION IS ACCURATE, IT IS SUFFICIENT TO PROVIDE
AN ADEQUATE BASIS FOR CREDITORS AND EQUITY INTEREST HOLDERS TO MAKE INFORMED
DECISIONS WHETHER TO APPROVE OR REJECT THE PLAN.
THIS DISCLOSURE STATEMENT HAS NOT BEEN APPROVED OR DISAPPROVED
BY THE U.S. SECURITIES AND EXCHANGE COMMISSION, NOR HAS THE S.E.C. PASSED UPON
THE ACCURACY OR ADEQUACY OF ANY STATEMENTS CONTAINED HEREIN.
1.3 DEFINITIONS.
The words or phrases used in this Disclosure Statement have
their usual and customary meanings. Some words or phrases with initial capital
letters have the definitions set forth in the Plan. Unless otherwise defined,
the terms used in this Disclosure Statement shall have the same meaning as in
the Bankruptcy Code or Rules.
ARTICLE II
HISTORY OF DEBTORS
2.1 PREBANKRUPTCY HISTORY
The Debtor is a result of a merger between Minco American
Corporation, a Nevada corporation, and Princeton Electronic Products, Inc., a
New Jersey corporation, which closed on July 31, 1991. Both companies were
publicly held and Princeton Electronics was traded on the Nasdaq exchange,
although Minco was not. Princeton Electronics had been in the business of making
television monitors and freeze framing images for airport security and medical
imagery. Minco American Corporation had dealt in mining claims, but new
management in 1987 purchased an NASD brokerage house and arranged a number of
stock swaps with other micro-cap companies.
In the merger, the Minco shareholders received 80% of
Princeton Electronics' stock in exchange for all of Minco's assets (and they
retained their ownership of Minco shares, although Minco was rendered an empty
shell). The Princeton Electronics shareholders retained the other 20% of
Princeton Electronics' stock. The name of the merged entity was changed to
Princeton American Corporation in September of 1995.
Dale E. Eyman had been the President of Minco for
approximately five years before the merger, and became the Chairman of the Board
and CEO of Princeton American Corporation upon the closing of the merger.
Taylor was a Vice President of Princeton American Corporation
from the time of the merger (July 31, 1991) until his resignation on April 3,
1995. In that capacity his duties primarily focused on obtaining corporate
acquisitions and obtaining financing for the company. He was also a director
from August 5, 1994 until his resignation on April 3, 1995.
4
<PAGE> 5
After the merger the Debtor began acquiring real estate and
personal care products businesses, and subsequently closed its brokerage
subsidiary and the electronics business. The Debtor's business was conducted
primarily through subsidiaries. Two wholly owned subsidiaries, 4808 Corporation
and 88 Redevelopment Corporation, owned office buildings in Phoenix, Arizona,
located at 4808 N. 22d St. and at 2222 E. Camelback Road, respectively. Another
wholly owned subsidiary, Prinwest Corporation, owned a warehouse that was sold
pre-petition; the Debtor still owns the stock in that subsidiary but it has no
remaining assets. Another wholly owned subsidiary, Saturn Resources, Inc., owned
74 unimproved lots that could have a value of approximately $9,200 each. Saturn
was transferred pre-petition (in October of 1996) to the Debtor's treasurer and
CFO, David S. Smith, to buy out his consulting contract, but that transaction
may be avoidable as a fraudulent conveyance.
In addition to the subsidiaries, the Debtor owned some
miscellaneous real estate assets, including five (5) acres of raw land located
in Chino Valley, Yavapai County, Arizona, and an approximate 4.2 acre parcel of
undeveloped real property located at the northwest corner of Scottsdale Road and
Lone Mountain, Maricopa County, Arizona. The Trustee has sold the Lone Mountain
property for $275,000 gross, in a sale approved by the Bankruptcy Court, which
has reserved for later determination the allowance of any brokers' claims for
commissions. The Debtor also owned some receivables, including deferred real
estate commissions derived from mobile home lot sales, which have a
substantially higher face value payable over a long term but a current
liquidation value of approximately $100,000, in Taylor's opinion. The Debtor
also owns stock in unrelated companies, artwork and office furniture.
Two non-wholly owned subsidiaries, GSK and Biosome, were in
the business of manufacturing and distributing personal care products. The
Debtor owned 80% of Biosome and 50% of GSK. The Trustee has sold the Debtor's
interest in GSK for $1000, and has noticed a sale of Biosome's inventory, which
is subject to certain objections and is pending Court approval. The Debtor also
owns 100% of Organifyl Labs, of unknown value.
The Debtor's operations lost $4,072,854 for the fiscal year
ending May 31, 1994; $1,455,371 for the year ended May 31, 1995; and $5,544,844
for the year ended May 31, 1996. For the first half of the Debtor's 1996-97
fiscal year, the Debtor lost $2,304,000. The last form 10-Q filed with the
Securities and Exchange Commission ("SEC") by the Debtor, for the quarter ended
August 31, 1996, and a Debtor-prepared draft of the form 10-Q for the quarter
ended November 30, 1996 that was not filed with the SEC, are attached hereto as
Exhibit 2.
The Debtor's August 31, 1996 10-Q states that the total number
of shares outstanding was 18,443,586. However, information obtained by the
Trustee from the company responsible for issuing the Debtor's stock, American
Stock Transfer, indicates the number may be as high as 26,000,000. The process
of requiring all stockholders to file proofs of interest
5
<PAGE> 6
will determine the actual number of shares outstanding for purposes of the plan.
The Debtor's draft disclosure statement states that the only stockholder owning
more than five percent (5%) of outstanding common stock was Dale Eyman, who held
approximately two million shares or approximately 12.5% of the total
outstanding. Taylor's 94,500 shares represent 0.5% of the outstanding stock if
the total is 18 million shares, or 0.36% if the total is 26 million shares.
2.2 TAYLOR LITIGATION.
Taylor had a Personal Services Consulting Agreement with
Minco, entered into on May 15, 1991. It had a five (5) year term that was
automatically extended for an additional five year term on each anniversary
unless otherwise terminated. It called for Taylor to be compensated for his
consulting services at the rate of $105,000 per year, increased by 5% each year.
The contract required that compensation continue to be paid for the balance of
the five-year term upon termination. The contract also contained significant
stock option rights.
In addition to the Personal Services Consulting Agreement,
Taylor was also a director and executive vice president of Princeton American
after its merger. On April 3, 1995, Taylor resigned those positions due to the
failure of the company to keep him adequately informed of its activities. His
resignation letter made clear, however, that he regarded the Personal Services
Consulting Agreement as remaining in full force and effect, and he indicated his
continued availability to perform all services required of him under that
Agreement. Shortly thereafter, however, he found himself locked out of his
office at Princeton American. The Debtor never terminated the Personal Service
Consulting Agreement, but failed to make the payments due Taylor under the
Agreement.
On October 13, 1995, Taylor sued the Debtor in Maricopa County
Superior Court (Case No. CV 95-16635) for amounts due under the contract. He
also sought a temporary restraining order ("TRO") on October 25, 1996, which the
Superior Court granted on October 31, 1996. The Court entered a stipulated
preliminary injunction on November 8, 1996. The injunction enjoined the
defendant company and its officers from issuing or selling any shares of stock
pursuant to Regulation S, paying any salary, bonus or other compensation to
David Smith, paying Dale Eyman any salary or other compensation in excess of
$10,000 per month, and selling or transferring any asset of the company. The
Debtor filed its petition commencing this bankruptcy case on December 11, 1996.
2.3 BANKRUPTCY CASE DEVELOPMENTS.
2.3.1 APPOINTMENT OF TRUSTEE. Immediately after the bankruptcy
filing, on December 18, 1996, Taylor moved for appointment of a trustee and
issuance of a temporary restraining order by the Bankruptcy Court. The
Bankruptcy Court issued the temporary restraining order in a form agreed to by
the Debtor on December 19, 1996, which was essentially the same as the state
court injunction described above. The Court held hearings on
6
<PAGE> 7
the motion for appointment of a trustee on January 17, 23 and 24, 1997, and
issued its Memorandum Decision appointing a trustee on February 6, 1997.
The Court's Memorandum Decision made a number of important
findings, for example:
1. "[T]he company may be self-dealing in significant figures.
Potential claims for fraudulent conveyance or preferences may exist against
insiders, directors and officers."
2. "The debtor has sustained continued and consecutive losses
for 5 years."
3. "Despite continuing and escalating losses, the debtor
continued to sell its stock on the public markets and pay its officers and
directors large salaries."
4. "In [October, 1996, the Company's Chairman and CEO] Mr.
Eyman was arrested (and later indicted by a federal grand jury) in connection
with a complaint then pending in the Federal District Court for the Southern
District of New York, that alleged conspiracy to violate the securities laws."
5. "Mr. Eyman has taken the Fifth Amendment in response to
questions concerning the operation of the company. . . . The Court can and does
draw negative inferences from such refusal. Failure to respond to a party in
interest's legitimate questions violates both the spirit and intent of a
debtor's duties as a fiduciary."
6. "It also is apparent that the injunctions agreed to by the
debtor have been violated or, at a minimum, are subject to serious question."
7. "Additionally, question 15 of the Statement of Affairs
reflects significant accounts receivable owed to the debtor by its current
officers: Dale E. Eyman $1,083,710; Winston McKellar $176,230. . . . This is
what was described by [former treasurer] Mr. Smith as the 'Loan to Officer'
program by which additional sums were funneled to the officers, while the
company was sustaining significant operating losses."
8. "[T]hese allegations [made in the criminal securities
violation complaint against Mr. Eyman], whether ultimately proven to be true or
false, cast a dark cloud over Mr. Eyman's ability to manage the business at this
time."
Based on those findings, the Court ordered the appointment of
a trustee. The Office of the U.S. Trustee selected Roger Brown for that
position, and his appointment was confirmed by the Court.
2.3.2 TRUSTEE'S ACTIVITIES. Upon his appointment the Trustee
immediately began to cut operating expenses and liquidate various nonoperating
aspects of Debtor's business. The Trustee moved Biosome's inventory out of the
warehouse where it had been kept, and has noticed a sale of that inventory,
which is pending Court approval after certain objections were filed to such
sale. The Trustee has sold the Debtor's 50% stock ownership in GSK, another hair
care products subsidiary, for $1000.
7
<PAGE> 8
The Trustee has sold the Debtor's Lone Mountain property for
$275,000 gross, with a commission of $27,500 potentially owing to the broker(s)
involved. The Bankruptcy Court approved that sale but reserved ruling on the
allowance of the brokers' commissions.
The Trustee has closed the Debtor's offices so the Debtor has
no rent obligation, and has rented the Debtor's previous office space to a third
party.
The Trustee has taken no action to regain the Nasdaq listing
of the Debtor's stock, or to pay the subscription fees to the various rating
agencies, many of which are necessary to maintain the tradability of the
Debtor's stock under many states' Blue Sky Laws. The Trustee has indicated the
he has taken no such action because no plan of reorganization has yet been
confirmed and it would be premature for any stock to be trading without adequate
disclosures by the debtor.
No actions have yet been commenced to recover fraudulent
conveyances such as improper loans, payments and transfers of property to the
Debtor's officers and insiders, but the Trustee has completed an initial
analysis and evaluation of the potential for such actions, described in
paragraph 2.3.3 below.
2.3.3 TRUSTEE'S INVESTIGATIONS. The Trustee has undertaken the
following investigations of the Debtor's affairs and potential claims, and has
arrived at the following tentative conclusions:
The Trustee has investigated whether a fraudulent conveyance
action may lie against the recipients of payments from the proceeds of the
prepetition sale of the commercial warehouse owned by the Debtor's subsidiary,
Prin West. The amount of such claim would be approximately $20,000, and the
Trustee has tentatively concluded such a claim does not have sufficient legal
merit to be worth pursuing.
The Trustee has investigated whether fraudulent conveyance
actions may lie against the recipients of payments from the proceeds of the of
the prepetition refinancing of the office buildings owned by the Debtor's
subsidiaries 88 Redevelopment Corporation and 4808 Corporation. The amount of
such claim would be approximately $100,000, and the Trustee has tentatively
concluded such a claim does not have sufficient legal merit to be worth
pursuing.
The Trustee has determined that the Debtor has receivables due
it from various insiders and former consultants, in excess of $1,000,000. The
Trustee has tentatively concluded that not less than $150,000 of these
receivables are worth pursuing through demands, negotiations and, if necessary,
adversary proceedings.
The Trustee made an initial examination of the proofs of claim
that were due to be filed by the August 5, 1997 bar date. These claims are
summarized in paragraph 3.4 below. The Trustee has not yet examined the proofs
of interest that were due to be filed by either the August 5 or the September
17, 1997 bar dates.
8
<PAGE> 9
The Trustee has determined that various professionals were
employed by the Debtor and paid for services rendered after the commencement of
this case (and prior to the appointment of the Trustee) without the Debtor
having complied with the Code procedures for their employment and/or their
payment, as required by Code Sections 327 & 330. The Trustee has filed a
motion seeking an order requiring the following professionals to disgorge, or
repay the estate, the following amounts:
<TABLE>
<S> <C>
Dale Beck Furnish $ 2,500
Bulldog Investments $ 2,500
Allen Bickart $10,000
Jeffrey Proper $25,000
-------
Total $40,000
</TABLE>
2.3.4 PLAN EVOLUTION, DISCLOSURE STATEMENTS, HEARINGS AND BAR
DATES. The Court established August 5, 1997 as a deadline for the filing of
proofs of claim and proofs of interest. The Court also set an initial hearing on
the approval of this disclosure statement for July 29, 1997. At that hearing,
counsel for William Taylor informed the Court that American Stock Transfer had
failed to provide a complete list of stockholders, but that it would be provided
upon payment of an additional fee. The Court therefore continued the disclosure
hearing until August 29, 1997, at 11:00 am, as to those shareholders who had not
previously received notice, and also established a new bar date for filing of
proofs of interest by such shareholders for September 17, 1997. The Court also
ruled on the adequacy of William Taylor's disclosure statement then on file,
requiring him to provide additional information in an amended disclosure
statement to be filed within 15 days. Taylor filed a First Amended Disclosure
Statement on August 6, 1997, and on August 15 filed a Memorandum re changes..
Competing plans of reorganization were filed by the debtor and
by equity security holder Angelo Panzarella. The debtor's plan was accompanied
by a draft disclosure statement, and the Court also set the hearing on it for
August 29, 1997, at 11:00. The Debtor failed to give timely notice of that
hearing however, and consequently moved for that hearing date to be continued.
Panzarella's plan was not accompanied by a draft disclosure statement.
Taylor's original Plan was a stock for debt plan, in which all
unsecured creditors would be paid by an issuance of common stock. One reason for
drafting the plan in that fashion was that, until the Bar Date for the filing of
proofs of claim, it could not be determined with any degree of confidence how
much unsecured debt creditors would claim to be owed. After that could be
determined, however, in mid-August, Taylor met with the Trustee and a creditor
to discuss whether the Plan could be modified to provide for full cash payment
of all unsecured claims that would likely be allowed. They also discussed
commencing an active search for a merger partner even prior to confirmation. As
a result of those discussions, Taylor and the Trustee agreed to modify the
Taylor Plan to provide for full cash payment of all
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<PAGE> 10
Allowed unsecured creditors, with interest and within a year of the Effective
Date, and to make such a modified plan the Joint Plan of both Taylor and the
Trustee. Consequently Taylor modified his Plan, as permitted by Code Section
1127(a), to incorporate those changes, and modified his Disclosure Statement
accordingly. In addition, the Securities and Exchange Commission provided Taylor
with some informal comments on the First Amended Disclosure Statement, and this
Disclosure Statement incorporates some of those requested changes or additions.
2.3.5 MERGER EFFORTS. The Trustee has requested Bankruptcy
Court approval for him to engage the services of the investment banking firm of
Peacock, Hislop, Staley & Given, and particularly Edward B. Vallone of that
office, to act as financial adviser with respect to prospective merger
opportunities. Taylor and the Trustee believe that it may be possible to find a
merger partner who can make better use of the Debtor's Net Operating Loss
Carryforwards of the approximate amount of $15 million, and who would be
interested in merging with a publicly traded company, and would also bring some
additional capital or operating business to the merged entity. Consequently the
effort to find such a merger partner will be actively pursued even prior to
confirmation. If a suitable merger partner is located prior to confirmation it
is possible that the Plan Proponents will propose modifications to this Plan to
facilitate the merger.
2.4 ASSETS OF THE ESTATE.
After confirmation, the principal assets of the estate will be
the two office buildings presently owned by the Debtor's subsidiaries.
2.4.1 2222 E. CAMELBACK. The office building located at 2222
E. Camelback Road is subject to two ground leases. Charles and Virginia
Donofrio, Jr., are the landlords on the Lot 1 lease. This lease was entered into
on November 1, 1974, for a term of 99 years. The lease is a net lease and the
tenant shall pay all expenses. The rental rate for the first 15 years was $1500
per month. Starting on the 15th anniversary that rate was to be adjusted, for
each succeeding ten year term, to an annual rate equal to eight percent (8%) of
the fair market value of the leased premises excluding improvements.
Consequently the rate was adjusted to $5,156.55 per month for the ten (10) year
period commencing November 1, 1989. In August, 1993, that rate was reduced to
$4,462 per month as a result of street widening condemnation taking 3,868 square
feet of Lot 1.
The landlords on the Lot 2 lease are Eugene and Geraldine
Jones, and that lease commenced on August 1, 1977 for a 99 year term. The lease
is a net lease and the tenant shall pay all expenses. The rental rate for the
first 15 years was $1,000 per month. Starting on the 15th anniversary that rate
was to be adjusted, for each succeeding ten year term, to an annual rate equal
to eight percent (8%) of the fair market value of the leased premises excluding
improvements. On the 15th anniversary the rental rate was adjusted to $3,100 for
the next ten year period.
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<PAGE> 11
The 2222 E. Camelback building was appraised in January, 1996,
by Michael Turner, MAI, of Appraisal Technology, who opined that it then had a
present fair market value of $2 million. Although there is no more current
appraisal, the building probably has a significantly higher value today. For
example, the Trustee projected that the building would generate a net operating
income for the month of June, 1997 of $26,249.36 (after payment of monthly
ground lease rent but not counting debt service). Extrapolated to an annual
basis this would yield an annual net operating income of $314,992.32. At a cap
rate of 10% this would yield a capitalized present value of $3,149,923; at a cap
rate of 9% the capitalized present value would be $3,499,914.66.
Phillip M Breidenbach, Associate Vice President of Colliers
Iliff Thorn, rendered an opinion of value to the Trustee on this building on
August 15, 1997, based on market comparables and capitalization of operating
income. Based on current tenancy and expense information as of June, 1997, he
concluded that this building had an operating income of $194,223 for calendar
year 1997 and $301,213 for calendar 1998. He concluded that current market
capitalizations for similar buildings were in the range of 9.0% to 9.5%, which
he increased to 10.25% for this building to adjust for the effect of the ground
leases. He concluded that this "suggests a value of $2,950,000" for 2222 E.
Camelback, based on capitalization of projected net operating income.
Mr. Breidenbach also compared the building to six comparable
sales in the general area in the past year. He concluded that "based on the
provided prices per square foot and capitalization rates [of the comparables] it
would be reasonable to suggest a value for 2222 E. Camelback of $2,373,926.37."
Combining the values derived from capitalization of net
operating income and from comparables, Mr Breidenbach evaluated 2222 E.
Camelback to be worth $2,950,000. This was based on a current value of
$2,700,000, coupled with an estimate that "the supply and demand as projected
for the future suggest a 10% increase over current market in the value of these
buildings based on a sale taking place during the coming 12 months."
Current secured debt against the building is approximately $1
million (Vanderford's first lien), so the Debtor has an equity value in the
building of approximately $2 million based on these evaluations.
2.4.2 4808 N. 22d STREET. The office building located at 4808
N. 22d Street is subject to a ground lease, the term of which extends through
July 31, 2031. The lease is a net lease so all expenses such as taxes,
assessments and licenses are the obligation of the lessee. The rental rate as of
June, 1997 was $2,205.98 per month, and is subject to an annual adjustment based
on the Consumer Price Index.
The 4808 building has not been formally appraised since it was
acquired by the debtor. Although there is no current appraisal, the building
probably has a value of
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approximately $2 million in today's market. For example, the Trustee projected
that the building would generate a net operating income for the month of June,
1997 of $18,787.61 (after payment of monthly ground lease rent but not counting
debt service). Extrapolated to an annual basis this would yield an annual net
operating income of $225,451.32. At a cap rate of 10% this would yield a
capitalized present value of $2,254,513; at a cap rate of 9% the capitalized
present value would be $2,505,014.66.
Based on current tenancy and expense information as of June,
1997, Mr. Breidenback concluded that this building had an operating income of
$185,617 for calendar year 1997 and $195,286 for calendar 1998. He concluded
that current market capitalizations for similar buildings were in the range of
9.0% to 9.5%, which he increased to 10.25% for this building to adjust for the
effect of the ground leases. He concluded that "the provided information and NOI
suggests a value based on 1998 income at 4808 N. 22d Street of $1,905,229.26."
Mr. Breidenbach also compared the building to six comparable
sales in the general area in the past year. He concluded that "based on the
market comparables for price per square foot and cap rate the value for 4808 N.
22d Street would equate to $1,492,850."
Combining the values derived from capitalization of net
operating income and from comparables, Mr Breidenback evaluated 4808 N. 22d
Street to be worth $1,950,000. This was based on a current value of $1,750,000,
coupled with an estimate that "the supply and demand as projected for the future
suggest a 10% increase over current market in the value of these buildings based
on a sale taking place during the coming 12 months."
Debt secured by the building currently totals approximately
$1.1 million, consisting of DBK's first lien of $800,000 plus Vanderford's
second lien that may be released for $300,000. Assuming the second lien would be
satisfied by a sale of 2222 E. Camelback, however, would leave only $800,000 of
debt to be satisfied by 4808 N. 22d St, so the Debtor has an equity value in the
building of approximately $1,150,000.
2.4.3 OTHER ASSETS. The Debtor's other assets of significant
value are (1) the mobile home lot sale commission receivables of a face value of
approximately $750,000, with annual payments of $12,750 each until a balloon
payment due in 2030, and (2) a five acre parcel in Chino Valley, which the
Trustee estimates to have a value of approximately $12,500. Taylor believes all
of the Debtor's other assets have only a nominal value, which is reflected on
the Liquidation Analysis attached hereto as Exhibit 3. In addition there are the
potential recoveries from the avoidance actions and collection actions that the
Trustee has investigated as summarized above, but Taylor is unable to estimate a
net value for these actions.
2.4.4 NET OPERATING LOSSES. One of the Debtor's most valuable
assets, other than its office buildings, is its Net Operating Loss Carryforward,
of approximately $15 million. Although this "asset" is not directly convertible
into cash available to creditors, it would permit
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the Reorganized debtor to shelter that amount of post-confirmation income from
taxation. More importantly, it would be of potentially significant value to a
post-confirmation merger partner. Consequently one of the important advantages
of this plan, as compared to liquidation or even outright sale of the company,
is the preservation of this NOL, whose value can hopefully be realized by a
postconfirmation merger.
2.5 STATUS OF PLAN PROPONENT.
Taylor holds certificates for 94,500 shares of common stock of
the Debtor, although Debtor's minutes reflect that 250,000 of those shares,
pre-split, were converted to preferred, so he today claims to own 69,500 shares
of common and 25,000 shares of preferred. Official records of American Stock
Transfer differ from these amounts.
In addition, Taylor has filed a proof of claim in the amount
of $990,134, arising out of the transactions giving rise to his litigation with
the Debtor as described in section 2.2 above. The claim consists of $346,393 for
arrearages Taylor was owed on his consulting contract as of April 3, 1995, and
$590,000 for the balance owed on that contract, plus attorneys' fees and costs
incurred pre-petition. Debtor's records also reflect that the Debtor has claims
against Taylor in the amounts of $45,000 and $75,000 for amounts allegedly due
for stock purchases. Taylor acknowledges that the $45,000 should be setoff
against his claim (pursuant to Code Section 553), but disputes any liability for
the claimed $75,000. Taylor's contract with the Debtor provided that, at his
election, he could take payment of any arrearages owed under the contract by
issuance of "common stock of Minco at a price seventy percent (70%) less than
the bid price on the day of election."
ARTICLE III
SUMMARY OF PLAN
3.1 PRIORITY CLAIMS.
The Plan contains four classes of priority claims:
CLASS 1 - ADMINISTRATIVE EXPENSE CLAIMS.: Claims incurred
during the pendency of this bankruptcy case, including both ordinary operating
debts and fees due professionals, as defined in Code Section 503. It is too soon
to predict what such claims may total by the time of the confirmation hearing.
As of the approximate date of this disclosure statement, however, the following
administrative claims have been asserted:
<TABLE>
<S> <C> <C>
Trustee's fees and costs $ 5,650 Awarded
Trustee's fees and costs $ 26,138 Applied for, hearing 8/29
Trustee's attorney's fees and costs $ 21,377 Awarded
Trustee's attorneys' fees and costs $ 44,957 Applied for, hearing 8/29
Debtor's Claimed Attorneys' Fees $ 86,872 Applied for, hearing 9/18
Taylor's Former Counsel's Claim
Under Code Section 503(b)(3)(D) $117,950 Applied for, hearing 9/18
</TABLE>
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<PAGE> 14
Taylor's Present Counsel's Fees $ 39,108 Accrued, not applied for
Under Code Section 503(b)(3)(D)
C.J. Management commission $ 8,250 Applied for, hearing 9/18
Objections have been filed as to some of these claims
(particularly Taylor's former counsel's claim), and Taylor and the Trustee
expect that additional objections will be filed as to some of the other pending
claims (particularly Debtor's attorneys' fee claim), and that such claims will
ultimately not be allowed in the amounts sought.
CLASS 2 - PRIORITY WAGE CLAIMS: All claims for wages, salaries
or commissions as defined in Section 507(a)(3) of the Code, which are limited to
$4000 per individual and must have been earned within 90 days prior to the
filing of the bankruptcy case. Debtor's schedules show two such claims, of
$4,000 each, for Sheridan Bailey and Winston McKellar.
CLASS 3 - PRIORITY EMPLOYEE BENEFIT CLAIMS: All claims of
employees for contributions to an employee benefit plan as defined in Section
507(a)(4) of the Code, which are limited to $4,000 per employee and must relate
to services rendered within 180 days prior to the filing of the bankruptcy case.
Debtor's schedules assert there are no such claims. This class is included in
case such claims are filed, and will be eliminated if no such claims are filed.
CLASS 4 - PRIORITY TAX CLAIMS: All unsecured claims of
governmental units for taxes as defined in Section 507(a)(8) of the Code, which
includes all income, personal property, employment and excise taxes for which a
return was last due after three years prior to the filing of the bankruptcy
petition. Debtor's schedules reflect $1394 owed to the Maricopa County
Treasurer.
All of these priority claims will be paid in full, in cash, on
the Effective Date of the Plan (which is defined to be thirty (30) days after
the Bankruptcy Court's order confirming the Plan is entered on the Court's
docket). These claims are unimpaired, and therefore pursuant to Code Section
1126(f), all holders of claims in such classes are conclusively presumed to have
accepted the plan and therefore acceptances from such holders will not be
solicited.
3.2 SECURED CLAIMS
The Plan contains three classes of secured claims:
CLASS 5 - PROPERTY TAX CLAIMS: All claims for ad valorem taxes
owed to any governmental unit, secured by any Asset. In particular, this class
includes any property taxes owed on the office buildings owned by the Debtor's
subsidiaries (which are being merged into the Debtor upon confirmation) -- 4804
N. 22d St. and 2222 E. Camelback Rd. Debtor's schedules do not reflect what
property taxes are owed on those buildings, if any. The Debtor's subsidiaries
own only the improvements, subject to net net ground leases that require
Debtors' subsidiaries to pay all taxes. The Debtor may also owe property taxes
on the Chino Valley lot. The class will be eliminated in the event there are no
real property taxes owed by the Debtor.
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<PAGE> 15
The holders of Allowed Secured Tax Claims in Class 5 shall
retain their liens and will be paid the Allowed amount of their claims, together
with interest in an amount and at a rate determined by the Court to satisfy Code
Section 1129(b)(2)(A)(i)(II), six (6) months after the Effective Date.
CLASS 6 - VANDERFORD COMPANY. Vanderford Company, Inc. holds a
secured claim that is secured by a first deed of trust on 2222 E. Camelback Road
and a second deed of trust on 4808 N. 22d St. The loan was taken out just
shortly before the bankruptcy filing, under circumstances that have not been
satisfactorily explained. Taylor is unaware of the identity of Vanderford, the
nature of its relationships with the Debtor, the circumstances of the financing
giving rise to its deed of trust, or the use of the proceeds of that financing.
The amount of the debt is approximately $1 million and bears interest at an
above market rate of 15%, and becomes fully due in December, 1999. The second
deed of trust on 4808 N. 22d St. may be released for a principal payment of
$300,000.
Vanderford will retain its liens and will be paid in monthly
installments commencing on the first day of the first full month that is at
least thirty (30) days after the Effective Date, with the amount of each
installment calculated on a thirty (30) year amortization with interest at a
rate determined by the Court to satisfy Code Section 1129(b)(2)(A)(i)(II) (i.e.,
a fair market rate of interest given the term of the restructured debt and the
quality of the collateral), with the full balance due on the seventh (7th)
anniversary of the Effective Date. Since the collateral is of high quality and
provides more than adequate equity cushion over the amount of the debt, Taylor
believes an appropriate market rate of interest would be in the range of 7 1/2%
to 8%. Debtor's rental income from the properties will be more than sufficient
to service this debt.
CLASS 7 - DBK. DBK holds a secured claim that is secured by a
first deed of trust on 4808 N. 22d St. The debt is in the amount of $800,000,
bears interest at a rate of 8%, and comes due in December, 2004. Taylor is
unaware of the identity of DBK, the nature of its relationships with the Debtor,
the circumstances of the financing giving rise to its deed of trust, or the use
of the proceeds of that financing.
DBK will retain its lien and will be paid by the Debtor
according to the terms of the existing note and deed of trust. The DBK claim is
impaired, however, because upon confirmation of the Plan the owner of its
collateral and the obligor on its notes will become the Debtor, rather than the
Debtor's subsidiary. Consequently DBK will be entitled to vote on the Plan even
though its loan terms remain unchanged. Debtor's rental income from the property
will be more than sufficient to service this debt.
3.3 CLASS 8 - ADMINISTRATIVE CONVENIENCE CLASS.
The administrative convenience class consists of all unsecured
claims that are less than Five Thousand Dollars ($5,000) each, or the holders of
which elect to reduce their
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<PAGE> 16
claims to $5,000 and waive any claim for any balance. Debtor's schedules reflect
that there are 30 claims that are for less than $5,000 each, which total
$40,816. The amount of claims in this class could be higher than that if some of
the claims greater than $5000 elect to accept payment of $5000 in full
satisfaction.
For administrative convenience and pursuant to Code Section
1122(b), these claims will be paid in full, in cash, thirty (30) days after the
Effective Date.
3.4 CLASS 9 - GENERAL UNSECURED CLAIMS.
Class 9 consists of all unsecured claims that are not
otherwise classified (i.e., all unsecured claims except priority claims,
administrative convenience claims and intercompany debt claims). Debtor's
schedules state that these claims total $2,868,067, but a number of these,
particularly those owed to insiders, may not be proper corporate debts and could
be disallowed.
The following summarizes the proofs of claim filed by the
August 5, 1997, Bar Date, for claims in excess of $10,000, that do not assert
claims arising from the purchase of stock in the Debtor and that otherwise do
not appear on their surface to be objectionable. This does not, however,
preclude any party in interest (including either of the Joint Proponents) from
filing objections to any such claims:
<TABLE>
<CAPTION>
CLAIMANT AMOUNT OF CLAIM ORIGIN OF CLAIM COMMENTS
<S> <C> <C> <C>
S.L. Bailey $12,061 accounting services separately documented
Semple & Cooper $62,937.33 accounting services documented
Dr. Armstrong $35,000 money loaned see below
Interrep $20,661.43 breach of contract documented
Colliers Iliff Thorn $38,496.43 lease commission documented
Jane Demenna $57,420.00 money loaned documented, note
Lieberman Dodge $13,636.55 legal services documented
Doug Forrest $15,115.53 graphics work documented
Peggy Kriese $17,000 settlement agreement documented
---------
TOTAL $272,328.27
</TABLE>
Taylor and the Trustee believe that these claims may be
allowed in approximately the amounts claimed, and that Class 9 will therefore
consist of less than $300,000 in Allowed Claims.
The following summarizes the proofs of claim filed by the
August 5, 1997, Bar Date, for claims in excess of $10,000, that appear to assert
claims arising from the purchase of stock in the Debtor or that otherwise appear
on their surface to be objectionable and subject to disallowance or
subordination. The Trustee has already filed objections to the claims marked
with an asterisk, and those objections are pending and not yet set for hearing.
No inference
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<PAGE> 17
should be drawn that the Trustee will not also file objections to other claims,
and nothing precludes any party in interest from objecting to such claims.
<TABLE>
<CAPTION>
CLAIMANT AMOUNT OF CLAIM ORIGIN OF CLAIM COMMENTS
<S> <C> <C> <C>
Jeff Proper $29,840 legal services documented
Dr. Armstrong* $225,426 stock purchase Section 510(b) and Section 547 defenses
William Carpenter* $164,705 Loan Mtn. loan satisfied by sale
Grace Johnson* $164,705 Loan Mtn. loan satisfied by sale
Edward Conn* $164,705 Loan Mtn. loan satisfied by sale
Roland Vanhoudt $19,800 stock purchase Section 510(b)
Blakely Trust* $25,000 stock purchase Section 510(b)
Blakely Trust* $10,000 stock purchase Section 510(b)
Stuart Ramsay* $10,000 stock purchase Section 510(b)
Harry Weiss* $812,707.72 stock purchase Section 510(b)
Hyman Center $355,000 salary defenses,Section 510(c)
David Smith* $180,000 salary settlement,Section 548,Section 510(c)
Dr. Aaron Weiss $34,152.55 stock purchase Section 510(b)
Farley Weiss $31,481.88 stock purchase Section 510(b)
Morgan Lewis $19,671.96 legal services Eyman's lawyer
Jerald Legaspi* $77,956.25 stock purchase Section 510(b)
Dale Eyman $900,000 salary setoff,Section 510(c)
Winston McKellar $13,896 post-pet. wages undocumented
Winston McKellar $10,000 post-pet. expenses undocumented
Winston McKellar $389,895 salary undocumented;Section 510(c)
Amer. Financial* $685,000 securities claim Section 510(b)
</TABLE>
Taylor and the Trustee believe that most of these claims
should either be disallowed or subordinated to the level of common stock, Class
12, pursuant to Code Sections 502(b) or (c). Those Code provisions provide
for the automatic subordination to the level of common stock any claim for
damages arising from the purchase of stock, or for recision of such a purchase,
and for the subordination of any claim, after notice and hearing, under
principles of equitable subordination.
All unsecured claims that are Allowed in Class 9 will be paid
in full, in cash, within one year after the Effective Date, together with
interest at the rate of 8% per annum (or such other rate as the Court determines
is required by Code Section 1129(b)(2)(B)(i)) calculated from the Effective Date
until the date of payment. If the unsecured claims are allowed in approximately
the amounts set forth above, and the insiders' claims are disallowed or
subordinated as the Plan Proponents anticipate, then such payments can be made
from the Reorganized Debtor's operating income, which Taylor and the Trustee
believe should exceed
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<PAGE> 18
$300,000 per year from the two office buildings alone. If the Allowed Claims are
greater, or if the operating income is for other reasons insufficient to pay the
unsecured claims, then the Reorganized Debtor will obtain the cash necessary for
such payments either from a sale or refinancing of one or both of the office
buildings, or from capital contributed as a result of a merger.
3.5 CLASS 10 - INTERCOMPANY CLAIMS
All unsecured claims of the Debtors' subsidiaries that are
being merged into the Debtor pursuant to this Plan. Due to the merger, all
intercompany debt will be eliminated.
3.6 CLASS 11 - PREFERRED STOCK
Class 11 consists of all preferred stock in the Debtor. The
10-Q's attached as exhibits reflect there are 77,835 shares of preferred stock
issued and outstanding, but information obtained by the Trustee indicates the
number may be 1,549,882. All preferred stock will be converted into common stock
at the rate of one share of common stock for each share of preferred stock
interest that is allowed, and the preferred stock shall be extinguished as of
the Effective Date.
3.7 CLASS 12 - COMMON STOCK
Class 12 consists of all common stock in the Debtor, all
equity interests convertible into common stock of the Debtor including warrants
and options, and all claims subordinated to the level of Interests pursuant to
Code Section 510(b). The 10-Q's attached as exhibits reflect there are
18,443,586 shares of common stock issued and outstanding, but this information
may be inaccurate or outdated.
All stockholders were required to file proper proofs of
interest by the Bar Date of September 17, 1997. However, notwithstanding that
Bar Date, the Plan provides that notwithstanding the failure of an Interest
holder to file a timely proof of interest, the Interests of all holders of
10,000 shares or less of Debtor's common stock (according to the records of
American Stock Transfer as of the date of the order approving the disclosure
statement for this Plan) shall be Allowed absent specific objection to such
Interest and entry of a Final Order disallowing such Interest. The Interest of
any holder of more than 10,000 shares of Debtor's common stock (according to the
records of American Stock Transfer as of the date of the order approving the
disclosure statement for this Plan) shall be Allowed in the amount of 10,000
shares if such holder files a ballot on this Plan making such election, absent
specific objection to such Interest and entry of a Final Order disallowing such
Interest.
All Allowed Class 12 Common Stock Interests shall retain their
common stock and otherwise receive no distribution under this Plan. There will
be some dilution in the value of common stock due to the issuance of new common
stock to unsecured creditors whose Allowed Claims are subordinated to Class 12,
and due to the issuance of common stock to Class 13.
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<PAGE> 19
3.8 CLASS 13 - TAYLOR CLAIMS
Class 13 consists of all claims asserted by Taylor. Taylor's
claims arise from his Personal Services Consulting Agreement, described above.
His claim consists of $346,393 for arrearages Taylor was owed on his consulting
contract as of April 3, 1995, and $590,000 for the balance owed on that
contract, plus attorneys' fees and costs incurred pre-petition. If Taylor were
regarded as an employee, then Code Section 502(b)(7) arguably might limit the
post-termination portion of the claim to one year's compensation, but in that
event Taylor contends he would be entitled to treble damages for the past due
wages, pursuant to A.R.S. Section 23-355, so the claim for $346,393 would be
trebled to $1,039,179. Taylor filed suit in state court for these amounts, plus
interest and attorneys's fees, and contends he would be entitled to a claim for
those amounts, payable in cash as an unsecured creditor. However, to facilitate
this Plan of Reorganization, he has agreed to waive his claim for treble damages
and to accept payment of this total allowed claim in stock.
The Personal Services Consulting Agreement provided that, at
his election, Taylor could take payment of any arrearages owed under the
contract in common stock, issued at a rate of 30% of the market value of such
stock as of the date of the election. Consequently $346,393 of Taylor's Allowed
Class 13 Claim will be paid by an issuance of a number of shares of common stock
equal to $346,393 divided by the product of 0.3 times the market value of such
stock as of the date of the filing of the Joint Plan. The balance of Taylor's
Allowed Class 13 Claim will be paid by an issuance of the number of shares of
common stock equal to the amount of the balance of such Allowed Claim divided by
the market value of such stock as of the Confirmation Date. Taylor acknowledges
that the balance of his claim is subject to a setoff (pursuant to Code Section
553) in the amount of $45,000, pursuant to a promissory note he signed.
3.8 MERGER OF WHOLLY OWNED SUBSIDIARIES
Effective as of the Confirmation Date, the Debtor's wholly
owned subsidiaries 4808 Corporation and 88 Redevelopment shall be merged into
the Debtor and their Assets shall be deemed to be Assets of the Debtor's estate
as defined in Code Section 541. All claims secured by those Assets shall be
deemed to be claims in this Bankruptcy Case as defined in Code Section 101(5).
All of the Debtor's other subsidiaries will remain as separate entities.
3.9 POSTCONFIRMATION MANAGEMENT AND OPERATION OF DEBTOR AFTER CONFIRMATION
As of the Confirmation Date, all Assets and property of the
Debtor's estate shall be revested in the Reorganized Debtor pursuant to Code
Section 1141(b), which shall terminate all role and authority of the Official
Creditors' Committee. The Trustee shall serve as Interim Manager of the Debtor
to maintain the status quo from the Effective Date until the Reorganized
Debtor's Board of Directors meets to appoint new management, and shall
thereafter continue to
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<PAGE> 20
assist the Reorganized Debtor in pursuit of merger opportunities and shall
advise with respect to any such proposals as set forth below.
Upon the Effective Date, the Reorganized Debtor's Board of
Directors shall consist of Taylor, Roderick W. McKinnon III and Scott E. Bird,
Jr., whose curriculum vitae are attached hereto as Exhibits 5, 6 and 7,
respectively. Their terms shall expire one year after the Effective Date. The
new Board shall meet as soon as practicable after the Effective Date to appoint
new officers and other management for the Reorganized Debtor. The Plan
Proponents cannot predict whom that Board might appoint, and there are no
contracts, agreements or understandings with them as to whom they might appoint.
All management salaries and directors fees shall be limited to a total of
$100,000 for the year following the Effective Date.
A stockholders' meeting shall be held within one year of the
Effective Date, at which the stockholders shall be provided the opportunity to
vote for the Reorganized Debtor's board of directors, to approve any new bylaws
or amendments, and conduct any other business proper for an annual shareholders'
meeting.
Taylor anticipates that immediately after confirmation, the
Debtor's operations will consist solely of the operation of its two office
buildings. The Trustee projects that 2222 E. Camelback and 4808 N. 22d St. will
generate net operating income of $314,992.32 and $225,451.32, respectively.
After reorganized debt service of $88,051.75 and $70,441.40, respectively, this
should provide an annual net income of approximately $381,951.
The Plan Proponents expect the Reorganized Debtor to eliminate
the losses that the Debtor suffered over the last three and a half years by
eliminating the very substantial costs the Debtor incurred in promoting and
selling Reg S stock. In addition, they expect the Reorganized Debtor to reduce
management salaries from the level of approximately $400,000 per year to less
than $100,000 per year.
The Plan Proponents anticipate that the pre-confirmation
efforts of the Debtor to locate a suitable merger partner will continue
post-confirmation, and will be enhanced once operations have been stabilized
from the disruption of the bankruptcy process. The Plan Proponents anticipate
that the Reorganized Debtor will continue to seek a merger partner, in any line
of business, that can capitalize on the value of the Debtor's Net Operating Loss
Carryforward and provide additional cash infusion to support additional business
opportunities and renovation or redevelopment of one or both office buildings.
In support of those merger efforts, the Plan provides that the
Reorganized Debtor shall continue to employ Edward Vallone of Peacock, Hislop,
Staley & Given, on terms substantially the same as agreed to by the Trustee
prior to the Confirmation Date, until the earlier of one year after the
Effective Date or the consummation of a merger of the Reorganized Debtor. The
Reorganized Debtor shall actively pursue merger opportunities, with merger
partners who can provide additional capital and/or business to the merged entity
and who can
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<PAGE> 21
increase the market and tradability of the Reorganized Debtor's stock. All
merger proposals that are deemed worthy of consideration by any of the members
of the Reorganized Debtor's Board of Directors, the Trustee or Mr. Vallone shall
be submitted both to the shareholders and to the Court for approval or
disapproval, together with an independent report and recommendation from Mr.
Vallone. Upon request of the Joint Proponents, the Plan may be modified pursuant
to Code Section 1127(b) prior to Substantial Consummation to facilitate any
merger that may be approved by the shareholders or by the Court. For this
reason, the Plan defines "substantial consummation" as the date of commencement
of payments to Class 9 unsecured creditors.
The Plan requires the Reorganized Debtor to come current with
its SEC reports within the first quarter after the Effective Date, and operating
income should be sufficient to fund this effort. In addition, Taylor anticipates
that the Reorganized Debtor will make every reasonable effort to regain the
listing of the stock on Nasdaq (Small Capital Market) Exchange.
ARTICLE IV
ACCEPTANCE AND CONFIRMATION
Creditors and stockholders may vote to accept or reject the
Plan. Acceptance by a class of creditors (e.g., by Class 9, general unsecured
creditors) requires an affirmative vote of both two thirds in dollar amount of
claims and one half in number of claims that actually vote. Acceptance by a
class of stockholder (e.g., by Class 12, common stock) requires an affirmative
vote of two thirds of the shares of stock actually voted.
If a class does not accept the Plan, the Plan may nonetheless
be confirmed in spite of such rejection by a procedure set forth in the Code and
known colloquially as "cram down." Taylor believes that his Plan can be
confirmed over the rejection of any secured creditor because the Plan satisfies
the cram down requirement for secured claims set forth in Code Section
1129(b)(2)(A)(i), by providing for the secured creditors to retain their liens
on their collateral and be paid deferred cash payments having a present value
equal to their claims.
Taylor believes the Plan can be confirmed over the rejection
of any class of unsecured creditors pursuant to Code Section 1129(b)(2)(B)(i),
because the Plan provides for unsecured creditors to be paid in full together
with post-petition interest.
Taylor believes the Plan can be confirmed over the rejection
of any class of stockholders pursuant to Code Section 1129(b)(2)(C)(i), because
the Plan provides for them to receive property (i.e., common stock) having a
value equal to the value of their interests. As to common stockholders (Class
12), the Plan is also confirmable pursuant to Code Section 1129(b)(2)(C)(ii),
because there is no interest junior to them that is receiving anything pursuant
to the Plan.
However, confirmation of this Plan will be much simpler,
quicker and far less expensive in attorneys' fees if all impaired classes vote
to accept the Plan, and for that reason
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<PAGE> 22
Taylor and the Trustee urge all creditors and stockholders to submit ballots
marked as accepting the Plan.
ARTICLE V
LIQUIDATION ALTERNATIVE AND PROJECTIONS
Neither the Debtor, the Trustee nor Taylor has a current
audited financial statement for the Debtor, and the principal Assets, the two
office buildings, have not been recently appraised. Attached as Exhibit 3,
however, is the liquidation analysis Taylor has prepared based on his best
estimates of both the values of the Assets if retained under the Plan, and the
amounts the Assets would realize in a chapter 7 liquidation, together with his
estimates of the costs of such liquidation and the chapter 7 case. Chapter 7
would cause additional delay and impose additional costs, such as continuing
attorneys' fees and trustee's fees, and the assets would be liquidated for less
than their fair market value. When compared to the value of these assets when
retained by the Reorganized Debtor, it is apparent that while all creditors
could be paid in full on liquidation, there would be far less left for
stockholders in a chapter 7 liquidation. Attached as Exhibit 4 is a pro forma
balance sheet of the Debtor after reorganization under this Plan.
ARTICLE VI
TAX CONSEQUENCES
Neither Taylor nor the Trustee has obtained any tax opinions,
and they express no opinion as to the tax consequences to the holder of any
Claim or to the holder of any stock caused by the terms of the Plan of
Reorganization. Creditors and stockholders are advised and encouraged to obtain
their own tax counsel to determine the tax consequences of this Plan.
BECAUSE TAYLOR AND THE TRUSTEE EXPRESS NO TAX ADVICE, IN NO
EVENT WILL THEY OR ANY PROFESSIONAL ADVISORS ENGAGED BY THEM BE LIABLE IF, FOR
ANY REASON, THE TAX CONSEQUENCES OF THE PLAN ARE OTHER THAN AS ANTICIPATED.
CREDITORS AND STOCKHOLDERS MUST LOOK SOLELY TO AND RELY SOLELY UPON THEIR OWN
ADVISORS AS TO THE TAX CONSEQUENCES OF THIS PLAN.
With respect to the Reorganized Debtor, Taylor and the Trustee
believe, based on tax advice obtained by them, that the Reorganized Debtor will
retain its substantial net operating losses, because the Plan will not cause a
change of ownership of more than 50% of the ownership of the company.
Consequently the Reorganized Debtor will essentially be able to earn profits tax
free for the next several years to the extent of the retained net operating
losses. This also makes the Reorganized Debtor more valuable to its existing
stockholders and to its new owners, the unsecured creditors, than would be the
same assets if liquidated and distributed to creditors and stockholders, who
could not use them to earn profits tax free.
22
<PAGE> 23
ARTICLE VII
NATURE AND TRADABILITY OF NEW STOCK BEING ISSUED
The new common stock being issued pursuant to this Plan will
be issued without registration under the 1933 Act or under any state securities
laws, because Bankruptcy Code Section 1145 provides an exemption from such
registration requirements. Such stock may be resold by a holder pursuant to that
exemption, except for holders who are new investors (i.e., purchased claims in
the case with a view to sale of the securities received), or who are brokers,
dealers, issuers or underwriters as defined in the Code. These definitions are
technical and hinge on a number of factors that cannot adequately be set forth
in this Disclosure Statement, so NEITHER THE DEBTOR, THE TRUSTEE, THE PLAN
PROPONENT NOR ANY OF THEIR ADVISERS MAKES ANY REPRESENTATION AS TO WHETHER ANY
CREDITOR MAY RESELL STOCK ISSUED PURSUANT TO THIS PLAN. Creditors should consult
independent counsel to determine whether they may freely trade their stock that
is received pursuant to this Plan, considering their particular circumstances
and the requirements of Code Section 1145, the 1933 Act and applicable state
"blue sky" laws.
Although the Plan Proponents are hopeful that a public market
for such stock will develop after the reorganization, and even that the stock
once again may be listed on Nasdaq, there is no warrant or assurance that this
will occur, and the Plan Proponents certainly make no representation as to what
price the stock may sell for in such a market should it develop.
Dated this 28th day of August, 1997.
By______________________________
William C. Taylor
Plan Proponent
By______________________________
Roger W. Brown, Trustee
Plan Proponent
23
<PAGE> 24
EXHIBIT 3
<PAGE> 25
LIQUIDATION ANALYSIS
<TABLE>
<CAPTION>
PROCEEDS NET
FAIR MARKET LIQUIDATION COSTS OF OF SECURED
ASSET VALUE(1) VALUE(1) SALE(1) DEBT
- -----------------------------------------------------------------------------
<S> <C> <C> <C> <C>
2222 East Camelback $3,200,000 2,400,000 240,000 1,160,000
4808 N. 22nd Street 2,300,000 1,725,000 172,000 753,000
A/Rs 750,000 100,000 100,000
Chino Lot 12,500 9,500 950 8,550
Prinwest 0 0 0
Organifyl Labs 0 0 0
50% of GSK 0 0 0
80% of Biosome 100,000 10,000 10,000
Lawsuits 200,000 20,000 200,000
---------- --------- ------- ---------
TOTALS 6,562,500 4,264,501(2) 412,951 2,231,550
Trustee's fees and
trustee's counsel's
fees (500,000)(3)
---------
NET LIQUIDATION
PROCEEDS FOR
UNSECURED CREDITORS 1,731,550
UNSECURED CLAIMS
PER DEBTOR'S
SCHEDULES 2,868,067
</TABLE>
- ------------------------
(1) All figures are estimates made by plan proponent William Taylor and/or his
counsel, except for "lawsuits," which were estimated by Trustee's counsel. For
the two office buildings, the fair market values are Mr. Taylor's
extrapolations from current operations, as explained in paragraphs 2.4.1 and
2.4.2. The broker's valuations are $2.7 million and $1.75 million,
respectively. The liquidation values are derived on the assumption that
trustees' sales pursuant to Section 363 of the Code typically generate only
about 75% of fair market value. Costs of sale, including brokers' commissions,
are assumed to total 10% of the gross. The illiquid and unmarketable assets
such as accounts receivable, 80% ownership of a moribund subsidiary and
lawsuits are assumed to generate only approximately 10% of fair market value
when liquidated by a chapter 7 trustee.
(2) Although not a saleable asset, the debtors' $15 million net operating loss
carryforward adds significant value to the Reorganized Debtor, either by
allowing it to earn income tax free or to attract new capital from a merger
partner who could better utilize such tax benefits, but provides no value for
creditors upon liquidation.
(3) Trustee and his counsel have already sought or been awarded fees and costs
in the amount of $98,173.85.
EXHIBIT 3
<PAGE> 26
EXHIBIT 4
<PAGE> 27
REORGANIZED DEBTOR'S PRO FORMA BALANCE SHEET
<TABLE>
<S> <C>
ASSETS(1)
Buildings $5,500,000
Land 12,500
A/Rs 750,000
Subsidiaries 100,000
Lawsuits 200,000
----------
SUBTOTAL 6,562,500
LIABILITIES
Secured Debt 1,800,000
Administrative Expenses 200,000(2)
Unsecured Claims 300,000(3)
----------
SUBTOTAL 2,300,000
STOCKHOLDERS' EQUITY $4,262,500
</TABLE>
- ------------------
(1) For assumptions, see footnote 1 of Liquidation Analysis, Exhibit 3,
and paragraph 2.4 of the Disclosure Statement.
(2) See paragraph 3.1 of the Disclosure Statement, re Class 1.
(3) See paragraph 3.4 of the Disclosure Statement.
EXHIBIT 4
<PAGE> 28
EXHIBIT 5
<PAGE> 29
WILLIAM C. TAYLOR
7616 EAST SIERRA VISTA DRIVE
SCOTTSDALE, ARIZONA 85250
(602) 922-0072
EMPLOYMENT
April 1995 - Present
General Manager, Stockwell-Taylor LLC. Co-developer with other partners in
development of two residential subdivisions in west Phoenix valley area.
July 1991 - April 1995
Executive Vice President, Princeton American Corporation.
October 1978 - March 1991
President, Realty Securities Corporation, which was engaged in the acquisition
and development of real estate projects in Arizona. General partner and
Developer of Clearwater Farms, an 1,800-acre single-family residential
community west of Phoenix and over 6,000 acres of recreational and residential
properties south of Tucson and in the White Mountain area of northeastern
Arizona. Experience includes site acquisition and master planning, construction
supervision and project financing.
September 1975 - October 1978
Chief Hearing Officer, Arizona Department of Real Estate. Drafted and
implemented revised Commissioner's rules and regulations relating to
subdivision and supervision of real estate licensees.
August 1974 - September 1975
Carefree Development Corporation. Responsible for administration and liaison
with a number of states and the U.S. Department of Housing and Urban
Development.
February 1974 - July 1974
U.S. Department of Housing and Urban Development. Served as consultant to the
Secretary on matters relating to legal and administrative aspects of the
Federal New Communities Program.
August 1970 - January 1974
Senior Vice-President (Chief Operating Officer), Director and Secretary, Queen
Creek Land & Cattle Corporation, a land development company. Responsible for
administration, financial, construction and marketing operations for this
developer of three communities in central and northern Arizona.
<PAGE> 30
WILLIAM C. TAYLOR
Employment - Continued
September 1969 - May 1970
President and founder, California Scientific Laboratories, Inc., a corporation
engaged in aerospace research and development.
July 1961 - September 1969
Partner, Ryley, Carlock & Applewhite. Major areas of practice in corporate,
banking and general business law, real property development and estate planning.
OTHER BUSINESS ACTIVITIES
Service as consultant to Salt River Project, Arizona Public Service Corporation
and several community development companies.
CURRENT AND FORMER CIVIC ACTIVITIES
Chairman, Planning & Zoning Commission, Town of Paradise Valley; President,
Board of Directors, Visiting Nurse Service; Board of Directors, Arthritis
Foundation (Central Arizona Chapter); Advisory Board Member, Phoenix Symphony
Association; Counsel to Governor of Arizona for Arts and Humanities Commission.
PROFESSIONAL AFFILIATIONS
Member, State Bar of Arizona; Licensed Realtor, State of Arizona.
EDUCATION
Bachelor of Science, 1953; Juris Doctor, 1961; Cornell University, Ithaca, New
York.
MILITARY
Aviator, U.S. Naval Reserve (retired with rank of Commander). Commercial
pilot's license, multi-, single engine, instrument rated.
PERSONAL
Married to Gwen Stockwell Taylor, four children, two step-children, seven
grandchildren.
<PAGE> 31
EXHIBIT 6
<PAGE> 32
Roderick W. Mckinnon, III
300 West Clarendon Avenue, Suite 210
Phoenix, Arizona 85013
(602) 274-9963
(602) 274-6181 Fax
Curriculum Vitae
Education: Northern Arizona University, B.S.
Attended John Marshall Law School
Completed Advanced courses in Finance at Northwestern
University and the New York Institute of Finance
Professional Experience:
1974 to Present R.W. McKinnon & Co., Inc, Phoenix, Az
President
Investment banking and Development Services
to Corporate and Real Estate clients.
- Created, capitalized and managed 24 business units. Initial
capital ranged from mid six figures to mid eight figures as
a principal.
- Performed site selection activities and design services,
financed and constructed 14 major projects with values
ranging from $3,300,000 to $200,000,000 both as an advisor
and as a principal. These activities including residential,
retail, office, industrial, hotels and major community
redevelopment projects.
- Created and operated several strategic partnerships and
joint ventures designed to move specific activities off
balance sheet for private and public corporations.
- Successfully executed workouts and recapitalizations of over
a dozen corporate cases and an equal number of real estate
projects. Assisted several corporations both public and
private through bankruptcy proceedings and back to
viability.
- Survived the late 80's Real Estate Crash with the
distinction of causing no loss to any lender.
- Present and past board member of several private and public
companies.
<PAGE> 33
Roderick W. McKinnon, III
Page Two
1973-1974 Executive Vice President, Wellington Investment and Development
Corporation a syndicator and manager of commercial real estate.
Specialized in the redevelopment of existing commercial real
estate.
1972-1973 Merrill Lynch and Co., Investment Banking
Assisted clients in securing debt and equity with which to grow
their businesses. Helped develop and sell some of the first
public real estate securities.
1968-1973 Thomson & McKinnon Securities, Investment Banking including the
initiation and placement of private and public offerings of debt
and equity securities and municipal bonds.
Personal data Single, with two children ages 18 and 14.
References Furnished upon request
<PAGE> 34
EXHIBIT 7
<PAGE> 35
SCOTT E. BIRD
8825 N 86th Place
Scottsdale, AZ 85258
(602) 948-2649
BUSINESS RESUME
An experienced, senior business consultant with broad business, marketing
and financial expertise. Currently assisting owners and investors in opportunity
analysis, restructuring, improving management and profitability.
Major strengths are in evaluating, realistically, the market potential
matched to the current or proposed organization and its personnel, technical,
production and financial capabilities to achieve the business and ROI
objectives.
Recently certified as a Microsoft Systems Engineer and Certified Trainer,
to enhance and bring current my experience in migration from main frame to
server based networks as well as both local and wide area network management.
RECENT AND CURRENT CONSULTATIONS
Western Pacific Aviation Corporation International Aviation 1995 - Current
Philippines
Formation of USA LLC for owners and investors of Western Pacific Aviation
to participate and support aviation sales to the Philippine Department of
Defense.
Rodrian Investments Managed Futures Trading 1995 - 1996
Denver, Colorado
Acquisition, design and construction of satellite computerized trading
center and personal residence of owner on 14 acre estate in the Denver
foothills.
Financial Recovery, Inc. Liquidation/Collection 1990 - 1992
Phoenix, Arizona
Organized and managed this specialized company to liquidate the assets and
recovery of $2,300,000 of published receivables of the Flagship Acquisition
Corp., dba the Talking Phonebook of Phoenix and Tucson.
Centennial Media Corp. Publisher 1989 - 1990
Denver, Colorado
Retained by venture capital investors to assist President in the
reorganization and expansion of the advertising market share. This was a very
successful turn-around resulting in significantly improved revenue, cash flow
and financial stability.
<PAGE> 36
SCOTT E. BIRD BUSINESS RESUME PAGE 2
BUSINESS HISTORY
Aviation
Founded and owned the following successful commercial and business aviation
companies in Southeast Asia and California from 1974-1989.
Bird & Sons Aviation Thailand & Laos
Philippine Aviation Corporation Manila, Philippines
Bay Aviation Services, Inc. Oakland International Airport, California
Bay Avionics, Inc. Oakland International Airport, California
Pacific Aviation Services San Francisco, California
Property Development
Developer and General Partner of major real estate and resort properties
from 1979-1984. All projects completed and successfully sold.
Osborne Lake Apartments Phoenix, Arizona
Glenbrook Properties (Apartment Complex) Glendale, Arizona
River Run Resort Lake Tahoe, California
Insurance
A major stockholder and director of Safety Insurance Company, the 4th
largest non-life insurance company in Thailand.
Construction
Co-founder and Managing Director of three major, Southeast Asian heavy
construction companies that constructed airfields, highways and major
infrastructure projects for the U.S. Department of Defense and the host
governments.
Philippine Rock Products, Inc. Philippines
Thai Rock Products, Inc Thailand
Bird & Sons, Inc. Southeast Asia
PERSONAL INFORMATION
Graduate of the University of Washington with a B.S. in Chemistry and
Chemical Engineering. A project engineer for the Monsanto Chemical Company
constructing their West Coast plants and facilities. Resigned to join with my
brother in developing our Southeast Asian companies.
Experienced, commercial, multi-engined pilot with over 4,000 command hours
throughout Southeast Asia and the U.S.A.
Married to Ellsy Bird with three adult children. Ellsy Bird is a recognized
artist and an invited member of the Visions 20, Northern California and Leading
Edge Artists, Arizona, groups of the top women artists in their areas, as well
as a juried member of the Arizona Artists Guild.
