<PAGE>
______________________________________________________________________________
______________________________________________________________________________
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
June 18, 1999
Date of Report
(Earliest Reported
Event is May 19, 1999)
PHP HEALTHCARE CORPORATION
(Exact name of registrant as specified in its charter)
Commission File No. 0-16235
Delaware 54-1023168
(State or other jurisdiction of (IRS Employer Identification No.)
incorporation or jurisdiction)
1850 Centennial Park Drive
Reston, Virginia 20191
(Address of principal (Zip Code)
executive offices)
(703) 295-6700
Registrant's telephone number, including area code:
______________________________________________________________________________
(Former names or former address, if changed since last report)
11440 Commerce Park Drive
- ------------------------------------------------------------------------------
Reston, Virginia 20191
- ------------------------------------------------------------------------------
<PAGE>
Item 5. Other Events
- ---------------------
As previously reported by PHP Healthcare Corporation (the "Company" or the
"Debtor"), on November 19, 1998, the Company filed in the United States
Bankruptcy Court for the District of Delaware (the "Bankruptcy Court"),
Bankruptcy Case No. 98-2608(MFW), a voluntary petition for relief under Chapter
11 of the United States Bankruptcy Code (the "Bankruptcy Code"). In accordance
with its Chapter 11 reporting obligations, the Company filed its monthly
operating report for the month ended April 1999 (the "Monthly Report") with the
Office of the U.S. Trustee and the Bankruptcy Court on May 19, 1999. The Monthly
Report is attached to this Current Report on Form 8-K as Exhibit 99.1. Due to
the volume of documents and the expense associated with the electronic filing of
the Monthly Report in its entirety, certain exhibits and attachments to the
Monthly Report are not attached as part of Exhibit 99.1, but are available upon
request from the Office of the United States Trustee or the Bankruptcy Court. In
addition, the Company agrees that it will furnish copies of the omitted
attachments (i) without cost to any stockholder of the Company who so requests
and (ii) to the Commission upon its request.
On May 21, 1999, the Company and NationsBank, N.A., a partially secured
creditor of the Company ("NationsBank," and, collectively with the Debtor, the
"Proponents"), filed a Joint Plan of Liquidation, dated May 19, 1999, for the
Company (the "Plan") and a proposed Disclosure Statement (the "Proposed
Disclosure Statement") to accompany the Plan. The Plan is attached to this
Current Report on Form 8-K as Exhibit 99.2. All capitalized terms utilized in
this Form 8-K, unless otherwise defined herein, have the meanings ascribed to
them in the Plan. In addition, the following description is qualified in its
entirety by reference to the Plan, which is incorporated herein. A hearing to
consider the approval of the Proposed Disclosure Statement, as it may be
amended, will be held before the Bankruptcy Court on June 25, 1999. Objections,
if any, to the approval of the Proposed Disclosure Statement must be received by
the Bankruptcy Court no later than June 21, 1999. A copy of the Proposed
Disclosure Statement is available, without cost, to any stockholder of the
Company upon request served upon the Debtor addressed to Logan & Company, Inc.,
615 Washington Street, Hoboken, NJ 07030, Re: PHP Healthcare Corporation.
The Plan, if approved, classifies holders of Claims and Equity Interests
separately and provides different treatment for different classes of Claims and
Equity Interests in accordance with the Bankruptcy Code. In general, the Plan
provides for the payment in cash of Allowed Administrative Claims and Allowed
Priority Claims (except for the Allowed Priority Claim of NationsBank). The Plan
also creates two liquidating entities. One of these entities will be created for
the benefit of NationsBank with respect to its secured claim, which will be
satisfied through the Debtor's transfer of certain collateral to this entity.
The other entity, a limited liability company to be formed under Delaware law
(the "Liquidating LLC"), will be managed by a representative selected by the
Committee of Unsecured Creditors (the "Liquidating Agent"), and will be
administered generally for the benefit of holders of Allowed Unsecured Claims,
which will be entitled to receive membership interests in the Liquidating LLC
and the resulting distributions on account of their respective interests (as
described in Section 7.4 of the Plan). The recoveries to be received by holders
of Allowed Unsecured Claims will depend upon, among other things, the ability of
the Liquidating Agent to realize upon the value of the assets comprising the
Liquidating LLC, which will be listed on Exhibit 1.1.23 of the Plan (when the
Plan is amended).
<PAGE>
The Company believes that the Plan will yield to holders of Claims and
Equity Interests an amount at least equal to what would be available for their
respective Claims and Interests in a liquidation of the Company under Chapter 7
of the Bankruptcy Code. The Company believes that holders of Class 4 Claims
(Unsecured Claims) will enjoy a greater recovery under the Plan due to (i)
avoiding under the Plan the increased costs and expenses of a Chapter 7
liquidation associated with fees payable to a Chapter 7 trustee and its
professionals; (ii) the availability under the Plan of the $250,000 Plan Fund to
initiate litigation and administration of the Assets, which would not be
available in a Chapter 7 liquidation; and (iii) the Plan's provision for the
preferential sharing in the first $5,000,000 of distributions by the Liquidating
LLC among Class 4 Claim holders due to NationsBank's consensual non-
participation in these distributions. In addition, holders of Administrative and
Priority Claims have no assurance of being paid in a Chapter 7 liquidation of
the Company, while the Plan provides for the Available Cash Collateral to pay
Administrative and Priority Claims in cash upon allowance. As a result of these
factors, the Company believes that the Plan provides a superior recovery for
holders of Claims compared to a Chapter 7 liquidation. If the Plan is not
confirmed by the Bankruptcy Court and consummated, or another plan is not
approved by the Bankruptcy Court in lieu thereof, the Debtor believes that its
only realistic alternative is for its liquidation under Chapter 7 of the
Bankruptcy Code.
The holders of Equity Interests will not receive or retain any interest or
property under the Plan, except the beneficial interests in the custodial trust
established pursuant to section 8.1.2 of the Plan, on account of which the
Debtor anticipates no payment of money or any other consideration. Accordingly,
if the Plan is confirmed by the Bankruptcy Court, on the effective date of the
Plan the certificates that previously evidenced ownership of shares of Common
Stock and Preferred Stock of the Company shall be canceled and shall be null and
void, and the holders thereof shall have no rights thereunder, and such
certificates shall evidence no rights.
The Proponents may alter, amend, or modify the Plan under section 1127(a)
of the Bankruptcy Code at any time prior to the Confirmation Date so long as the
Plan, as modified, meets the requirements of sections 1123 and 1123 of the
Bankruptcy Code. After the Confirmation Date and prior to the Effective Date,
the Proponents may alter, amend, or modify the Plan in accordance with section
1127(b) of the Bankruptcy Code. In addition, the Plan may be revoked or
withdrawn prior to the Confirmation Date by the Proponents. If the Plan is
revoked or withdrawn prior to the Confirmation Date, then the Plan shall be
deemed null and void. There can be no assurance that the Plan will be confirmed
by the Bankruptcy Court.
This Form 8-K does not contain or purport to be a complete description of
the Plan or the applicable provisions of the Bankruptcy Code.
<PAGE>
Item 7. FINANCIAL STATEMENTS AND EXHIBITS
Exhibits. The following exhibits are furnished as part of this report:
Exhibit Description
------- -----------
99.1 Monthly Operating Report of PHP Healthcare
Corporation as filed with the Office of the
U.S. Trustee and the United States Bankruptcy
Court for the District of Delaware on May 19,
1999.
99.2 Joint Plan of Liquidation for PHP Healthcare
Corporation as filed with the United States
Bankruptcy Court for the District of Delaware
on May 21, 1999.
FORWARD LOOKING STATEMENTS
This Report contains forward-looking statements. The words, "believe",
"expect", and "anticipate" and similar expressions identify such forwarding-
looking statements. These forward-looking statements reflect the Company's views
with respect to future events and financial performance. Such statements are
subject to risks and uncertainties that could cause the Company's actual results
and financial position to differ materially from those projected in the forward-
looking statements. Readers are cautioned not to place undue reliance on these
forward-looking statements, which speak only as of their dates. The Company
undertakes no obligation to publicly update or revise any forward-looking
statements, whether as a result of new information, future events or otherwise.
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
PHP HEALTHCARE CORPORATION
By: /s/ Anthony M. Picihi
---------------------------------
Name: Anthony M. Picihi
Title: Executive Vice President
Dated: June 18, 1999
<PAGE>
EXHIBIT INDEX
Exhibit Description
------- -----------
99.1 Monthly Operating Report of PHP Healthcare
Corporation as filed with the Office of the U.S.
Trustee and the United States Bankruptcy Court for
the District of Delaware on May 19, 1999.
99.2 Joint Plan of Liquidation for PHP Healthcare
Corporation as filed with the United States
Bankruptcy Court for the District of Delaware on
May 21, 1999.
<PAGE>
Debtor: PHP Healthcare Corporation
Case No: 98-2608 (MFW)
OFFICE OF THE UNITED STATES TRUSTEE - REGION 3
MONTHLY OPERATING REPORT
FOR THE MONTH ENDING April, 1999
================================================================================
Document Previously Explanation
Required Attachments Attached Submitted Attached
1. Tax Receipts N/A ( ) ( ) ( )
2. Bank Statements (X) ( ) ( )
3. Most Recently Filed ( ) ( ) ( )
Income Tax Return
4. Most Recently Annual ( ) (X) ( )
Financial Statements
Prepared by Accountant
IN ACCORDANCE WITH TITLE 25, SECTION 1746 OF THE UNITED STATES CODE, I
DECLARE UNDER PENALTY OF PERJURY THAT I HAVE EXAMINED THE FOLLOWING MONTHLY
OPERATING REPORT (CASH BASIS - 1 THROUGH CASH BASIS - 9) AND THE
ACCOMPANYING ATTTACHMENTS AND, TO THE BEST OF MY KNOWLEDGE, THESE DOCUMENTS
ARE TRUE, CORRECT AND COMPLETE DECLARATION OF THE PREPARER (OTHER THAN
RESPONSIBLE PARTY) IS BASED ON ALL INFORMATION OF WHICH PREPARER AS ANY
KNOWLEDGE.
RESPONSIBLE PARTY:
/s/ Anthony M. Picini Executive V.P.
__________________________________ ---------------------------
SIGNATURE OF RESPONSIBLE PARTY TITLE
Anthony M. Picini May 19, 1999
----------------------------------- ___________________________
PRINTED NAME OF RESPONSIBLE PARTY DATE
PREPARER
___________________________________ ___________________________
SIGNATURE OF PREPARER TITLE
___________________________________ ___________________________
PRINTED NAME OF PREPARER DATE
All Chapter 11 debtors must file this report with the Court
and serve a copy on the United States Trustee no later than
the 15th day of the month following the end of the month
covered by this report.
<PAGE>
Debtor: PHP Healthcare Corporation
Case No: 98-2608 (MFW)
<TABLE>
<CAPTION>
Apr-99 MONTH ENDING
-------------------
=================================================================================================================
CASH RECEIPTS AND MONTH MONTH MONTH
--------- --------- ----------
DISBURSEMENTS 2/28/99 3/31/99 4/30/98
- -----------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
1 Cash -Beginning of Month 3,075,781 3,363,840 3,478,750
- -----------------------------------------------------------------------------------------------------------------
RECEIPTS
- -----------------------------------------------------------------------------------------------------------------
2 Cash Sales 107,018 210,775 140,401
- -----------------------------------------------------------------------------------------------------------------
3 Accounts Receivable Collections 6,015,169 7,457,669 5,239,946
- -----------------------------------------------------------------------------------------------------------------
4 Loans & Advances
- -----------------------------------------------------------------------------------------------------------------
5 Sale of Assets (attachment 2C) 962,178 92,500 3,016,784
- -----------------------------------------------------------------------------------------------------------------
6 Lease & Rental Income
- -----------------------------------------------------------------------------------------------------------------
7 Wages
- -----------------------------------------------------------------------------------------------------------------
8 Other (Attach List) (attachment 2A) 73,712 7,077,550
- -----------------------------------------------------------------------------------------------------------------
9 Total Receipts (total lines 2-8) 7,084,365 7,834,656 15,474,680
DISBURSEMENTS
- -----------------------------------------------------------------------------------------------------------------
10 Net Payroll
- -----------------------------------------------------------------------------------------------------------------
11 Payroll Taxes Paid
- -----------------------------------------------------------------------------------------------------------------
12 Sales, Use & Other Taxes Paid
- -----------------------------------------------------------------------------------------------------------------
13 Inventory Purchases
- -----------------------------------------------------------------------------------------------------------------
14 Mortgage Payments
- -----------------------------------------------------------------------------------------------------------------
15 Other Secured Note Payments
- -----------------------------------------------------------------------------------------------------------------
16 Rental & Lease Payments
- -----------------------------------------------------------------------------------------------------------------
17 Utilities
- -----------------------------------------------------------------------------------------------------------------
18 Insurance
- -----------------------------------------------------------------------------------------------------------------
19 Vehicle Expense
- -----------------------------------------------------------------------------------------------------------------
20 Travel
- -----------------------------------------------------------------------------------------------------------------
21 Entertainment
- -----------------------------------------------------------------------------------------------------------------
22 Repairs & Maintenance
- -----------------------------------------------------------------------------------------------------------------
23 Supplies
- -----------------------------------------------------------------------------------------------------------------
24 Advertising
- -----------------------------------------------------------------------------------------------------------------
25 Household Expenses
- -----------------------------------------------------------------------------------------------------------------
26 Charitable Contributions
- -----------------------------------------------------------------------------------------------------------------
27 Gifts
- -----------------------------------------------------------------------------------------------------------------
28 Other (Attach List) (attachment 2B) 6,269,371 7,074,698 5,056,745
- -----------------------------------------------------------------------------------------------------------------
29 Total Lines 10 thru 28 6,269,371 7,074,698 5,056,745
- -----------------------------------------------------------------------------------------------------------------
REORGANIZATION EXPENSES
- -----------------------------------------------------------------------------------------------------------------
30 Professional Fees 526,935 645,048 540,138
- -----------------------------------------------------------------------------------------------------------------
31 U.S. Trustee Fees
- -----------------------------------------------------------------------------------------------------------------
32 Other (Attach List) (attachment 2D) 10,207,741
- -----------------------------------------------------------------------------------------------------------------
33 Total Lines 30 thru 32 526,935 645,048 10,747,879
- -----------------------------------------------------------------------------------------------------------------
34 Total Disbursements (line 29+line 33) 6,796,306 7,719,746 15,804,624
- -----------------------------------------------------------------------------------------------------------------
35 Net Cash Flow (line 9 - line 34) 288,059 114,910 (329,944)
- -----------------------------------------------------------------------------------------------------------------
36 Cash - End of Month (line 1 + line 35) 3,363,840 3,478,750 3,148,806
=================================================================================================================
</TABLE>
<PAGE>
PHP HEALTHCARE CORP.
Other Receipts
April 1999
==========================================================================
Description Net Amount
==========================================================================
DC Chartered Health Plan Settlement 7,000,000.00
US Treasury Form 941 Refund 77,549.60
- --------------------------------------------------------------------------
Total Other Receipts 7,077,549.60
==========================================================================
Attachment 2A
<PAGE>
PHP HEALTHCARE CORP.
EXPENSES - CASH BASIS
APRIL 1999
<TABLE>
<CAPTION>
===========================================================================
Description Net Activity
===========================================================================
<S> <C>
Net Payroll 1,552,507
Payroll Taxes 750,225
Payroll W/H's 2,312
Due from HIP 0
Other Secured Notes Payable 0
Insurance 581,625
Less malpractice premium paid from sales (306,816)
proceeds
Legal 76,851
Professional Fees 14,048
Directors' Fees 0
Deposits (2,000)
Health/Dental Claims 17,873
Sales & Use Taxes 70
Line of Credit, Notes & Leases 0
Contract-Primary Care Prov 25,585
Contract-Locum Tenens Fees 0
Contract-Psychiatrist 12,479
Contract-Dentist 3,585
Contract-Consultant 0
Contract-Medical Temps 41,012
Contract-Office Temps 91,670
Contract-Transcriptionist 0
Fringe Benefits 89,520
Claims-Physician 0
Claims-Other A/P 1,842,552
Medical Lab Services/Supplies 47,192
Medical Supplies 89,521
Patient Care Services 1,104
Office Supply Expense 15,446
Utilities 31,993
Bldg & Office Expense 221,696
Less rent paid from Primus sale proceeds (72,500)
Business Taxes/Licenses 59
Professional Dues & Subs 2,500
Employee Education & Other 4,368
Travel & Meals 16,171
Interest Expense 590
Prior Period Adjustment (94,533)
Misc. Expense 39
---------------------------------------------------------------------------
Total Disbursements 5,056,745
===========================================================================
</TABLE>
Attachment 2B
<PAGE>
PHP HEALTHCARE CORPORATION
Sale of Assets
April 1999
<TABLE>
<CAPTION>
====================================================================================================================================
Contract Working
Sale Capital Total
====================================================================================================================================
<S> <C> <C> <C>
Primus
Purchase Price/Total 3,060,000.00 1,511,962.00 4,571,962.00
Adjustments: Fairfax Lease Cure (30,000.00) (30,000.00)
Woodbridge Lease Cure (42,500.00) (42,500.00)
Malpractice Tail Coverage (285,000.00) (285,000.00)
Held in Escrow (988,038.00) (1,511,962.00) (2,500,000.00)
--------------- ----------------- ----------------
Subtotal 1,714,462.00 - 1,714,462.00
PCA
Proceeds from sale 155,000.00 155,000.00
Adjustments: Malpractice insurance (21,816.00) (21,816.00)
Accrued vacation expense (5,361.19) (5,361.19)
Purchase of PCA partnership interest from Jerry McBride (1,000.00) (1,000.00)
--------------- ----------------- ----------------
126,822.81 - 126,822.81
Cornerstone
Proceeds from sale 1,300,000.00 1,300,000.00
Adjustments: Repair charges (8,752.00) (8,752.00)
Commerce V hold over rent (23,941.25) (23,941.25)
Commerce III April rent, net of CAM adjustments (41,864.15) (41,864.15)
Commerce V April rent, net of CAM adjustments (49,943.86) (49,943.86)
--------------- ----------------- ----------------
1,175,498.74 - 1,175,498.74
- ------------------------------------------------------------------------------------------------------------------------------------
Total Asset Sales 3,016,783.55 - 3,016,783.55
====================================================================================================================================
</TABLE>
Attachment 2C
<PAGE>
PHP HEALTHCARE CORPORATION
Other Disbursements
April 1999
<TABLE>
<CAPTION>
================================================================================================================================
Corporate Meridian
Credit Services Corporate Healthcare Total
================================================================================================================================
<S> <C> <C> <C> <C>
DC Chartered Stettlement 7,000,000.00 7,000,000.00
PCA
Proceeds from sale 155,000.00
Adjustments: Malpractice Insurance (21,816.00)
Accrued Vacation Expense (5,361.19)
---------------
127,822.81 127,822.81
Primus
Purchase Price/Total 3,060,000.00
Adjustments: Fairfax Lease Cure (30,000.00)
Woodbridge Lease Cure (42,500.00)
Malpractice Tail Coverage (285,000.00)
Held in Escrow (988,038.00)
---------------
Subtotal 1,714,462.00 1,714,462.00
Anderson Sale 92,500.00 92,500.00
Columbus Receipt 163,409.33 163,409.33
Primus - Fairfax and Woodbridge A/R Receipts 1,109,546.94 1,109,546.94
- --------------------------------------------------------------------------------------------------------------------------------
Total Other Disbursements 8,934,784.81 1,272,956.27 10,207,741.08
================================================================================================================================
</TABLE>
Attachment 2D
<PAGE>
Debtor: PHP Healthcare Corporation
Case No: 98-2608 (MFW)
<TABLE>
<CAPTION>
=========================================================
CASH DISBURSEMENTS DETAIL MONTH: Apr-99
(Attach sheets if necessary) ----------------------
=====================================================================================================================
CASH DISBURSEMENTS
=====================================================================================================================
DATE PAYEE PURPOSE AMOUNT
<S> <C> <C> <C> <C>
--------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------
Various Various (See attachment 3A) 10,843,837
--------------------------------------------------------------------------------------------------------
4/1-30/99 Various (See attachment 3C) 772,092
--------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------
TOTAL CASH DISBURSEMENTS 11,615,929
=====================================================================================================================
</TABLE>
<TABLE>
<CAPTION>
=====================================================================================================================
BANK ACCOUNT DISBURSEMENTS
- ---------------------------------------------------------------------------------------------------------------------
CHECK
NUMBER DATE PAYEE PURPOSE AMOUNT
<S> <C> <C> <C> <C>
- ---------------------------------------------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------------------------------------------
Various 4/1-30/99 Various (See attachment 3B) 2,636,189
- ---------------------------------------------------------------------------------------------------------------------
Various 4/1-30/99 Various Net Payroll 1,552,507
- ---------------------------------------------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------------------------------------------
Various 3/99 and prior Less voided checks issued in prior months.
- ---------------------------------------------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------------------------------------------
Total Bank Account Disbursements 4,188,695
=====================================================================================================================
</TABLE>
<TABLE>
=====================================================================================================================
<S> <C>
TOTAL DISBURSEMENTS FOR THE MONTH 15,804,624
=====================================================================================================================
</TABLE>
<PAGE>
PHP HEALTHCARE CORP.
NationsBank Concentration Account 375 052 7254
Cash Disbursements
April 1999
<TABLE>
<CAPTION>
==================================================================================================================================
Payroll Notes Payable Reliastar/ Misc.
APR Vendor Description Taxes LOC CoreSource Expense TOTAL
==================================================================================================================================
<S> <C> <C> <C> <C> <C> <C> <C>
5 PHP - FIT & FICA 368,907.28 368,907.28
7 PHP - VA Tax w/h 17,987.53 17,987.53
7 PCA - FIT & FICA 6,673.57 6,673.57
8 Corporate Credit Services Proceeds from DC Chartered
Settlement 7,000,000.00 7,000,000.00
8 Corporate Credit Services Proceeds from Sale to
Meridian 1,714,462.00 1,714,462.00
8 Meridian Corporate Healthcare Columbus Receipt of 4/7/99 163,409.33 163,409.33
9 PHP - FIT & FICA 32,969.59 32,969.59
9 PHP - VA Tax w/h 3,331.12 3,331.12
12 ReliaStar Claims and Adm Fees 4,534.97 4,534.97
14 Corporate Credit Services Proceeds from PCA Sale 155,000.00 155,000.00
15 PHP - SC Tax w/h 15,067.09 15,067.09
15 PHP - MD Tax w/h 12,828.59 12,828.59
19 PHP - FIT & FICA 114,864.95 114,864.95
20 ReliaStar Claims and Adm Fees 10,463.27 10,463.27
21 PHP - VA Tax w/h 5,041.22 5,041.22
22 Corporate Credit Services Payment from Anderson less
PCA Expenses 65,322.81 65,322.81
23 Meridian Corporate Healthcare Fairfax & Woodbridge
Receipts of 4/20 1,109,546.94 1,109,546.94
28 ReliaStar Claims and Adm Fees 2,875.13 2,875.13
30 PHP - FUTA 40,552.01 40,552.01
---------------------------------------------------------------------------------------------------------------------------
Total 618,222.95 8,934,784.81 17,873.37 1,272,956.27 10,843,837.40
===========================================================================================================================
</TABLE>
Attachment 3A
<PAGE>
PHP Healthcare Corporation
Cash Payment Register - Wire Transfers
For the month of April 1999
<TABLE>
<CAPTION>
==================================================================================================================================
Payment Vendor Remit To: Payment Payment
Number Number Name City Date Amount
==================================================================================================================================
<S> <C> <C> <C> <C> <C>
1809 10040 National Union Fire Insurance Washington 4/14/99 122,625.00
5577 3961 Midland Loan Services Kansas City 4/5/99 42,605.21
5641 2284 Olympia Properties, Inc Richmond 4/5/99 27,391.40
5698 3322 Prima Search, Inc Arlington 4/5/99 7,280.00
5899 9900 Eastridge Group Temps San Diego 4/27/99 6,500.00
5952 3322 Prima Search, Inc Arlington 4/27/99 5,600.00
6033 400 Washington Post Baltimore 4/29/99 402.00
6110 250 Nationwide Advertising Ser Cincinnati 4/29/99 245.90
8801 9900 Eastridge Group Temps San Diego 4/7/99 5,781.60
8870 4850 Price Waterhouse Coopers LLP Charlotte 4/15/99 213,489.60
8973 9334 Richards, Layton & Finger Wilmington 4/15/99 134,670.12
11457 289 Physicians Dispensing RX Oklahoma City 4/6/99 2,896.69
11526 10136 Healthcare Insurance Service Houston 4/6/99 459,000.00
Less: Malpractice premium paid from sales proceeds (306,816.00)
12374 6020 Alexander's Moving and Storage Baltimore 4/28/99 10,400.00
12438 3419 Carmack Moving & Storage Herndon 4/28/99 4,356.25
12459 9900 Eastridge Group Temps San Diego 4/20/99 5,979.60
13346 3322 Prima Search, Inc Arlington 4/13/99 7,280.00
13383 5585 CAM Communications, Inc Fairfax 4/12/99 3,525.00
13414 250 Nationwide Advertising Ser Cincinnati 4/13/99 2,670.08
13428 9900 Eastridge Group Temps San Diego 4/12/99 5,029.20
13475 6020 Alexander's Moving and Storage Baltimore 4/12/99 11,180.00
- ----------------------------------------------------------------------------------------------------------------------------------
Total Open Payments 772,091.65
==================================================================================================================================
</TABLE>
Attachment 3C
<PAGE>
<TABLE>
<CAPTION>
===================================
ACCOUNTS RECEIVABLE MONTH: Apr-99
------------------
Accounts Receivable -Trade
===============================================================================================================
<S> <C>
Total accounts receivable at the beginning of the period 3,170,200
- ---------------------------------------------------------------------------------------------------------------
Amounts billed during the period, net of adjustments 5,001,223
- ---------------------------------------------------------------------------------------------------------------
Amounts collected during the period 5,239,946
- ---------------------------------------------------------------------------------------------------------------
Total accounts receivable at the end of the period 2,931,477
===============================================================================================================
===============================================================================================================
ACCOUNTS RECEIVABLE AGING AMOUNT
- ---------------------------------------------------------------------------------------------------------------
0 - 30 days old 2,585,892
- ---------------------------------------------------------------------------------------------------------------
30 - 60 days old 141,016
- ---------------------------------------------------------------------------------------------------------------
61 - 90 days old 98,703
- ---------------------------------------------------------------------------------------------------------------
91 + days old 105,865
- ---------------------------------------------------------------------------------------------------------------
TOTAL ACCOUNTS RECEIVABLE 2,931,477
- ---------------------------------------------------------------------------------------------------------------
TOTAL CONSIDERED UNCOLLECTIBLE 0
- ---------------------------------------------------------------------------------------------------------------
ACCOUNTS RECEIVABLE (NET) 2,931,477
- ---------------------------------------------------------------------------------------------------------------
===============================================================================================================
AMOUNTS DUE FROM AFFILIATES & INSIDERS (ITEMIZE) AMOUNT
- ---------------------------------------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------------------------------------
(See attachment 4A) 61,996,561
- ---------------------------------------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------------------------------------
TOTAL 61,996,561
===============================================================================================================
===============================================================================================================
INVENTORY AMOUNT
===============================================================================================================
Beginning inventory 0
- ---------------------------------------------------------------------------------------------------------------
Plus Purchases
- ---------------------------------------------------------------------------------------------------------------
Minus Sales
- ---------------------------------------------------------------------------------------------------------------
Ending Inventory 0
===============================================================================================================
</TABLE>
<PAGE>
PHP Healthcare Corp.
Amounts Due from Affiliates & Insiders
April 30, 1999
<TABLE>
<CAPTION>
Exec Loan Program Amount
----------------- ------
<S> <C>
Jack Mazur 5,366,033
Michael Starr 1,366,890
Anthony Picini 153,518
William Lubin 171,420
Kenneth Weixel 284,360
Robert Bowles 444,382
Frank Provato 132,731
- -----------------------------------------------------------------------------
Subtotal 7,919,335
- -----------------------------------------------------------------------------
Other Notes Receivable
----------------------
Robert Bowles 690,250
Kenneth Weixel-Employment 63,333
Kenneth Weixel-Other 273,725
G&L Realty 2,127,500
Shamrock Investments 963,000
- -----------------------------------------------------------------------------
Subtotal 4,117,808
- -----------------------------------------------------------------------------
Due from Subsidiaries
---------------------
Pinnacle Health Enterprises, LLC 26,139,536
Pinnacle Medical Group, PA 21,523,392
All other subsidiaries 2,296,491
- -----------------------------------------------------------------------------
Subtotal 49,959,418
- -----------------------------------------------------------------------------
- -----------------------------------------------------------------------------
Grand Total 61,996,561
=============================================================================
</TABLE>
Attachment 4A
<PAGE>
<TABLE>
<CAPTION>
MONTH: Apr-99
---------------------
- ----------------------------------------------------------------------------------------------------------------------------------
UNPAID POSTPETITION PAYABLES AND AGING AMOUNT
- ----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Postpetition items
Reorganization Expenses
Professional Fees 1,041,290
U.S. Trustee Fees
Court Fees
Trade Debt 91,774
Other (attach list) (Report tax in next section only)
- ----------------------------------------------------------------------------------------------------------------------------------
AGING 0-30 31-60 61-90 90 +
PAYABLES DAYS DAYS DAYS DAYS TOTAL
- ----------------------------------------------------------------------------------------------------------------------------------
1,133,065 0 0 0 1,133,065
- ----------------------------------------------------------------------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------------------------------------------------------------
STATUS OF POST PETITION TAXES
- ----------------------------------------------------------------------------------------------------------------------------------
BEGINNING AMOUNT ENDING
TAX WITHHELD AMOUNT TAX DELINQUENT
LIABILITY* OR ACCRUED PAID LIABILITY TAXES
- ----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
FEDERAL
Withholding** 0 358,449 273,054 85,395
FICA Employee** 0 154,095 119,755 34,340
FICA Employer** 0 155,110 120,644 34,466
Unemployment 40,552 2,678 40,552 2,678
Income
Other (Attach List)
- ----------------------------------------------------------------------------------------------------------------------------------
Total Federal Taxes 40,552 670,332 554,004 156,879 -
- ----------------------------------------------------------------------------------------------------------------------------------
STATE AND LOCAL
Withholding 63,579 105,609 120,631 48,557
Sales
Excise
Unemployment 80,405 6,785 80,405 6,785
Real Property
Personal Property
Other (Attach List)
- ----------------------------------------------------------------------------------------------------------------------------------
Total State & Local 143,984 112,394 201,036 55,342 0
- ----------------------------------------------------------------------------------------------------------------------------------
TOTAL TAXES 184,536 782,725 755,041 212,221 0
- ----------------------------------------------------------------------------------------------------------------------------------
</TABLE>
*The beginning tax liability should represent the liability from the prior month
or if this is the first operating report the amount should be zero.
** Attach photocopies of PCF Form 8123 or your FTD coupon and payment receipt to
verify payment or deposit.
<PAGE>
The debtor in possession must complete the reconciliation below for each bank
account, including all general, payroll and tax accounts, as well as all savings
and investment accounts, money market accounts, certificates of deposit,
government obligations, etc. Accounts with restricted funds should be identified
by placing an asterix next to the account number. Attach additional sheets if
necessary.
<TABLE>
<CAPTION> MONTH: Apr-99
- ---------------------------------------------- ------------------------------------------------------------------
BANK RECONCILIATIONS
ACCOUNT #1 ACCOUNT #2 ACCOUNT #3 ACCOUNT #4
- ----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
A BANK:
B ACCOUNT NUMBER
C PURPOSE (TYPE)
- ----------------------------------------------------------------------------------------------------------------------------------
1 Balance per Bank Statement (See attachment 6A)
2 Add: Total Deposits
3 Less: Outstanding Checks
4 +/- Other Reconciling Items (Attach List)
5 Month Ending Balance Per Books As of 4/30/99 3,135,156
6 Number of Last Check Written
- ----------------------------------------------------------------------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
- -----------------------------
INVESTMENT ACCOUNTS
- --------------------------------------------------------------------------------------
DATE OF TYPE OF PURCHASE CURRENT
BANK, ACCOUNT NAME & NUMBER PURCHASE INSTRUMENT PRICE VALUE
- --------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
7
8
9 N/A
10
11 Total Investment 0 0
- --------------------------------------------------------------------------------------
- -----------------------------
CASH
- --------------------------------------------------------------------------------------
12 Currency on Hand 13,650
- --------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------
13 TOTAL CASH - END OF MONTH (TOTAL LINES 5, 11 &12) As of 4/30/99 3,148,806
- --------------------------------------------------------------------------------------
</TABLE>
Please attach copies of BANK STATEMENTS.
<PAGE>
PHP Healthcare Corporation
Cash Balances
4/30/99
<TABLE>
<CAPTION>
===============================================================================
G/L Balance
Bank Title Account # 4/30/99
===============================================================================
<S> <C> <C> <C>
NationsBank Concentration 375 052 7254 3,327,480.04
NationsBank Accounts Payable-Pre-Petition 375 001 8417 0.00
NationsBank Payroll 375 001 8420 (55,085.87)
NationsBank Executive 375 052 6886 2,173.16
NationsBank Accounts Payable-Post-Petition 375 123 3738 (139,411.29)
- -------------------------------------------------------------------------------
Total 3,135,156.04
===============================================================================
</TABLE>
Attachment 6A
<PAGE>
================================================================================
PAYMENTS TO INSIDERS AND PROFESSIONALS
================================================================================
MONTH: Apr.-99
Of the total disbursements shown for the month, list the amount paid
to insiders (as defined in section 101 (31) (A)-(F) of the U.S. Bankruptcy Code)
and to professionals, for payments to insiders, identify the type of
compensation paid (e.g. salary, bonus, commission, insurance, housing allowance
travel car allowance, etc). Attach additional sheets if necessary.
<TABLE>
<CAPTION>
===================================================================================================================================
INSIDERS
===================================================================================================================================
TYPE OF CUMULATIVE UNPAID
NAME POSITION PAYMENT PAID BALANCE
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
1 K. Weixel Acting CEO & President Salary 55,385 -
- -----------------------------------------------------------------------------------------------------------------------------------
2 M Starr Senior Executive Vice President Salary 22,872 -
- -----------------------------------------------------------------------------------------------------------------------------------
3 A. Picini Executive Vice President Salary 34,615 -
- ----------------------------------------------------------------------------------------------------------------------------------
4 J. Hercenberg Senior Vice President Salary 31,731 -
- ----------------------------------------------------------------------------------------------------------------------------------
5 J. Mazur Former CEO & President Salary - -
- ----------------------------------------------------------------------------------------------------------------------------------
6 W. Lubin Former Executive Vice President Salary - -
- ----------------------------------------------------------------------------------------------------------------------------------
7 D. Berman Former Senior Vice President Salary - -
- ----------------------------------------------------------------------------------------------------------------------------------
Total Payments to Insiders 144,602 -
==================================================================================================================================
</TABLE>
<TABLE>
<CAPTION>
===================================================================================================================================
PROFESSIONALS
===================================================================================================================================
DATE OF COURT TOTAL
ORDER AUTH. AMOUNT AMOUNT PAID
NAME PAYMENT APPROVED PAID TO DATE (cumulative)
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
1 Richards, Layton &
Finger Legal Fees - 4/15/99 163,177 134,670 560,338
- -----------------------------------------------------------------------------------------------------------------------------------
2 The Bayard Firm Legal Fees - 4/14/99 11,798 9,675 9,675
- -----------------------------------------------------------------------------------------------------------------------------------
3 Cole, Schotz, Meisel,
Forman Legal Fees - 4/14/99 52,355 42,829 173,769
- -----------------------------------------------------------------------------------------------------------------------------------
4 Comey, Boyd & Luskin Legal Fees 0 0 23,289
- -----------------------------------------------------------------------------------------------------------------------------------
5 Weil Gotshal &
Manges, LLP Legal Fees - 4/23/99 78,948 63,775 63,775
- -----------------------------------------------------------------------------------------------------------------------------------
6 Arthur Andersen, LLP Professional Fees - 4/14/99 90,487 75,699 186,019
- -----------------------------------------------------------------------------------------------------------------------------------
7 Pricewaterhouse
Coopers, LLP Professional Fees - 4/15/99 258,966 213,490 713,787
- -----------------------------------------------------------------------------------------------------------------------------------
8 Sugarman & Company, LLP Professional Fees 0 0 182,107
- -----------------------------------------------------------------------------------------------------------------------------------
Total Payments to Professionals 655,731 540,138 1,912,758
===================================================================================================================================
</TABLE>
<TABLE>
<CAPTION>
===================================================================================================================================
SECURED NOTES, LEASES PAYABLE AND
ADEQUATE PROTECTION PAYMENTS
===================================================================================================================================
SCHEDULED AMOUNTS PAID TOTAL
NAME OF MONTHLY DURING UNPAID
CREDITOR PAYMENTS DUE MONTH POSTPETITION
<S> <C> <C> <C> <C>
- -----------------------------------------------------------------------------------------------------------------------------------
1
- -----------------------------------------------------------------------------------------------------------------------------------
2
- -----------------------------------------------------------------------------------------------------------------------------------
3
- -----------------------------------------------------------------------------------------------------------------------------------
4
- -----------------------------------------------------------------------------------------------------------------------------------
5
- -----------------------------------------------------------------------------------------------------------------------------------
Total 0
===================================================================================================================================
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
===================================================================================================================================
QUESTIONNAIRE
MONTH: Apr-99 YES NO
===================================================================================================================================
<S> <C> <C> <C>
1 Have any assets been sold or transferred outside the normal course of business this reporting period? X
- -----------------------------------------------------------------------------------------------------------------------------------
2 Have any funds been disbursed from any account other than a debtor in possession account? X
- -----------------------------------------------------------------------------------------------------------------------------------
3 Are any postpetition receivables (accounts,notes, or loans) due from related parties? X
- -----------------------------------------------------------------------------------------------------------------------------------
4 Have any payments been made on prepetition liabilities this reporting period? X
- -----------------------------------------------------------------------------------------------------------------------------------
5 Have any postpetition loans been received by the debtor from any party? X
- -----------------------------------------------------------------------------------------------------------------------------------
6 Are any postpetition payroll taxes past due? X
- -----------------------------------------------------------------------------------------------------------------------------------
7 Are any postpetition state or federal income taxes past due? X
- -----------------------------------------------------------------------------------------------------------------------------------
8 Are any postpetition real-estate taxes past due? X
- -----------------------------------------------------------------------------------------------------------------------------------
9 Are any other postpetition taxes past due? X
- -----------------------------------------------------------------------------------------------------------------------------------
10 Are any amounts owed to postpetition creditors past due? X
- -----------------------------------------------------------------------------------------------------------------------------------
11 Have any prepetition taxes been paid during the reporting period? X
- -----------------------------------------------------------------------------------------------------------------------------------
12 Are any wage payments past due? X
===================================================================================================================================
</TABLE>
If the answer to any of the above questions is "YES", provide a detailed
explanation of each item. Attach additional sheets if necessary
(See attachment 8A)
<TABLE>
<CAPTION>
===================================================================================================================================
INSURANCE
===================================================================================================================================
YES NO
<S> <C> <C> <C>
1 Are worker's compensation, general liability and other necessary insurance coverages in effect? X
- -----------------------------------------------------------------------------------------------------------------------------------
2 Are all premium payments paid current? X
- -----------------------------------------------------------------------------------------------------------------------------------
3 Please itemize policies below.
===================================================================================================================================
</TABLE>
If the answer to any of the above questions is "NO", or if any policies have
been cancelled or not renewed during this reporting period, provide an
explanation below. Attach additional sheets if necessary.
(See attachment 8B)
<TABLE>
<CAPTION>
===================================================================================================================================
INSTALLMENT PAYMENTS
===================================================================================================================================
TYPE OF
POLICY CARRIER PERIOD COVERED
<S> <C> <C> <C>
- -----------------------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------------------
===================================================================================================================================
</TABLE>
<PAGE>
PHP Healthcare Corporation
Case #98-2608 (MFW)
For the month ended April 30, 1999
Additional information for questionnaire
Question #
1.
Assets sold during the current month include the following: 1. the Primus
contracts were sold to Meridian Corporate Healthcare ($1,714,462 net of
expenses), 2. the assets of Primecare Associates were sold to Frank L. Provato,
M.D. ($126,823 net of expenses), and 3. the Cornerstone below market lease was
terminated for a fee ($1,175,499 net of expenses). These amounts are reflected
in cash receipts on page 2.
3.
Certain payments have been made in the ordinary course for certain subsidiaries,
Prime Care Associates and Health Cost Consultants, primarily related to fringe
benefits and federal payroll taxes. These amounts are reflected in cash
disbursements on page 2.
4.
In accordance with orders from the Bankruptcy Court, prepetition amounts were
paid for employee benefits and critical vendors. These amounts are reflected in
cash disbursements on page 2.
ATTACHMENT 8A
<PAGE>
PHP Healthcare Corporate Insurance
<TABLE>
<CAPTION>
<S> <C> <C> <C>
Policy Type Carrier Term Coverage
Real/Personal Property Travelers 12/31/98-99 $ 30.4
Indemnity
Auto Wausau 12/31/98-99 $ 1M
Lawyers Malpractice American 6/1/98-6/15/99 $ 2M
International
Directors & Officers (D&O) Tamarack 3/31/99-00 $ 5M
American
D&O Extended Reporting National 3/30/99-00 $ 15M
Period Union
Employment Practices Zurich 4/15/99-00 $ 1M
Liability
Managed Care E&O and * Reliance 5/1/98-5/31/99 $1M/$3M
General Liability National
Dishonesty/Forgery/Theft Gulf 12/31/97-00 $ 1M
Insurance
Workers Compensation Wausau 12/31/98-99 By Law
Medical Malpractice Healthcare Unlimited $ 1M/3M
"Tail" Coverage ** Insurance 7 years $ 4M/4M
Fiduciary Responsibility Chubb 12/31/98-99 $ 3M
</TABLE>
* This policy has been extended for managed care and general liability coverages
since sale/disposition of certain assets has not yet been achieved.
** Separate extended reporting period (tail) coverage was purchased for the
Fairfax, VA; Woodbridge, VA; Columbus, GA; Tustin, CA; Vista, CA, PrimeCare, VA;
and Chrysler's Kenosha, WI/Newark, DE projects to support the sale/disposition
of those activities.
Attachment 8B
<PAGE>
MONTH: Apr-99
<TABLE>
<CAPTION>
=================================================================================================================
PERSONNEL
=================================================================================================================
Full Time Part Time
<S> <C> <C>
- -----------------------------------------------------------------------------------------------------------------
1 Total number of employees at beginning of period 678
- -----------------------------------------------------------------------------------------------------------------
2 Number of employees hired during period 5
- -----------------------------------------------------------------------------------------------------------------
3 Number of employees terminated or resigned during the period 407
- -----------------------------------------------------------------------------------------------------------------
4 Total number of employees at the end of the period 276
=================================================================================================================
=================================================================================================================
CHANGE OF ADDRESS
=================================================================================================================
</TABLE>
If your mailing address has changed and you have not previously notified
the United States Trustee of the change, list your new address below:
DATE OF CHANGE: 5/1/99
NEW ADDRESS: 1850 Centennial Park Drive
Reston, VA 20191
<PAGE>
IN THE UNITED STATES BANKRUPTCY COURT
FOR THE DISTRICT OF DELAWARE
In re: )
) Chapter 11
PHP HEALTHCARE CORPORATION, )
) Case No. 98-2608 (MFW)
Debtor. )
______________________________)
JOINT PLAN OF LIQUIDATION FOR PHP HEALTHCARE CORPORATION
Dated: May 21, 1999
Wilmington, Delaware
RICHARDS, LAYTON & FINGER, P.A. MOORE & VAN ALLEN, PLLC
One Rodney Square 100 North Tryon Street, 47th Floor
P.O. Box 551 Charlotte, North Carolina 28202
Wilmington, Delaware 19899 (704) 331-1000
(302) 658-6541 Attorneys for NationsBank, N.A.
Attorneys for PHP Healthcare Corporation
DUANE, MORRIS & HECKSCHER LLP
1201 Market Street
Wilmington, Delaware 19801
(302) 571-5560
Attorneys for NationsBank, N.A.
<PAGE>
Table of Contents
<TABLE>
<CAPTION>
Page Number
<S> <C>
ARTICLE 1 DEFINITIONS......................................................... 1
-
1.1 Defined Terms.............................................................. 1
-
1.2 Other Terms................................................................ 9
-
1.3 Exhibits................................................................... 9
-
1.4 Conflicting Terms.......................................................... 10
--
ARTICLE 2 PROVISIONS FOR PAYMENT OF ADMINISTRATIVE EXPENSES
AND TAX CLAIMS............................................. 10
--
2.1 Payment of Allowed Administrative Expenses.................................. 10
--
2.2 Objections to Asserted Administrative Expenses.............................. 10
--
2.3 Compensation and Reimbursement.............................................. 11
--
2.4 Tax Claims.................................................................. 11
--
ARTICLE 3 CLASSIFICATION AND TREATMENT OF CLAIMS AND EQUITY
INTERESTS.................................................. 11
--
3.1 Summary..................................................................... 11
--
3.2 Classification and Treatment................................................ 11
--
3.3 Controversy Concerning Impairment........................................... 15
--
ARTICLE 4 15
--
MODIFICATION, REVOCATION, OR WITHDRAWAL OF THE PLAN............................ 16
--
4.1 Modification of the Plan.................................................... 16
--
4.2 Revocation or Withdrawal.................................................... 16
--
4.3 Amendment of Plan Documents................................................. 16
--
ARTICLE 5 PROVISIONS FOR TREATMENT OF DISPUTED CLAIMS......................... 16
--
5.1 Objections to Claims; Prosecution of Disputed Claims........................ 16
--
5.2 Claims Settlement Guidelines................................................ 17
--
5.3 Distributions on Account of Disputed Claims................................. 18
--
5.4 Escrow for Disputed Claims.................................................. 18
--
ARTICLE 6 ACCEPTANCE OR REJECTION OF THE PLAN................................. 18
--
6.1 Impaired Classes to Vote.................................................... 18
--
6.2 Acceptance by Class of Claims............................................... 18
--
6.3 Nonconsensual Confirmation.................................................. 18
--
ARTICLE 7 THE LIQUIDATING ENTITIES............................................ 18
--
7.1 The Collateral Trust........................................................ 18
--
7.2 Liquidating Agent........................................................... 20
--
7.3 Liquidating LLC............................................................. 21
--
</TABLE>
-i-
<PAGE>
<TABLE>
<S> <C>
7.4 Distributions; Beneficial Interests......................................... 22
--
7.5 Purpose of the Liquidating LLC.............................................. 22
--
7.6 Tax Treatment of Transfer of Assets......................................... 22
--
7.7 Valuation of Assets......................................................... 22
--
7.8 Liquidation of Assets; Responsibilities of Liquidating Agent................ 23
--
7.9 Investment Powers........................................................... 23
--
7.10 Semi-Annual Distribution; Withholding...................................... 24
--
7.11 Reporting Duties........................................................... 24
--
7.12 Implementation of Liquidating LLC.......................................... 25
--
7.13 Registry of Beneficial Interests........................................... 25
--
7.14 Termination................................................................ 25
--
7.15 Disputed Unsecured Claims Escrow........................................... 25
--
7.16 Non-Transferability........................................................ 27
--
ARTICLE 8 IMPLEMENTATION OF THE PLAN.......................................... 27
--
8.1 Debtor's Post-Confirmation Role; Dissolution................................ 27
--
8.2 Transfers to the Collateral Trust and the Liquidating LLC................... 29
--
8.3 Books and Records........................................................... 29
--
8.4 Distributions Under the Plan................................................ 30
--
8.5 Timing of Distributions Under the Plan...................................... 30
--
8.6 Address for Delivery of Distributions Under the Plan........................ 30
--
8.7 Distributions Under One Hundred Dollars..................................... 31
--
8.8 Time Bar to Cash Payments................................................... 31
--
8.9 Manner of Payment Under the Plan............................................ 31
--
8.10 Professional Expenses Incurred on or After the Effective Date.............. 31
--
8.11 Periodic Reports by Liquidating Agent...................................... 31
--
8.12 Occurrence of the Confirmation Date........................................ 31
--
8.13 Occurrence of the Effective Date........................................... 32
--
8.14 Distribution of Unclaimed Property......................................... 32
--
8.15 Severance and Benefit Programs............................................. 33
--
8.16 Corporate Action........................................................... 33
--
8.17 Effectuating Documents and Further Transactions............................ 33
--
8.18 Extinguishment of Indemnification Claims................................... 33
--
ARTICLE 9 EXECUTORY CONTRACTS AND UNEXPIRED LEASES............................ 33
--
9.1 Assumption of Executory Contracts and Unexpired Leases...................... 33
--
9.2 Rejection of Executory Contracts and Unexpired Leases....................... 34
--
9.3 Claims Arising from Rejection or Termination................................ 34
--
9.4 Previously Scheduled Contracts.............................................. 35
--
9.5 Insurance Policies.......................................................... 35
--
9.6 Compensation and Benefit Programs........................................... 36
--
ARTICLE 10 RETENTION OF JURISDICTION.......................................... 36
--
ARTICLE 11 SETTLEMENT AND COMPROMISE OF NATIONSBANK'S CLAIMS.................. 38
--
11.1 NationsBank's Allowed Claim................................................ 38
--
11.2 NationsBank's Priority Claim............................................... 38
--
11.3 NationsBank's Secured Claim................................................ 38
--
</TABLE>
-ii-
<PAGE>
<TABLE>
<S> <C>
11.4 Release.................................................................... 39
--
11.5 Claim Adjustment Procedure................................................. 40
--
11.6 Settlement of Bondholder Subordination Issues.............................. 41
--
ARTICLE 12 MISCELLANEOUS PROVISIONS........................................... 41
--
12.1 Payment of Statutory Fees.................................................. 41
--
12.2 Binding Effect; Discharge of the Debtor.................................... 41
--
12.3 Rights of Action........................................................... 42
--
12.4 Third Party Agreements..................................................... 42
--
12.5 Dissolution of Committee................................................... 42
--
12.6 Exculpation................................................................ 42
--
12.7 Title to Assets and Collateral............................................. 43
--
12.8 Surrender and Cancellation of Instruments.................................. 43
--
12.9 Notices.................................................................... 43
--
12.10 Headings.................................................................. 44
--
12.11 Severability.............................................................. 44
--
12.12 Governing Law............................................................. 44
--
12.13 Filing of Additional Documents............................................ 44
--
12.14 Compliance with Tax Requirements.......................................... 44
--
12.15 Expedited Tax Determinations.............................................. 45
--
12.16 Exemption from Transfer Taxes............................................. 45
--
12.17 Income Tax and Related Information........................................ 45
--
</TABLE>
-iii-
<PAGE>
IN THE UNITED STATES BANKRUPTCY COURT
FOR THE DISTRICT OF DELAWARE
In re: )
) Chapter 11
PHP HEALTHCARE CORPORATION, )
) Case No. 98-2608 (MFW)
Debtor. )
______________________________)
JOINT PLAN OF LIQUIDATION FOR
PHP HEALTHCARE CORPORATION
--------------------------
PHP Healthcare Corporation, as debtor in possession (the "Debtor"),
and NationsBank, N.A., a creditor of the Debtor, hereby jointly propose the
following plan of liquidation.
ARTICLE 1
DEFINITIONS
1.1 Defined Terms. As used herein, the following terms shall have the
respective meanings specified below, unless the context otherwise requires.
1.1.1 Administrative Claim or Administrative Expense: Any Claim constituting a
cost or expense of administration in the Chapter 11 Case under section
503 of the Bankruptcy Code, including, without express or implied
limitation, any actual and necessary costs and expenses of preserving the
estate of the Debtor, any actual and necessary costs and expenses of
operating the businesses of the Debtor, reasonable fees incurred by
current members of the Board of Directors for bankruptcy and insurance
counsel, any indebtedness or obligations incurred or assumed by the
Debtor in Possession in connection with the conduct of its business or
for the sale, acquisition, or lease of property or the rendition of
services, including, without limitation, indemnity or similar
obligations, allowed compensation or reimbursement of expenses under
section 503(b)(2)-(5) of the Bankruptcy Code, and any fees or charges
assessed against the estate of the Debtor under section 1930, chapter
123, title 28, United States Code.
1.1.2 Administrative Expense Creditor: Any Creditor entitled to payment of an
Administrative Expense.
1.1.3 Administrative and Priority Claim Escrow: Has the meaning ascribed to
such term in section 8.1.4.
-1-
<PAGE>
1.1.4 Allowed:
1.1.4.1 With respect to any Claim other than an
Administrative Expense, proof of which was filed within the applicable
period of limitation fixed in accordance with Bankruptcy Rule
3003(c)(3) by the Bankruptcy Court, (i) as to which no objection to
the allowance thereof has been interposed within the applicable period
of limitation fixed by the Plan, the Bankruptcy Code, the Bankruptcy
Rules, or a Final Order of the Bankruptcy Court, such Claim to the
extent asserted in the proof of such Claim, or (ii) as to which an
objection has been interposed, such Claim to the extent that it has
been allowed in whole or in part by a Final Order of the Bankruptcy
Court.
1.1.4.2 With respect to any Claim other than an
Administrative Expense, as to which no proof of claim was filed within
the applicable period of limitation fixed by the Plan, the Bankruptcy
Code, the Bankruptcy Rules, or a Final Order of the Bankruptcy Court,
such Claim to the extent that it has been listed by the Debtor in its
Schedules as liquidated in amount and not disputed or contingent,
unless such Claim has been objected to by the Committee, the
Liquidating Agent or NationsBank in accordance with the terms hereof.
1.1.4.3 With respect to any Claim that is asserted to
constitute an Administrative Expense (i) that represents an actual or
necessary expense of preserving the estate or operating the business
of the Debtor, any such Claim to the extent that the Debtor determines
it to constitute an Administrative Expense without objection by the
Committee, the Liquidating Agent or NationsBank, (ii) other than with
respect to a Claim of a professional person employed under section 327
or 1103 of the Bankruptcy Code that is required to apply to the
Bankruptcy Court for the allowance of compensation and reimbursement
of expenses pursuant to section 330 of the Bankruptcy Code, that the
Debtor does not believe constitutes an Administrative Expense, any
such Claim to the extent it is allowed in whole or in part by a Final
Order of the Bankruptcy Court and only to the extent that such allowed
portion is deemed, pursuant to a Final Order of the Bankruptcy Court,
to constitute a cost or expense of administration under sections
503(b) and 507(a)(1) of the Bankruptcy Code, or (iii) that represents
a Claim of a professional person employed under section 327 or 1103 of
the Bankruptcy Code that is required to apply to the Bankruptcy Court
for the allowance of compensation and reimbursement of expenses
pursuant to section 330 of the Bankruptcy Code, such Claim to the
extent it is allowed by a Final Order of the Bankruptcy Court under
section 330 of the Bankruptcy Code.
1.1.5 Allowed Amount: (x) The lesser of (a) the dollar amount of an Allowed
Claim or (b) the Estimated Amount of such Claim less (y) any amount paid
by the Debtor on account of such Claim prior to the first Distribution
occurring under the Plan with respect to such Claim. Unless otherwise
specified herein or by Final Order of the Bankruptcy Court, the Allowed
Amount of an Allowed Claim shall not include interest accruing on such
Allowed Claim from and after the Petition Date.
-2-
<PAGE>
1.1.6 Assets: All of the right, title, and interest of the Debtor or Debtor
in Possession in any and all assets and property other than the
Collateral, whether tangible, intangible, real, or personal, that
constitute property of the Debtor's estate within the purview of
section 541 of the Bankruptcy Code, including, without limitation,
Avoidance Actions and any and all claims, causes of action, or rights
of the Debtor or Debtor in Possession under federal or state law
(excluding causes of action and claims comprising a portion of the
Collateral). Exhibit 1.1.23 contains a non-exclusive description of
the Assets in the section "Collateral Exclusions/Assets to be
Transferred to the Liquidating LLC".
1.1.7 Available Cash Collateral: Has the meaning ascribed to such term in
the Second Amended and Partially Restated Stipulation between PHP
Healthcare Corporation and NationsBank, N.A., and Final Order
Regarding Use of Cash Collateral and Adequate Protection Therefor,
entered on April 13, 1999 by the Bankruptcy Court, as amended and
extended from time to time.
1.1.8 Avoidance Actions: Any and all Causes of Action which a trustee,
debtor-in-possession, the estate or other appropriate party in
interest or estate representative may assert under sections 502, 510,
522(f), 522(h), 542, 543, 544, 545, 547, 548, 549, 550, 551, 553 and
724(a) of the Bankruptcy Code (other than those which are released,
dismissed or compromised as part of and pursuant to the Plan),
including, without limitation, the Debtor's rights of setoff,
recoupment, contribution, reimbursement, subrogation or indemnity (as
those terms are defined by the non-bankruptcy law of any relevant
jurisdiction) and any other indirect claim of any kind whatsoever,
whenever and wherever arising or asserted.
1.1.9 Bankruptcy Code: The Bankruptcy Reform Act of 1978, as amended, and as
codified in title 11 of the United States Code, as applicable to the
Chapter 11 Case.
1.1.10 Bankruptcy Court: The United States District Court for the District of
Delaware, having jurisdiction over the Chapter 11 Case and, to the
extent of any reference made pursuant to section 157 of title 28 of
the United States Code, the unit of such District Court constituted
pursuant to section 151 of title 28 of the United States Code.
1.1.11 Bankruptcy Rules: The Federal Rules of Bankruptcy Procedure, as
amended, as applicable to the Chapter 11 Case, including the Local
Rules of the Bankruptcy Court.
1.1.12 Bar Date: March 31, 1999, the bar date for filing proofs of claim
against PHP Healthcare Corporation approved by the Bankruptcy Court.
1.1.13 Board of Directors: The board of directors of PHP Healthcare
Corporation as such board may exist from time to time.
1.1.14 Bonds: The subordinated debentures issued in the face amount of $69
million by the Debtor on December 18, 1995, bearing a maturity date of
December 15, 2002 and for which IBJ Whitehall Bank & Trust Company
(f/k/a IBJ Schroder Bank & Trust Company) serves as trustee.
1.1.15 Bondholders: The holders of the Bonds.
-3-
<PAGE>
1.1.16 Bondholder Claims: The general unsecured claims of the Bondholders and
IBJ Whitehall Bank & Trust Company against the Debtor arising under
the Bonds.
1.1.17 Business Day: Any day on which commercial banks are required to be
open for business in Wilmington, Delaware.
1.1.18 Cash Equivalents: Equivalents of cash in the form of readily
marketable securities or instruments constituting (i) readily
marketable direct obligations of, or obligations guaranteed by, the
United States of America, (ii) commercial paper of domestic
corporations carrying a Moody's Rating of "A" or better, or equivalent
rating of any other nationally recognized rating service, or (iii)
interest-bearing certificates of deposit or other similar obligations
of domestic banks or other financial institutions having a
shareholders' equity or equivalent capital of not less than Two
Hundred Million Dollars ($200,000,000), having maturities of not more
than one hundred eighty (180) days, at the then best generally
available rates of interest for like amounts and like periods.
1.1.19 Causes of Action: Any and all actions, claims, rights, defenses,
third-party claims, cross-claims, counterclaims, suits, causes of
action, choses in action, controversies, agreements, promises, rights
to legal remedies, rights to equitable remedies, rights to payment and
claims, whether known, unknown, reduced to judgment, not reduced to
judgment, liquidated, unliquidated, fixed, contingent, matured,
unmatured, disputed, undisputed, secured or unsecured, and whether
asserted or assertable directly or indirectly or derivatively, at law,
in equity or otherwise, accruing to the Debtor or Debtor in
Possession, including, but not limited, to the Avoidance Actions.
1.1.20 Chapter 11 Case: The case of the Debtor commenced by the filing by the
Debtor of a voluntary petition for relief under chapter 11 of the
Bankruptcy Code on the Petition Date and pending in the Bankruptcy
Court as Case No. 98-2608 (MFW).
1.1.21 Claim: A "claim," as defined in section 101(5) of the Bankruptcy Code,
against the Debtor or Debtor in Possession, whether or not asserted,
whether or not the facts of or legal bases therefor are known or
unknown, and specifically including, without express or implied
limitation, any rights under sections 502(g), 502(h), or 502(i) of the
Bankruptcy Code, any claim of a derivative nature, any potential or
unmatured contract claims, and any other Contingent Claim.
1.1.22 Class 4 Disbursing Agent: The person or firm selected by the
Liquidating Agent to administer the Disputed Unsecured Claim Escrow.
Such person or firm may serve as both the Class 4 Disbursing Agent and
the Liquidating Agent; however, in such circumstances, each such
service shall be considered as provided in a separate capacity.
1.1.23 Collateral: Those assets and causes of action of the Debtor or Debtor
in Possession listed in Exhibit "1.1.23" hereto.
1.1.24 Collateral Trust: The liquidating trust or other entity selected by
NationsBank and the Collateral Trustee for the benefit of NationsBank
to own, hold, liquidate, transfer, and administer the Collateral.
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1.1.25 Collateral Trustee: The person or firm selected by NationsBank as the
trustee, principal, officer or other fiduciary to administer the
Collateral Trust.
1.1.26 Committee: The Official Unsecured Creditors' Committee consisting of
Entities appointed as members in the Chapter 11 Case in accordance
with section 1102(a) of the Bankruptcy Code and their duly appointed
successors, if any, as the same may be reconstituted from time to
time.
1.1.27 Confirmation Date: The date on which the Confirmation Order is entered
by the Clerk of the Bankruptcy Court.
1.1.28 Confirmation Order: The order of the Bankruptcy Court confirming the
Plan in accordance with the provisions of chapter 11 of the Bankruptcy
Code.
1.1.29 Contingent Claim: Any Claim, the liability for which attaches or is
dependent upon the occurrence or happening of, or is triggered by, an
event, which event has not yet occurred, happened, or been triggered,
as of the date on which such Claim is sought to be estimated or an
objection to such Claim is filed, whether or not such event is within
the actual or presumed contemplation of the holder of such Claim and
whether or not a relationship between the holder of such Claim and the
Debtor now or hereafter exists or previously existed.
1.1.30 Creditor: Any Entity that holds a Claim against the Debtor or Debtor
in Possession.
1.1.31 Debtor: PHP.
1.1.32 Debtor in Possession: The Debtor in its capacity as a debtor in
possession pursuant to sections 1107(a) and 1108 of the Bankruptcy
Code.
1.1.33 Disallowed Claim: A Claim that is disallowed by a Final Order of the
Bankruptcy Court or other court of competent jurisdiction; provided,
however, with respect to those Disputed Claims anticipated by the
Liquidating Agent in connection with the prosecution of the Avoidance
Actions, each such Disputed Claim shall become a Disallowed Claim upon
the earlier of (i) the entry of such Final Order determining that such
holder is not liable with respect to such Avoidance Action, and (ii)
the failure of the Liquidating LLC to initiate such Avoidance Action
within two years of the Effective Date.
1.1.34 Disbursing Agent: The person or firm selected by the Debtor to
administer the Administrative and Priority Claim Escrow established
pursuant to section 8.1.4 of the Plan.
1.1.35 Disputed Claim: A Claim that is neither an Allowed Claim nor a
Disallowed Claim. For purposes of the Plan, Disputed Claims shall also
include, in the discretion of the Liquidating Agent, those Unsecured
Claims anticipated by the Liquidating Agent in connection with the
Liquidating LLC's prosecution of the Avoidance Actions.
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1.1.36 Disputed Claim Amount: The Estimated Amount of a Disputed Claim, or,
if no Estimated Amount exists, the amount set forth in the proof of
claim relating to such Disputed Claim as the liquidated amount of such
Disputed Claim.
1.1.37 Disputed Unsecured Claim Escrow: Has the meaning ascribed to such term
in section 7.15.1.
1.1.38 Distribution: The payment or distribution under the Plan of property
or interests in property to the holders of Allowed Claims.
1.1.39 Effective Date: The first Business Day on which all of the conditions
precedent to the effectiveness of the Plan specified in section 8.13
have been satisfied or waived or, if a stay of the Confirmation Order
is in effect on such date, the first Business Day after the
expiration, dissolution, or lifting of such stay on which all of such
conditions precedent have been satisfied or waived.
1.1.40 Encumbrance: With respect to any asset, any mortgage, lien, pledge,
charge, security interest, assignment, or encumbrance of any kind or
nature in respect of such asset (including, without express or implied
limitation, any conditional sale or other title retention agreement,
any security agreement, and the filing of, or agreement to give, any
financing statement under the Uniform Commercial Code or comparable
law of any jurisdiction).
1.1.41 Entity: An individual, corporation, partnership, association, joint
stock company, joint venture, estate, trust, unincorporated
organization, or government or any political subdivision thereof, or
other person or entity.
1.1.42 Equity Interest: Any interest in PHP represented by shares of Existing
PHP Stock or warrants, options, or other rights to purchase any shares
of Existing PHP Stock.
1.1.43 Estimated Amount: The estimated dollar value of an Unliquidated Claim,
Disputed Claim, or Contingent Claim pursuant to section 502(c) of the
Bankruptcy Code.
1.1.44 Existing PHP Stock: All stock having been authorized pursuant to PHP's
Certificate of Incorporation as in effect immediately prior to the
Effective Date.
1.1.45 Final Order: An order as to which the time to appeal, petition for
certiorari, or move for reargument or rehearing has expired and as to
which no appeal, petition for certiorari, or other proceedings for
reargument or rehearing shall then be pending or as to which any right
to appeal, petition for certiorari, reargue, or rehear shall have been
waived in writing, or in the event that an appeal, writ of certiorari,
or reargument or rehearing thereof has been sought, such order shall
have been affirmed by the highest court to which such order was
appealed or from which reargument or rehearing was sought, or
certiorari has been denied, and the time to take any further appeal,
petition for certiorari or move for reargument or rehearing shall have
expired.
1.1.46 Initial Distribution Date: A date selected by the Liquidating Agent in
its discretion, but in any event, no later than one hundred eighty
(180) days after the Effective Date, or such later
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date as the Bankruptcy Court may establish, upon request by the
Liquidating Agent, for cause shown.
1.1.47 Internal Revenue Code: The Internal Revenue Code of 1986, as amended,
and any applicable rulings, regulations (including temporary and
proposed regulations) promulgated thereunder, judicial decisions, and
notices, announcements, and other releases of the United States
Treasury Department or the IRS.
1.1.48 IRS: The United States Internal Revenue Service.
1.1.49 Key Employee Orders: The two "Order Approving Key Employee Retention,
Severance, and Benefit Programs of PHP Healthcare Corporation pursuant
to Sections 105(a) and 363(b) of the Bankruptcy Code," entered by the
Bankruptcy Court on or about March 1, 1999 and March 11, 1999.
1.1.50 Lammico Note: That certain promissory note made by Lammico Practice
Management, L.L.C., dated August 1, 1998, in favor of the Debtor in
the original outstanding principal amount of $515,000, which note
matures December 31, 1999.
1.1.51 Liquidating Agent: The person or firm selected by the Committee to be
the manager of the Liquidating LLC for all purposes set forth in the
Plan.
1.1.52 Liquidating LLC: The limited liability company formed under Delaware
law, which such limited liability company shall be formed on the
Effective Date in accordance with the provisions of Article 7 hereof
and the LLC Operating Agreement.
1.1.53 LLC Operating Agreement: That certain Limited Liability Company
Agreement of the Liquidating LLC, substantially in the form of Exhibit
"1.1.53" to the Plan.
1.1.54 NationsBank: NationsBank, N.A.
1.1.55 NationsBank's Priority Claim: The Allowed Priority Claim of
NationsBank in the aggregate amount of $5.05 million having priority
under section 507(b) of the Bankruptcy Code pursuant to various cash
collateral orders entered by the Bankruptcy Court.
1.1.56 Other Secured Claim: Any Secured Claim other than the Secured Claim of
NationsBank.
1.1.57 Petition Date: November 19, 1998.
1.1.58 PHP: PHP Healthcare Corporation, a Delaware corporation.
1.1.59 Plan Fund: Has the meaning as ascribed to such term in Section 7.3
hereof.
1.1.60 Plan: This plan of liquidation, either in its present form or as it
may be amended, supplemented, or otherwise modified from time to time,
and the exhibits and schedules to the foregoing, as the same may be in
effect at the time such reference becomes operative.
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1.1.61 Priority Claim: Any Claim to the extent such claim is entitled to
priority in right of payment under section 507(a) of the Bankruptcy
Code, other than an Administrative Expense or a Tax Claim.
1.1.62 Proponents: PHP and NationsBank.
1.1.63 Pro Rata Share: With respect to (i) Priority Claims, the amount
obtained by dividing the Allowed Amount of an Allowed Priority Claim
by the sum of the Allowed Amount of all Allowed Priority Claims and
the Disputed Claim Amount of all Priority Claims that are Disputed
Claims, and (ii) Unsecured Claims, the amount obtained by dividing the
Allowed Amount of an Allowed Unsecured Claim by the sum of the Allowed
Amount of all Allowed Unsecured Claims and the Disputed Claim Amount
of all Unsecured Claims that are Disputed Claims, excluding in either
instance, where appropriate and consistent with the terms of the Plan,
the participation of NationsBank's Priority Claim and NationsBank's
Allowed Unsecured Claim.
1.1.64 Retention Period: Two (2) years from and after the Effective Date, or
such shorter period as the Bankruptcy Court may set.
1.1.65 Schedules: The schedules of assets and liabilities and the statements
of financial affairs filed by the Debtor in Possession with the
Bankruptcy Court, as required by section 521 of the Bankruptcy Code
and the Official Bankruptcy Forms of the Bankruptcy Rules, as such
schedules and statements may be amended by the Debtor in Possession
from time to time in accordance with Bankruptcy Rule 1009.
1.1.66 Secured Claim: Any Claim against the Debtor to the extent of the value
of any interest in property of the Debtor's estate securing such
Claim.
1.1.67 Severance and Benefit Programs: The Key Employee Retention, Severance,
and Benefit Programs (as such terms are defined in the Key Employee
Orders) approved and authorized by the Bankruptcy Court pursuant to
the Key Employee Orders.
1.1.68 Subordinated Claim: Any Claim (i) for any fine, penalty, collection
fee, or forfeiture, or for multiple, exemplary, or punitive damages to
the extent that such fine, penalty, forfeiture, or damages are not
compensation for actual pecuniary loss suffered by the holder of such
Claim, (ii) arising from rescission of a purchase or sale of a
security of the Debtor or of an affiliate of the Debtor, for damages
arising from the purchase or sale of such a security, or for
reimbursement or contribution allowed under section 502 of the
Bankruptcy Code on account of such a Claim, or (iii) that, pursuant to
an order of the Bankruptcy Court or the agreement of the holder
thereof, is subordinated for purposes of distribution to all Allowed
Unsecured Claims.
1.1.69 Tax Claim: A Claim against the Debtor that is of a kind specified in
section 507(a)(8) of the Bankruptcy Code, or one which arises in
connection with the transfers of the Assets and Collateral by the
Debtor or otherwise in furtherance of the Plan.
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1.1.70 Unliquidated Claim: Any Claim, the amount of liability for which has
not been fixed, whether pursuant to agreement, applicable law, or
otherwise, as of the date on which such Claim is sought to be
estimated.
1.1.71 Unsecured Claim: Any Claim that is not an Administrative Expense, a
Tax Claim, a Priority Claim, a Subordinated Claim, or a Secured Claim.
1.1.72 Voting Procedures Order: An order of the Bankruptcy Court approving
procedures relating to the solicitation and tabulation of votes with
respect to the Plan.
1.2 Other Terms. Wherever from the context it appears
appropriate, each term stated in either the singular or the plural shall include
the singular and the plural, and pronouns stated in the masculine, feminine, or
neuter gender shall include the masculine, the feminine, and the neuter. The
words "herein," "hereof," "hereto," "hereunder," and others of similar import
refer to the Plan as a whole and not to any particular section, subsection, or
clause contained in the Plan. An initially capitalized term used herein that is
not defined herein shall have the meaning ascribed to such term, if any, in the
Bankruptcy Code, unless the context shall otherwise require. For ease of
reference and clarity, the interests in the Liquidating LLC to be issued
pursuant to the Plan may be referred to as "membership" interests and the
holders of such interests referred to as "members", although applicable Delaware
law does not necessarily use such terminology to denominate the interests in a
limited liability company or the holder thereof, respectively.
1.3 Exhibits. All Exhibits to the Plan shall be contained in a
separate Exhibit Volume, which shall be filed with the Clerk of the Bankruptcy
Court not less than twenty (20) days prior to the commencement of the hearing on
confirmation of the Plan. Such Exhibits may be inspected in the office of the
Clerk of the Bankruptcy Court during normal hours of operation of the Bankruptcy
Court. Holders of Claims and Equity Interests may obtain a copy of such Exhibit
Volume, once filed, from the Proponents by a written request sent to the
following address:
LOGAN & COMPANY, INC.
615 Washington Street
Hoboken, New Jersey 07030
Re: PHP Healthcare Corporation
1.4 Conflicting Terms. To the extent that the terms, conditions
or provisions of the Plan conflict with any documents or agreements attached to
the Plan or to be submitted with or in connection with the Plan, then the terms,
conditions and provisions of the Plan shall control.
ARTICLE 2
PROVISIONS FOR PAYMENT OF ADMINISTRATIVE
EXPENSES AND TAX CLAIMS
2.1 Payment of Allowed Administrative Expenses. The Allowed
Amount of each Allowed Administrative Expense shall be paid in full, in cash, on
the later of the Effective Date or the first Business Day after which an Allowed
Amount for such Allowed Administrative Expense is determined; provided, however,
that (i) the Bankruptcy Court shall fix in the Confirmation Order a date for the
filing of, and a date to hear and determine, all applications for final
allowances of
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compensation or reimbursement of expenses under section 330 of the Bankruptcy
Code, (ii) if a party has asserted an Administrative Expense, other than an
Administrative Expense that is a Contingent Claim or Unliquidated Claim as of
the Effective Date, the Debtor may request the Bankruptcy Court to estimate such
Administrative Expense pursuant to section 502(c) of the Bankruptcy Code, in
which case the Allowed Amount of such Administrative Expense shall be paid in
full, in cash, on the date that an order estimating such Administrative Expense
becomes a Final Order, and (iii) a party asserting an Administrative Expense,
other than an Administrative Expense arising under the Severance and Benefit
Programs, an Administrative Expense that is Allowed as of the Effective Date, or
an Administrative Expense of the type described in subsection (i) hereof, must
file and serve on the Debtor notice of such Administrative Expense on or before
the earlier of (a) any applicable bar date for Administrative Claims established
by the Bankruptcy Court and (b) the date fifteen (15) days after the
Confirmation Date. Such notice of Administrative Expense shall state, at a
minimum, (a) the name of the party asserting the Administrative Expense, (b) the
amount of the Administrative Expense, and (c) the basis of the Administrative
Expense. The failure to file and serve the notice provided in subsection (iii)
hereof timely and properly shall constitute a waiver of such Administrative
Expense.
2.2 Objections to Asserted Administrative Expenses. Objections
to any Administrative Expense as to which a notice is timely and properly served
pursuant to subsection (iii) of section 2.1 hereof shall be filed and served
within forty-five (45) days after the filing and service of notice of such
Administrative Expense. If an objection is filed within such forty-five-day
period, the Administrative Expense shall become an Allowed Administrative
Expense only to the extent allowed by a Final Order of the Bankruptcy Court.
Objections to Administrative Expenses may be filed by either of the Proponents,
the Committee or the Liquidating Agent.
2.3 Compensation and Reimbursement. The Allowed Amount of all
Allowed Administrative Expenses arising under section 503(b)(2), 503(b)(3),
503(b)(4), or 503(b)(5) of the Bankruptcy Code shall be paid in full, in cash,
(a) upon the later of (i) the Effective Date and (ii) the date upon which the
order with respect to the allowance or disallowance of any such Administrative
Expense becomes a Final Order, or (b) upon such other terms as may be mutually
agreed upon between each Administrative Expense Creditor and the Proponents.
2.4 Tax Claims. Each holder of an Allowed Tax Claim shall be
paid the Allowed Amount of its Allowed Tax Claim in full, in cash, on the later
of (i) the Effective Date, (ii) the first Business Day after which such Tax
Claim becomes an Allowed Tax Claim, or (iii) the date such Tax Claim becomes due
in the ordinary course.
ARTICLE 3
CLASSIFICATION AND TREATMENT OF
CLAIMS AND EQUITY INTERESTS
3.1 Summary. Claims and Equity Interests are classified for all
purposes, including, without express or implied limitation, voting,
confirmation, and distribution pursuant to the Plan, as follows:
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CLASS STATUS
Class 1: Priority Claims Unimpaired B not entitled to vote.
Class 2: Secured Claims of NationsBank Impaired - entitled to vote.
Class 3: Other Secured Claims Unimpaired B not entitled to vote.
Class 4: Unsecured Claims Impaired B entitled to vote.
Class 5: Subordinated Claims Impaired B deemed to reject the
Plan.
Class 6: Equity Interests Impaired B deemed to reject the
Plan.
3.2 Classification and Treatment
3.2.1 Class 1. Priority Claims.
3.2.1.1 Classification: Class 1 consists of all Allowed
Priority Claims.
3.2.1.2 Treatment: On the Effective Date, each holder of
an Allowed Priority Claim, other than NationsBank, shall be paid, in
cash, the Allowed Amount of such holder's Allowed Priority Claim.
NationsBank's Priority Claim shall be satisfied through its receipt of
a preferential membership interest in the Liquidating LLC and the
application of certain credits or offsets, as more particularly
described in Article 11 hereof and the LLC Operating Agreement. The
foregoing does not create or effect a subordination of NationsBank's
Priority Claim to other Priority Claims. To the extent that any
Administrative Claims, Tax Claims, or Priority Claims are not allowed
and paid by the Debtor prior to NationsBank's receipt of any payment
or other distribution on account of its preferential interest in the
Liquidating LLC, NationsBank shall nevertheless be entitled to receive
and retain fully all such Distributions to the extent of its Priority
Claim.
3.2.1.3 Interest: Interest shall neither accrue nor be
payable with respect to Allowed Priority Claims.
3.2.1.4 Status: Class 1 is unimpaired with respect to each
holder other than NationsBank. The holders of the Claims in Class 1
(other than NationsBank) are deemed to accept the Plan and,
accordingly, are not entitled to vote to accept or reject the Plan. As
a Plan Proponent, NationsBank is deemed to accept the Plan.
3.2.2 Class 2. Secured Claims of NationsBank.
3.2.2.1 Classification: Class 2 consists of all Allowed
Secured Claims of NationsBank.
3.2.2.2 Treatment: On the Effective Date, in accordance
with Article 7 of this Plan, all right, title and interest in and to
all Collateral that has not already
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been liquidated by the Debtor will be assigned and transferred to, and
shall vest in, the Collateral Trust for the benefit of NationsBank.
NationsBank and the Collateral Trustee shall execute such documents
establishing and governing the Collateral Trust as NationsBank and the
Collateral Trustee shall determine in their sole discretion. The
Collateral Trustee shall be appointed by NationsBank at or prior to
the Confirmation Date. The Collateral Trustee, under the direction of
NationsBank, shall liquidate and administer the Collateral, for the
benefit of NationsBank and, upon the liquidation of each item of
Collateral, shall transfer the net liquidation proceeds to
NationsBank. For the avoidance of doubt, NationsBank, its successors
and assigns shall be the sole beneficiary of the Collateral Trust; no
other Creditor of the Debtor or Debtor-in-Possession shall have any
claim to or interest in, legal or equitable, the Collateral Trust. To
the extent that assets comprising the Collateral have been liquidated
by the Debtor during its Bankruptcy Case, and the proceeds therefrom
have been paid or transferred to NationsBank, upon confirmation of the
Plan, NationsBank shall be entitled to retain irrevocably all such
proceeds free of any claim or Encumbrance of any person or Entity. The
Collateral Trustee shall not be required to obtain approval of the
Bankruptcy Court for the sale, transfer, or other disposition of any
asset contained in the Collateral Trust, the authorization to effect
all such sales, transfers and other dispositions being irrevocably
vested in the Collateral Trustee; provided, however, the Collateral
Trustee may seek in its discretion court authorization for any such
sale, transfer or other disposition of an asset owned by the
Collateral Trust to the extent beneficial to complete any such
transaction.
3.2.2.3 Status: Class 2 is impaired. To the extent and in
the manner provided in the Voting Procedures Order, the holder of
Claims in Class 2 is entitled to vote to accept or reject the Plan.
3.2.3 Class 3. Other Secured Claims.
3.2.3.1 Classification: Class 3 consists of all Allowed
Other Secured Claims. Although placed in one class for purposes of
convenience, each Allowed Other Secured Claim shall be treated as
though in a separate class for all purposes under the Plan.
3.2.3.2 Treatment: At the option of the Debtor and in
accordance with section 1124 of the Bankruptcy Code, each Allowed
Other Secured Claim shall be treated in one of the following ways:
3.2.3.2.1 The holder of such Allowed Other
Secured Claim shall be authorized to repossess its collateral
securing its Allowed Other Secured Claim in full satisfaction
thereof;
or
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3.2.3.2.2 The legal, equitable and contractual rights
to which such Allowed Other Secured Claim entitles the holder of
such Claim shall be unaltered.
3.2.3.3 Status: Class 3 is not impaired. The holders of
the Claims in Class 3 are deemed to accept the Plan and, accordingly,
are not entitled to vote to accept or reject the Plan.
3.2.4 Class 4. Unsecured Claims.
3.2.4.1 Classification: Class 4 consists of all Allowed
Unsecured Claims. Class 4 is divided into two sub-classes for purposes
of voting, tabulation of ballots, and inter-creditor treatment under
the Plan. Class 4A shall be comprised of all Allowed Unsecured Claims
other than the Bondholder Claims. Class 4B shall be comprised of the
Bondholder Claims.
3.2.4.2 Treatment: On the later of the Effective Date and
the date on which an Unsecured Claim becomes Allowed, each holder of
an Allowed Unsecured Claim shall be entitled to receive, in accordance
with Article 7 of this Plan, and subject to section 3.2.4.3, each
holder's Pro Rata Share of the membership interests in the Liquidating
LLC (exclusive of the preferential membership interest distributable
to NationsBank in accordance with section 3.2.1). Membership interests
in the Liquidating LLC shall be uncertificated.
3.2.4.3 Intercreditor Allocation: As part of the
settlement and compromise effected by the Plan as described in
sections 11.5 and 11.6 hereof, distributions among members in the
Liquidating LLC, as former Class 4 claim holders, shall be shared as
follows. The initial $3,186,000 of distributions from the Liquidating
LLC shall be paid to NationsBank on account of its preferential
membership interest, and upon such aggregate payment such preferential
membership interest shall be extinguished. Holders of Allowed Class 4
Claims shall not receive any share of this initial distribution of
$3,186,000. The next $5,000,000 in distributions from the Liquidating
LLC shall be paid Pro Rata to all members in the Liquidating LLC
excluding NationsBank; NationsBank shall not be entitled to any
portion of such $5,000,000 in distributions. Thereafter, all
distributions from the Liquidating LLC shall be allocable Pro Rata
among all members of the Liquidating LLC including NationsBank,
subject to adjustment as provided in section 11.5; provided however,
that one-half ( 1/2) of the distributions allocable to the membership
interests issued on account of Allowed Bondholder Claims shall be paid
instead directly by the Liquidating Agent to NationsBank, with the
remaining one-half ( 1/2) of the distributions allocable to such
membership interests being paid to and retained by the respective
holders of such membership interests without claim by NationsBank. The
allocation set forth in this section 3.2.4.3 and in section 11.6 shall
be deemed to supersede any and all rights inconsistent therewith as
may be contained in the Bonds or otherwise.
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3.2.4.4 Cancellation of Notes: As of the Effective Date,
all notes, agreements, and securities evidencing Unsecured Claims and
the rights thereunder of the holders thereof shall be canceled and
deemed null and void and of no further force and effect, and the
holders thereof shall have no rights, and such instruments shall
evidence no rights, except the right to receive the Distributions
provided in section 3.2.4.2 hereof.
3.2.4.5 Interest: Interest shall neither accrue nor be
payable with respect to Allowed Unsecured Claims.
3.2.4.6 Status: Class 4 is impaired. To the extent and in
the manner provided in the Voting Procedures Order, the holders of the
Claims in Class 4 are entitled to vote to accept or reject the Plan.
3.2.5 Class 5. Subordinated Claims.
3.2.5.1 Classification: Class 5 consists of Subordinated
Claims.
3.2.5.2 Treatment: The holders of Subordinated Claims will
not receive or retain any interest or property under the Plan.
3.2.5.3 Status: Class 5 is impaired. The holders of Claims
in Class 5 are deemed to reject the Plan and, accordingly, are not
entitled to vote to accept or reject the Plan.
3.2.6 Class 6. Equity Interests.
3.2.6.1 Classification: Class 6 consists of Equity
Interests.
3.2.6.2 Treatment: The holders of Equity Interests will
not receive or retain any interest or property under the Plan, except
the beneficial interests in the custodial trust established pursuant
to section 8.1.2 hereof, which interests are expected to have no value
and on account of which the Debtor anticipates no payment of money or
money's worth. On the Effective Date, the certificates that previously
evidenced ownership of Existing PHP Stock shall be canceled and shall
be null and void, the holders thereof shall have no rights thereunder,
and such certificates shall evidence no rights.
3.2.6.3 Status: Class 6 is impaired. The holders of Equity
Interests are deemed to reject the Plan and, accordingly, are not
entitled to vote to accept or reject the Plan.
3.3 Controversy Concerning Impairment. In the event of a controversy
as to whether any class of Claims or Equity Interests is impaired under the
Plan, the Bankruptcy Court shall, after notice and a hearing, determine such
controversy prior to the Confirmation Date.
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ARTICLE 4
MODIFICATION, REVOCATION,
OR WITHDRAWAL OF THE PLAN
4.1 Modification of the Plan. The Proponents may alter, amend, or
modify the Plan under section 1127(a) of the Bankruptcy Code at any time prior
to the Confirmation Date so long as the Plan, as modified, meets the
requirements of sections 1122 and 1123 of the Bankruptcy Code. After the
Confirmation Date and prior to the Effective Date, the Proponents may alter,
amend, or modify the Plan in accordance with section 1127(b) of the Bankruptcy
Code.
4.2 Revocation or Withdrawal.
4.2.1 Right to Revoke. The Plan may be revoked or withdrawn prior to the
Confirmation Date by the Proponents.
4.2.2 Effect of Withdrawal or Revocation. If the Plan is revoked or withdrawn
prior to the Confirmation Date, then the Plan shall be deemed null and
void. In such event, nothing contained herein shall be deemed to
constitute a waiver or release of any claims by the Debtor or any other
Entity or to prejudice in any manner the rights of the Debtor or any
Entity in any further proceedings involving the Debtor.
4.3 Amendment of Plan Documents. From and after the Effective Date,
the authority to amend, modify, or supplement the Exhibits to the Plan and any
documents attached to such Exhibits shall be as provided in such Exhibits and
their respective attachments.
ARTICLE 5
PROVISIONS FOR TREATMENT OF
DISPUTED CLAIMS
5.1 Objections to Claims; Prosecution of Disputed Claims. Prior to
the Effective Date, the Debtor, the Committee and NationsBank may object to the
allowance of Claims filed with the Bankruptcy Court with respect to which any of
them disputes the Debtor's liability therefor in whole or in part. After the
Effective Date, the Liquidating Agent may object to the allowance of Claims
filed with the Bankruptcy Court with respect to which the Debtor or the
Liquidating Agent disputes liability in whole or in part. All objections that
are filed and prosecuted as provided herein shall be litigated to Final Order or
compromised and settled in accordance with section 5.2 of the Plan. Unless
otherwise provided herein or ordered by the Bankruptcy Court, all objections to
Claims shall be served and filed no later than ninety (90) days after the
Effective Date. Notwithstanding the foregoing, the Collateral Trust and the
Liquidating Trust may object to or otherwise contest any tax claims asserted by
any governmental unit against the Debtor, the Liquidating Trust or the
Collateral Trust, as their interests appear.
5.2 Claims Settlement Guidelines. Notwithstanding any requirements
that may be imposed pursuant to Bankruptcy Rule 9019, from and after the
Effective Date all Claims and all
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claims that either the Debtor or the Liquidating Agent has asserted against
other parties may be compromised and settled according to the following
procedures:
5.2.1 Subject to section 5.2.2 hereof, the following settlements or compromises
do not require the review or approval of the Bankruptcy Court or any
other party in interest:
5.2.1.1 The settlement or compromise by the Debtor or the
Liquidating Agent of a Claim pursuant to which such Claim is Allowed
in an amount of $100,000 or less;
5.2.1.2 The settlement or compromise of a Claim where the
difference between the amount of the Claim listed on the Schedules and
the amount of the Claim proposed to be allowed under the settlement is
$100,000 or less;
5.2.1.3 The settlement or compromise of a claim asserted by the
Debtor or the Liquidating Agent against a party where the difference
between the amount sought to be recovered by the Debtor or the
Liquidating Agent and the amount to be paid to the Debtor or the
Liquidating Agent under the proposed settlement is $100,000 or less;
and
5.2.1.4 The settlement or compromise of a claim comprising part
of the Collateral, such claim being asserted by the Collateral
Trustee.
5.2.2 The following settlements or compromises shall be submitted to the
Bankruptcy Court for approval:
5.2.2.1 Any settlement or compromise not described in section
5.2.1 hereof; and
5.2.2.2 Any settlement or compromise of a Claim or a claim
asserted by the Debtor or the Liquidating Agent that involves an
"insider," as defined in section 101(31) of the Bankruptcy Code.
Notices of any settlements requiring Bankruptcy Court approval in
accordance with section 5.2.2 shall be sent to the members of the
Liquidating LLC and those creditors and other parties in interest
appearing on the Rule 2002 list maintained by the Bankruptcy Court.
5.3 Distributions on Account of Disputed Claims. Notwithstanding
section 3.2 hereof, a Distribution shall only be made to the holder of a
Disputed Claim when, and to the extent that, such Disputed Claim becomes
Allowed. No interest shall be paid on account of Disputed Claims that later
become Allowed except to the extent that payment of interest is required under
section 506(b) of the Bankruptcy Code. No Distribution shall be made with
respect to all or any portion of any Disputed Claim pending the entire
resolution thereof in the manner prescribed by section 5.1 hereof.
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5.4 Escrows for Disputed Claims. As set forth in sections 7.15 and
8.1.4 of the Plan, respectively, upon the Effective Date, the Disputed Unsecured
Claims Escrow and the Administrative and Priority Claims Escrow shall be
established and thereafter administered pending the resolution of all Disputed
Unsecured Claims and all Disputed Administrative and Priority Claims,
respectively.
ARTICLE 6
ACCEPTANCE OR REJECTION OF THE PLAN
6.1 Impaired Classes to Vote. Each holder of a Claim in an impaired
class of Claims shall be entitled to vote to accept or reject the Plan to the
extent and in the manner provided by the Voting Procedures Order.
6.2 Acceptance by Class of Claims. Acceptance of the Plan by any
impaired class of Claims shall be determined in accordance with the Voting
Procedures Order.
6.3 Nonconsensual Confirmation. Because Classes 5 and 6 are deemed
to have rejected the Plan, the Proponents intend to request that the Bankruptcy
Court confirm the Plan in accordance with section 1129(b) of the Bankruptcy Code
with respect to Classes 5 and 6. In the event that any other impaired class of
Claims shall fail to accept the Plan in accordance with section 1129(a) of the
Bankruptcy Code, the Proponents reserve the right to (a) request that the
Bankruptcy Court confirm the Plan in accordance with section 1129(b) of the
Bankruptcy Code with respect to such non-accepting class, in which case the Plan
shall constitute a motion for such relief, or (b) amend the Plan in accordance
with section 4.1 hereof.
ARTICLE 7
THE LIQUIDATING ENTITIES
7.1 The Collateral Trust. On or prior to the Confirmation Date,
NationsBank shall designate and appoint a trustee (the "Collateral Trustee") to
administer and liquidate the Collateral for the benefit of NationsBank. On the
Effective Date, all right, title and interest in and to each asset comprising
the Collateral, which has not previously been liquidated by the Debtor, shall be
automatically (without further order of the Bankruptcy Court or the execution of
any documentation by the Debtor or NationsBank) assigned and transferred to the
Collateral Trust for the benefit of NationsBank. Upon such transfer, (a) neither
the Debtor nor its estate nor the Liquidating LLC shall have any remaining legal
or equitable interest in any of the Collateral, and (b) the Collateral Trustee
shall have full legal title and all incidents of ownership to each asset
comprising the Collateral. The Collateral Trustee and NationsBank shall execute
such documentation concerning the establishment of a liquidating trust or other
legal entity to facilitate the administration and liquidation of the Collateral
as the Collateral Trustee and NationsBank determine in their discretion, and the
Collateral Trustee is authorized to cause the transfer and assignment of any of
the Collateral to such liquidating trust or trusts or such other entity in its
discretion or as directed by NationsBank. From and after the Effective Date, the
Collateral Trustee may freely sell, transfer, assign or otherwise dispose of the
assets comprising the Collateral without further order of the Bankruptcy Court
or any approval or oversight by the Debtor or the Liquidating
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Agent. The Collateral Trustee, subject to the direction of NationsBank, shall
have full legal power and authority to transfer, sell, assign or otherwise
dispose of any of the Collateral, and to execute and deliver all necessary and
appropriate documentation to effect any such disposition.
The Collateral Trustee may take all actions that it and NationsBank
deem necessary or appropriate to administer and liquidate the Collateral,
including, without limitation, (i) filing motions, lawsuits, adversary
proceedings or other documents with respect to causes of action comprising the
Collateral, and, in connection therewith, naming the Debtor as plaintiff, movant
or respondent therein or taking other actions in the name of the Debtor in
furtherance thereof as appropriate, (ii) executing and delivering all documents
and agreements as the Collateral Trustee determines to be necessary or
appropriate, (iii) compromising and settling any and all claims or causes of
action currently pending or filed in the future with respect to the Collateral,
and (iv) transferring all liquidation proceeds received by it or the Collateral
Trust to NationsBank. Any such action taken by the Collateral Trustee pursuant
to the direction or with the consent of NationsBank shall be binding on the
Collateral Trustee, the Debtor's chapter 11 estate, the Debtor, the Liquidating
LLC, and NationsBank, provided that any such action does not impose any
liability or duty upon the Liquidating LLC, the Liquidating Agent, or the
Debtor. The Debtor and the Liquidating Agent shall cooperate with NationsBank
and the Collateral Trustee to the extent required to maximize the value of the
Collateral, including, but not limited to, permitting the Collateral Trustee and
its designees to have access to the Debtor's books and records and other
documents as well as to the Debtor's employees, if any. NationsBank shall have
the sole discretion to instruct the Collateral Trustee with respect to the
foregoing actions and with respect to any compromise and settlement of any claim
or cause of action relating to, or otherwise concerning, the liquidation of the
Collateral. The Collateral Trustee and NationsBank shall also have sole
discretion to abandon any asset or the prosecution of any claim or cause of
action that is a part of the remaining Collateral. NationsBank shall be
responsible for the payment of the costs and expenses of the Collateral Trust
and the Collateral Trustee, the payment of such costs, expenses, and
professional fees not being subject to approval by the Bankruptcy Court.
NationsBank shall, however, have the authority at any time to either dismiss,
terminate or replace the Collateral Trustee. The Collateral Trustee may hire or
engage consultants, professionals, independent contractors or employees, in its
discretion or as directed by NationsBank, to aid in the liquidation of the
Collateral, including, without limitation, any former employees, consultants or
professionals of the Debtor.
During its Bankruptcy Case, the Debtor has liquidated certain of the
assets comprising the Collateral with the approval of the Bankruptcy Court and,
pursuant to various cash collateral orders entered by the Bankruptcy Court, the
net sales proceeds of such assets have been transferred to NationsBank for
application to the Debtor's pre-petition obligations. Upon entry of the
Confirmation Order, NationsBank shall retain all such proceeds irrevocably and
free of any Claim or Cause of Action by any person or party in interest, such
proceeds being applied in partial satisfaction of NationsBank's Secured Claim.
Upon the written request of NationsBank made no later than thirty (30)
days after the Effective Date, NationsBank and the Debtor shall treat the
transfer of any subsidiary stock so specified and that is included in the
Collateral as a sale of the underlying assets for federal income tax purposes by
making, if permitted under applicable law, an election under Section 338(h)(10)
of the Internal Revenue Code and under any comparable provisions of state or
local law. NationsBank
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and the Debtor shall each promptly file all documents necessary to effect such
elections and cooperate with each other with respect thereto.
Upon the Effective Date of the Plan, NationsBank shall release all of
its liens and security interests in (i) the Debtor's membership interest in
Pinnacle Health Enterprises, L.L.C., and (ii) the Debtor's stock interest in PHP
NJ MSO, Inc., a Delaware corporation. Such releases are being made for the
purpose of enabling the Debtor to transfer these interests unencumbered in
accordance with sections 8.1.1. and 8.1.2.
7.2 Liquidating Agent. On or before the Confirmation Date, the
Committee shall designate and appoint its representative or representatives for
the purpose of implementing and administering the Liquidating LLC (the
"Liquidating Agent"). If the Committee fails to designate a representative to
serve as the Liquidating Agent, the Proponents shall designate one.
The Liquidating Agent, together with its representatives and
professionals, shall be entitled to reasonable compensation. The duties and
powers of the Liquidating Agent shall include all powers necessary to implement
the Plan and the LLC Operating Agreement, including but not limited to, the
following: (i) to compromise, dismiss or pursue in litigation any and all Causes
of Action (except claims comprising a portion of the Collateral and claims or
Causes of Action released under the Plan) existing at confirmation (whether or
not pending in litigation), including but not limited to Avoidance Actions and
claims against the Debtor's officers and directors; (ii) to retain professionals
to assist it in performing its duties hereunder; (iii) to object to or seek to
subordinate claims against the estate; and (iv) to serve as manager of the
Liquidating LLC hereunder.
Upon the Effective Date, pursuant to Section 12.5 of the Plan, the
Committee shall cease to exist. In the event the position of Liquidating Agent
hereunder is vacated for any reason, the former Committee members shall
reconvene for the sole purpose of selecting a successor Liquidating Agent. If
the former Committee members fail to select a successor Liquidating Agent, one
shall be selected by the Bankruptcy Court. The Liquidating Agent shall be
required to disclose his or her connections, if any, with the Debtor, creditors,
any other party-in-interest and the United States Trustee.
7.3 Liquidating LLC. Upon the Effective Date, all right, title and
interest in and to all Assets and Causes of Action of the Debtor and Debtor in
Possession that are not included in the Collateral shall be assigned and
transferred to the Liquidating LLC. (Exhibit 1.1.23 contains a non-exclusive
------
description of the "Collateral Exclusion Assets Transferred to the Liquidating
LLC.") Such transfer shall be free and clear of any Claims (including without
limitation, Administrative and Priority Claims other than NationsBank's Priority
Claim), Interests or Encumbrances, except the rights of the members of the
Liquidating LLC hereunder and under the LLC Operating Agreement.
On the Effective Date, the LLC Operating Agreement shall become
effective and form the Liquidating LLC, designating the Liquidating Agent as the
manager of such limited liability company. To the extent deemed necessary or
appropriate by the Proponent, the Committee, or the Liquidating Agent, the
Debtor shall execute the LLC Operating Agreement. The Liquidating Agent shall
thereupon be authorized to take all other steps necessary to complete the
formation of the Liquidating LLC. The Liquidating LLC shall have all duties,
powers, standing and authority necessary to implement the Plan and to administer
and liquidate the Assets for the benefit of the
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members the Liquidating LLC. Such powers shall include, without limitation the
following: (i) to investigate, institute, compromise, dismiss or pursue in
litigation, any and all claims of the Debtor and Debtor in Possession (except
claims comprising part of the Collateral and claims or Causes of Action released
the Plan), existing, whether or not pending in litigation, at confirmation,
including but not limited to Avoidance Actions and claims against the Debtor's
officers and directors; (ii) to retain professionals; and (iii) to object to or
seek to subordinate claims against the Debtor's estate.
On the Effective Date, each holder of an Allowed Unsecured Claim
shall, by operation of the Plan, (i) be admitted to the Liquidating LLC as a
member of the Liquidating LLC, (ii) become bound by the LLC Operating Agreement,
and (iii) receive an uncertificated membership interest in the Liquidating LLC
in proportion to its Pro Rata Share of Allowed Unsecured Claims, as such
membership interests are more particularly described in the LLC Operating
Agreement. On the Effective Date, the Disputed Unsecured Claims Escrow shall
receive uncertificated membership interests in the Liquidating LLC in respect of
the Disputed Class 4 Claims. In addition, on the Effective Date, NationsBank
shall receive, as part of the settlement and compromise effected by this Plan as
described in section 3.2.1.2 and Article 11 hereof, a preferential membership
interest in respect of NationsBank's Priority Claim, as such preferential
interest is more particularly described in the LLC Operating Agreement. No other
Entity, including the Debtor or Debtor in Possession, shall have any interest,
legal, beneficial, or otherwise, in the Liquidating LLC or the Assets upon their
assignment and transfer to the Liquidating LLC.
As soon as possible after the Confirmation Date, but no later than the
Effective Date, the Debtor shall deposit the sum of $250,000.00, constituting
proceeds from the liquidation of the Collateral made available by NationsBank as
part of the settlement and compromise effected by the Plan, into a separate
interest-bearing account established jointly in the name of the Debtor and the
Liquidating Agent (the "Plan Fund"). The Plan Fund shall be available (i) to pay
any Allowed Administrative Claims and Allowed Priority Claims which have not
otherwise been paid or reserved for from the Available Cash Collateral, provided
that the Liquidating Agent consents to such payment in its discretion, and (ii)
to fund the litigation to be commenced by the Liquidating LLC. The decision of
whether to pursue any litigation or to compromise claims once they have been
asserted shall be in the sole discretion of the Liquidating Agent.
7.4 Distributions; Beneficial Interests. All recoveries from the
liquidation of the Assets assigned to the Liquidating LLC shall be distributed
as follows: (i) first, to compensate the Liquidating Agent and its professionals
for expenses and services incurred in connection with liquidating and
administering the Assets pursuant to the terms of the Liquidating LLC; (ii)
second, until NationsBank has received aggregate payments totaling $3,186,000
from the Liquidating LLC on account of its preferential membership interest
therein, to NationsBank in respect of such preferential membership interest;
(iii) third, for the next $5,000,000 of Distributions from the Liquidating LLC
(including any amounts payable into the Disputed Unsecured Claims Escrow in
accordance with section 7.15 hereof), to each member of the Liquidating LLC,
based upon each such member's relative membership interest in the Liquidating
LLC but excluding NationsBank; and (iv) for all remaining distributions from the
Liquidating LLC, pro rata among all holders of membership interests in the
Liquidating LLC, based upon their relative membership interests in accordance
with, and subject to, sections 3.2, 4.3, 11.5 and 11.6 hereof. No other Entity,
including the Debtor or Debtor in Possession, shall have any interest, legal,
beneficial, or otherwise, in the Liquidating LLC or the Assets upon their
assignment and transfer to the Liquidating LLC.
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7.5 Purpose of the Liquidating LLC. The Liquidating LLC shall be
established for the sole purpose of liquidating its assets in furtherance of the
Plan for the sole benefit of its members, with no objective to continue or
engage in the conduct of a trade or business. The Liquidating LLC shall be
deemed not to be the same legal entity as the Debtor, but only the assignee of
the Assets and a representative of its estate within the meaning of section
1123(b)(3) of the Bankruptcy Code.
7.6 Tax Treatment of Transfer of Assets. For all federal income tax
purposes, all parties (including, without limitation, the Debtor, the
Liquidating Agent and holders of membership interests in the Liquidating LLC)
shall treat the transfer of assets to the Liquidating LLC in accordance with the
terms of the Plan as a transfer to holders of Allowed Claims in Classes 2 and 4,
followed by a transfer by such holders to the Liquidating LLC.
7.7 Valuation of Assets. As soon as possible after the Effective
Date (and after any later date that any assets are transferred to the
Liquidating LLC), but in no event later than thirty (30) days thereafter, the
Debtor and the Liquidating Agent shall mutually determine, in good faith, the
value of the assets transferred to the Liquidating LLC under the Plan (other
than cash). This valuation shall be available from the Liquidating Agent upon
written request of its members, the Collateral Trustee or the Debtor.
7.8 Liquidation of Assets; Responsibilities of Liquidating Agent.
7.8.1 The Liquidating Agent shall, in an expeditious but orderly manner,
liquidate and convert to cash the Assets, make timely distributions, and
not unduly prolong the duration of the Liquidating LLC. In so doing, the
Liquidating Agent shall exercise its reasonable business judgment in
liquidating the Assets to maximize recoveries. The liquidation of such
Assets may be accomplished either through the sale of assets (in whole or
in combination, and including the sale of any claims, rights, or causes
of action) or through the prosecution, compromise and settlement,
abandonment or dismissal of any or all claims, rights, or causes of
action, or otherwise. The Liquidating Agent shall have the absolute right
to pursue or not to pursue any and all claims, rights, or causes of
action as the Liquidating Agent determines are in the best interests of
the members of the Liquidating LLC, consistent with the purposes of the
Liquidating LLC, and the Liquidating Agent shall have no liability for
the outcome of its decisions in this regard. The Liquidating Agent may
incur any reasonable and necessary expenses in liquidating and converting
the Assets in the Liquidating LLC to cash.
7.8.2 The Liquidating Agent shall be named in the Confirmation Order or in the
LLC Operating Agreement and shall have the power (i) to prosecute for the
benefit of the Liquidating LLC all claims, rights and Causes of Action
transferred to the Liquidating LLC (whether such suits are brought in the
name of the Liquidating LLC or otherwise), (ii) to liquidate the Assets
in the Liquidating LLC, and (iii) to otherwise perform the functions and
take the actions provided for or permitted herein or in any other
agreement executed by the Liquidating Agent pursuant to the Plan. Any and
all proceeds generated from such claims, rights, and Causes of Action
shall be the property of the Liquidating LLC.
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7.8.3 The Liquidating Agent shall not have any responsibility for managing or
winding up the affairs of the Debtor, including but not limited to filing
of tax returns, payment of Administrative or Priority Claims (other than
NationsBank's Priority Claim), or maintaining its books and records other
than as provided in section 8.3.
7.9 Investment Powers. The right and power of the Liquidating Agent
to invest assets transferred to the Liquidating LLC, the proceeds thereof, or
any income earned by the Liquidating LLC shall be limited to the right and power
to invest such assets (pending periodic distributions in accordance with section
7.10 of the Plan) in Cash Equivalents; provided, however, that (a) the
Liquidating Agent may expend the assets of the Liquidating LLC (i) as reasonably
necessary to meet contingent liabilities and to maintain the value of the assets
of the Liquidating LLC during liquidation, (ii) to pay reasonable administrative
expenses which have been incurred (including, but not limited to, any taxes
imposed on the Liquidating LLC or fees and expenses in connection with
litigation), and (iii) to satisfy other liabilities incurred or assumed by the
Liquidating LLC (or to which the assets are otherwise subject) in accordance
with the Plan or the LLC Operating Agreement, and (b) the Liquidating Agent may,
but shall not be required to, invest any funds held by the Liquidating Agent or
the Liquidating LLC (pending distributions pursuant to the Plan) in investments
that are exempt from federal, state and local taxes.
7.10 Semi-Annual Distribution; Withholding. Subject to sections 11.5
and 11.6 hereof, the Liquidating Agent shall distribute at least semi-annually
(including within ten (10) Business Days after the Initial Distribution Date) to
the holders of membership interests in the Liquidating LLC all net cash income
and all other cash received, whether from the liquidation of assets or the
transfer of assets to the Liquidating LLC (including as cash for this purpose
all Cash Equivalents); provided, however, that the Liquidating LLC may retain
such amounts, in the aggregate amount at any time not exceeding $300,000
(excluding any remaining portion of the Plan Fund), (i) as are reasonably
necessary to meet contingent liabilities and to maintain the value of the assets
of the Liquidating LLC during liquidation, (ii) to pay reasonable administrative
expenses which have been incurred, and (iii) to satisfy other liabilities
incurred or assumed by the Liquidating LLC (or to which the Assets are otherwise
subject) in accordance with the Plan or the LLC Operating Agreement. The
Liquidating Agent may withhold from amounts distributable to any Entity any and
all amounts, determined in the Liquidating Agent's reasonable sole discretion,
to be required by any law, regulation, rule, ruling, directive or other
governmental requirement.
7.11 Reporting Duties.
7.11.1 Partnership Tax Status. The Liquidating LLC will be treated as a
partnership for federal tax purposes and, to the extent permitted under
applicable law, for state and local income tax purposes. The Liquidating
Agent shall be responsible for filing informational returns on behalf of
the Liquidating LLC and distributing information statements to holders of
the membership interests in the Liquidating LLC, setting forth each
member's allocable share of the income, loss, deduction or credit of the
Liquidating LLC.
7.11.2 Allocations of Liquidating LLC Taxable Income or Loss. For federal income
tax purposes, the Liquidating LLC's taxable income (or loss) shall be
allocated among the holders of the membership interests in the
Liquidating LLC in a manner consistent with applicable Treasury
Regulations taking into account such holders' relative economic interests
in the Liquidating LLC. Each holder of a membership interest in the
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Liquidating LLC will be required to take into account its allocable share
of the income, loss, deduction or credit of the Liquidating LLC in
determining its taxable income for federal income tax purposes.
7.11.3 Other. The Liquidating Agent shall file (or cause to be filed) any other
statements, returns or disclosures relating to the Liquidating LLC that
are required by any governmental unit or applicable law.
7.12 Implementation of Liquidating LLC. On the Effective Date,
the Liquidating LLC will be formed and become effective for the benefit of
NationsBank with respect to its Allowed Priority Claim and of the holders of
Allowed Unsecured Claims in Class 4. The LLC Operating Agreement shall contain
provisions customary for agreements of Delaware limited liability companies
utilized in comparable circumstances, including, but not limited to, any and all
provisions necessary to ensure the continued treatment of the Liquidating LLC as
a partnership for federal income tax purposes. Entry of the Confirmation Order
and the occurrence of the Effective Date shall automatically cause all right,
title and interests in the Assets to be transferred to the Liquidating LLC. In
furtherance thereof, the Debtor and the Liquidating Agent shall execute any
documents or other instruments as necessary to evidence the transfer of title to
the Assets to the Liquidating LLC.
7.13 Registry of Beneficial Interests. The Liquidating Agent
shall maintain a registry of the membership interests in the Liquidating LLC.
7.14 Termination. The Liquidating LLC will terminate after its
liquidation, administration and distribution of the Assets in accordance with
the Plan and its full performance of all other duties and functions set forth
herein or in the LLC Operating Agreement.
7.15 Disputed Unsecured Claims Escrow.
7.15.1 General. From and after the Effective Date, the Class 4 Disbursing Agent
shall set aside, segregate and hold in escrow (the "Disputed Unsecured
Claims Escrow"), for the benefit of each holder of a Disputed Unsecured
Claim, the membership interests in the Liquidating LLC (and any cash
distributable on account thereof) that the holder of such Disputed
Unsecured Claim would have received under section 3.2.4 hereof if such
Disputed Unsecured Claim had been Allowed in the Disputed Claim Amount as
of the Effective Date. Any cash held in the Disputed Unsecured Claims
Escrow for the benefit of holders of Disputed Unsecured Claims shall be
either (i) held by the Class 4 Disbursing Agent in trust for the benefit
of such holders in an interest-bearing account, (ii) invested in
interest-bearing obligations issued by the United States government or by
an agency of the United States government and guaranteed by the United
States government, or (iii) invested in investments that are exempt from
federal, state or local taxes, and having (in each case) a maturity of
not more than thirty (30) days, pending determination of their
entitlement thereto under the terms of the Plan.
7.15.2 Effect of Allowance of Disputed Unsecured Claims. At such time as a
Disputed Unsecured Claim becomes, in whole or in part, an Allowed
Unsecured Claim, by operation of the Plan, (i) such holder shall be
admitted to the Liquidating LLC as a member of the Liquidating
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LLC, (ii) such holder shall become bound by the LLC Operating Agreement,
and (iii) the Class 4 Disbursing Agent shall distribute to the holder of
such Allowed Claim the membership interests in the Liquidating LLC to
which such holder would have been entitled under the Plan had such claim
been Allowed as of the Effective Date, together with any cash and
earnings attributable thereto, after reduction for all costs and expenses
attributable to such membership interest, cash and earnings (including,
without limitation, attorneys' fees and any taxes imposed on the Disputed
Unsecured Claims Escrow). Such distributions shall be made as soon as
practicable after the date that the order or judgment of the Bankruptcy
Court allowing such Unsecured Claim becomes a Final Order, but in no
event more than thirty (30) days thereafter.
7.15.3 Effect of Disallowance of Disputed Unsecured Claims. To the extent that
a Disputed Unsecured Claim ultimately is either disallowed by Final Order
or becomes an Allowed Unsecured Claim in an amount less than the Disputed
Claim Amount of such Disputed Claim, the Class 4 Disbursing Agent shall
distribute the excess balance of any membership interests in the
Liquidating LLC previously reserved on account of such Disputed Unsecured
Claim to such persons whom such amounts would have been distributed had
such Disputed Claim been disallowed, or partially disallowed, on the
Effective Date, together with any cash and earnings attributable thereto,
after reduction for all costs and expenses attributable to such
membership interest, cash and earnings (including, without limitation,
attorneys' fees and taxes imposed on the Disputed Unsecured Claims
Escrow).
7.15.4 Payment of Tax Attributable to Taxable Income of Liquidating LLC. In the
event, and to the extent, the Disputed Unsecured Claims Escrow has
insufficient funds to pay taxes attributable to the membership interests
held therein, the necessary funds to pay such taxes shall be advanced to
the Disputed Unsecured Claims Escrow by the Liquidating LLC and the
Disputed Unsecured Claims Escrow shall reimburse the Liquidating LLC
therefor from future distributions and disbursements to or for the
benefit of the Disputed Unsecured Claims Escrow.
7.15.5 Tax Treatment of Disputed Unsecured Claims Escrow. Subject to definitive
guidance from the IRS or a court of competent jurisdiction to the
contrary (including the receipt by the Class 4 Disbursing Agent of a
private letter ruling if the Class 4 Disbursing Agent so requests one, or
the receipt of an adverse determination by the IRS upon audit if not
contested by the Class 4 Disbursing Agent), the Class 4 Disbursing Agent
shall (i) treat the Disputed Unsecured Claims Escrow as a discrete trust
for federal income tax purposes, consisting of separate and independent
shares to be established in respect of each Disputed Unsecured Claim, in
accordance with the trust provisions of the Internal Revenue Code
(Sections 641 et seq.), and (ii) to the extent permitted by applicable
law, report consistently with the foregoing for state and local income
tax purposes. All holders of Allowed and Disputed Unsecured Claims shall
report, for tax purposes, consistently with the foregoing.
7.16 Non-Transferability: Upon issuance thereof, interests in the
Liquidating LLC shall be non-transferable, except with respect to a transfer by
will or under the laws of descent and distribution or with respect to
distributions of membership interests in the Liquidating LLC from the Disputed
Unsecured Claims Escrow. Any such transfer, however, shall not be effective
until and unless the Liquidating Agent receives written notice of such transfer.
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ARTICLE 8
IMPLEMENTATION OF THE PLAN
8.1 Debtor's Post-Confirmation Role; Dissolution. On or before the
Effective Date, the Debtor shall select the Disbursing Agent to administer the
payment of Allowed Administrative Claims and Allowed Priority Claims. The source
of such payments shall be from the Available Cash Collateral remaining as of the
Confirmation Date, together with any amounts of the Plan Fund necessary to
effect the full payment of Allowed Administrative Claims and Allowed Priority
Claims. The Debtor and the Disbursing Agent shall not expend any portion of the
Plan Fund without the consent of the Liquidating Agent. Upon the full payment of
Administrative Claims and Priority Claims which are or become Allowed, the
Disbursing Agent shall transfer and assign the Debtor's interest in the Plan
Fund to the Liquidating LLC, and thereafter, the Debtor and the Disbursing Agent
shall have no further responsibilities with respect to making Distributions
under the Plan.
In addition to enabling the Disbursing Agent to make payments to holders
of Allowed Administrative Claims and Allowed Priority Claims, the Debtor shall
perform each of the following acts as soon as practicable on or after the
Effective Date:
8.1.1 PHE Membership Interest. Contribute all of its right, title and interest
in and to its membership interests in Pinnacle Health Enterprises, L.L.C.
to PHP NJ MSO, Inc.;
8.1.2 PHP NJ MSO, Inc. Interest. Transfer all of its right, title and interest
in and to its stock in PHP NJ MSO, Inc. to a custodial trust for the
benefit of the holders of the Existing PHP Stock. Such holders shall
share in any assets or distributions of the custodial trust in a
proportion so as to preserve the economic relationship and economic
entitlements that exist between and among such holders as of the
Effective Date. The beneficial interests in such custodial trust shall be
nontransferable and uncertificated. As soon as possible after the
Effective Date, the Debtor shall execute a trust agreement with a
disinterested person and cause such shares of common stock in PHP NJ MSO,
Inc. to be transferred irrevocably to the trust created thereby. The form
and content of such trust agreement shall be reasonably satisfactory to
each of the Proponents, the chapter 7 trustee for PHP NJ MSO, Inc., and
the custodial trustee selected by the Debtor to administer such trust.
The Debtor shall designate such trustee on or before the Effective Date.
8.1.3 Expedited Tax Return. Complete and file within ninety (90) days after
the Effective Date (or such longer period as authorized by the Bankruptcy
Court for cause) its final federal, state and local tax returns, and
pursuant to 11 U.S.C. (S)505(b) request an expedited determination of any
unpaid tax liability of the Debtor or its estate for all taxable periods
of the Debtor ending after the Petition Date through the dissolution of
the Debtor pursuant to the Plan.
8.1.4 Administrative and Priority Claims Escrow. Upon the Effective Date, or
as soon thereafter as is practicable, place in an interest bearing escrow
account (the "Administrative and Priority Claims Escrow") sufficient
funds from the Available Cash Collateral (and to the
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extent that the amount of Available Cash Collateral is insufficient to
establish such escrow, from the Plan Fund provided that the Liquidating
Agent consents to such use of the Plan Fund, which consent may be
withheld by the Liquidating Agent in its discretion) for the payment of
Administrative Claims and Priority Claims which are Disputed as of the
Confirmation Date. With respect to each such Disputed Administrative
Claim and Disputed Priority Claim, the Debtor shall place in the escrow
either (i) the Disputed Claim Amount, (ii) the Estimated Amount, or (iii)
such lesser amount approved by the Bankruptcy Court after notice and a
hearing. Payment shall be made by the Disbursing Agent from the escrow to
the holders of such Disputed Claims as their respective Claims become
Allowed, or as soon thereafter as is practicable. To the extent that a
Disputed Administrative Claim or Disputed Priority Claim is ultimately
disallowed by Final Order or becomes Allowed in an amount less than the
Disputed Claim Amount of such Disputed Claim, then the Disbursing Agent
shall pay the excess balance of any cash previously escrowed on account
of such Disputed Claim, together with any interest that has accrued on
the amount of such excess balance, first to the Liquidating LLC to the
extent that the Plan Fund contributed to the escrow, and then to the
Collateral Trust. The Debtor's initial use of the Available Cash
Collateral in the amounts required by this subsection for the creation of
the escrow is subject to NationsBank's consent.
Subject to definitive guidance from the IRS or the courts to the
contrary (including the issuance of applicable Treasury Regulations, the
receipt by the Debtor or the Disbursing Agent of a private letter ruling
if the Debtor or the Disbursing Agent requests one, or the receipt of an
adverse determination by the IRS upon audit if not contested by the
Debtor or the Disbursing Agent), the Debtor and the Disbursing Agent
shall (i) treat the Administrative and Priority Claims Escrow as a
discrete trust for federal income tax purposes, consisting of separate
and independent shares to be established in respect of each Disputed
Administrative or Priority Claim, in accordance with the trust provisions
of the Internal Revenue Code ((S)(S)641, et seq.) and (ii) to the extent
permitted by applicable law, report consistently for state or local
income tax purposes. All parties (including holders of such Disputed
Claims) shall report consistently with such treatment.
8.1.5 Dissolution. Within thirty (30) days after its completion of the acts
required by section 8.1 hereof, including subsections 8.1.1 through
8.1.4, or as soon thereafter as is practicable, file its certificate of
dissolution, together with all other necessary corporate documentation,
to effect its dissolution under the applicable laws of the State of
Delaware.
8.2 Transfers to the Collateral Trust and the Liquidating LLC. On
the Effective Date, (i) the Debtor shall pay from the Available Cash Collateral
(and to the extent necessary and permitted by section 8.1 hereof, the Plan Fund)
all Allowed Administrative Claims and all Allowed Priority Claims (other than
NationsBank's Allowed Priority Claim), (ii) all of the Debtor's right, title and
interest in and to the Collateral shall be transferred and assigned absolutely
and unconditionally to the Collateral Trust, by operation of the Plan, for the
benefit of NationsBank and in full satisfaction of NationsBank's Secured Claim,
and (iii) all of the Debtor's right, title and interest in and to the Assets
(excluding the Collateral and the Plan Fund) shall be transferred and assigned
absolutely and unconditionally to the Liquidating LLC, by operation of the Plan.
The Debtor shall transfer its interest in the Plan Fund, or the remaining
portion of the Plan Fund, to the Liquidating LLC upon the payment in full of
Allowed Administrative Claims and Allowed Priority
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Claims (other than NationsBank's Allowed Priority Claim), and its creation of
the Administrative and Priority Claims Escrow. To the extent that any Available
Cash Collateral exists after the payment of Allowed Administrative and Priority
Claims and the creation of such escrow, such excess Available Cash Collateral
shall be paid to the Collateral Trustee. For the avoidance of doubt, the Debtor
shall use and exhaust the Available Cash Collateral in the payment of, and the
creation of the Administrative and Priority Claims Escrow before seeking to use
any portion of the Plan Fund for these purposes. The Debtor's use of the
Available Cash Collateral for such purpose shall remain subject to NationsBank's
consent and approval.
8.3 Books and Records. Upon the Effective Date, the Debtor shall
transfer and assign: (i) to the Collateral Trust full title to, and the
Collateral Trust shall be authorized to take possession of, all of the books and
records of the Debtor and Debtor in Possession relating to or supporting the
Collateral, and (ii) to the Liquidating LLC full title to, and the Liquidating
LLC shall be authorized to take possession of, all of the books and records of
the Debtor and Debtor in Possession relating to or supporting the Assets. To the
extent that certain books and records of the Debtor or Debtor in Possession
relate to or support both the Collateral and the Assets, then the Liquidating
LLC shall have full title thereto, but shall make such books and records
available to the Collateral Trustee or its designees for its use, copying and
analysis during reasonable business hours. The Collateral Trust and the
Liquidating LLC shall each have the responsibility of storing and maintaining
books and records transferred to each of them hereunder. The Debtor shall
cooperate with the Collateral Trustee and the Liquidating Agent to facilitate
the delivery and storage of its books and records in accordance herewith. Books
and records of the Debtor or Debtor in Possession which do not relate to or
support either the Collateral or the Assets (such as medical records of former
patients of the Debtor or its affiliates) shall not be transferred to either the
Collateral Trust or the Liquidating LLC and neither entity shall have any duty
or responsibility to store, preserve or handle any such books and records. The
Debtor (as well as its current and former officers and directors) shall be
entitled to reasonable access to any books and records transferred to either the
Collateral Trust or the Liquidating LLC for all necessary corporate purposes,
including, without limitation, defending or prosecuting litigation, determining
insurance coverage, filing tax returns, and addressing personnel matters. For
the purpose of this section, books and records include computer generated or
computer maintained books and records and computer data, as well as
electronically generated or maintained books and records or data, along with
books and records of the Debtor maintained by or in possession of third parties
and all of the claims and rights of the Debtor and Debtor in Possession in and
to their books and records, wherever located.
8.4 Distributions Under the Plan. As soon as possible following the
Effective Date, the Debtor (and the Disbursing Agent) shall make all payments to
holders of Allowed Administrative Claims and Allowed Priority Claims required by
the Plan, including without limitation Disputed Administrative and Priority
Claims as they become Allowed. The Debtor shall also make the payments and other
transfers to holders of Other Secured Claims in satisfaction of their respective
claims. The Debtor shall have no responsibility for making the Distributions to
holders of Allowed Unsecured Claims or to NationsBank on account of its Priority
Claim, other than the execution and delivery of the LLC Operating Agreement and
effecting the transfer of the Assets to the Liquidating LLC. Whenever any
Distribution to be made under this Plan shall be due on a day other than a
Business Day, such Distribution shall instead be made, without interest, on the
immediately succeeding Business Day, but shall be deemed to have been made on
the date due. For federal income tax purposes, a Distribution will be allocated
to the principal amount of an Allowed
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Claim first and then, to the extent the Distribution exceeds the principal
amount of the Allowed Claim, to the portion of the Allowed Claim representing
accrued but unpaid interest.
8.5 Timing of Distributions Under the Plan. Any Distribution to be
made pursuant to the Plan shall be deemed to have been timely made if made
within ten (10) Business Days after the time therefor specified in the Plan.
8.6 Address for Delivery of Distributions Under the Plan. Subject to
Bankruptcy Rule 9010, any Distribution or delivery to a holder of an Allowed
Claim shall be made at the address of such holder as set forth on the proof of
Claim filed by such holder (or at the last known address of such holder if no
proof of claim is filed or if the Debtor, the Disbursing Agent, the Class 4
Disbursing Agent, the Liquidating Agent, or the Liquidating LLC, as the case may
be, has not been notified of a change of address). If any holder's Distribution
or payment is returned as undeliverable, no further Distributions or payments to
such holder shall be made unless and until the Liquidating Agent, the Debtor,
the Disbursing Agent, the Class 4 Disbursing Agent, or the Liquidating LLC, as
the case may be, is notified of such holder's then current address, at which
time any missed Distribution or payment shall be made to such holder without
interest.
8.7 Distributions Under One Hundred Dollars. No Distribution of less
than one hundred dollars ($100.00) shall be made to the holder of any Claim
unless a request therefor is made in writing to the Debtor, the Liquidating
Agent, the Class 4 Disbursing Agent, or the Disbursing Agent, as applicable.
8.8 Time Bar to Cash Payments. Checks issued by the Debtor, the
Disbursing Agent, the Liquidating Agent or the Class 4 Disbursing Agent in
respect of Allowed Claims shall be null and void if not negotiated within ninety
(90) days after the date of issuance thereof. Requests for reissuance of any
check shall be made directly to the party issuing such check, by the holder of
the Allowed Claim with respect to which such check originally was issued. Any
claim in respect of such a voided check shall be made on or before the first
anniversary of the date on which such Distribution was made. After such date,
all Claims in respect of void checks shall be discharged and forever barred.
8.9 Manner of Payment Under the Plan. Unless the Entity receiving a
payment agrees otherwise, any payment in cash to be made under the Plan shall be
made by check drawn on a domestic bank or by wire transfer from a domestic bank.
8.10 Professional Expenses Incurred on or After the Effective Date.
Professional fees and expenses incurred by the Debtor after the Effective Date
in connection with the effectuation of the Plan shall be paid in the ordinary
course of business from the Available Cash Collateral, or to the extent that the
Available Cash Collateral is insufficient, from the Plan Fund, subject to
Bankruptcy Court authorization and approval. Professional fees and expenses
incurred by the Liquidating Agent after the Effective Date in connection with
the effectuation of the Plan shall be paid in the ordinary course of business
from the Liquidating LLC.
8.11 Periodic Reports by Liquidating Agent. The Liquidating Agent
shall provide on at least a semi-annual basis a report detailing all receipts
and disbursements from the Liquidating LLC, all contingent and accrued
liabilities incurred by the Liquidating Agent or the
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Liquidating Trust, the available cash balances of the Liquidating LLC, and a
narrative summary describing the status of the liquidation of the Assets and any
litigation relating thereto. The Liquidating Agent shall furnish a copy of this
report to NationsBank and, upon written request, each other member of the
Liquidating LLC requesting a copy of the report.
8.12 Occurrence of the Confirmation Date. The following shall
constitute conditions to confirmation of the Plan:
8.12.1 The Bankruptcy Court has entered the Confirmation Order on
or before August 15, 1999;
8.12.2 The Confirmation Order shall be, in form and substance,
acceptable to the Proponents; and
8.12.3 No stay shall be in effect with respect to the Confirmation
Order.
8.13 Occurrence of the Effective Date. The "effective date of the
plan," as used in section 1129 of the Bankruptcy Code, shall not occur, and the
Plan shall be of no force and effect, until the Effective Date. The occurrence
of the Effective Date is subject to satisfaction of the following conditions
precedent:
8.13.1 NationsBank has selected the Collateral Trustee and the
Committee has selected the Liquidating Agent.
8.13.2 The Debtor and the Liquidating Agent have executed the LLC
Operating Agreement.
8.13.3 NationsBank and the Collateral Trustee shall have executed
documentation creating the Collateral Trust enabling the transfer of the
Collateral to the Collateral Trustee.
8.13.4 NationsBank shall have made available to the Debtor collateral
proceeds in the amount of $250,000 for the creation of the Plan Fund.
8.13.5 The Debtor shall have sufficient funds from the Available Cash
Collateral and other sources to pay Allowed Administrative and Priority
Claims in cash and to establish the Administrative and Priority Claims
Escrow.
Notwithstanding the foregoing, the Proponents reserve the right, in their sole
and absolute discretion, to waive the occurrence of any of the foregoing
conditions precedent to the Effective Date or to modify any of such conditions
precedent. Any such waiver of a condition precedent hereof may be effected at
any time, without notice, without leave or order of the Bankruptcy Court, and
without any formal action other than proceeding to consummate the Plan. Any
actions required to be taken on the Effective Date shall take place and shall be
deemed to have occurred simultaneously, and no such action shall be deemed to
have occurred prior to the taking of any other such action. If the Proponents
decide that one of the foregoing conditions cannot be satisfied and the
occurrence of such condition is not waived by the Proponents, then the
Proponents shall file a notice of the failure of the Effective Date with the
Bankruptcy Court.
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8.14 Distribution of Unclaimed Property. Any Distribution under the Plan
that is unclaimed after one hundred eighty (180) days following the date such
property is distributed shall be deemed not to have been made and shall be
transferred to the Liquidating LLC, free and clear of any claims or interests of
any Entities, including, without express or implied limitation, any claims or
interests of any governmental unit under escheat principles. Nothing contained
herein shall affect the discharge of the Claim with respect to which such
Distribution was made, and the holder of such Claim shall be forever barred from
enforcing such Claim against the Liquidating LLC, the assets, estates,
properties, or interests in property of the Liquidating LLC.
8.15 Severance and Benefit Programs. The Severance and Benefit
Programs shall remain in effect until the Effective Date, and all benefits shall
be payable thereunder by the Debtor as Allowed Administrative Expenses in
accordance with the terms thereof.
8.16 Corporate Action. Upon the Effective Date, the Debtor shall
perform each of the actions and effect each of the transfers required by the
terms of the Plan, in the time period allocated therefor, whether or not the
Board of Directors has authorized any such actions or transfers. Within the
time period set forth in section 8.1 of the Plan, the Debtor shall be authorized
and directed, following its completion of all disbursements, other transfers and
other actions required by the Plan, to file its certificate of dissolution to
cease the corporate existence of PHP Healthcare Corporation. The filing of such
certificate of dissolution shall be authorized and approved in all respects
without further action under applicable law, regulation, order, or rule,
including, without express or implied limitation, any action by the stockholders
or the Board of Directors.
8.17 Effectuating Documents and Further Transactions. Each of the
officers of the Debtor is authorized and directed, in accordance with his or her
authority under the resolutions of the Board of Directors, to execute, deliver,
file, or record such contracts, instruments, releases, indentures, and other
agreements or documents and take such actions as may be necessary or appropriate
to effectuate and further evidence the terms and conditions of the Plan.
8.18 Extinguishment of Indemnification Claims. Any claim for
indemnification against the Debtor or Debtor in Possession in favor of present
or former directors or officers, whether arising under bylaws or otherwise,
shall be extinguished upon the Effective Date.
ARTICLE 9
EXECUTORY CONTRACTS AND
UNEXPIRED LEASES
9.1 Assumption of Executory Contracts and Unexpired Leases. Any
executory contracts or unexpired leases listed on Exhibit "9.1" to the Plan
shall be deemed to have been assumed by the Debtor on the Effective Date and
either transferred to the Collateral Trust, if such executory contracts or
unexpired leases constitute part of the Collateral, or transferred to the
Liquidating LLC. The Plan shall constitute a motion to assume (and, if
applicable, assign to the Collateral Trust or the Liquidating LLC as designated
on Exhibit "9.1") such executory contracts and unexpired leases. Subject to the
occurrence of the Effective Date, entry of the Confirmation Order by the Clerk
of the Bankruptcy Court shall constitute approval of such assumptions (and, if
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applicable, assignments) pursuant to section 365(a) of the Bankruptcy Code and a
finding by the Bankruptcy Court that each such assumption is in the best
interest of the Debtor, its estate, and all parties in interest in the Chapter
11 Case and that the requirements for assignment of any executory contract or
unexpired lease to be assigned under section 365 of the Bankruptcy Code have
been satisfied. With respect to each such executory contract or unexpired lease
assumed by the Debtor, unless otherwise determined by the Bankruptcy Court
pursuant to a Final Order or agreed to by the parties thereto prior to the
Effective Date, the dollar amount required to cure any defaults of the Debtor
existing as of the Confirmation Date shall be conclusively presumed to be the
amount set forth in Exhibit "9.1" with respect to such executory contract or
unexpired lease. Subject to the occurrence of the Effective Date, any such cure
amount shall be treated as an Allowed Administrative Expense under the Plan,
and, upon payment of such Allowed Administrative Expense, all defaults of the
Debtor existing as of the Confirmation Date with respect to such executory
contract or unexpired lease shall be deemed cured.
9.2 Rejection of Executory Contracts and Unexpired Leases. Any executory
contracts or unexpired leases of the Debtor that (i) are not listed on Exhibit
"9.1" to the Plan, (ii) have not been approved by the Bankruptcy Court prior to
the Confirmation Date for assumption and/or assignment by the Debtor, and (iii)
are not the subject of pending motions to assume at the Confirmation Date, shall
be deemed to have been rejected by the Debtor, the Plan shall constitute a
motion to reject such executory contracts and unexpired leases, and the
Collateral Trust and the Liquidating LLC shall have no liability thereunder
except as is specifically provided in the Plan. Entry of the Confirmation Order
by the Clerk of the Bankruptcy Court shall constitute approval of such
rejections pursuant to section 365(a) of the Bankruptcy Code and a finding by
the Bankruptcy Court that each such rejected executory contract or unexpired
lease is burdensome and that the rejection thereof is in the best interest of
the Debtor, its estate, and all parties in interest in the Chapter 11 Case.
9.3 Claims Arising from Rejection or Termination. Claims created by the
rejection of executory contracts or unexpired leases or the expiration or
termination of any executory contract or unexpired lease prior to the
Confirmation Date must be filed with the Bankruptcy Court and served on the
Debtor (i) in the case of an executory contract or unexpired lease rejected by
the Debtor prior to the Confirmation Date, in accordance with the Bar Date, or
(ii) in the case of an executory contract or unexpired lease that (a) was
terminated or expired by its terms prior to the Confirmation Date, or (b) is
deemed rejected pursuant to section 9.2 of the Plan, no later than thirty (30)
days after the Confirmation Date, or (iii) in the case of an executory contract
or unexpired lease that is rejected by the Debtor after the Confirmation Date,
within thirty (30) days after the entry of an order of the Bankruptcy Court
authorizing and approving such rejection. Any Claims for which a proof of claim
is not filed and served within such time will be forever barred from assertion
and shall not be enforceable against the Debtor, its estate, assets, properties,
or interests in property, or the Collateral Trust or NationsBank, or the
Liquidating LLC. Unless otherwise ordered by the Bankruptcy Court, all such
Claims that are timely filed as provided herein shall be treated as Unsecured
Claims under the Plan.
9.4 Previously Scheduled Contracts. Exhibit "9.4" to the Plan sets forth a
list of agreements that were listed on the Schedules as executory contracts, but
which the Debtor believes should not be considered executory contracts. If any
such agreements are determined to be executory contracts, the Proponents or the
Liquidating Agent, as the case may be, reserve the right
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to seek the assumption or rejection of any such contracts, and the time within
which the Debtor or the Liquidating Agent, as the case may be, may seek to
assume or reject any such agreements shall be tolled until ten (10) Business
Days after the date on which an order determining that any such agreement is an
executory contract becomes a Final Order. Set forth on Exhibit "9.4" is the
amount that the Debtor intends to treat as an Allowed Unsecured Claim for each
such agreement. Such amount and the treatment of each such agreement shall be
binding unless, on or before ten (10) days after the Confirmation Date, the
other party to any such agreement either (i) files a proof of claim (which proof
of claim shall be deemed timely filed) or (ii) files a motion seeking to compel
assumption or rejection of such agreement.
9.5 Insurance Policies.
9.5.1 Assumed Insurance Policies. To the extent that any or all of the
insurance policies set forth on Exhibit "9.5.1" to the Plan are
considered to be executory contracts, then, notwithstanding anything
contained in sections 9.1 and 9.2 and of the Plan to the contrary, the
Plan shall constitute a motion to assume the insurance policies set
forth on Exhibit "9.5.1" to the Plan (and, if applicable, to assign to
the Collateral Trust or the Liquidating LLC as designated on Exhibit
"9.5.1"). Subject to the occurrence of the Effective Date, the entry
of the Confirmation Order by the Clerk of the Bankruptcy Court shall
constitute approval of such assumption pursuant to section 365(a) of
the Bankruptcy Code and a finding by the Bankruptcy Court that each
such assumption is in the best interest of the Debtor, its estate, and
all parties in interest in the Chapter 11 Case. Unless otherwise
determined by the Bankruptcy Court pursuant to a Final Order or agreed
to by the parties thereto prior to the Effective Date, no payments are
required to cure any defaults of the Debtor existing as of the
Confirmation Date with respect to each such insurance policy set forth
on Exhibit "9.5.1" to the Plan. To the extent that the Bankruptcy
Court determines otherwise as to any such insurance policy, the Debtor
reserves the right to seek rejection of such insurance policy or other
available relief.
9.5.2 Rejected Insurance Agreements. To the extent that any or all of the
insurance agreements set forth on Exhibit "9.5.2" to the Plan are
considered to be executory contracts, then, notwithstanding anything
contained in sections 9.1 and 9.2 of the Plan to the contrary, the
Plan shall constitute a motion to reject the insurance agreements set
forth on Exhibit "9.5.2" to the Plan, and the entry of the
Confirmation Order by the Clerk of the Bankruptcy Court shall
constitute approval of such rejection pursuant to section 365(a) of
the Bankruptcy Code and a finding by the Bankruptcy Court that each
such rejected insurance agreement set forth on Exhibit "9.5.2" to the
Plan is burdensome and that the rejection thereof is in the best
interest of the Debtor, its estate, and all parties in interest in the
Chapter 11 Case.
9.5.3 Reservation of Rights. Nothing contained in the Plan, including this
section 9.5, shall constitute a waiver of any claim, right, or cause
of action that the Debtor, the Collateral Trust, the Liquidating
Agent, the directors and officers of the Debtor or Debtor in
Possession, or any other party asserting claims as an insured or
otherwise under any insurance policy, as the case may be, may hold
against the insurer under any policy of insurance. Any such Entity
asserting rights under any policy of insurance shall be free to pursue
whatever rights such Entity may have against the insurer. The rights
and interests in
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insurance policies assumed and transferred to the Liquidating LLC
pursuant to the Plan shall consist of only such rights and interests
as are held by the Debtor or Debtor in Possession.
9.6 Compensation and Benefit Programs. All employment and severance
policies (excluding only the Severance and Benefit Programs, as modified
pursuant to section 8.15 hereof), and all compensation and benefit plans,
policies and programs of the Debtor applicable to its present and former
employees, officers, and directors, including, without express or implied
limitation, all savings plans, retirement plans, health care plans, disability
plans, severance benefit plans, incentive plans, and life, accidental death, and
dismemberment insurance plans, shall be deemed to be, and shall be treated as
though they are, executory contracts that are deemed rejected under the Plan,
and the Debtor's obligations under such plans, policies, and programs shall be
deemed rejected pursuant to section 365(a) of the Bankruptcy Code as of the
Effective Date.
ARTICLE 10
RETENTION OF JURISDICTION
Pursuant to sections 105(a) and 1142 of the Bankruptcy Code, the Bankruptcy
Court shall retain and shall have exclusive jurisdiction over any matter (a)
arising under the Bankruptcy Code, (b) arising in or related to the Chapter 11
Case or the Plan, or (c) that relates to the following:
10.1 To liquidate the Assets and the Collateral; provided, however,
notwithstanding the foregoing, the Collateral Trustee shall have no obligation
to obtain the approval or authorization of the Bankruptcy Court for, or to
report to the Bankruptcy Court concerning, the sale, transfer, assignment,
termination or other disposition of any of the Collateral; provided, further,
that the Collateral Trustee may seek "comfort orders" or similar orders of the
Bankruptcy Court approving the Collateral Trustee's sale or other disposition of
any of the Collateral in order to facilitate any such transactions; provided,
further, the Bankruptcy Court retains jurisdiction to hear and determine any and
all Causes of Action comprising either the Assets or the Collateral;
10.2 To hear and determine any and all motions or applications
pending on the Confirmation Date or thereafter brought in accordance with
section 9.4 hereof for the assumption and/or assignment or rejection of
executory contracts or unexpired leases to which the Debtor is a party or with
respect to which the Debtor may be liable, and to hear and determine any and all
Claims resulting therefrom or from the expiration or termination of any
executory contract or unexpired lease.
10.3 To determine any and all adversary proceedings, applications,
motions, and contested or litigated matters that may be pending on the Effective
Date or that, pursuant to the Plan, may be instituted by the Liquidating LLC or
the Collateral Trust after the Effective Date, including, without express or
implied limitation, and any claims to avoid any preferences, fraudulent
transfers, or other voidable transfers, or otherwise to recover assets for the
benefit of the Liquidating LLC or the Collateral Trust;
10.4 To hear and determine any objections to the allowance of
Claims, whether filed, asserted, or made before or after the Effective Date,
including, without express or implied
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limitation, to hear and determine any objections to the classification of any
Claim and to allow or disallow any Disputed Claim in whole or in part;
10.5 To issue such orders in aid of execution of the Plan to the extent
authorized or contemplated by section 1142 of the Bankruptcy Code;
10.6 To consider any modifications of the Plan, remedy any defect or
omission, or reconcile any inconsistency in any order of the Bankruptcy Court,
including, without express or implied limitation, the Confirmation Order;
10.7 To hear and determine all applications for allowances of
compensation and reimbursement of expenses of professionals under sections 330
and 331 of the Bankruptcy Code and any other fees and expenses authorized to be
paid or reimbursed under the Plan;
10.8 To hear and determine all controversies, suits, and disputes that
may relate to, impact upon, or arise in connection with the Plan (and all
Exhibits to the Plan) or its interpretation, implementation, enforcement, or
consummation;
10.9 To the extent that Bankruptcy Court approval is required, to
consider and act on the compromise and settlement of any Claim or cause of
action by or against the Debtor's estate;
10.10 To determine such other matters that may be set forth in the Plan,
the Confirmation Order, the LLC Operating Agreement, or that may arise in
connection with the Plan, the Confirmation Order, or the LLC Operating
Agreement;
10.11 To hear and determine matters concerning state, local, and federal
taxes, fines, penalties, or additions to taxes for which the Debtor, the Debtor
in Possession, the Liquidating Agent, the Liquidating LLC, the Class 4
Disbursing Agent, or the Disbursing Agent may be liable, directly or indirectly,
in accordance with sections 346, 505, and 1146 of the Bankruptcy Code; and
10.12 To enter an order or final decree closing the Chapter 11 Case.
ARTICLE 11
SETTLEMENT AND COMPROMISE OF NATIONSBANK'S CLAIMS
The Debtor and NationsBank have agreed to a comprehensive settlement and
compromise of (i) all of NationsBank's Claims against the Debtor and its estate,
and (ii) all of the Debtor's and its estate's claims and Causes of Action
against NationsBank, which provides as follows:
11.1 NationsBank's Allowed Claim. NationsBank shall have an Allowed Claim
in the aggregate amount of $78,414,448. Such Allowed Claim is comprised of
NationsBank's Priority Claim, its Allowed Unsecured Claim, and its Allowed
Secured Claim. The amounts of NationsBank's Allowed Unsecured Claim and its
Allowed Secured Claim shall not be fixed by the Plan or the Confirmation Order,
but rather shall adjust (as set forth below) based upon the actual results of
the Collateral Trust's liquidation and administration of the Collateral. Entry
of the
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Confirmation Order shall constitute the allowance of NationsBank's
Allowed Claim in the aggregate amount of $78,414,448.
11.2 NationsBank's Priority Claim. NationsBank shall have an Allowed
Priority Claim in the aggregate amount of $5,050,000, which shall be reduced by
(1) $1.3 million of proceeds from the Debtor's termination of its interest in
its lease of its headquarters facility in Reston, Virginia, such amount to be
paid in accordance with existing cash collateral orders entered by the
Bankruptcy Court, and (2) a credit of $564,000 in exchange for designating the
Lammico Note, and all proceeds paid on account thereof, as part of the
Collateral, whether or not NationsBank or the Collateral Trustee actually
receives payment on account of the Lammico Note, yielding a net unpaid Priority
Claim for NationsBank in the amount of $3,186,000. For purposes of enabling
confirmation of the Plan, NationsBank has agreed that such remaining amount of
its Priority Claim shall be satisfied through its receipt of preferential
membership interests in the Liquidating LLC, entitling it to the first
$3,186,000 of distributions paid to the members of the Liquidating LLC (other
than the reasonable professional fees and expenses of the Liquidating Agent),
rather than being paid at confirmation like other Allowed Priority Claims. Entry
of the Confirmation Order shall constitute the allowance of NationsBank's
Priority Claim in the amount of $5,050,000.
11.3 NationsBank's Secured Claim. NationsBank's Secured Claim, and its
liens, security interests, pledges and other Encumbrances in or upon the
Collateral, shall be deemed and determined to be valid, enforceable, perfected,
and unavoidable, and not subject to the claims, causes of action, or any
Encumbrance of any Entity or party in interest, including without limitation the
Committee, the Liquidating LLC and the Liquidating Agent. The transfer and
assignment by the Debtor of the Collateral to the Collateral Trust shall be in
full satisfaction of NationsBank's Secured Claim. Entry of the Confirmation
Order shall constitute the allowance of NationsBank's Secured Claim, and a
determination, binding upon the Debtor, all of its creditors, the Committee, the
Liquidating Agent, the Liquidating LLC, and each other party in interest in this
Bankruptcy Case, that NationsBank's liens, security interests, pledges and other
Encumbrances in or upon the Collateral are valid, perfected, enforceable and
unavoidable in all respects and without exception. In addition, entry of the
Confirmation Order and the occurrence of the Effective Date shall effect the
transfer of all of the Debtor's right, title and interest in the Collateral to
the Collateral Trust, without further action, the execution of any documents or
instruments, or the entry of any further orders of the Bankruptcy Court. The
Debtor, NationsBank and the Collateral Trustee shall mutually determine in their
reasonable discretion the fair market value of the component assets of the
Collateral, and the Debtor shall furnish to the Liquidating Agent a written
statement indicating such amount. The Liquidating LLC, the Collateral Trust,
NationsBank and the Debtor shall report consistently with such allocation for
all federal, state and local tax reporting purposes.
11.4 Release. In consideration of the treatment of NationsBank's
Claims set forth in this Plan, and as a full settlement and compromise of all
claims by and between (1) NationsBank, and (2) the Debtor, the Liquidating
Agent, the Liquidating LLC, and any successors in interest thereof, including
without limitation any subsequently appointed chapter 7 trustee (collectively,
the "Releasing Parties"), effective upon entry of the Confirmation Order, the
Releasing Parties release and discharge, individually and collectively,
NationsBank and all of its present and former officers, directors, shareholders,
affiliates, agents, consultants (excluding Price Waterhouse Coopers with respect
to any Avoidance Actions), employees and attorneys (collectively, the "Released
Parties") from any and all manner of action, claims, causes of action, suits,
proceedings, debts, accounts,
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<PAGE>
accountings, demands, liabilities, acts, omissions, and all other controversies
of every type, kind, nature, description or character whatsoever (all of the
foregoing being the "Released Claims"), whether known or unknown, foreseen or
unforeseen, liquidated or unliquidated, and whether based upon facts now known
or unknown, direct or derivative, in law, equity or bankruptcy, arising at any
time prior to the Effective Date), including without limitation, (i) any claims
or causes of action relating, directly or indirectly, to the Amended and
Restated Credit Agreement dated as of May 26, 1998 or any documents or
instruments executed in connection therewith, any transactions arising under or
in connection therewith, or any other aspect of the lending relationship by and
among the Debtor, its predecessors in interest, and each of its non-debtor
subsidiaries and affiliates, and any of the Released Parties; (ii) any claims,
liabilities or causes of action relating directly or indirectly to any of the
various cash collateral orders entered by the Bankruptcy Court relating to the
Debtor, or to any orders approving the sale, transfer, assignment or other
disposition of any of the assets of the Debtor during the pendency of its
Chapter 11 Case; and (iii) any Avoidance Actions which the Debtor, Debtor in
Possession, Liquidating Agent, Liquidating LLC, any subsequently appointed
chapter 7 trustee, or any other party having standing could assert against any
of the Released Parties, directly, indirectly or derivatively, including without
limitation all claims or causes of action that arise under Chapter 5 of the
Bankruptcy Code or any comparable provisions of nonbankruptcy law. Entry of the
Confirmation Order shall effect the releases set forth above and be binding upon
all parties.
11.5 Claim Adjustment Procedure. Within thirty (30) days prior to each
distribution by the Liquidating Agent in excess of a cumulative total of
$5,000,000 of cash distributions to former holders of Class 4 Unsecured Claims
(including to the Disputed Unsecured Claim Escrow), the Liquidating Agent shall
notify the Collateral Trustee in writing of such anticipated distribution.
Within ten (10) Business Days after its receipt of such notification, the
Collateral Trustee shall provide a written certification (the "Collection
Certification") to the Liquidating Agent certifying (i) the aggregate net amount
of cash proceeds received by either NationsBank, the Collateral Trustee, or
NationsBank's designees from the liquidation of the Collateral prior to or after
the Effective Date, plus the aggregate amount of all net cash proceeds received
by NationsBank on account of its claims against Pinnacle Health Enterprises,
L.L.C. or PHP NJ MSO, Inc., prior to or after the Effective Date (collectively,
the "Collected Amount"), and (ii) the calculation of NationsBank's Allowed
Unsecured Claim based on the following formula: (A) $78,414,448 minus (B)
$5,050,000 (the Allowed amount of NationsBank's Priority Claim) minus (C) the
Collected Amount equals the Allowed Unsecured Claim of NationsBank. The
Collateral Trustee's calculation and certification of such amount of
NationsBank's Allowed Unsecured Claim shall be presumed to be correct absent
manifest error. Such amount, which may change from time to time based upon the
Collateral Trustee's actual results in liquidating the Collateral and other
receipts by NationsBank from the bankruptcy cases of Pinnacle Health
Enterprises, L.L.C. and PHP NJ MSO, Inc., shall be used by the Liquidating Agent
in determining NationsBank's Pro Rata Share of the membership interests of the
Liquidating LLC and in all distributions in respect thereof in excess of the
cumulative amount of $5,000,000.
From time to time, to the extent that the Collected Amount increases from
the date of the first such distribution until the dates of subsequent
distributions, then upon the Collateral Trustee's submission of each subsequent
Collection Certification, the Liquidation Trustee shall calculate the amount of
the overpayment, if any, made to NationsBank out of the prior distributions and
reduce the then current distribution by the amount of such prior overpayment.
The Allowed amount of NationsBank's Unsecured Claim, and its Pro Rata Share of
membership interests in the Liquidating
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<PAGE>
LLC, shall continue to be adjusted based upon increases in the Collected Amount.
The Liquidating Agent's calculation of the amount of the adjustment to
NationsBank's share of each subsequent distribution, based upon the foregoing
procedure, shall be presumed to be correct absent manifest error. If there is a
dispute between the Collateral Trustee and the Liquidating Agent about the
calculation of either the Collected Amount, NationsBank's Allowed Unsecured
Claim, or the corrective adjustment in any subsequent distribution, then the
Bankruptcy Court shall resolve such dispute after notice and a hearing. No
distribution shall be made by the Liquidating Agent pending the resolution of
any such dispute; provided, however, in the discretion of the Liquidating Agent,
distribution may be made to the other members in the amount calculated based
upon the Collateral Trustee's determination of the amount of NationsBank's
Allowed Unsecured Claim and to the Collateral Trustee based upon the Liquidating
Agent's calculation of the amount of NationsBank's Allowed Unsecured Claim, with
the Liquidating Agent transferring to the Disputed Unsecured Claim Escrow the
distributions (including membership interests in the Liquidating LLC) associated
with the disputed amount of NationsBank's Unsecured Claim, for treatment as
provided in section 7.15 hereof.
11.6 Settlement of Bondholder Subordination Issues. The Plan also
effects a settlement and compromise of the dispute between NationsBank and the
Bondholders concerning the interpretation of the contractual terms of the
subordination of the Bondholder Claims to NationsBank's Claims. The Plan
settles this dispute through the allocations among the respective membership
interests to be issued to NationsBank and the Bondholders in the Liquidating
LLC. The LLC Operating Agreement shall reflect the following sharing
arrangement between NationsBank and the Bondholders in distributions from the
Liquidating LLC. The first $3,186,000 of distributions from the Liquidating LLC
shall be paid to NationsBank on account of its preferential membership interest,
issued in respect of its Priority Claim, and upon payment of such amount
NationsBank's preferential membership interest shall be extinguished. The next
$5,000,000 of distributions from the Liquidating LLC among all members shall be
shared Pro Rata without including for calculation and excluding NationsBank from
any such distributions. Any further distributions from the Liquidating LLC
shall be allocated Pro Rata among all members (including NationsBank); provided,
however, that one-half ( 1/2) of all of the amounts distributable on account of
membership interests issued in respect of Allowed Bondholder Claims shall be
paid directly by the Liquidating LLC to NationsBank, and the remaining one-half
( 1/2) of distributions in respect of such interests shall be paid to and
retained by the respective holders of the membership interests issued on account
of Allowed Bondholder Claims without claim by NationsBank.
ARTICLE 12
MISCELLANEOUS PROVISIONS
12.1 Payment of Statutory Fees. All fees payable pursuant to section 1930
of title 28 of the United States Code, as determined by the Bankruptcy Court at
the hearing on confirmation of the Plan, shall be paid by the Debtor on or
before the Effective Date.
12.2 Binding Effect; Discharge of the Debtor. All Entities shall be
precluded and forever barred from asserting against the Collateral Trust, the
Collateral Trustee, NationsBank, the Committee, the Liquidating Agent, the
Liquidating LLC, the Debtor and their respective
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<PAGE>
successors or assigns, or their assets, properties, or interests in property,
any other or further claims or liability based upon any act or omission,
transaction, or other activity of any kind to be taken under or in connection
with the Plan or in connection with the Chapter 11 Case or the administration of
the Debtor during the Chapter 11 Case. Pursuant to 11 U.S.C. (S) 1141(d), the
Debtor shall not receive a discharge of the Claims and Equity Interests upon
confirmation of the Plan. Nevertheless, on and after the Effective Date, the
terms of the Plan shall bind all holders of Claims and Equity Interests, whether
or not they voted to accept the Plan.
12.3 Rights of Action. Any rights, claims, or causes of action
accruing to the Debtor or Debtor in Possession pursuant to the Bankruptcy Code
or pursuant to any statute or legal theory, including, without express or
implied limitation, any Avoidance Actions and any rights to, claims, or Causes
of Action for recovery under any policies of insurance issued to or on behalf of
the Debtor or Debtor in Possession shall remain assets of the Debtor's estate
and, on the Effective Date, shall be transferred to the Liquidating LLC or the
Collateral Trust pursuant to the terms hereof. From and after the transfer of
all such rights to the Liquidating LLC and the Collateral Trust, pursuant to
section 8.2 hereof and section 1123(b)(3) of the Bankruptcy Code, (a) the
Liquidating Agent shall be deemed the appointed representative to, and may,
pursue, litigate, and compromise and settle any such rights, claims, or causes
of action (exclusive of any such rights, claims or causes of action comprising
part of the Collateral) in accordance with what is in the best interests of and
for the benefit of the members of the Liquidating LLC; and (b) the Collateral
Trustee shall be deemed the appointed representative to, and may pursue,
litigate, and compromise and settle any such rights, claims or Causes of Action
comprising part of the Collateral in accordance with what is in the best
interests of and for the benefit of NationsBank as the former secured creditor
of the Debtor.
12.4 Third Party Agreements. The Distributions to the various classes of
Claims hereunder and to the Liquidating LLC shall not affect the right of any
Entity to levy, garnish, attach, or employ any other legal process with respect
to such Distributions by reason of any claimed subordination rights or
otherwise. All of such rights and any agreements relating thereto shall remain
in full force and effect, except as modified in accordance with Article 11
hereof.
12.5 Dissolution of Committee. On the Effective Date, the Committee
shall thereupon be released and discharged of and from all further authority,
duties, responsibilities, and obligations relating to and arising from and in
connection with the Chapter 11 Case, and the Committee shall be deemed
dissolved; provided, however, that, in the event that the Effective Date occurs
prior to the Confirmation Order becoming a Final Order, the Committee may, at
its option, continue to serve and function for the sole purpose of participating
in any appeal of the Confirmation Order until such time as the Confirmation
Order becomes a Final Order.
12.6 Exculpation. None of the Debtor, the Committee, the Liquidating Agent,
NationsBank, the Collateral Trustee, the Collateral Trust, or the Liquidating
LLC, or any of their respective officers, directors, employees, advisors, or
agents shall have or incur any liability to any Entity for any act or omission
in connection with or arising out of the pursuit of confirmation of the Plan,
the consummation of the Plan, or the administration of the Plan or the property
to be distributed under the Plan, except for gross negligence or willful
misconduct, and in all respects shall be entitled to rely upon the advice of
counsel with respect to their duties and responsibilities under the Plan.
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<PAGE>
12.7 Title to Assets and Collateral. Except as otherwise provided in the
Plan, on the Effective Date, (a) title to all Assets shall vest in the
Liquidating LLC free and clear of all Claims, Equity Interests, Encumbrances,
and other interests; and (b) title to all Collateral shall vest in the
Collateral Trust free and clear of all Claims, Equity Interests, Encumbrances
and other interests.
12.8 Surrender and Cancellation of Instruments. In addition to the
provisions of section 3.2 hereof, each holder of a promissory note or other
instrument evidencing a Claim shall surrender such promissory note or instrument
to the Liquidating Agent, and the Liquidating Agent shall distribute or cause to
be distributed to the holder thereof the appropriate Distribution hereunder or
under the LLC Operating Agreement. At the option of the Liquidating Agent in its
sole and absolute discretion, no Distribution hereunder shall be made to or on
behalf of any holder of any such Claim unless and until such promissory note or
instrument is received or the unavailability of such note or instrument is
reasonably established to the satisfaction of the Liquidating Agent. In
accordance with section 1143 of the Bankruptcy Code, any such holder of such a
Claim that fails to surrender or cause to be surrendered such promissory note or
instrument or to execute and deliver an affidavit of loss and indemnity
reasonably satisfactory to the Liquidating Agent, and, in the event that the
Liquidating Agent requests, furnish a bond in form and substance (including,
without limitation, amount) reasonably satisfactory to the Liquidating Agent
within the Retention Period shall be deemed to have forfeited all rights,
claims, and interests and shall not participate in any Distribution hereunder or
under the LLC Operating Agreement, as the case may be.
12.9 Notices. Any notices, requests, and demands required or permitted to
be provided under the Plan, in order to be effective, shall be in writing
(including, without express or implied limitation, by facsimile transmission),
and, unless otherwise expressly provided herein, shall be deemed to have been
duly given or made when actually delivered or, in the case of notice by
facsimile transmission, when received and telephonically confirmed, addressed as
follows:
If to the Debtor: Richards, Layton & Finger, P.A.
Attention: Thomas L. Ambro, Esq.
One Rodney Square
P.O. Box 551
Wilmington, Delaware 19899
Telecopier: (302) 658-6548
Telephone: (302) 658-6541
If to the Committee: Cole, Schotz, Meisel, Forman & Leonard, P.C.
Attention: Gerald H. Gline, Esq.
25 Main Street
P.O. Box 800
Hackensack, New Jersey 07602-0800
Telecopier: (201) 678-6240
Telephone: (201) 525-6240
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<PAGE>
If to NationsBank: David S. Walls, Esq.
Moore & Van Allen, PLLC
NationsBank Corporate Center
100 N. Tryon Street, 47th Floor
Charlotte, North Carolina 28202-4003
Telecopier: (704) 331-1159
Telephone: (704) 331-1058
12.10 Headings. The headings used in the Plan are inserted for
convenience only and neither constitute a portion of the Plan nor in any manner
affect the construction of the provisions of the Plan.
12.11 Severability. At the option of the Proponents acting in their
sole discretion, any provision of the Plan, the Confirmation Order, or any of
the Exhibits to the Plan that is prohibited, unenforceable, or invalid shall, as
to any jurisdiction in which such provision is prohibited, unenforceable, or
invalidated, be ineffective to the extent of such prohibition, unenforceability,
or invalidation without invalidating the remaining provisions of the Plan, the
Confirmation Order, and the Exhibits to the Plan or affecting the validity or
enforceability of such provisions in any other jurisdiction.
12.12 Governing Law. Unless a rule of law or procedure is supplied by
federal law (including the Bankruptcy Code and Bankruptcy Rules), the laws of
the State of Delaware, without giving effect to the conflicts of laws principles
thereof, shall govern the construction of the Plan and any agreements,
documents, and instruments executed in connection with the Plan, except as
otherwise expressly provided in such instruments, agreements or documents.
12.13 Filing of Additional Documents. On or before the Effective Date,
the Debtor shall file with the Bankruptcy Court such agreements and other
documents as may be necessary or appropriate to effectuate and further evidence
the terms and conditions of the Plan.
12.14 Compliance with Tax Requirements. In connection with the Plan,
the Collateral Trustee, the Liquidating Agent, the Disbursing Agent, the Class 4
Disbursing Agent and the Liquidating LLC will comply with all withholding and
reporting requirements imposed by federal, state and local taxing authorities,
and all distributions hereunder shall be subject to such withholding and
reporting requirements.
12.15 Expedited Tax Determinations. The Liquidating Agent is hereby
authorized to request an expedited determination under section 505(b) of the
Bankruptcy Code for all tax returns filed for or on behalf of the Liquidating
LLC for all taxable periods through the termination of the Liquidating LLC. The
Disbursing Agent and the Class 4 Disbursing Agent are hereby authorized to
request an expedited determination under section 505(b) of the Bankruptcy Code
for all tax returns filed for or on behalf of the Administrative and Priority
Claims Escrow and the Disputed Unsecured Claim Escrow.
12.16 Exemption from Transfer Taxes. Pursuant to section 1146(c) of the
Bankruptcy Code, the issuance, transfer, or exchange of notes or equity
securities under the Plan, the creation of any mortgage, deed of trust, or other
security interest, the making or assignment of
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<PAGE>
any lease or sublease, or the making or delivery of any deed or other instrument
of transfer under, in furtherance of, or in connection with the Plan, including,
without express or implied limitation, any transfers to or by the Liquidating
LLC and any transfers to or by the Collateral Trust, shall not be subject to any
stamp, real estate transfer, sales, mortgage recording, or other similar tax.
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<PAGE>
12.17 Income Tax and Related Information. The Liquidating Agent
shall be authorized to collect such tax and fiscal information from members of
the Liquidating LLC (including, without limitation, social security numbers
and/or other tax identification numbers) as it in its sole discretion deems
necessary to effectuate the Plan, and the Confirmation Order shall expressly
provide this authority. Failure of any member of the Liquidating LLC to furnish
this information in a timely fashion may result in the suspension or waiver of
any distributions on account of such member's interest until the requisite
information is supplied.
Dated: May 21, 1999
Wilmington, Delaware
Respectfully submitted,
PHP HEALTHCARE CORPORATION
/s/ Randy Sugarman
By:________________________________
Title: President and Chief Executive Officer
NATIONSBANK N.A.
/s/ John F. Register
By:________________________________
Title: Vice President
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<PAGE>
IN THE UNITED STATES BANKRUPTCY COURT
FOR THE DISTRICT OF DELAWARE
In re )
) Chapter 11
PHP HEALTHCARE CORPORATION, )
) Case No. 98-2608 (MFW)
Debtor. )
)
- ---------------------------------
- ---------------------------------
Exhibit "1.1.23"
THE COLLATERAL
--------------
The Collateral shall be comprised of all of the following property, causes
of action and proceeds thereof, whether now existing or hereafter arising:
(a) Equipment. All of the Debtor's right, title and interest, whether now
---------
owned or hereafter acquired, in and to all machinery, equipment, furniture and
furnishings, in all of its forms, wherever located, all fixtures and all parts
thereof and all accessions thereto, excluding, however, any and all machinery,
equipment, furniture and furnishings subject to a valid and perfected lien or
security interest, prior in right to NationsBank's interest, in favor of the
holder of an Other Secured Claim;
(b) Inventory. All of the Debtor's right, title and interest, whether now
----------
owned or hereafter acquired, in and to all inventory in all of its forms,
wherever located, and all accessions thereto and products thereof and documents
therefor;
(c) Accounts and Contract Rights. All of the Debtor's right, title and
----------------------------
interest, whether now owned or hereafter acquired, in and to all accounts,
receivables, intercompany receivables, contract rights, government contracts,
other contracts, chattel paper, general intangibles and other obligations of any
kind, now or hereafter existing, whether or not arising out of or in connection
with the sale or lease of goods or the rendering of services, including
specifically and without limitation the Debtor's contingent rights to payment
arising from its sale of its stock in PHP Health Services, Inc. to United Payors
and United Providers, Inc., and all rights now or hereafter existing in and to
all security agreements, leases and other contracts securing or otherwise
relating to any such accounts, receivables, government contracts, contract
rights, chattel paper, general intangibles or obligations, together with all
rights to payment, termination fees, assignment fees, and all other interests
arising from any of the foregoing. In addition, without limiting the generality
of the foregoing, the Collateral includes the payment or payments made by D.C.
Chartered Health Plan, Inc. to the Debtor on account of the intercompany payable
owed by D.C. Chartered Health Plan, Inc. to the Debtor, with the
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source of such payment being proceeds received by D.C. Chartered Health Plan,
Inc. from its settlement of litigation with and claims against the District of
Columbia.
(d) Equity Interests and Outstanding Debt. All of the following:
-------------------------------------
(i) the shares and other equity interests listed on part A of
Schedule I hereto (the "Shares") and the certificates representing the
------
Shares, and all dividends, cash, instruments and other property from time
to time received, receivable or otherwise distributed in respect of or in
exchange for any or all of the Shares;
(ii) the Outstanding Debt listed on part B of Schedule I hereto (the
"Outstanding Debt") and the instruments evidencing the Outstanding Debt,
----------------
and all interest, cash, instruments and other property from time to time
received, receivable or otherwise distributed in respect of or in exchange
for any or all of the Outstanding Debt;
(iii) all additional shares of stock of any issuer of the Shares from
time to time acquired by the Debtor in any manner, and the certificates
representing such additional shares, and all dividends, cash, instruments
and other property from time to time received, receivable or otherwise
distributed in respect of or in exchange for any or all of such shares; and
(iv) all of the Debtor's right, title and interest in and to the
membership interests in any limited liability company or similar Entity and
all dividends, cash, instruments and other property from time to time
received, receivable or otherwise distributed in respect of or in exchange
for any or all of such membership interests, excluding, however, any of the
Debtor's membership interests in Pinnacle Health Enterprises, L.L.P. and
the Debtor's rights of payment arising therefrom.
(e) Real Property. All of the Debtor's right, title and interest in
-------------
and to the real property, improvements and other fixed assets which it owns in
the following locations, each of which is subject to a recorded mortgage, deed
of trust or deed to secure debt in favor of NationsBank:
(i) Columbus, Georgia;
(ii) Fayetteville, North Carolina;
(iii) Omaha, Nebraska;
(iv) Virginia Beach, Virginia;
(v) Jacksonville, North Carolina;
(vi) Charleston, South Carolina; and
(vii) Jacksonville, Florida;
together with rights to payment, proceeds, rentals, and all other rights and
property interests of every kind or nature arising from any of the foregoing.
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<PAGE>
(f) Specific Causes of Action. Without limiting the generality of the
-------------------------
foregoing, all of the Debtor's rights and interests, arising either directly or
derivatively, in its claims, demands, and Causes of Action, in law or in equity,
against (i) Connecticut Health Enterprises, (ii) Maryland Department of Public
Safety and Correctional Services, and (iii) the Debtor's pre-petition auditors
and accountants other than any Avoidance Actions which Actions are assigned to
the Liquidating LLC).
(g) Cash Collateral. All of the Cash Collateral (as such term is
---------------
defined in the Second Amended and Partially Restated Stipulation between PHP
Healthcare Corporation and NationsBank, N.A., and Final Order Regarding Use of
Cash Collateral and Adequate Protection Therefor, entered on April 13, 1999 by
the Bankruptcy Court, as amended and extended from time to time; provided,
however, that the Debtor shall be permitted, to the extent set forth in the
Plan, to utilize the Available Cash Collateral existing as of the Effective Date
to pay Allowed Administrative Claims and Allowed Priority Claims (excluding
NationsBank's Priority Claim) and to create a reserve sufficient in amount to
satisfy Administrative Claims and Priority Claims which are either Disputed or
not Allowed as of the Effective Date. All Available Cash Collateral existing as
of the Effective Date in excess of such amounts shall be paid to the Collateral
Trust on the Effective Date or as soon thereafter as practicable.
(h) Proceeds. All proceeds of any and all of the foregoing Collateral
--------
(including, without limitation, proceeds that constitute property of the types
described above), and, to the extent not otherwise included, all (i) payments
under any property insurance related to any of the foregoing, and (ii) all cash
and other consideration paid or payable on account of or in exchange for any of
the foregoing.
Collateral Exclusions/Assets to be Transferred to Liquidating LLC.
-----------------------------------------------------------------
Notwithstanding the foregoing, the Collateral excludes the following Assets,
which are assigned to the Liquidating LLC by operation of the Plan: (i) any
claims, causes of action, demands or obligations arising or existing in favor of
the Debtor, Debtor in Possession, or its bankruptcy estate under sections 544,
547, 548, 549, 550, and 553(b) of the Bankruptcy Code, and any similar statutes
under applicable nonbankruptcy law, including, without limitation, claims under
Section 160 of the Delaware General Corporate Law; (ii) any claims, causes of
action, demands or obligations arising or existing in favor of the Debtor,
Debtor in Possession, or its bankruptcy estate against any officers or directors
of the Debtor for alleged breaches of fiduciary duties under applicable
bankruptcy or nonbankruptcy law; (iii) except as specifically described in Part
B below, any claims, causes of action, demands, or obligations ("Officer
Claims") arising or existing in favor of the Debtor, Debtor in Possession, or
its bankruptcy estate against any of the Debtor's present or former officers or
directors, including but not limited to Officer Claims in respect of promissory
notes, notes receivable, employee loans, or other instruments evidencing any
such obligations; (iv) any rights of the Debtor, Debtor in Possession, or its
bankruptcy estate arising under any insurance policies providing coverage for
the acts or omissions of the Debtor's officers and directors; (v) without
limiting the foregoing, all Causes of Action against (a) former or existing
common or preferred shareholders, (b) insiders of the Debtor (except as
specifically described in Part B below), (c) Capello Capital, (d) Shamrock
Investments, Inc., (e) North American
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<PAGE>
Health Plan, Inc. (f) Health Insurance Plan of New Jersey, Inc. (except for
collection of accounts or other contractual amounts due), (g) Health Insurance
Plan of New York, Inc., (h) the State of New Jersey (except for Causes of Action
relating to the use or depletion of the inventory, equipment or other tangible
or intangible property of the Debtor or Pinnacle Health Enterprises, LLC), (i)
Wasserstein Perralla, and (j) any officers, directors, employees, advisors, or
insurers of any of the foregoing; and (vi) any proceeds of any of the foregoing.
-46-
<PAGE>
Schedule I
----------
Shares and Outstanding Debt
PART A
SHARES
<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------------------------------------------
Stock
Class of Par Certificate Number Percentage of
Stock Issuer Stock Value No(s) of Shares Outstanding Shares
- --------------------- ----- ----- ----- --------- ------------------
<S> <C> <C> <C> <C> <C>
- ----------------------------------------------------------------------------------------------------------------
PHP Louisiana, Inc. Common 0.01 1 100 100
- ----------------------------------------------------------------------------------------------------------------
PHP/CHE, Inc. Common 0.01 1 3000 100
- ----------------------------------------------------------------------------------------------------------------
PHP Executive Common 0.01 1 1000 100
Services, Inc.
- ----------------------------------------------------------------------------------------------------------------
PHP/GHE, Inc. Common 1.00 1 1000 100
- ----------------------------------------------------------------------------------------------------------------
Preventive Health Common 1.00 516 500 100
Programs, Inc.
- ----------------------------------------------------------------------------------------------------------------
PHP Travel, Ltd Common 1.00 1 100 100
- ----------------------------------------------------------------------------------------------------------------
PHP/IHS, Inc. Common 0.01 1 3000 100
- ----------------------------------------------------------------------------------------------------------------
PHP/GHE, Inc. Common 0.01 1 1000 100
- ----------------------------------------------------------------------------------------------------------------
Primary Care Common 0.01 1,2 1100 100
Corporation
- ----------------------------------------------------------------------------------------------------------------
Health Cost Common 1.00 13 6000 100
Consultants, Inc.
- ----------------------------------------------------------------------------------------------------------------
PHP International Common 0.01 1 1000 100
Holdings, Inc.
- ----------------------------------------------------------------------------------------------------------------
D.C. Chartered Common 0.01 1 1000 100
Health Plan, Inc.
- ----------------------------------------------------------------------------------------------------------------
Sterling Common 0.01 2 1000 100
Communities
Corporation
- ----------------------------------------------------------------------------------------------------------------
Pacific HealthCare Common 1 100 100
International, Inc.
- ----------------------------------------------------------------------------------------------------------------
PHP Asia, Inc. Common 1 100 100
- ----------------------------------------------------------------------------------------------------------------
PHP International Common 1 1000 100
Mgmt. Services,
Inc.
- ----------------------------------------------------------------------------------------------------------------
Pacific HealthCare Common 1,2 30,70 100
East Asia, Inc.
- ----------------------------------------------------------------------------------------------------------------
PHP Correctional Common 1 1000 100
Managed Care, Inc.
- ----------------------------------------------------------------------------------------------------------------
Paragon Common 1 1,457,142 -
Ambulatory
Services, Inc.
- ----------------------------------------------------------------------------------------------------------------
</TABLE>
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<PAGE>
PART B
OUTSTANDING DEBT
(1) Promissory Note or Notes made by GL/PHP, LLC to PHP Healthcare
Corporation in the amount of $2,000,000;
(2) Promissory Note, dated August 1, 1998 made by Lammico Practice
Management, L.L.C. to PHP Healthcare Corporation in the original principal
amount of $515,000;
(3) Promissory Notes made by Kenneth Weixel to PHP Healthcare Corporation,
dated June 1, 1997 and November 5, 1998 in the respective original principal
amounts of $225,000 and $260,302.11; and
(4) Promissory Notes made by Dr. Robert Bowles to PHP Healthcare
Corporation dated April 30, 1996 and October 7, 1998 in the respective original
principal amounts of $550,000 and $411,465.62.
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<PAGE>
IN THE UNITED STATES BANKRUPTCY COURT
FOR THE DISTRICT OF DELAWARE
In re )
) Chapter 11
PHP HEALTHCARE CORPORATION, )
) Case No. 98-2608 (MFW)
Debtor. )
)
_______________________________
Exhibit "1.1.53"
LLC OPERATING AGREEMENT
(To Be Included in Exhibit Volume)
-49-
<PAGE>
IN THE UNITED STATES BANKRUPTCY COURT
FOR THE DISTRICT OF DELAWARE
In re )
) Chapter 11
PHP HEALTHCARE CORPORATION, )
) Case No. 98-2608 (MFW)
Debtor. )
)
Exhibit "9.1"
EXECUTORY CONTRACTS OR UNEXPIRED LEASES
TO BE ASSUMED
(To Be Included in Exhibit Volume)
-50-
<PAGE>
IN THE UNITED STATES BANKRUPTCY COURT
FOR THE DISTRICT OF DELAWARE
In re )
) Chapter 11
PHP HEALTHCARE CORPORATION, )
) Case No. 98-2608 (MFW)
Debtor. )
)
_______________________________
Exhibit "9.4"
PREVIOUSLY SCHEDULED CONTRACTS
(To Be Included in Exhibit Volume)
-51-
<PAGE>
IN THE UNITED STATES BANKRUPTCY COURT
FOR THE DISTRICT OF DELAWARE
In re )
) Chapter 11
PHP HEALTHCARE CORPORATION, )
) Case No. 98-2608 (MFW)
Debtor. )
)
_______________________________
Exhibit "9.5.1"
INSURANCE POLICIES TO BE ASSUMED
All insurance policies and related agreements as to which any
insurer may still have obligations to the Debtor so long as
such policies and agreements are not listed on Exhibit "9.5.2."
-52-
<PAGE>
IN THE UNITED STATES BANKRUPTCY COURT
FOR THE DISTRICT OF DELAWARE
In re )
) Chapter 11
PHP HEALTHCARE CORPORATION, )
) Case No. 98-2608 (MFW)
Debtor. )
)
==============================
Exhibit "9.5.2"
INSURANCE AGREEMENTS TO BE REJECTED
(To Be Included in Exhibit Volume)
-53-
