SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form 8-K
Current Report Pursuant to Section 13 or 15(d) of
The Securities Act of 1934
Date of Report (Date of earliest event reported) September 30, 1998
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NAL Financial Group Inc.
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(Exact name of registrant as specified in its charter)
Delaware 0-25476 23-2455294
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(State or other (Commission (I.R.S. Employer
jurisdiction) File Number) Identification No.)
500 Cypress Creek Road West
Suite 590
Fort Lauderdale, Florida 33309
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (954) 938-8200
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Not Applicable
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(Former name or former address, if changed since last report.)
<PAGE>
ITEM 5. OTHER EVENTS
NAL Financial Group Inc. and its affiliates and subsidiaries that filed for
bankruptcy under Chapter 11 of the Bankruptcy Code received confirmation of its
First Amended Plan of Reorganization at a hearing held on September 22, 1998.
The Confirmation Order, dated September 30, 1998, is appended hereto and is
also available for review at the office of the Clerk of Court of the United
States Bankruptcy Court for the Southern District of Florida, in re NAL
Financial Group Inc., NAL Acceptance Corporation, NAL Insurance Services, Inc.,
Autorics, Inc., NAL Mortgage Corporation, Performance Cars of South Florida,
Inc., and Special Finance, Inc. Case Nos. 98-21966-BKC-PGH through 98-21972-
BKC-PGH. All interested parties are directed to the Amended Plan of
Reorganization, the Amended Disclosure Statement, and the Confirmation Order for
all of the terms and conditions of the reorganization of the Company.
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
NAL FINANCIAL GROUP, INC.
-------------------------
(Registrant)
Date October 6, 1998 By: /s/ Andrew Combs
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Andrew Combs,
Chief Operating Officer
UNITED STATES BANKRUPTCY COURT
SOUTHERN DISTRICT OF FLORIDA
BROWARD DIVISION
| CASE NO. 98-21966-BKC-PGH
| CASE NO. 98-21967-BKC-PGH
| CASE NO. 98-21968-BKC-PGH
| CASE NO. 98-21969-BKC-PGH
In re | CASE NO. 98-21970-BKC-PGH
| CASE NO. 98-21971-BKC-PGH
NAL FINANCIAL GROUP, INC. et al. | CASE NO. 98-21972-BKC-PGH
|
Debtors. | SUBSTANTIVELY CONSOLIDATED
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CONFIRMATION ORDER
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This Court held a hearing on September 22, 1998 at 9:30 a.m. to consider
confirmation of the Amended Plan of Reorganization (the "Plan") filed herein by
the Debtors NAL Financial Group, Inc. ("NALF"), NAL Acceptance Corp. ("NALA")
and Autorics, Inc. ("Autorics") (collectively the "Debtors") under chapter 11 of
the Bankruptcy Code (the "Code"). As is more fully set forth below, the Debtors'
Plan is confirmed and in connection therewith, the Court makes the following
findings of fact, conclusions of law and rulings.
FINDINGS OF FACT
----------------
On or about August 10, 1998 this Court entered an order captioned "Order
(I) Approving Disclosure Statement; (II) Setting Hearing on Confirmation of
Plan; (III) Setting Hearing on Fee Applications; (IV) Setting Various Deadlines;
and, (V) Describing Plan Proponent's Obligations (C.P. 425) ("Disclosure
Statement Order"). The Disclosure Statement Order set September 22, 1998 as the
date for the confirmation hearing. The Disclosure Statement Order further
provides that the Court may continue the hearing notice given in open Court. On
September 22, 1998 when this Court was advised that there were unresolved
objections to confirmation, this Court
Page 1 of 17
<PAGE>
Substantively Consolidated Case Nos. 98-21966-BKC-PGH
through and including CASE NO. 98-21972-BKC-PGH
announced that the confirmation hearing would be adjourned and reconvened on
September 22, 1998 at 11:00 a.m.
On or about September 17, 1998, the Debtors filed under their Certificate
of Proponent of Plan on Acceptance of Plan, Report on Amount to be Deposited,
Certificate of Amount Deposited and Payment of Fees (C.P. 598) affidavits of
John P. Barbee, who has acted as the accountant for the Debtors during this
Chapter 11 and, the affidavit of William Dyer, who has acted as the CEO of the
Debtors since April 29, 1998. The Debtors also filed under that same notice of
filing the Debtors' Certificate of Proponent of Plan on Acceptance of Plan,
Report on Amount to be Deposited, Certificate of Amount Deposited and Payment of
Fees ("Proponent's Certificate").
The Disclosure Statement Order set September 14, 1998 as the deadline for
filing objections to confirmation. Objections were timely filed by Susquehanna
Bank (C.P. 582), Bankers Trust Company (C.P. ______), Textron Financial
Corporation (C.P. 584), The United States Trustee (C.P. 585), Greenwich Capital
Markets, Inc/Greenwich Capital Financial Products, Inc. (C.P. 583) and First
Financial Acceptance, Inc. (C.P. 558). None of the objections are accompanied by
an affidavit setting forth a factual predicate for such objection. All of the
objections except for those of Bankers Trust and Susquehanna Bank were resolved
before the commencement of the adjourned hearing held at 11:00 a.m. on
September 22, 1998.
The Plan has a total of thirteen (13) separate classes of creditors, twelve
(12) of which are impaired. Classes 7 and 8, which consist of creditors whose
allowed claims arise out of the purchase or sale of NALF's common stock or the
ownership of that stock, respectively, did not receive ballots and are deemed to
have rejected the Plan. Of the remaining ten (10) impaired
Page 2 of 17
<PAGE>
Substantively Consolidated Case Nos. 98-21966-BKC-PGH
through and including CASE NO. 98-21972-BKC-PGH
classes of creditors, Classes 2, 3, 4(1), 5, 6 and 7 accepted the Plan. Class 5
consists of the allowed claims of general unsecured creditors that accepted the
Plan by 84.958% in dollar amount and 88.889% of the total number of ballots
filed. The Debtor NALF, when reorganized, will issue new equity interests as set
forth in Article V, Section A, P.5.1 of the Plan. The new equity interests will
be issued on the Effective Date and when issued, Greenwich and Conseco will own
the Reorganized Debtor NALF which in turn will own all of the stock of the
Reorganized Debtor NALA which in turn owns all of the stock of the Reorganized
Debtor Autorics. As a condition precedent to that event occurring, the Plan as
well as the respective term sheet agreements require Conseco and Greenwich to
contribute new equity capital and to make available working capital loans
according to the formula set forth in Article V, Section C, P.5.3 of the Plan.
The precise amount of equity capital Conseco and Greenwich are to contribute is
not yet determined since it is a function of what the amount of cash the Debtors
have remaining on hand after the payments that are required in Articles III and
IV of the Plan have been made (Conseco and Greenwich are each making substantial
new value contributions to the Debtors). The resulting capital that the Debtors
will have available in large measure, results in this Court concluding that
there will not be a requirement for these Debtors to reorganize as more fully
set forth below in the conclusions of law with respect to 11 U.S.C.
ss.1129(a)(11).
The Objections
--------------
Bankers Trust Company filed a "limited objection" which essentially seeks
as relief a contingent confirmation order. Bankers Trust's "limited objection"
specifically requests that this
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1 Greenwich has sought permission to change its vote in Classes 3 and 4.
Such a vote would result in both Classes "accepting" the Plan.
Page 3 of 17
<PAGE>
Substantively Consolidated Case Nos. 98-21966-BKC-PGH
through and including CASE NO. 98-21972-BKC-PGH
Court only confirm the Plan provided that the issues raised in the limited
objection are satisfied. Certain of the issues raised by Bankers Trust are
clearly not confirmation issues. By way of example but not limitation, Bankers
Trust objects in paragraph 7(c) of its "limited objection" to confirmation on
the grounds that the objections to claims (presumably the objection filed by the
Debtors and the Official Committee of Unsecured Creditors) have not been
resolved. The same may be said for the objections raised in paragraph 8(a) and
(b) of Bankers Trust's limited objection. All of those objections raised matters
that are inappropriate to deal with in the context of determining whether the
Plan Proponent has satisfied the requirements of 11 U.S.C. ss.1129.
The matters raised in P.P.7(a) and 7(b) are, at least to some extent,
appropriate issues to raise in the context of confirmation. As to the issues
relating to the Debtors' ability to pay the $1.8 Million to NAL Auto Trust
1997-2 as raised in Bankers Trust's limited objection P.7(b)(i), this Court is
satisfied that it is adequately addressed in Schedule 1 to the Proponent's
Certificate which sets forth the proposed disposition of those amounts that the
Debtors' counsel has on deposit in his trust account which includes over $2
Million for payments to be made under the Plan other than to the holders of
allowed Class 5 claims.
The remaining objections relate to the fact that the Master Servicer
Agreement between Bankers Trust and Conseco has not yet been completed, the
amendments to the Interim Servicing Agreement have not yet been completed and
there is no evidence that Conseco or Greenwich will in fact contribute the
capital they have agreed to contribute pursuant to the Plan and the various term
sheet agreements attached to the Amended Disclosure Statement which set forth
the requirements for those capital contributions.
Page 4 of 17
<PAGE>
Substantively Consolidated Case Nos. 98-21966-BKC-PGH
through and including CASE NO. 98-21972-BKC-PGH
The fact that the amendments to the Interim Servicing Agreement have not
yet been completed should not be a bar to confirmation since Bankers Trust and
the Debtors have been operating under an understanding, if not a written
agreement, since at least July 1 of this year and the failure to have those
amendments completed certainly has not had any adverse impact to date. The
parties have now agreed in principle to extend the Interim Servicing Agreement
to the earlier of the Effective Date or the date that the Debtors cease
servicing. While this Court urges the parties to execute the amendments to the
Interim Servicing Agreement, execution is not a requirement of confirmation.
The capital contributions to be made by Greenwich and Conseco are not
required under the Plan until the Effective Date as that term is defined in the
Plan. That will be thirty days from the date this Order is entered. Bankers
Trust has not produced any evidence that Conseco or Greenwich are unable or
unwilling to make those contributions, or have evidenced any intent not to make
the contributions. Had such evidence been produced by Bankers Trust, this Court
would be more concerned. Conseco, Inc.'s resources are a matter of public record
and it has already invested in excess of $30 Million in the Debtors,
pre-petition. Greenwich has funded a $50 Million loan pre-petition and the
Debtors are comfortable that Conseco and Greenwich will meet their obligations
under the term sheet agreements. Clearly, if they do not, the Debtors have
available to them appropriate remedies in this Court.
The remaining issue raised by Bankers Trust relates to the failure of
Bankers Trust and Conseco to have finalized the terms and conditions under which
Conseco will assume the obligation to service the NAL Auto Trusts 1996-4 and
1997-2 and the Debtors would actually
Page 5 of 17
<PAGE>
Substantively Consolidated Case Nos. 98-21966-BKC-PGH
through and inceluding CASE NO. 98-21972-BKC-PGH
perform the servicing by acting as Conseco's agent. Bankers Trust points out
that Exhibit 6 to the Amended Disclosure Statement and specifically paragraph 4
provides as follows:
At the time of confirmation of the Plan, Bankers Trust shall
appoint Conseco as the servicer and administrator of the Trusts
(the "Master Servicer") pursuant to the terms related to a
successor Servicer under the Sale and Servicing Agreement related
to the trusts and administration under the Administration
Agreements related to the trusts; and Conseco, as Master Servicer
and Administrator thereunder, shall then assume and perform such
duties and obligations thereunder; provided however, that Conseco
shall not be liable for any acts or omissions of NAL occurring
prior to the effective date of the Plan...
Simply stated, the Bankers Trust term sheet appears to require that Conseco,
which is a party to the agreement, become the master servicer as of or by the
confirmation date. However, as the Debtors correctly point out, Art. V, Section
K, P.5.17 of the Plan provides that Conseco shall become the master servicer
for NAL Auto Trusts 1996-4 and 1997-2 and that the Reorganized Debtors shall
become Conseco's agent on the "Effective Date." Paragraph 5.2 provides that in
the event of any conflict between the Plan and the term sheets, the provisions
of the Plan govern. Consequently, while Bankers Trust may have other remedies
available to it under the Code in the event that the agreement between Conseco
and Bankers Trust is not finalized by the "Effective Date" it does not appear to
this Court that the failure to have that agreement completed as of today's date
constitutes a legal or factual basis for this Court to deny confirmation to the
Plan Proponents.
CONCLUSIONS OF LAW
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Based upon the foregoing, and the factual matters set forth in the
Certificate of Plan Proponent on Acceptance of Plan, Report on Amount to Be
Deposited, Certificate of Amount Deposited and Payment of Fees; the Confirmation
Affidavit of William Dyer; the Confirmation
Page 6 of 17
<PAGE>
Substantively Consolidated Case Nos. 98-21966-BKC-PGH
through and including CASE NO. 98-21972-BKC-PGH
Affidavit of John P. Barbee and the proffer made on the record by counsel for
the Debtors, the Court makes the following conclusions of law:
1. The Debtors' Plan satisfies 11 U.S.C. ss.1129(a)(1) in that it complies
with the applicable provisions of title 11.
2. The Court finds that the Plan has been proposed in good faith and not by
any means forbidden by law. Therefore, the Plan satisfies 11 U.S.C.
ss.1129(a)(2) and (3).
3. The Plan satisfies 11 U.S.C. ss.1129(a)(4) in that this Court retains
jurisdiction to determine the reasonableness of any compensation to be paid by
the Debtors for services or costs and expenses in connection with this case.
4. The Plan satisfies 11 U.S.C. ss.1129(a)(5) in that the identity and
affiliations of directors and officers of the Reorganized Debtors has been
sufficiently disclosed in the Debtors' Amended Disclosure Statement. The
continuance in office of those individuals is consistent with the interests of
creditors in this case and with public policy.
5. This Court finds that 11 U.S.C. ss.1129(a)(6) is not relevant to this
case and that 11 U.S.C. ss.1129(a)(7) has been met in that each impaired class
of claims or interests has either accepted the Plan or will receive or retain
under the Plan, on account of such claim or interest, property of a value, as of
the Effective Date of the Plan, that is not less than the amount such holder
would receive if this case were converted and liquidated under chapter 7 of
title 11.
6. The Plan provides for payment, on the Effective Date, of claims of a
kind specified in 11 U.S.C. ss.507(a)(1). There are no claims of a kind
specified in 11 U.S.C. ss.507(a)(2). The claims of a kind specified in 11 U.S.C.
ss.507(a)(3) and (4) are to be paid in cash on the Effective
Page 7 of 17
<PAGE>
Substantively Consolidated Case Nos. 98-21966-BKC-PGH
through and including CASE NO. 98-21972-BKC-PGH
Date. There are no claims of a kind specified in 11 U.S.C. ss.507(a)(5), (6) or
(7). As such, this Court finds that the Plan satisfies 11 U.S.C. ss.1129(a)(9).
7. The provisions of 11 U.S.C. ss.1129(a)(10) have been fulfilled in that
there are three (3) classes of impaired claims which have accepted the Plan.
Moreover, to the extent that Conseco, Inc. or its affiliates are determined to
be insiders, there is at least one (1) class of claims that is impaired under
the Plan that has accepted the Plan and that does not consist of insiders.
8. The requirements of 11 U.S.C. ss.1129(a)(11) have been met in that it
would appear, based upon the Affidavit of William Dyer, that confirmation of the
Debtors' Plan is not likely to be followed by the liquidation or need for
further financial reorganization of the Debtors, primarily due to the facts
that:
a. the Debtors are receiving a significant capital infusion;
b. the Debtors have eliminated that portion of the business which
was never profitable - loan origination; and,
c. the Debtors now receive current compensation for the servicing of
loans which was not the case, historically.
9. The Plan meets the requirements of 11 U.S.C. ss.1129(a)(12) because all
of the fees payable under 28 U.S.C. ss.1930, as determined by this Court at the
hearing on confirmation, either have been paid or will be paid pursuant to the
terms of the Plan as of the Effective Date.
10. The requirements of 11 U.S.C. ss.1129(a)(13) have been met based upon
the Affidavit of William Dyer in that all retiree benefits have been paid.
11. The requirements of 11 U.S.C. ss.1129(a)(8) have not been met and
therefore it is appropriate to determine whether the requirements of ss.1129(b)
have been met with respect to each impaired class that has not accepted the
Plan. There are seven (7) such classes. The impaired
Page 8 of 17
<PAGE>
Substantively Consolidated Case Nos. 98-21966-BKC-PGH
through and including CASE NO. 98-21972-BKC-PGH
classes are Classes 2 through 12. The impaired classes accepting the Plan are
Classes, 2, 5, 6 and 7. Class 3 which is the allowed secured class of Greenwich
Capital Markets, Inc./Greenwich Capital Financial Products, Inc. ("Greenwich")
has requested authority to change its vote in favor of the Plan and the Court
hereby accepts Greenwich's change in ballot and Class 3 is hereby deemed to have
accepted the Plan. Class 4 consists of the allowed claims of Greenwich and
Conseco, Inc. which are simply unsecured claims where the holders of such claims
have agreed to treatment outside of Class 5.
12. The Debtors satisfy the requirements for cramdown with respect to Class
4 Claims under 11 U.S.C. ss.1129(b)(2)(B) because the Plan provides that each
holder of a claim of such class will receive or retain on account of such claim
property of a value, as of the Effective Date of the Plan, equal to the allowed
amount of such claim. Moreover, the requirements of 11 U.S.C.
ss.1129(b)(2)(B)(ii) have been satisfied in that interests which are junior to
Class 4 Claims, other than the Conseco claims Classes 6 and 7 which Conseco has
voted in favor of the Plan, will not receive or retain any property.
Specifically, shareholders and claimants whose claims arise out of the purchase
of NAL Financial Group, Inc.'s common stock, which are Classes 9 and 8,
respectively, do not receive any distribution under the Plan.
13. Classes 8 and 9 did not receive ballots and are deemed to have rejected
the Plan. The Debtors have met the requirements for cramdown on the equity
security holders as set forth in 11 U.S.C. ss.1129(b)(2)(C)(i) since the holder
of such interests do not have any fixed liquidation preference to which they are
entitled, do not have a fixed redemption price to which they are entitled and
the value of such interest is zero since the Debtors are not in a position to
pay all of their creditors in full and consequently, equity would not receive
anything in a liquidation.
Page 9 of 17
<PAGE>
Substantively Consolidated Case Nos. 98-21966-BKC-PGH
through and including CASE NO. 98-21972-BKC-PGH
14. The Debtors have met the requirements of 11 U.S.C. ss.1129(b)(2)(A)
with respect to the cramdown of the secured claims in Classes 10, 11 and 12. The
allowed Class 10 Claim will be satisfied by a surrender of that claimant's
collateral either directly to the claimant or in the form of an abandonment
pursuant to the Plan. Classes 11 and 12 are each being satisfied by payment
according to the Plan over a period of five (5) years in equal semi-annual
installments with interest at eight percent (8%) per annum with each of the
claimants retaining a lien on their respective collateral and in the event of a
disposition of that collateral by the Debtors, each claimant retaining its
respective lien on the cash produced from such disposition.
15. This Court finds as a matter of law that the Plan complies with the
fair and equitable test required under 11 U.S.C. ss.1129(b)(1) with respect to
each class of claims or interests that is impaired and which has not accepted
the Plan as is more fully set forth above. While not expressly set forth in the
Code, 11 U.S.C. ss.1129(b) also requires that, as to each class of claims or
interests that is impaired under the plan and which has not accepted the plan,
that no junior class retain any interest in property of the debtor. This
concept, known as the absolute priority rule, generally becomes an issue when
the general unsecured creditors have rejected the plan and existing equity will
retain an ownership interest under the plan. That is not the case here since:
(i) Class 5 consisting of the Allowed Claims of General Unsecured Creditors have
accepted the Plan overwhelming; and, (ii) existing equity interests are being
canceled and new stock issued to Greenwich and Conseco. To the extent that it
would be necessary to comply with the absolute priority rule, this Court finds
that the Debtors have met the so-called new value exception as a result of the
capital contributions being made both in the form of equity and a working
capital loan by Conseco and Greenwich. While not bound by Coltex Loop Central
III, L.P. v. BT/Sap Pool
Page 10 of 17
<PAGE>
Substantively Consolidated Case Nos. 98-21966-BKC-PGH
through and including CASE NO. 98-21972-BKC-PGH
Sea Associates, 138 F.3d 39 (2nd Cir. 1998), this Court believes that this Plan
would meet the stringent requirements of Coltex Loop Central. To the extent that
the absolute priority rule may be applicable in this case with respect to the
rejection of the Plan by Classes 7 and 8 (existing equity interests), this Court
finds that the new value exception has been satisfied and that the Plan is
therefore fair and equitable as to all impaired classes that have not accepted
the Plan as is required by the express provisions of 11 U.S.C. ss.1129(b)(1).
RULINGS
-------
Based upon findings of fact and conclusions of law as set forth above, the
Court makes the following rulings:
16. The Plan has been accepted in writing by the creditors and equity
holders whose acceptance is required by law. The Plan is in all respects
confirmed pursuant to Section 1129 of the Bankruptcy Code, and all of its terms
and provisions are hereby approved. The terms and provisions of the Plan are
incorporated into this Order by reference. In the event of any conflict between
the terms and provisions of the Plan and terms and provisions of this Order, the
terms and provisions of this Order shall control.
17. The provisions of the Plan and this Confirmation Order are binding on
the Debtors, each creditor and interest holder and each and every other party in
interest in these cases and the Reorganized Debtors are authorized and directed
to take such steps as may be required to carry out the Plan.
18. The Debtors shall pay the United States Trustee the appropriate sum
required pursuant to 28 U.S.C. ss.1930(a)(6) within ten (10) days of the entry
of this order for pre-confirmation periods and simultaneously provide to the
United States Trustee an appropriate
Page 11 of 17
<PAGE>
Substantively Consolidated Case Nos. 98-21966-BKC-PGH
through and including CASE NO. 98-21972-BKC-PGH
affidavit indicating the cash disbursements for the relevant period; and the
Reorganized Debtors shall further pay the United States Trustee the appropriate
sum required pursuant to 28 U.S.C. ss.1930(a)(6) for post-confirmation periods
within the time set forth in 28 U.S.C. ss.1930(a)(6), until the earlier of the
closing of this case by the issuance of a Final Decree by the Court, or upon the
entry of an Order by this Court dismissing this case or converting this case to
another chapter under the United States Bankruptcy Code, and the party
responsible for payment the post-confirmation United States Trustee fees shall
provide the United States Trustee upon the payment of each post-confirmation
payment an appropriate affidavit indicating all the cash disbursements for the
relevant period.
19. The Debtors shall pay the Clerk of the Court any outstanding fees and
costs within ten (10) days of the entry of this Order.
20. The Court hereby retains jurisdiction as provided in the Plan.
21. Arthur Halsey Rice of Rice & Robinson, P.A. ("Rice") is hereby
designated as the Disbursing Agent without bond and shall make the initial
distribution of funds pursuant to the provisions of the Plan on the Effective
Date. All payments thereafter shall be made by the Debtors. The lump sum payment
of Two Million Thirty Thousand Dollars ($2,030,000.00) for payment to the
holders of Allowed Class 5 Claims to be made on the Effective Date shall be made
by the Disbursing Agent transferring that sum (the "Unsecured Claims Funds") to
the Reorganized Debtors which shall deposit the Unsecured claims Funds in a
segregated, interest bearing, deposit account (the "Unsecured Claims Account").
Such transfer made by the Disbursing Agent to the Reorganized Debtors on the
Effective Date shall constitute commencement of distribution under the Plan as
that term is described in connection with the
Page 12 of 17
<PAGE>
Substantively Consolidated Case Nos. 98-21966-BKC-PGH
through and including CASE NO. 98-21972-BKC-PGH
concept of substantial consummation. The Unsecured Claims Account and any
interest credited thereto shall be maintained for the sole use and benefit of
holders of allowed general unsecured claims pending the adjudication of all
objections to general unsecured claims or such earlier time(s) as the Court may
deem reasonably practical upon the motion of the Committee only. Counsel for the
Committee shall notify the Reorganized Debtors in writing of the conclusion of
the claims objection process and the allowed amounts of all general unsecured
claims subject thereof whereupon the Reorganized Debtors shall calculate and
distribute the pro rata amount due to each holder of an allowed general
unsecured claim and file a certificate with the Court setting forth the amounts
so paid. Absent manifest error, the Reorganized Debtors may conclusively rely
upon Committee's counsel's written notice. Copies of the Reorganized Debtors'
certificate shall be served on counsel for the Committee.
22. Not later than sixty (60) days after this order becomes final, the
Disbursing Agent shall file a final report on the local form approved by this
Court. The Disbursing Agent's obligations shall be limited to reflecting the
disbursements of the funds he has in his trust account. The Debtors shall be
responsible for filing a final report of the estate. The failure to timely file
the report of estate and motion for final decree closing case shall result in
the imposition of sanctions against the Debtors.
23. This Court shall conduct a post-confirmation status conference
pre-Effective Date on October 19, 1998 at 9:30 a.m. at the United States
Courthouse, Courtroom ________, 299 East Broward Boulevard, Ft. Lauderdale,
Florida to determine (i) whether the Debtors have complied with the provisions
of this order; and, (ii) for other matters properly noticed. At the status
conference, the Court will consider the propriety of dismissal of this case or
conversion of
Page 13 of 17
<PAGE>
Substantively Consolidated Case Nos. 98-21966-BKC-PGH
through and including CASE NO. 98-21972-BKC-PGH
this case to chapter 7 and/or the imposition of sanctions against the Debtors
for failure to comply with the provisions of this order or other orders of
Court.
24. Notwithstanding any provision in the Plan or in this order to the
contrary, nothing in the Plan or this order shall be construed to modify the
Greenwich Term Sheet which is attached to the Amended Disclosure Statement as
Exhibit 3, including without limitation, the provisions in the Greenwich Term
Sheet defining the respective rights of Greenwich and Conseco to receive
payments, dividends and/or distributions from the Reorganized Debtors.
25. First Financial Acceptance, Inc. ("FFA") has agreed to withdraw its
Limited Objection to Confirmation of the Plan (C.P. 558) in consideration of an
overall settlement of claims between the Debtors, FFA and the Committee as
announced by the parties at the Confirmation Hearing. Upon the Effective Date,
the Debtors shall waive and release any and all claims they may have against FFA
and FFA shall waive and release any and all claims it has against any of the
Debtors, provided, however, FFA shall be allowed a Class 5 unsecured claim in
the amount of Twenty-Five Thousand Dollars ($25,000.00) and the Debtors and
Committee shall withdraw their joint objections to the FFA claims to such
extent. With the exception of the Allowed Twenty-Five Thousand Dollar
($25,000.00) Class 5 Claim, on the Effective Date of the Plan, NAL and FFA shall
exchange mutual, unlimited general releases which shall be binding on FFA, the
reorganized NAL, the Committee and the Debtors' estates.
PURSUANT TO FEDERAL RULE OF BANKRUPTCY PROCEDURE 9019 AND APPLICABLE LOCAL
RULES ANY CREDITOR OR PARTY IN INTEREST WISHING TO OBJECT TO THE SETTLEMENT
BETWEEN THE DEBTORS, FFA AND THE COMMITTEE SHALL FILE AN OBJECTION WITH THIS
COURT AND SERVE IT
Page 14 of 17
<PAGE>
Substantively Consolidated Case Nos. 98-21966-BKC-PGH
through and including CASE NO. 98-21972-BKC-PGH
UPON COUNSEL FOR THE DEBTORS, FFA AND THE COMMITTEE WITHIN FIFTEEN (15) DAYS OF
THE DATE OF THIS ORDER AND HAVE SAME SET FOR HEARING PRIOR TO THE EFFECTIVE DATE
OF THE PLAN.
26. Confirmation of the Debtors' Plan shall not have and shall not be
deemed to have any effect on the determination of who, as between Textron, the
Debtors and the Reorganized Debtors has liability for the return or repayment of
consumer and other customer deposits related to the Textron Loan and Lease
Portfolios (as such are defined in that certain Settlement Agreement by and
amongst the Debtors, Textron and the Committee attached to the Amended
Disclosure Statement as Exhibit 5). Such issue will be determined by separate
order of this Court.
27. Susquehanna Bank's "limited objection" is overruled. This Order shall
not constitute an interpretation of the scope of the release provision in
Exhibit 2 to the Amended Disclosure Statement and therefore shall not be res
judicata as to issues relating thereto.
28. Based upon the unique facts and circumstances of this case, including
but not limited to the time constraints which were imposed on the Limited
Liability Parties with respect to completing the plan process, the quite
reasonable amounts that the Limited Liability Parties have charged as
professional fees and the complex nature of this case, the release provisions
contained in Art. 10, Section H, Limitation of Liability, P.10.11 are expressly
approved except that the time period for the filing of civil actions against the
Limited Liability Parties as defined in the Plan is extended to November 22,
1998. This provision should not be interpreted as precedent granting or general
authority for approving and authorizing releases for professionals and others
Page 15 of 17
<PAGE>
Substantively Consolidated Case Nos. 98-21966-BKC-PGH
through and including CASE NO. 98-21972-BKC-PGH
in chapter 11 plans. This provision is intended to deal with the objection to
confirmation filed by the United States Trustee.
29. Bankers Trust's Limited Objection is overruled for the reasons set
forth above. Notwithstanding anything to the contrary, Bankers Trust and the
Noteholders preserve their rights to pursue their proofs of claim and
confirmation of the Plan shall not be deemed to constitute the determination of
whether Bankers Trust and the Noteholders have released their claims. The
allowance of Bankers Trust's proofs of claim shall be determined by separate
order of the Court after a hearing or presentation of a proposed settlement
agreement. Nothing contained herein shall be deemed to be a ruling on either
Bankers Trust's claims or NAL's defenses including the defense of release.
30. The term sheet agreements attached to the Amended Disclosure Statement
as Exhibits 2, 3, 4 and 6 are hereby approved in all respects except as amended
by the Plan..
31. Each of Stroock & Stroock & Lavan LLP, as counsel to the Official
Committee of Unsecured Creditors, and counsel to the Reorganized Debtors are
authorized and empowered to continue to prosecute objections to claims herein,
and the fees and expenses of such counsel in connection therewith shall be paid
by the Reorganized Debtors, as more fully set forth in Section 5.12 of the Plan
and Section 4.25 of the Amended Disclosure Statement.
32. Rice & Robinson, P.A. are hereby discharged from any further
responsibility in this case except as set forth above with respect to the
requirements for Rice to act as Disbursing Agent and to file the required report
with this Court reflecting the disposition of the funds held in Rice's trust
account. Rice & Robinson, P.A. and Rice shall have no other responsibility for
continuing obligations in this case and the Debtors are hereby directed to
obtain counsel forthwith
Page 16 of 17
<PAGE>
Substantively Consolidated Case Nos. 98-21966-BKC-PGH
through and including CASE NO. 98-21972-BKC-PGH
and certainly in time to meet all of their obligations pursuant to the Code, the
Plan and the Orders of this Court. Rice & Robinson, P.A. shall cooperate with
the transition to new counsel. The Reorganized Debtors shall be responsible for
the payment of any fees and costs incurred by Rice acting as Disbursing Agent or
in connection with the transition to new counsel and shall provide the names,
addresses and amounts of all disbursements to be made, other than the
professional fees awarded on September 22, 1998, to Rice over the signature of
William Dyer as CEO which shall render the Reorganized Debtors responsible for
ascertaining the amount of such disbursements. Rice's only obligation shall be
to act on such instructions and to return the excess, if any, net of the
Disbursing Agents fees and costs and fees related to the transition, to the
Reorganized Debtors.
DONE AND ORDERED in the Southern District of Florida, this 30th day of
September, 1998.
/s/ Paul Hyman
--------------------------------------
HONORABLE PAUL G. HYMAN
U.S. BANKRUPTCY JUDGE
Copies furnished to:
Arthur Halsey Rice, Esquire
Attorney Rice is instructed to serve a conformed copy of this Order upon all
interested parties immediately upon receipt.
Page 17 of 17
<PAGE>
