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Exh. 99.1
IN THE UNITED STATES BANKRUPTCY COURT
FOR THE DISTRICT OF MARYLAND
Greenbelt Division
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)
)
In re )
)
CRIIMI MAE Inc., et al., ) Chapter 11
) Case Nos. 98-2-3115(DK)
Debtors. ) through 98-2-3117(DK)
) (Jointly Administered)
)
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ORDER (i) APPROVING DISCLOSURE STATEMENT; (ii) FIXING TIME WITHIN WHICH
CREDITORS AND EQUITY INTEREST HOLDERS
MAY VOTE TO ACCEPT OR REJECT PLAN OF REORGANIZATION;
(iii) FIXING DATE, TIME AND PLACE FOR HEARING ON
CONFIRMATION OF PLAN; (iv) APPROVING FORM OF BALLOTS
AND VOTING PROCEDURES; AND (v) APPROVING MANNER OF NOTICE
This matter having come before the Court on the Motion of
CRIIMI MAE Inc. ("CMI"), CRIIMI MAE Holdings II, L.P. ("Holdings") and CRIIMI
MAE Management, Inc. ("Management") (collectively, the "Debtors") and the
Official Committee of Equity Security Holders of CMI (the "Equity
Committee"), seeking an Order, INTER ALIA, approving the Debtors' Joint
Disclosure Statement and procedures with respect to voting on the Debtors'
Amended Joint Plan of Reorganization (the "Motion"), this Court's Order (i)
Fixing Date for Hearing on Approval of Disclosure Statement, etc., entered
herein on February 7, 2000, and all other pleadings and proceedings of record
herein, due notice having been given, the Court having considered the Motion
and any responses thereto, including the Objections thereto filed by Salomon
Smith Barney Inc. and Citicorp Real Estate, Inc., First Union National Bank
and the Securities Class Action
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Plaintiffs (the "Objections") and the Responses thereto and Stipulations
Resolving Objections of First Union National Bank and the Shareholder
Plaintiffs, and the Debtors' Third Amended Joint Plan of Reorganization,
including the interlineated pages and exhibits thereto filed with this Court
by Praecipes on July 13, 14 and 21, 2000 (the "Debtors' Third Amended Plan"),
the Debtors' Second Amended Joint Disclosure Statement, including the
interlineated pages and exhibits thereto filed with this Court by Praecipes
on July 13 and 21 and August 18, 2000 (the "Debtors' Disclosure Statement"),
the proposed letters to creditors and equity security holders from the
Official Committees in these cases filed with this Court by Praecipe on July
13, 2000 (the "Committee Letters"), and the proposed forms of ballots as
submitted to this Court for approval (the "Ballots"), and hearings having
been held on these matters on April 25 and August 23, 2000 (the "Disclosure
Statement Hearing"), it is this 24th day of August, 2000, by the United
States Bankruptcy Court for the District of Maryland, sitting at Greenbelt,
ORDERED, that the Debtors' Disclosure Statement, including
all exhibits thereto, is hereby APPROVED as containing adequate information
within the meaning of Section 1125(a) of Title 11 of the United States Code
(the "Bankruptcy Code"); and it is further,
ORDERED, that the Objection of Salomon Smith Barney Inc.
and Citicorp Real Estate, Inc. to the Debtors' proposed disclosure statement
has been addressed and ruled upon by this Court, in part at the Disclosure
Statement Hearing for the reasons stated on the record and in part by
separate Memorandum and Order of this Court entered herein on July 12, 2000
(the "Citicorp Order"); and it is further,
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ORDERED, that to the extent not withdrawn, settled or
otherwise resolved, or otherwise ruled upon by this Court in the Citicorp
Order, all objections to the Disclosure Statement are hereby OVERRULED; and
it is further,
ORDERED, that notice of the Motion and the Disclosure
Statement Hearing, and the procedures and process of approval of the Debtors'
Disclosure Statement, were adequate and sufficient and appropriate under the
circumstances, and complied with the requirements of the Bankruptcy Code, the
Bankruptcy Rules and the Local Rules; and it is further,
ORDERED, that the proposed Ballots are hereby APPROVED as
consistent with Official Form No. 14, as appropriate for each Class of Claims
and Interests (as defined in the Debtors' Third Amended Plan) entitled to
vote to accept or reject the Plan and as complying with Bankruptcy Rule
3017(d); and it is further,
ORDERED, that the Voting Record Date for purposes of
determining creditors and equity security holders entitled to receive
Solicitation Packages (as hereinafter defined) and related materials, and for
purposes of determining who is entitled to vote to accept or reject the Plan
shall be ten days after the date this Order is entered (if said date falls on
a Saturday, Sunday or legal holiday, then the Voting Record Date shall be the
next business day); and it is further,
ORDERED, that the period during which the Debtors may
solicit votes to accept or reject the Plan, as established by this Order,
provides a sufficient time for creditors to make informed decisions to accept
or reject the Plan, and provides sufficient time for brokers, banks, dealers
or other nominees ("Master Ballot Agents") to distribute,
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complete and submit timely Ballots in accordance with the provisions hereof;
and it is further,
ORDERED, that the procedures for the solicitation and
tabulation of votes to accept or reject the Debtors' Third Amended Plan
attached hereto as Exhibit 1 (the "Voting Procedures"), are hereby APPROVED
as providing a fair and equitable voting process and are consistent with
Section 1126 of the Bankruptcy Code; and it is further,
ORDERED, that the contents of the Solicitation Packages,
including the Committee Letters, and the procedures for providing notice of
the Confirmation Hearing and other matters as set forth in the Voting
Procedures are hereby APPROVED as complying with the provisions of the
Bankruptcy Code and the Bankruptcy Rules, including Section 1125(e) and
Bankruptcy Rules 2002 and 3017, and constitute sufficient notice to all
interested parties in accordance with the Bankruptcy Code, the Bankruptcy
Rules and the Local Rules; and it is further,
ORDERED, that by no later than September 20, 2000 (the
"Mailing Deadline"), the Debtors (directly or through Bankruptcy Services LLC
("BSI")) and the Master Balloting Agents (as hereinafter defined) are hereby
DIRECTED to mail or cause to be mailed Solicitation Packages containing
copies of: (a) the Debtors' Third Amended Plan (as an exhibit to the Debtors'
Disclosure Statement); (b) the Debtors' Disclosure Statement; (c) this Order;
(d) the Voting Procedures; (e) notice of the approval of the Debtors'
Disclosure Statement and the dates fixed for voting to accept or reject the
Plan, for filing objections to confirmation of the Plan, and the date set for
the hearing on confirmation of the Plan (if and to the extent not set forth
in this Order); (f) a Ballot and
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instructions thereon; (g) pre-addressed return envelope; and (h) the
Committee Letters (the "Solicitation Packages"); and it is further,
ORDERED, that, except as provided herein with respect to
the Master Ballots as defined in the Voting Procedures and as provided in the
following paragraph, all Ballots must be properly executed, completed and
delivered to BSI either (i) by mail; (ii) by overnight courier; or (iii) by
personal delivery, so that each Ballot is received by BSI by 5:00 p.m.,
Eastern Time, on October 20, 2000 (the "Voting Deadline"); and it is further,
ORDERED, that all Beneficial Owner Ballots (as hereinafter
defined) must be properly executed, completed and delivered to the Master
Balloting Agents by 2:00 p.m., Eastern Time, on October 20, 2000 (the
"Beneficial Owner Ballot Deadline"); and it is further,
ORDERED, that solely for the purpose of voting to accept or
reject the Plan, and not for the purpose of the allowance of, or distribution
on account of, a Claim or Interest and without prejudice to the rights of the
Debtors and/or any of the Official Committees in any other context, each
class of Claims or Interests entitled to vote to accept or reject the Plan
shall be temporarily allowed in accordance with the following rules (the
"Tabulation Rules"):
a. A Claim will be deemed temporarily allowed for voting
purposes in the lesser amount of (i) such Claim as set forth in the Debtors'
Schedules or (ii) such Claim as set forth in a timely filed Proof of Claim,
provided no objection has been filed by the Debtors or any of the Official
Committees to such Proof of Claim;
b. An Interest will be deemed temporarily allowed for
voting purposes in the amount set forth on the respective ballot for such
Interest provided that none of the Debtors objects to such ballot amount
prior to the Confirmation Hearing date
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(if an objection is filed, such objection will be submitted to the Bankruptcy
Court for resolution if it cannot be resolved by the parties);
c. If a Claim or Interest is deemed allowed in accordance
with the Plan, such Claim or Interest will be temporarily allowed for voting
purposes in the deemed allowed amount set forth in the Plan;
d. If a Claim or Interest is listed in the Debtors'
Schedules as contingent, unliquidated or disputed, and a Proof of Claim or
Interest was not timely filed, such Claim or Interest will be disallowed for
voting purposes;
e. If a Claim or Interest has been estimated or otherwise
allowed for voting purposes by order of the Court, such Claim or Interest
will be temporarily allowed for voting purposes in the amount so estimated or
allowed by the Court;
f. If any of the Debtors or any of the Official Committees
has filed and served an objection to a Claim or Interest, such Claim or
Interest will be disallowed for voting purposes unless the Court temporarily
allows such Claim or Interest for voting purposes through estimation or other
order of the Court;
g. If a Claim or Interest is listed in an amount on a
Ballot that is less than the amount otherwise calculated in accordance with
these provisions, the Claim or Interest will be temporarily allowed for
voting purposes in the lesser amount listed on the Ballot;
h. To the extent a Claim or Interest has been superseded by
other Claims or Interests in accordance with these procedures, or is
duplicative, the superseded or duplicate Claims or Interests will be
disallowed for voting purposes; and
i. With respect to Claims and Interests asserted by holders
of Old Senior Notes, Series B Preferred Stock, Series F Preferred and CMI
Common Stock, the amounts of such Claims and Interests for voting purposes
will be calculated in accordance with the Special Procedures discussed below;
and it is further,
ORDERED, that if any Holder of a Claim or Interest seeks to
challenge the allowance of its Claim or Interest for voting purposes in
accordance with the Tabulation Rules, such holder shall file a motion, under
Rule 3018(a), for an order temporarily allowing such Claim or Interest in a
different amount or classification for voting purposes (the "Rule 3018(a)
Motion"), and serve such motion on the Debtors, the Equity Committee and the
Official Unsecured Creditors' Committees in the CMI and
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Management cases no less than ten days after the later of (i) the date of
service of a notice of an objection to the underlying Claim or Interest, if
any; or (ii) the Mailing Deadline (the "Rule 3018(a) Motion Deadline"). Any
Ballot submitted by a creditor or equity security holder that timely files a
Rule 3018(a) Motion shall be counted in accordance with the Tabulation Rules
and the other applicable provisions of this Order, unless and until the
underlying Claim or Interest is temporarily allowed by the Court for voting
purposes in a different amount or classification, after notice and a hearing.
Rule 3018(a) Motions that are not filed by the Rule 3018(a) Motion Deadline
will not be considered; and it is further,
ORDERED, that in tabulating the Ballots, the following
additional procedures shall be utilized:
a. For the purpose of voting on the Plan, BSI will be
deemed to be in constructive receipt of any Ballot timely delivered to the
address that BSI (or its authorized agent) has designated on the instructions
included with each Ballot;
b. Any Ballot that is properly completed, executed and
returned to BSI but does not indicate an acceptance or rejection of the Plan
will be counted as an acceptance of the Plan;
c. If a Ballot casts a vote to partially accept or
partially reject the Plan, such Ballot will not be counted;
d. Any Ballot received by BSI after the Voting Deadline
will not be counted;
e. The authority of the signatory of each Ballot to
complete and execute the ballot shall be presumed, but each such signatory
shall certify that he or she has such authority;
f. Any Ballot that is not signed will not be counted;
g. If more than one Ballot voting the same Claim or
Interest is received by BSI before the
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Voting Deadline, the last Ballot received by BSI before the Voting Deadline
will be deemed to reflect the voter's intent and any prior Ballots will not
be counted; and
h. Except for the Master Ballots, Ballots sent by facsimile
will not be counted; and it is further,
ORDERED, that with respect to those holders of Old Senior
Notes, Series B Preferred Stock, Series F Preferred Stock and CMI Common
Stock who hold such Notes or Stock in street name through one or more
brokers, banks, dealers or other nominees (the "Master Ballot Agents"), the
following additional Tabulation Rules and procedures for distributing
Solicitation Packages shall apply:
a. The appropriate transfer agent or Trustee, as
applicable, will be required to provide to BSI within seven business days
after the Voting Record Date (i) a list in appropriate electronic or other
format as agreed to by BSI containing the names, addresses and holdings of
the respective Record Holders as of the Voting Record Date (the "Record
Holder Register"); (ii) a list in appropriate electronic or other format as
agreed to by BSI containing the names and addresses of the Master Ballot
Agents and, for each Master Ballot Agent, the aggregate holdings of the
Beneficial Owners as of the Voting Record Date for whom such Master Ballot
Agent provides services (the "Beneficial Owner Register") (collectively, the
"Registers"); and (iii) accompanying mailing labels;
b. Upon receipt of the lists described above, BSI will
contact each Master Ballot Agent to determine the number of Solicitation
Packages needed for distribution to the applicable Beneficial Owners for whom
the Master Ballot Agent performs services, and will deliver to each Master
Ballot Agent the requisite number of Solicitation Packages with ballots for
such Beneficial Owners (the "Beneficial Owner Ballots");
c. BSI will mail Solicitation Packages via first class mail
to each Record Holder as of the Voting Record Date;
d. Along with the Solicitation Packages, BSI will mail via
first class mail to each Master Ballot Agent both (i) a Master Ballot to be
completed by the Master Ballot Agent and (ii) Beneficial Owner Ballots to be
completed by the Beneficial Owners for whom the Master Ballot Agent provides
services. The Master Ballot Agent will be responsible for distributing the
Beneficial Owner Ballots and Solicitation Packages to the applicable
Beneficial Owners, who will complete and return the Beneficial Owner Ballots
to the Master Ballot Agent. The Master Ballot Agent will then (i) tally the
votes on the
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Master Ballot of the applicable Beneficial Owners who return Beneficial Owner
Ballots, and (ii) return the completed Master Ballot to BSI;
e. The Master Ballot Agent will distribute the Solicitation
Packages to the Beneficial Owners by the Mailing Deadline so that the
Beneficial Owners may complete and return the Ballots to the Master Ballot
Agent in the manner set by the Master Ballot Agent and by the Beneficial
Owner Ballot Deadline. The Master Ballot Agent will then summarize the votes
of its respective Beneficial Owners on a Master Ballot in accordance with
these procedures, and return it to BSI prior to the Voting Deadline;
f. Each Master Ballot Agent will be required to retain the
Beneficial Owner Ballots cast by its Beneficial Owners for inspection for a
period of one year following the Voting Deadline;
g. BSI will compare the votes cast by Record Holders and
Beneficial Owners to the respective Registers. Votes submitted on a Record
Holder Ballot will not be counted in excess of the record position for that
particular Record Holder as identified in the Record Holder Register. Votes
submitted on a Master Ballot will not be counted in excess of the aggregate
position for particular Beneficial Owners as identified in the Beneficial
Owner Register. The submission of a Record Holder Ballot or a Master Ballot
reflecting an aggregate amount of voting claims that exceeds the record
position identified on the Registers is referred to herein as an "overvote;"
h. To the extent that a Record Holder Ballot contains an
overvote or otherwise conflicts with the Record Holder Register, BSI will
tabulate the votes based upon information in the Register. With respect to a
Master Ballot, BSI will attempt to resolve the overvote or conflicting vote
prior to the Voting Deadline;
i. If the overvote or conflicting vote on a Master Ballot
cannot be reconciled prior to the Voting Deadline, BSI will calculate the
respective percentage of the total statement amount of the Master Ballot
voted by each Beneficial Owner, will multiply such percentage for each
Beneficial Owner by the amount of aggregate holdings for the applicable
Master Ballot Agent identified on the Beneficial Owner Register and will
tabulate votes to accept or reject the Plan based on the result of this
calculation. The Debtors reserve the right to challenge the appropriateness
of this calculation in any given case by seeking a determination of the Court
at or before the Confirmation Hearing; and
j. Any Master Ballot Agent may complete and deliver to BSI
multiple Master Ballots summarizing the votes of Beneficial Owners. Votes
reflected on multiple Master Ballots will be counted, except to the extent
that they are duplicative of other Master Ballots. If two or more Master
Ballots are inconsistent, the latest dated Master Ballot received prior to
the Voting Deadline will, to the extent of such inconsistency, supersede and
revoke any prior Master Ballot; and it is further,
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ORDERED, that with respect to the Convenience Class Ballot,
as defined in the Voting Procedures, if the Holder of an Allowed Claim in
Class A10 elects the convenience class option, or elects to reduce all of its
Class A10 Claims to $150,000 and elect the convenience class option, the
election so made on each Ballot shall be deemed irrevocable and legally
binding on the electing creditor upon execution of the Ballot and
confirmation of the Debtors' Third Amended Plan; and it is further,
ORDERED, that the Confirmation Hearing will be held on
November 15, 2000, at 10:00 a.m., in Courtroom 3C, United States Bankruptcy
Court, 6500 Cherrywood Lane, Greenbelt, Maryland, 20770. The Confirmation
Hearing may be continued from time to time by the Court without further
notice other than the announcement of the adjourned date(s) at the
Confirmation Hearing or any continued hearing; and it is further,
ORDERED, that objections to confirmation of the Plan, if
any, must: (a) be in writing; (b) state the name and address of the party so
objecting and the nature of the Claim or Interest of such party; (c) state
with particularity the basis and nature of any objection to confirmation of
the Plan and all facts and authorities upon which such objecting party
relies; and (d) be filed with the Court and served on the following parties
so that they are received no later than at least twelve days prior to the
date set forth for the commencement of the Confirmation Hearing:
Richard L. Wasserman, Esquire Stanley J. Samorajczyk, Esquire
Venable, Baetjer and Howard, L.L.P. Akin, Gump, Strauss, Hauer
1800 Mercantile Bank and Trust Building and Feld, L.L.P.
Two Hopkins Plaza 1333 New Hampshire Ave., N.W.
Baltimore, Maryland 21201 Washington, D.C. 20036
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Morton A. Faller, Esquire Michael St. Patrick Baxter, Esquire
Shulman, Rogers, Gandal, Pordy Covington & Burling
and Ecker, P.A. 1201 Pennsylvania Ave., N.W.
11921 Rockville Pike Washington, D.C. 20004-2401
Third Floor
Rockville, MD 20852-2753
Daniel M. Lewis, Esquire Paul M. Nussbaum, Esquire
Arnold & Porter Whiteford, Taylor & Preston, L.L.P.
555 Twelfth Street, N.W. Seven Saint Paul Street
Washington, D.C. 20004-1206 Suite 1400
Baltimore, Maryland 21202-1626
Clifford J. White, III, Esquire
Office of U.S. Trustee
6305 Ivy Lane
Greenbelt, Maryland 20770
and it is further,
ORDERED, that the Debtors are DIRECTED to serve copies of
this Order as part of their Solicitation Package and, to further provide
notice, to publish notice of the Confirmation Hearing and the time for filing
and serving objections to confirmation two times beginning no later than ten
business days after entry of the Order Approving the Disclosure Statement, in
THE WASHINGTON POST, THE BALTIMORE SUN and THE WALL STREET JOURNAL (national
edition), and in addition by posting it on the Debtors' website; and it is
further,
ORDERED, that the Debtors are excused from mailing
Solicitation Packages to those entities for which the Debtors have only
undeliverable addresses unless the Debtors are provided with accurate
addresses. Failure to mail Solicitation Packages to such entities shall not
constitute inadequate notice of the deadline to object to confirmation of the
Plan, the Confirmation Hearing, the Voting Deadline or any other matter; and
it is further,
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ORDERED, that the Debtors are authorized to take or refrain
from taking any action necessary or appropriate to implement the terms of,
and the relief granted in, this Order without seeking further Order of the
Court.
/s/ Duncan W. Keir
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DUNCAN W. KEIR
United States Bankruptcy Judge
cc: Richard L. Wasserman, Esquire
Venable, Baetjer and Howard, LLP
1800 Mercantile Bank & Trust Building
Two Hopkins Plaza
Baltimore, Maryland 21201
Stanley J. Samorajczyk, Esquire
Akin, Gump, Strauss, Hauer & Feld, L.L.P.
1333 New Hampshire Avenue, N.W., Suite 400
Washington, D.C. 20036
Clifford J. White III, Esquire
Office of U.S. Trustee
6305 Ivy Lane
Greenbelt, MD 20770
Daniel M. Lewis, Esquire
Michael L. Bernstein, Esquire
Michelle C. France, Esquire
Arnold & Porter
555 Twelfth Street, N.W.
Washington, D.C. 20004-1206
Michael St. Patrick Baxter, Esquire
Covington & Burling
1201 Pennsylvania Avenue, N.W.
Washington, D.C. 20044-7566
Paul Nussbaum, Esquire
Martin T. Fletcher, Esquire
Whiteford, Taylor & Preston, LLP
Seven Saint Paul Street, Suite 1400
Baltimore, MD 21202-1626
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Morton A. Faller, Esquire
Shulman, Rogers, Gandal, Pordy & Ecker, P.A.
11921 Rockville Pike, 3rd Floor
Rockville, Maryland 20852-2743
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EXHIBIT 1
PROPOSED PROCEDURES FOR SOLICITATION AND TABULATION
OF VOTES TO ACCEPT OR REJECT THE PLAN
FORM OF BALLOTS
1. Bankruptcy Rule 3017(d) requires that a form of ballot that
substantially conforms to Official Form No. 14 (the "Official Form") be
provided to creditors and equity security holders entitled to vote on the
Plan. Fed.R.Bankr.P. 3017(d). CRIIMI MAE Inc., CRIIMI MAE Management, Inc.,
CRIIMI MAE Holdings II, L.P. (collectively, the "Debtors") and the Official
Committee of Equity Security Holders (the "Equity Committee") propose to
distribute to creditors and equity security holders entitled to vote on the
Debtors' Third Amended Joint Plan of Reorganization (the "Plan") one or more
ballots substantially in the forms of the amended ballots filed with the
Bankruptcy Court on July 13, 2000 (collectively, the "Ballots").
2. The following Classes are impaired under the Plan, and are,
therefore, entitled to vote to accept or reject the Plan: A1, A2, A3, A4, A5,
A6, A7, A9, A10, A11, A13, A14, A16, A18, A20, A21, B1, B2, B5, B6, C1, C2,
C5 and C6. By these Proposed Procedures for Solicitation and Tabulation of
Votes to Accept or Reject the Plan (the "Proposed Procedures"), the Debtors
and the Equity Committee will be soliciting votes from these Classes to
accept or reject the Plan.
3. The Debtors and the Equity Committee submit that the Ballots
substantially conform to the Official Form. The forms are described and their
functions are more fully explained as follows:
a. Form 1. Ballot to be used by Holders of Allowed Claims
in Classes A1 through A7, A11, A13, B1, B2, B4, B5, B6, C1, C2, C5 and C6
(the "Claims Ballot"). The Claims Ballot will be submitted directly to
Bankruptcy Services LLC ("BSI" or the "Balloting Agent").
EXHIBIT 1
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b. Form 2. Ballot to be used by Holders of Allowed Claims
in Class A10 (the "Convenience Class Ballot"). The Convenience Class Ballot
will be submitted directly to BSI.
c. Form 3. Ballot to be used by Holders of Allowed Claims
or Interests held in street name through a broker, bank, dealer or other
nominee (the "Beneficial Owners") in Classes A9, A14, A20 and A21 (the
"Beneficial Owner Ballot"). The Beneficial Owner Ballot will be submitted
directly to a Master Ballot Agent, as such term is defined in paragraph 17
herein.
d. Form 4. Ballot to be used by Holders of Allowed Claims
or Interests registered in their own name (the "Record Holders") in Classes
A9, A14, A16, A18, A20 and A21 (the "Record Holder Ballot"). The Record
Holder Ballot will be submitted directly to BSI.
e. Form 5. Ballot on which the Master Ballot Agent will
transcribe votes recorded on Beneficial Owner Ballots as submitted to the
Master Ballot Agent by Beneficial Owners (the "Master Ballot"). The Master
Ballot will be submitted by the Master Ballot Agent directly to BSI.
4. The Debtors and the Equity Committee respectfully request that
the Ballots be approved in substantially the forms submitted, and that they
be authorized to distribute Ballots that substantially conform to such
Ballots to creditors and equity security holders in connection with
soliciting votes to accept or reject the Plan.
VOTING DEADLINE FOR RECEIPT OF BALLOTS BY BSI
5. Bankruptcy Rule 3017(c) provides that, on or before approval of a
disclosure statement, the Court may fix a time within which the holders of
claims or equity interests may accept or reject a plan. The Debtors and the
Equity Committee anticipate that the Ballots and the Solicitation Package, as
defined below, will be mailed no later than twenty business days after the
entry of an Order approving the Disclosure Statement (the "Order Approving
Disclosure Statement"). The Debtors and the Equity Committee propose that,
with the exception of the Master Ballots which are discussed below under
Special Procedures for Holders of Old Senior Notes, Series B Preferred
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Stock, Series F Preferred Stock and CMI Common Stock, all Ballots must be
properly executed, completed and delivered to BSI either (i) by mail in the
return envelope provided with each Ballot; (ii) by overnight courier; or
(iii) by personal delivery, so that each Ballot is received by BSI no later
than 5:00 p.m., Eastern Daylight Savings Time, on ____________ , 2000 (the
"Voting Deadline"). The Beneficial Owner Ballot Deadline is provided for in a
separate paragraph in the Order Approving Disclosure Statement.
6. The Debtors and the Equity Committee believe that the Voting
Deadline provides sufficient time for creditors and equity interest holders
to make informed decisions to accept or reject the Plan and to submit timely
Claims Ballots, Convenience Class Ballots and Record Holder Ballots to BSI.
In addition, the Debtors and the Equity Committee believe that the Voting
Deadline provides sufficient time for the Master Ballot Agents to distribute
the Beneficial Owner Ballots, complete the Master Ballots and submit them in
a timely manner to BSI.
VOTING RECORD DATE
7. Bankruptcy Rule 3017(d) provides that the date an order approving
a disclosure statement is entered, or such other date as established by the
Court, is the record date for determining holders of stock, bonds, notes and
other securities entitled to receive ballots and other solicitation
materials. Fed.R.Bankr.P. 3017(d). The Debtors and the Equity Committee
respectfully request that the Court set a date that is not less than eight
days after the date of entry of the Order Approving the Disclosure Statement
as the Voting Record Date (as defined in the Plan) for purposes of
determining which holders of stock, notes and other securities are entitled
to receive the Solicitation Package and to vote on the Plan.
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THE SOLICITATION PACKAGE
8. The Debtors and the Equity Committee propose to distribute the
following materials in connection with soliciting votes to accept or reject
the Plan (the "Solicitation Package"):
a. The Plan (as an exhibit to the Disclosure Statement);
b. The Disclosure Statement;
c. The Order Approving the Disclosure Statement;
d. The Tabulation Rules, as defined below;
e. Notice of the approval of the Disclosure Statement and the
dates fixed for voting to accept or reject the Plan, for filing objections to
confirmation of the Plan, and the date set for the hearing on confirmation of
the Plan (the "Confirmation Hearing"), if any such information is not otherwise
set forth in the Order Approving the Disclosure Statement;
f. A Ballot and instructions thereon;
g. Pre-addressed return envelope;
h. Letters from the Official Committees with respect to the
Plan; and
i. Any other materials as ordered by the Court.
TABULATION RULES
9. Section 1126(c) of the Bankruptcy Code provides that a class of
claims has accepted a plan if such plan has been accepted by creditors that
hold at least two-thirds in amount and more than one-half in number of the
allowed claims of such class held by creditors. 11 U.S.C. Section1126(c).
Section 1126(d) provides that a class of interests has accepted a plan if
such plan has been accepted by holders of such interests that hold at least
two-thirds in amount of the allowed interests of such class held by holders
of such interests. 11 U.S.C. Section1126(d). Only those holders of claims and
interests who actually
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vote count in these tabulations. Further, Bankruptcy Rule 3018(a) allows the
Court, after notice and a hearing, to temporarily allow claims or interests
in an amount which it deems proper for the purpose of accepting or rejecting
a plan. Fed.R.Bankr.P. 3018(a).
10. For the purpose of voting to accept or reject the Plan, the
Debtors and the Equity Committee propose that each Claim or Interest within a
Class of Claims or Interests entitled to vote to accept or reject the Plan be
temporarily allowed in accordance with the following provisions:
a. A Claim will be deemed temporarily allowed for voting
purposes in the lesser amount of (i) such Claim as set forth in the Debtors'
Schedules or (ii) such Claim as set forth in a timely filed Proof of Claim,
provided no objection has been filed by the Debtors or any of the Official
Committees to such Proof of Claim;
b. An Interest will be deemed temporarily allowed for
voting purposes in the amount set forth on the respective ballot for such
Interest provided that none of the Debtors object to such ballot amount prior
to the Confirmation Hearing date (if an objection is filed, such objection
will be submitted to the Bankruptcy Court for resolution if it cannot be
resolved by the parties);
c. If a Claim or Interest is deemed allowed in accordance
with the Plan, such Claim or Interest will be temporarily allowed for voting
purposes in the deemed allowed amount set forth in the Plan;
d. If a Claim or Interest is listed in the Debtors'
Schedules as contingent, unliquidated or disputed, and a Proof of Claim or
Interest was not timely filed, such Claim or Interest will be disallowed for
voting purposes;
e. If a Claim or Interest has been estimated or otherwise
allowed for voting purposes by order of the Court, such Claim or Interest
will be temporarily allowed for voting purposes in the amount so estimated or
allowed by the Court;
f. If any of the Debtors or any of the Official Committees
has filed and served an objection to a Claim or Interest, such Claim or
Interest will be disallowed for voting purposes unless the Court temporarily
allows such Claim or Interest for voting purposes through estimation or other
order of the Court;
g. If a Claim or Interest is listed in an amount on a
Ballot that is less than the amount otherwise calculated in accordance with
these provisions, the Claim or Interest will be temporarily allowed for
voting purposes in the lesser amount listed on the Ballot;
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h. To the extent a Claim or Interest has been superseded by
other Claims or Interests in accordance with these procedures, or is
duplicative, the superseded or duplicate Claims or Interests will be
disallowed for voting purposes; and
i. With respect to Claims and Interests asserted by holders
of Old Senior Notes, Series B Preferred Stock, Series F Preferred and CMI
Common Stock, the amounts of such Claims and Interests for voting purposes
will be calculated in accordance with the Special Procedures discussed below.
11. The provisions for the temporary allowance of Claims or
Interests set forth above are ONLY for the purpose of voting to accept or
reject the Plan and are not for any other purpose, including the allowance
of, or distribution on account of, such Claims or Interests, and such
provisions are without prejudice to the rights of the Debtors and/or the
Official Committees in any other context.
12. If any Holder of a Claim or Interest seeks to challenge the
allowance of its Claim or Interest for voting purposes in accordance with the
foregoing provisions, the Debtors and the Equity Committee propose that such
holder be required to file a motion, under Rule 3018(a), for an order
temporarily allowing such Claim or Interest in a different amount or
classification for voting purposes (the "Rule 3018(a) Motion"), and serve it
on the Debtors, the Equity Committee and the Official Unsecured Creditors'
Committees in the CMI and Management cases no less than ten days after the
later of (i) the date of service of a notice of an objection to the
underlying Claim or Interest, if any; or (ii) the Mailing Deadline as defined
in the Order Approving Disclosure Statement (the "Rule 3018(a) Motion
Deadline").
13. The Debtors and the Equity Committee further propose that any
Ballot submitted by a creditor or equity security holder that timely files a
Rule 3018(a) Motion will be provisionally counted in accordance with the
Proposed Procedures, unless and
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until the underlying Claim or Interest is temporarily allowed by the Court
for voting purposes in a different amount or classification. If the Debtors,
the Equity Committee and such party are unable to resolve the issue(s) raised
by the Rule 3018(a) Motion prior to the Voting Deadline, then the Debtors and
the Equity Committee request that the Court determine at or before the
Confirmation Hearing whether the Ballot cast by a holder who has filed a Rule
3018(a) Motion should be counted. Rule 3018(a) Motions that are not filed by
the Rule 3018(a) Motion Deadline will not be considered, and any Ballot cast
in connection with the underlying Claim or Interest will be counted in
accordance with the Proposed Procedures.
14. Requiring Rule 3018(a) Motions to be filed by the Rule 3018(a)
Motion Deadline will provide sufficient time for the filing of such motions
and for the Debtors and the Equity Committee to consider and determine
whether or not to seek to resolve or formally contest, as appropriate, such
motions. Further, the Proposed Procedures for filing Rule 3018(a) Motions
will help to ensure an efficient and accurate tabulation of Ballots before
the Confirmation Hearing.
15. The Debtors and the Equity Committee propose the following
additional procedures in connection with tabulating the Ballots:(1)
a. For the purpose of voting on the Plan, BSI will be
deemed to be in constructive receipt of any Ballot timely delivered to the
address that BSI (or its authorized agent) has designated on the instructions
included with each Ballot; (1)
b. Any Ballot that is properly completed, executed and
returned to BSI but does not indicate an acceptance or rejection of the Plan
will be counted as an acceptance of the Plan;
--------------------
(1) Such procedures will apply to all Classes voting to accept or reject the
Plan, unless provided otherwise below for Old Senior Notes, Series B
Preferred, Series F Dividend Preferred or CMI Common Stock.
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c. If a Ballot casts a vote to partially accept or
partially reject the Plan, such Ballot will not be counted;
d. Any Ballot received by BSI after the Voting Deadline
will not be counted;
e. The authority of the signatory of each Ballot to
complete and execute the ballot shall be presumed, but each such signatory
shall certify that he or she has such authority;
f. Any Ballot that is not signed will not be counted;
g. If more than one Ballot voting the same Claim or
Interest is received by BSI before the Voting Deadline, the last Ballot
received by BSI before the Voting Deadline will be deemed to reflect the
voter's intent and any prior Ballots will not be counted; and
h. Except for the Master Ballots, Ballots sent by facsimile
will not be counted.
16. In addition to the foregoing provisions, the Debtors and the
Equity Committee request that, with respect to the Convenience Class Ballot,
if the Holder of an Allowed Claim in Class A10 elects the convenience class
option, or elects to reduce all of its Class A10 Claims to $150,000 and elect
the convenience class option, the election so made on each Ballot be deemed
irrevocable and legally binding on the electing creditor upon execution of
the Ballot and confirmation of the Plan.
SPECIAL PROCEDURES AND TABULATION RULES FOR BENEFICIAL OWNERS OF OLD SENIOR
NOTES, SERIES B PREFERRED STOCK, SERIES F DIVIDEND PREFERRED STOCK AND
CMI COMMON STOCK AND MASTER BALLOT AGENTS PROVIDING SERVICES THERETO
17. The Debtors and the Equity Committee submit that they do not
have the necessary information regarding the identities of each Holder of Old
Senior Notes, Series B Preferred Stock, Series F Preferred Stock and CMI
Common Stock in order to directly solicit their votes. Further, the Debtors
and the Equity Committee recognize that certain Beneficial Owners hold some
of the Old Senior Notes, Series B and Series F Preferred
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Stock and Common Stock in street name through one or more brokers, banks,
dealers or other nominees (the "Master Ballot Agents"). For these reasons,
the following additional Proposed Procedures are submitted for the
distribution of the Solicitation Package to these Classes:
a. Pursuant to Bankruptcy Rules 1007(i) and 3017(e), to
facilitate the mailing of Solicitation Packages to Record Holders and
Beneficial Owners, the appropriate transfer agent or Trustee, as applicable,
will be required to provide to BSI within seven business days after the
Voting Record Date (i) a list in appropriate electronic or other format as
agreed to by BSI containing the names, addresses and holdings of the
respective Record Holders as of the Voting Record Date (the "Record Holder
Register"); (ii) a list in appropriate electronic or other format as agreed
to by BSI containing the names and addresses of the Master Ballot Agents and,
for each Master Ballot Agent, the aggregate holdings of the Beneficial Owners
as of the Voting Record Date for whom such Master Ballot Agent provides
services (the "Beneficial Owner Register") (collectively, the "Registers");
and (iii) accompanying mailing labels;
b. Upon receipt of the lists described above, BSI will
contact each Master Ballot Agent to determine the number of Solicitation
Packages needed for distribution to the applicable Beneficial Owners for whom
the Master Ballot Agent performs services, and will deliver to each Master
Ballot Agent the requisite number of Solicitation Packages with Beneficial
Owner Ballots;
c. BSI will mail Solicitation Packages via first class mail
to each Record Holder as of the Voting Record Date;
d. Along with the Solicitation Packages, BSI will mail via
first class mail to each Master Ballot Agent both (i) a Master Ballot to be
completed by the Master Ballot Agent and (ii) Beneficial Owner Ballots to be
completed by the Beneficial Owners for whom the Master Ballot Agent provides
services. The Master Ballot Agent will be responsible for distributing the
Beneficial Owner Ballots and Solicitation Packages to the applicable
Beneficial Owners, who will complete and return the Beneficial Owner Ballots
to the Master Ballot Agent. The Master Ballot Agent will then (i) tally the
votes on the Master Ballot of the applicable Beneficial Owners who return
Beneficial Owner Ballots, and (ii) return the completed Master Ballot to BSI;
and
e. The Master Ballot Agent will distribute the Solicitation
Packages to the Beneficial Owners by the Mailing Deadline as defined in the
Order Approving Disclosure Statement so that the Beneficial Owners may
complete and return the Ballots to the Master Ballot Agent in the manner set
by the Master Ballot Agent and by the Beneficial Owner Ballot Deadline. The
Master Ballot Agent will then summarize the votes of its respective
Beneficial Owners on a Master Ballot in accordance with these procedures, and
return it to BSI prior to the Voting Deadline.
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18. The following additional Proposed Procedures are submitted for
tabulating Ballots cast by Holders of Old Senior Notes, Series B Preferred
Stock, Series F Preferred Stock and CMI Common Stock:
a. Each Master Ballot Agent will be required to retain the
Beneficial Owner Ballots cast by its Beneficial Owners for inspection for a
period of one year following the Voting Deadline.
b. BSI will compare the votes cast by Record Holders and
Beneficial Owners to the respective Registers. Votes submitted on a Record
Holder Ballot will not be counted in excess of the record position for that
particular Record Holder as identified in the Record Holder Register. Votes
submitted on a Master Ballot will not be counted in excess of the aggregate
position for particular Beneficial Owners as identified in the Beneficial
Owner Register. The submission of a Record Holder Ballot or a Master Ballot
reflecting an aggregate amount of voting claims that exceeds the record
position identified on the Registers is referred to herein as an "overvote."
c. To the extent that a Record Holder Ballot contains an
overvote or otherwise conflicts with the Record Holder Register, BSI will
tabulate the votes based upon information in the Register. With respect to a
Master Ballot, BSI will attempt to resolve the overvote or conflicting vote
prior to the Voting Deadline.
d. If the overvote or conflicting vote on a Master Ballot
cannot be reconciled prior to the Voting Deadline, BSI will calculate the
respective percentage of the total statement amount of the Master Ballot
voted by each Beneficial Owner, will multiply such percentage for each
Beneficial Owner by the amount of aggregate holdings for the applicable
Master Ballot Agent identified on the Beneficial Owner Register and will
tabulate votes to accept or reject the Plan based on the result of this
calculation. The Debtors reserve the right to challenge the appropriateness
of this calculation in any given case by seeking a determination of the Court
at or before the confirmation hearing.
e. Any Master Ballot Agent may complete and deliver to BSI
multiple Master Ballots summarizing the votes of Beneficial Owners. Votes
reflected on multiple Master Ballots will be counted, except to the extent
that they are duplicative of other Master Ballots. If two or more Master
Ballots are inconsistent, the latest dated Master Ballot received prior to
the Voting Deadline will, to the extent of such inconsistency, supersede and
revoke any prior Master Ballot.
CONFIRMATION HEARING AND OBJECTIONS
19. Bankruptcy Rule 3017(c) provides that on or before approval of a
disclosure statement, the Court shall fix a time within which creditors and
equity security
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holders may accept or reject a Plan and may fix a date for hearing on
confirmation. Fed.R.Bankr.P. 3017(c). In accordance therewith, and in
accordance with the Proposed Procedures, the Debtors and the Equity Committee
request that the Confirmation Hearing be set for a date or dates within 60
days of the entry of an order approving the Disclosure Statement.
20. The Debtors and the Equity Committee further request that
objections, if any, to confirmation of the Plan must: (a) be in writing; (b)
state the name and address of the party so objecting and the nature of the
Claim or Interest of such party; (c) state with particularity the basis and
nature of any objection to confirmation of the Plan; and (d) be filed with
the Court and served on the following parties so that they are received no
later than at least twelve days prior to the date set forth for the
commencement of the Confirmation Hearing:
Richard L. Wasserman, Esquire Stanley J. Samorajczyk, Esquire
Venable, Baetjer and Howard, L.L.P. Akin, Gump, Strauss, Hauer
1800 Mercantile Bank and Trust Building and Feld, L.L.P.
Two Hopkins Plaza 1333 New Hampshire Ave., N.W.
Baltimore, Maryland 21201 Washington, D.C. 20036
Co-Counsel for CRIIMI MAE Inc. Co-Counsel for CRIIMI MAE Inc.
and CRIIMI MAE Holdings II, L.P. and CRIIMI MAE Holdings II, L.P.,
Debtors-in-Possession Debtors-in-Possession
Morton A. Faller, Esquire Michael St. Patrick Baxter, Esquire
Shulman, Rogers, Gandal, Pordy Covington & Burling
and Ecker, P.A. 1201 Pennsylvania Ave., N.W.
11921 Rockville Pike Washington, D.C. 20004-2401
Third Floor
Rockville, MD 20852-2753 Counsel for the Official
Committee of Equity Security
Counsel for CRIIMI MAE Holders of CRIIMI MAE Inc.
Management, Inc.,
Debtor-in-Possession
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Daniel M. Lewis, Esquire Paul M. Nussbaum, Esquire
Arnold & Porter Whiteford, Taylor & Preston, L.L.P.
555 Twelfth Street, N.W. Seven Saint Paul Street
Washington, D.C. 20004-1206 Suite 1400
Baltimore, Maryland 21202-1626
Counsel for the Official Committee
of Unsecured Creditors of Counsel for the Official Committee
CRIIMI MAE Inc. of Unsecured Creditors of CRIIMI
MAE Management, Inc.
Clifford J. White, III, Esquire
Office of U.S. Trustee
6305 Ivy Lane
Greenbelt, Maryland 20770
NOTICE BY PUBLICATION
21. The Debtors and the Equity Committee further propose to cause
BSI to publish notice, pursuant to Bankruptcy Rule 2002(l), two times no
later than ten business days after entry of the Order Approving the
Disclosure Statement, in THE WASHINGTON POST, THE BALTIMORE SUN and THE WALL
STREET JOURNAL (national edition), of entry of the Order (i) approving the
Disclosure Statement, (ii) setting the dates for the Confirmation Hearing and
filing objections to confirmation, and (iii) establishing the voting dates
and related procedures. CMI also intends to publish such notice by posting it
on its website.
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