<PAGE> 1
FORM 8-K
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
------------------------
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
DATE OF REPORT: SEPTEMBER 15, 1997
GRANT GEOPHYSICAL, INC.
(Exact name of registrant as specified in its charter)
DELAWARE
(State or other jurisdiction of incorporation)
000-18816 84-0766570
(Commission File Number) (I.R.S. Employer Identification Number)
16850 PARK ROW
HOUSTON, TEXAS 77084
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (281) 398-9503
SIGNATURE
Pursuant to the requirements of the Securities and Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned, hereunto duly authorized.
GRANT GEOPHYSICAL, INC.
(Registrant)
Dated: September 19, 1997 By: Larry E. Lenig, Jr.
------------------------------
Larry E. Lenig, Jr.
President and Chief Operating Officer
(Principal Executive Officer)
<PAGE> 2
ITEM 3. BANKRUPTCY OR RECEIVERSHIP - CONFIRMATION OF REORGANIZATION PLAN
(b)(1) The order confirming the Second Amended Plan of Reorganization
for Grant Geophysical, Inc. (the "Plan") was entered by the
United States Bankruptcy Court for the District of Delaware.
(2) The order confirming the Plan was entered by the Court on
September 15, 1997.
(3) The material features of the Plan are incorporated by
reference to the Second Amended Plan of Reorganization of
Grant Geophysical, Inc. filed as Exhibit 2.01 to the Company's
Form 10-Q for the quarter ended June 30, 1997 (file no.
000-18816). The information required by such item is set
forth under the caption "Overview of Plan".
(4) Share Information as of June 30, 1997 is as follows:
<TABLE>
<CAPTION>
RESERVED FOR
FUTURE ISSUANCE IN
RESPECT TO CLAIMS AGGREGATE
SECURITY DESCRIPTION ISSUED OUTSTANDING AND INTERESTS TOTAL SHARES
-------------------- --------- ------------- ------------------ ------------
<S> <C> <C> <C> <C>
$2.4375 convertible 2,300,000 2,300,000 0 *
exchangeable preferred
stock, $.01 par value
Series A convertible 0 0 0 *
preferred stock, $.01
par value
Junior preferred stock, 14,904 14,904 0 *
$100 par value
Serial preferred stock 0 0 0 *
$100 par value
Common stock, 22,206,247 22,206,247 0 *
$.002 par value
</TABLE>
--------------------
* Capital Stock will be canceled, extinguished and/or retired on the
Effective Date.
(5) Financial information of the Company is incorporated by
reference from the Company's Form 10-K for the year ended
December 31, 1996 (file no. 000-18816), and the Company's Form
10-Q for the six months ended June 30, 1997 (file no.
000-18816).
<PAGE> 3
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS
(a) None.
(b) None.
(c) Exhibits:
2.01 Disclosure Statement including Second Amended Plan of
Reorganization of Grant Geophysical, Inc. (filed as
Exhibit 2.01 to the Company's Form 10-Q for the
quarter ended June 30, 1997, file no. 000-18816).
2.02 Clarification to Plan and Disclosure Statement.*
2.03 Technical Modifications to Debtor's Second Amended
Plan of Reorganization.*
2.04 Findings of Fact, Conclusions of Law and Order
Confirming the Second Amended Plan of Reorganization
of Grant Geophysical, Inc. as entered by the
Bankruptcy Court*
99.01 Press Release dated September 15, 1997 regarding the
Confirmation of the Company's Reorganization Plan and
the setting of September 30, 1997 as the Closing
Date.*
_________________
* Filed herewith.
<PAGE> 4
INDEX TO EXHIBITS
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION
- ------ -----------
<S> <C>
2.01 Disclosure Statement including Second Amended Plan of
Reorganization of Grant Geophysical, Inc. (filed as
Exhibit 2.01 to the Company's Form 10-Q for the quarter
ended June 30, 1997, file no. 000-18816).
2.02 Clarification to Plan and Disclosure Statement.*
2.03 Technical Modifications to Debtor's Second Amended
Plan of Reorganization.*
2.04 Findings of Fact, Conclusions of Law and Order
Confirming the Second Amended Plan of Reorganization
of Grant Geophysical, Inc. as entered by the
Bankruptcy Court*
99.01 Press Release dated September 15, 1997 regarding the
Confirmation of the Company's Reorganization Plan and
the setting of September 30, 1997 as the Closing
Date.*
</TABLE>
_________________
* Filed herewith.
<PAGE> 1
IN THE UNITED BANKRUPTCY COURT
FOR THE DISTRICT OF DELAWARE
IN RE: ) CHAPTER 11
GRANT GEOPHYSICAL, INC. ) CASE NO. 96-1936 (HSB)
DEBTOR. )
CLARIFICATION TO PLAN AND DISCLOSURE STATEMENT
This Clarification is submitted in conjunction with the solicitation
of votes on the Second Amended Plan of Reorganization of Grant Geophysical,
Inc. (the "Plan") proposed jointly by Grant Geophysical, Inc. (the "Debtor")
and Elliott Associates, L.P. ("EALP"), pursuant to the Disclosure Statement
with respect to the Plan dated August 5, 1997 (the "Disclosure Statement").
All capitalized terms used herein not specifically defined herein shall have
the meaning ascribed thereto in the Plan.
Article V of the Plan contemplates a Rights Offering pursuant to which
shares of stock of Newco or any successor thereto shall be available for
purchase pursuant to Rights distributed to holders of Interests classified in
classes 7 and 8 of the Plan and Eligible Class 5 Claim Holders. Section
5.2.3.3 of the Plan, as well as Section VII.B of the Disclosure Statement,
states that Newco may be capitalized in any structure determined by EALP, so
long as EALP and Newco remain obligated to pay the Debtor $47.5 million as set
forth in Section 5.1.1.4 of the Plan and to assume certain of the Debtor's
liabilities as set forth in the Plan.
This Clarification is to ensure that, notwithstanding any other
language in the Plan, Disclosure Statement, or in the pro forma balance sheet
for Newco contained in Exhibit 4 to the Disclosure Statement, all creditors and
holders of Interests are adequately informed that (a) no offer made to
<PAGE> 2
purchase the stock or assets of the Debtor or for any other transaction with
the Debtor made by any party other than EALP (an "Alternative Transaction")
provided for any recovery whatsoever to holders of the Debtor's Old Preferred
Stock, Old Common Stock or any other Interests; (b) the Cash to be distributed
under the Plan to holders of Allowed Class 5 Claims exceeds the value of any
proposed distribution to such creditors offered in any Alternative Transaction;
(c) so long as Newco and EALP remain obligated to pay the $47.5 million cash
purchase price for the Debtor's assets as set forth in Section 5.1.1.4 of the
Plan and to assume certain of the Debtor's liabilities as set forth in the
Plan, Newco may be capitalized in any manner determined by EALP in EALP's sole
discretion; and (d) accordingly, the Rights shall provide for holders thereof
to have the right to purchase 48.8% of Newco's common stock in the aggregate
for an aggregate price of $23.75 million in cash, or shares of a successor to
Newco on economically equivalent terms in cash, or shares of a successor to
Newco on economically equivalent terms in cash, but the pricing of such shares
may not correlate to the terms upon which EALP acquires its shares in Newco.
Dated August 11, 1997
/s/ Larry E. Lenig, Jr.
----------------------------------------
Larry E. Lenig, Jr.
President and Chief Operating Officer
of the Debtor
/s/ Paul E. Singer
----------------------------------------
Paul E. Singer
General Partner of Elliott Associates, L.P.
<PAGE> 1
UNITED STATES BANKRUPTCY COURT
FOR THE DISTRICT OF DELAWARE
<TABLE>
<S> <C> <C>
IN RE: ) CASE NO. 96-1936 (HSB)
)
GRANT GEOPHYSICAL, INC., ) CHAPTER 11
)
) CONFIRMATION HEARING DATE:
DEBTOR. ) SEPTEMBER 15, 1997
) 9:30 A.M.
</TABLE>
NOTICE OF TECHNICAL MODIFICATIONS TO
DEBTOR'S SECOND AMENDED PLAN OF REORGANIZATION
TO: THE HONORABLE HELEN S. BALICK,
UNITED STATES BANKRUPTCY JUDGE
Grant Geophysical, Inc., debtor and debtor in possession
herein (the "Debtor"), hereby submits the following Notice of Technical
Modifications to Debtor's Second Amended Plan of Reorganization (the "Notice").
The Notice is submitted pursuant to section 1127 of the Bankruptcy Code, 11
U.S.C. Sections 101-1330 (the "Bankruptcy Code") and Rule 3019 of the Federal
Rules of Bankruptcy Procedure (the "Bankruptcy Rules"). Attached hereto as
Exhibit A are the Modifications to the Second Amended Plan of Reorganization of
Grant Geophysical, Inc. (the "Modifications"). The Debtor believes that the
Modifications are nonmaterial, do not adversely affect any creditor and do not
require reballoting or renoticing of its Second Amended Plan of Reorganization
(the "Plan").1
- -------------
1 Capitalized terms used but not defined herein shall have the respective
meanings ascribed to them by the Plan.
<PAGE> 2
BACKGROUND
1. On the Petition Date, the Debtor commenced its
reorganization case by filing a voluntary petition for relief under chapter 11
of the Bankruptcy Code.
2. The Debtor is continuing in possession of its
property and is operating and managing its business as debtor in possession,
pursuant to sections 1107 and 1108 of the Bankruptcy Code.
3. The Court has jurisdiction over this matter pursuant
to 28 U.S.C. Sections 157 and 1334. This is a core proceeding pursuant to 28
U.S.C. Section 157(b)(2).
4. On July ___, 1997, the Debtor filed the Plan. On
August ___, 1997, this Court approved the Disclosure Statement (the "Disclosure
Statement") filed by the Debtors in conjunction with the Plan.
RELIEF REQUESTED
5. Section 1127(a) of the Bankruptcy Code provides that
a proponent of a plan may modify such plan at any time before confirmation of
the plan, provided that the plan as modified meets the requirements of sections
1122 and 1123 of the Bankruptcy Code. Upon a filing of such modification with
the Court, the plan as modified becomes the plan. 11 U.S.C. 1127(a). If the
court finds after hearing on notice to the trustee, any official committee and
any other entity designated by the court that the proposed modification does
not adversely affect
2
<PAGE> 3
creditors, the plan proponent is not required to resolicit acceptances of the
plan as modified. Bankr. Rule 3019.
6. As a result of discussions between the Debtor, EALP,
the Official Committee and representatives of various creditors, which
discussions concluded subsequent to approval of the Disclosure Statement, minor
modifications to the Plan are necessary to appropriately reflect certain
details of the additional concessions and clarifications made by the Debtor and
EALP for the benefit of creditors. These Modifications (a) clarify the
definition of "Assumed Liabilities" under the Plan, (b) provide for
post-Effective Date interest to be paid on certain Allowed Priority Tax Claims,
(d) clarify that state tax authorities' state law and setoff rights are not
eliminated under the Plan (d) establish a deadline for the Debtor to file
objections to certain Priority Tax Claims, and (e) eliminates references to the
Newco Asset Purchase Agreement.
7. The Modifications clearly meet the requirements of
section 1127(a) of the Bankruptcy Code that the plan as modified meets the
requirements of sections 1122 and 1123. The Modifications do not affect the
classification system or make significant changes to the substantive contents
of the Plan.
8. Furthermore, the Modifications should not require
reballoting or renoticing of the Plan. Section 1127(c) requires that
modifications meet the disclosure requirements of section 1125 of the
Bankruptcy Code. As one court stated, however, "this does not necessarily
mandate the preparation of a new disclosure statement and resolicitation of the
plan. . ." In re American
3
<PAGE> 4
Solar King Corp., 90 B.R. 808 (Bankr. W. D. Tex 1988). See also, In re
Appelgate Property, Ltd., 133 B.R. 827 (Bankr. W.D. Tex. 1991); In re Sacred
Heart Hospital of Norristown, 182 B.R. 413 (Bankr. E.D. Pa. 1995). Congress
agrees. "[I]f the modification were sufficiently minor, the court might
determine that additional disclosure was not required". See H.R. Rep. No. 595,
95th Cong., 1st Sess. 411, (1978), reprinted in 1978, p. 6367; See also, 5
King, Collier on Bankruptcy, 1127.03 (15th ed. 1987) ("[a] new disclosure
statement is not required in every case where a modification is requested").
9. In fact, "Further disclosure only occurs when and to
the extent that . . . the modification materially and adversely impacts parties
who previously voted for the plan." Solar King, 90 B.R. at 823. See also, In
re Cellular Information Systems, Inc., 171 B.R. 926 (Bankr. S.D.N.Y.
1994)("changes are nonmaterial modifications which do not require
resolicitation"). Minor modifications are not considered material. As
Collier's notes, a modification is material if it affects a creditor so that
the creditor, if it knew of the change, would be likely to reconsider its
acceptance. 8 King, Collier on Bankruptcy 3019.03 (15th ed. 1987). A
modification that is not likely to trigger such reconsideration de facto
satisfies section 1125 disclosure requirements. Solar King, 90 B.R. at 824.
10. The Modifications are not material and do not
adversely affect creditors in any way. There is no question that
4
<PAGE> 5
the Modifications do not effect a material and adverse change that would cause
a creditor to reconsider its vote on the Plan. The Newco Asset Purchase
Agreement was eliminated as a Plan Exhibit by mutual agreement of the Debtor,
EALP and the Committee, because its provisions were entirely duplicative with
the provisions of the Plan. Thus, deletion of the Newco Asset Purchase
Agreement does not impact any creditor or equity security holder. The other
modifications affect certain creditors only, and were made with their consent.
Accordingly, the Debtor respectfully requests that this Court enter an order
(a) confirming the Plan, as modified; and (b) granting such other and further
relief as is just and equitable under the circumstances.
Dated: September 12, 1997 Respectfully submitted,
-------------------------------
David S. Kurtz C. Robert Bunch
Timothy R. Pohl KING & PENNINGTON, L.L.P.
Kathleen M. Boege 3100 South Tower, Pennzoil Place
JONES, DAY, REAVIS & POGUE 711 Louisiana Street
77 West Wacker Houston, Texas 77002
Chicago, Illinois 60601-1692 (713) 225-8400
(312) 782-3939
Counsel for the Debtor
Counsel for Elliott Associates, L.P. Laura Davis Jones
Scott D. Cousins
YOUNG, CONAWAY, STARGATT & TAYLOR
Neil B. Glassman Rodney Square North
BAYARD HANDELMAN & MURDOCH, P.A. 11th Floor
902 Market Street, 13th Floor P. O. Box 391
Wilmington, Delaware 19899 Wilmington, Delaware 19899-0391
(302) 655-5000 (302) 571-6600
Co-Counsel for Elliott Associates, L.P. Co-Counsel for the Debtor
Christopher Fuller
SCOTT, DOUGLASS
& MCCONNICO, L.L.P.
600 Congress, Suite 1500
Austin, Texas 78701
(512) 495-6300
Special Counsel for the Debtor
5
<PAGE> 6
EXHIBIT A
TECHNICAL MODIFICATIONS TO
SECOND AMENDED PLAN OF REORGANIZATION
OF GRANT GEOPHYSICAL, INC.
o Section 1.1.7 of the Plan shall be modified to read as follows:
1.1.7 "Assigned Liabilities" means the Claims against, and
liabilities of, the Debtor to Oyo, GECC, Georex, Inc., Sercel, S.A., Nynex and
TIAA as described in Sections 3.2.3, 5.1.2, the Contingent LC Liabilities and
certain unearned revenue and other liabilities and deferred credits on the
Debtor's balance sheet (which are approximately $8.5 million as of April 30,
1997).
o Section 1.1.60 of the Plan shall be deleted in its entirety and deemed
"intentionally omitted." Any and all references in the Plan to the "Newco
Asset Purchase Agreement" are deemed stricken, including Exhibit A to the Plan,
which shall be deemed "intentionally omitted."
o Section 2.2 of the Plan shall be modified to read as follows:
A. PRIORITY TAX CLAIMS
Pursuant to section 1129(a)(9)(C) of the Bankruptcy Code, unless
otherwise agreed by the holder of a Priority Tax Claim and the Debtor or GGI,
as soon as practicable after the Newco Cash Payment Deadline, each holder of an
Allowed Priority Tax Claim shall receive Cash equal to the amount of such
Allowed Priority Tax Claim in full and final satisfaction of such Claims;
provided, however, that the Allowed Priority Tax Claims of the Texas
Comptroller and the States of Louisiana shall bear interest from and after the
Effective Date at the per annum rate of 7.75%.
o Section 5.1.2.1 of the Plan shall be modified to read as follows:
5.1.2 CERTAIN ASSIGNED LIABILITIES
5.1.2.1 Assignment of GECC Master Lease Agreement. Notwithstanding
anything contained in the Plan, the terms of the GECC Lease Assumption
Order are expressly incorporated herein by reference. All obligations
of the Debtor under
1
<PAGE> 7
the GECC Lease Assumption Order and the Lease Documents (as
defined in and modified by the GECC Lease Assumption Order),
including, but not limited to, (i) the Debtor's cure obligations under
the GECC Lease Assumption Order and (ii) the Debtor's obligation to
reimburse GECC for any taxes, fees or assessments due, imposed,
assessed or levied against any equipment by any foreign, federal,
state, or local government or taxing authority including any taxes
arising from the sublease of such equipment to 3-D Geophysical, Inc.,
shall be, on the Effective Date, assigned to and assumed by Newco
pursuant to Section 5.1.1.2 and the Newco Asset Purchase Agreement,
and neither. Neither the Debtor, GGI, nor any funds paid by Newco to
GGI or the Disbursing Agent shall be subject to claims arising
therefrom. Newco agrees to be bound by the terms of the GECC Lease
Assumption Order and Lease Documents, as modified by the GECC Lease
Assumption Order. For purposes of clarification of the plan and
notwithstanding any provision to the contrary hereof, Georex, Inc. and
Sercel, S.A. were additional parties to the GECC Lease Assumption
Order. Nothing contained herein shall affect, expand or restrict any
rights or obligations of any party under the GECC Lease Assumption
Order and Lease Documents, as modified by the GECC Lease Assumption
order.
o Section 5.6.2 of the Plan shall be modified to add new Section
5.6.2.4, which shall read as follows:
Ability of Certain Taxing Authorities to Collect Tax Claims from
Non-Released Parties. Notwithstanding anything in the Plan or Confirmation
Order to the contrary, nothing contained in the Plan or Confirmation Order
shall limit or restrict the ability of the Texas Comptroller of Public Accounts
and the State of Louisiana to collect Priority Tax Claims arising prior to the
Effective Date from persons or entities (other than the Debtor, GGI, Newco or
EALP) otherwise liable for such Priority Tax Claims under applicable
nonbankruptcy law.
o Section 8.1 of the Plan shall be modified to add new Section 8.1.3,
which shall read as follows:
8.1.3 BAR DATE FOR OBJECTIONS TO CERTAIN PRIORITY TAX
CLAIMS
2
<PAGE> 8
Notwithstanding any provision to the contrary in the Plan or the
Confirmation Order, all objections to Priority Tax Claims asserted prior to the
Confirmation Date by the Texas Comptroller or the State of Louisiana shall be
filed not later than 90 days after the Confirmation Date.
o Article XI of the Plan shall be modified to add new Section 11.2,
which shall read as follows:
11.2 ASSERTION OF SETOFF OR RECOUPMENT RIGHTS BY CERTAIN
TAXING AUTHORITIES
Notwithstanding anything in the Plan or Confirmation Order to the
contrary, nothing contained in the Plan or Confirmation Order shall limit or
restrict the ability of the Texas Comptroller of Public Accounts or the State
of Louisiana to assert any setoff or recoupment rights in accordance with
applicable non-bankruptcy law.
3
<PAGE> 1
IN THE UNITED STATES BANKRUPTCY COURT
FOR THE DISTRICT OF DELAWARE
IN RE: ) CHAPTER 11
)
GRANT GEOPHYSICAL, INC., ) CASE NO. 96-1936 (HSB)
)
DEBTOR. )
JUDGMENT PURSUANT TO FEDERAL RULE OF
BANKRUPTCY PROCEDURE 9021
The Court having this day approved and entered the Findings of
Fact, Conclusions of Law and Order Confirming the Second Amended Plan of
Reorganization of Grant Geophysical, Inc. (the "Confirmation Order"), and the
Court having received a request to enter judgment thereon;
IT IS HEREBY ORDERED that final judgment is entered pursuant
to Federal Rule of Bankruptcy Procedure 9021 confirming the Second Amended Plan
of Reorganization of Grant Geophysical, Inc., pursuant to section 1129 of the
Bankruptcy Code, 11 U.S.C. Section 1129, as set forth in the Confirmation
Order.
Dated: Wilmington, Delaware
September 15, 1997
------------------------------
United States Bankruptcy Judge
<PAGE> 2
IN THE UNITED STATES BANKRUPTCY COURT
FOR THE DISTRICT OF DELAWARE
IN RE: ) CHAPTER 11
)
GRANT GEOPHYSICAL, INC., ) CASE NO. 96-1936 (HSB)
)
DEBTOR. )
FINDINGS OF FACT, CONCLUSIONS OF LAW
AND ORDER CONFIRMING THE SECOND
AMENDED PLAN OF REORGANIZATION
OF GRANT GEOPHYSICAL, INC.
<PAGE> 3
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
----
<S> <C> <C>
I. FINDINGS OF FACT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
A. JURISDICTION AND VENUE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
B. COMPLIANCE WITH THE REQUIREMENTS OF SECTION 1129 OF THE BANKRUPTCY CODE . . . . . . . . . . . . . . . . . . 4
1. Section 1129(a)(1) -- Compliance of the Plan with Applicable Provisions of the Bankruptcy Code . . . . 4
a. Sections 1122 and 1123(a)(1)-(4) -- Classification and Treatment of Claims and Interests . . . . 4
b. Section 1123(a)(5) -- Adequate Means for Implementation of the Plan . . . . . . . . . . . . . . . 5
c. Section 1123(a)(6) -- Prohibition Against the Issuance of Nonvoting Equity Securities . . . . . . 6
d. Section 1123(a)(7) -- Selection of Directors and Officers in a Manner Consistent with the
Interests of Creditors and Equity Security Holders and Public Policy . . . . . . . . . . . . . . . 6
e. Section 1123(b)(1)-(2) -- Impairment of Claims and Interests and Assumption, Assumption and
Assignment or Rejection of Executory Contracts and Unexpired Leases . . . . . . . . . . . . . . . 7
f. Section 1123(b)(3) -- Retention, Enforcement and Settlement of Claims Held by the Debtor . . . . . 8
g. Section 1123(b)(5) -- Other Provisions Not Inconsistent with Applicable Provisions of the
Bankruptcy Code . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
2. Section 1129(a)(2) -- Compliance of the Debtor with Applicable Provisions of the Bankruptcy Code . . . 9
3. Section 1129(a)(3) -- Proposal of the Plan in Good Faith . . . . . . . . . . . . . . . . . . . . . . . 9
4. Section 1129(a)(4) -- Bankruptcy Court Approval of Certain Payments as Reasonable . . . . . . . . . . . 10
5. Section 1129(a)(5) -- Disclosure of Identity and Affiliations of Proposed Management, Compensation of
Insiders and Consistency of Management Proposals with the Interests of Creditors and Public Policy . . 10
6. Section 1129(a)(6) -- Approval of Rate Changes . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
7. Section 1129(a)(7) -- Best Interests of Holders of Claims and Interests . . . . . . . . . . . . . . . . 11
8. Section 1129(a)(8) -- Acceptance of the Plan by Each Impaired Class . . . . . . . . . . . . . . . . . . 11
</TABLE>
-i-
<PAGE> 4
<TABLE>
<S> <C>
9. Section 1129(a)(9) -- Treatment of Claims Entitled to Priority Pursuant to Section 507(a) of the
Bankruptcy Code . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
10. Section 1129(a)(10) -- Acceptance By at Least One Impaired Class . . . . . . . . . . . . . . . . . . . 12
11. Section 1129(a)(11) -- Feasibility of the Plan . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
12. Section 1129(a)(12) -- Payment of Bankruptcy Fees . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
13. Section 1129(a)(13) -- Retiree Benefits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
14. Section 1129(b) -- Confirmation of the Plan Over the Nonacceptance of Certain Impaired Classes. . . . . 13
15. Section 1129(d) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
C. NEWCO AND EALP . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
D. SATISFACTION OF CONDITIONS TO CONFIRMATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
II. CONCLUSIONS OF LAW . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
A. JURISDICTION AND VENUE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
B. TECHNICAL MODIFICATIONS TO THE PLAN . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
C. COMPLIANCE WITH SECTION 1129 OF THE BANKRUPTCY CODE . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
D. APPROVAL OF THE SETTLEMENTS AND RELEASES PROVIDED UNDER THE PLAN AND CERTAIN OTHER MATTERS . . . . . . . . . 15
E. AGREEMENTS AND OTHER DOCUMENTS. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
III. ORDER . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
A. CONFIRMATION OF THE PLAN . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
B. EFFECTS OF CONFIRMATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
1. Immediate Effectiveness; Successors and Assigns . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
2. Injunctions and Stays Remain in Effect Until Effective Date . . . . . . . . . . . . . . . . . . . . . . 17
C. MATTERS RELATING TO IMPLEMENTATION OF THE PLAN . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
1. Implementation of the Newco Purchase Transaction . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
2. Corporate Governance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
3. Newco Purchase of Madeleine Claims . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
4. Reasonable Access to Books and Records . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
5. Establishment of Unsecured Creditors Trust, Approval of Trustee . . . . . . . . . . . . . . . . . . . . 18
D. ADDITIONAL ACTIONS IN FURTHERANCE OF THE PLAN . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
E. DISCHARGE, TERMINATION AND INJUNCTION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
1. Certain Liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
2. Setoff of EALP Assigned Claims Against Newco Payment Obligations . . . . . . . . . . . . . . . . . . . 20
F. RETENTION OF JURISDICTION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
G. REFERENCE TO PLAN PROVISIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
H. NOTICE OF ENTRY OF CONFIRMATION ORDER AND ESTABLISHMENT OF ADMINISTRATIVE CLAIM BAR DATES . . . . . . . . . 21
</TABLE>
-ii-
<PAGE> 5
IN THE UNITED STATES BANKRUPTCY COURT
FOR THE DISTRICT OF DELAWARE
IN RE: ) CHAPTER 11
)
GRANT GEOPHYSICAL, INC., ) CASE NO. 96-1936 (HSB)
)
DEBTOR. )
FINDINGS OF FACT, CONCLUSIONS OF LAW
AND ORDER CONFIRMING THE SECOND
AMENDED PLAN OF REORGANIZATION
OF GRANT GEOPHYSICAL, INC.
Grant Geophysical, Inc. (the "Debtor") having proposed the
Second Amended Plan of Reorganization of Grant Geophysical, Inc., dated August
5, 1997 and the Technical Modifications to the Second Amended Plan of
Reorganization of Grant Geophysical, Inc., dated September 12, 1997
(collectively, the "Plan");(1) the Court having entered an Order, dated August
5,1997, Approving Disclosure Statement, Approving Voting and Solicitation
Procedures, and Establishing Date and Procedures for Confirmation
____________________
(1) A copy of the Plan (without the Exhibits thereto) is attached hereto as
Exhibit A and incorporated herein by reference.
Unless otherwise specified, capitalized terms and phrases used herein have
the meanings assigned to them in the Plan (as defined herein). The rules
of interpretation set forth in Section 1.2.1 of the Plan shall apply to
these Findings of Fact, Conclusions of Law and Order (this "Confirmation
Order"). In addition, in accordance with Section 1.1 of the Plan, any term
used in the Plan or this Confirmation Order that is not defined in the Plan
or this Confirmation Order, but that is used in the Bankruptcy Code or the
Bankruptcy Rules, shall have the meaning assigned to that term in the
Bankruptcy Code or the Bankruptcy Rules. In accordance with Section III.A
of this Confirmation Order, if there is any direct conflict between the
terms of the Plan and the terms of this Confirmation Order, the terms of
this Confirmation Order shall control.
<PAGE> 6
Hearing (the "Disclosure Statement Order"); the Declaration of Logan & Company,
Inc. Certifying (i) the Methodology for the Tabulation of and (ii) Results of
Voting with Respect to the Debtor's Second Amended Plan of Reorganization (the
"Voting Declaration") having been filed on September 15, 1997; the Court having
established, September 15, 1997, at 9:30 a.m. as the date and time of the
hearing pursuant to section 1129 of the Bankruptcy Code to consider Confirmation
of the Plan (the "Confirmation Hearing"); the Certificate of Logan & Company,
Inc. ("Logan") having been filed with respect to the mailing of the notice of
the Confirmation Hearing (the "Mailing Declaration") with the Court on August
18, 1997 in accordance with the Disclosure Statement Order; an Affidavit of
Publication by The Wall Street Journal (the "Affidavit of Publication") having
been filed with respect to the publication of notice of the Confirmation Hearing
in such publication in accordance with the Disclosure Statement Order; the Court
having reviewed the Plan, the Disclosure Statement, the Disclosure Statement
Order, the Voting Declaration, the Mailing Declaration, the Affidavit of
Publication, and all statements and comments regarding, Confirmation, as
reflected in the record at the Confirmation Hearing; objections to Confirmation
having been withdrawn on the record or overruled; the Court having heard the
statements of counsel in support of Confirmation at the Confirmation Hearing;
the Court having considered all testimony presented and evidence admitted at the
Confirmation Hearing; the Court having taken judicial notice of the papers and
pleadings on file in the Chapter 11 Case; and the Court finding that (i) notice
2
<PAGE> 7
of the Confirmation Hearing and the opportunity of any party in interest to
object to Confirmation were adequate and appropriate, in accordance with
Bankruptcy Rule 2002(b), as to all parties to be affected by the Plan and the
transactions contemplated thereby and (ii) the legal and factual bases set forth
at the Confirmation Hearing and as set forth in the Confirmation Order establish
just cause for the relief granted herein; the Court hereby makes the following
Findings of Fact, Conclusions of Law and Order.(2)
I. FINDINGS OF FACT.
A. JURISDICTION AND VENUE.
On the Petition Date, the Debtor commenced the Chapter 11 Case by filing
a voluntary petition for relief under chapter 11 of the Bankruptcy Code. The
Debtor was and is qualified to be a debtor under section 109(a) of the
Bankruptcy Code. The Debtor's state of incorporation is Delaware. Accordingly,
venue in the District of Delaware is proper as of the Petition Date and
continues to be proper.
____________________
(2) This Confirmation Order constitutes the Court's findings of fact and
conclusions of law under Fed. R. Civ. P. 52, as made applicable by
Bankruptcy Rules 7052 and 9014. Any finding of fact shall constitute a
finding of fact even if it is stated as a conclusion of law, and any
conclusion of law shall constitute a conclusion of law even if it is stated
as a finding of fact.
3
<PAGE> 8
B. COMPLIANCE WITH THE REQUIREMENTS OF SECTION 1129 OF THE BANKRUPTCY
CODE.
1. SECTION 1129(a)(1) -- COMPLIANCE OF THE PLAN WITH APPLICABLE
PROVISIONS OF THE BANKRUPTCY CODE.
The Plan complies with all applicable provisions of the Bankruptcy
Code, as required by section 1129(a)(1) of the Bankruptcy Code, including,
without limitation, sections 1122 and 1123.
a. SECTIONS 1122 AND 1123(a)(1)-(4) -- CLASSIFICATION AND
TREATMENT OF CLAIMS AND INTERESTS.
Pursuant to sections 1122(a) and 1123(a)(1) of the Bankruptcy Code,
Article III of the Plan designates Classes of Claims and Interests, other than
Administrative Claims and Priority Tax Claims.(3) As required by section
1122(a), each Class of Claims and Interests contains only Claims or Interests
that are substantially similar to the other Claims or Interests within that
Class. Claims are classified separately in Classes 1 through 6 and Class 11.
Interests are classified separately in Classes 7 through 10. Such
classification is proper under section 1122(a) because such Claims and Interests
have differing rights among each other and against the assets of the Debtor or
differing interests in the Debtor or its reorganization. In accordance with
section 1122(b) of the Bankruptcy Code, the Plan provides for Class 6 to be a
Class of General Unsecured Claims of $500 or less. This Class is reasonable and
necessary for administrative convenience. Pursuant to sections 1123(a)(2) and
(3) of the Bankruptcy Code,
____________________
(3) Classes of Administrative Claims and Priority Tax Claims are not required
to be designated pursuant to section 1123(a)(1) of the Bankruptcy Code.
4
<PAGE> 9
Article III of the Plan specifies all Classes of Claims and Interests that are
not impaired under the Plan and specifies the treatment of all Classes of Claims
and Interests that are impaired under the Plan. Pursuant to section 1123(a)(4)
of the Bankruptcy Code, Article III of the Plan also provides the same treatment
for each Claim or Interest within a particular Class, unless the holder of a
Claim or Interest agrees to less favorable treatment of its Claim or Interest.
b. SECTION 1123(a)(5) -- ADEQUATE MEANS FOR IMPLEMENTATION OF THE
PLAN.
(i) Article V and various other provisions of the Plan
provide adequate means for the Plan's implementation. Those provisions relate
to, among other things: (i) the vesting of the Debtor's property in Newco; (ii)
the assignment of certain liabilities of the Debtor to Newco; (iii) the
cancellation of the Capital Stock; (iv) distributions to holders of Allowed
Claims and certain Allowed Interests in full satisfaction of such allowed Claims
and Allowed Interests; (v) the issuance and distribution of Rights to purchase
Newco Common Stock pursuant to terms and conditions set forth in the Plan; (vi)
the adoption or amendment and restatement of articles of incorporation, bylaws
or other similar constituent documents for Newco; (vii) the selection of
officers and directors of Newco; (viii) the cancellation or modification of
certain existing liens on property of the Debtor's estate; and (ix) execution
by the Debtor or Newco of a number of agreements, including the Newco Common
Stock Registration Rights Agreement and the New Credit Facility Documents.
5
<PAGE> 10
(ii) The Debtor, EALP and the Official Committee have
concluded that the provisions of Article V of the Plan are sufficient to provide
for the implementation of the Newco purchase and payment obligations set forth
therein. Such parties thus have concluded that entry into the Newco Asset
Purchase Agreement referenced in the Plan is not necessary. Accordingly, the
Debtor shall not enter into the Newco Asset Purchase Agreement.
c. SECTION 1123(a)(6) -- PROHIBITION AGAINST THE ISSUANCE OF
NONVOTING EQUITY SECURITIES.
Section 5.4.1 of the Plan provides for the inclusion in the Newco
Certificate of Incorporation of a provision prohibiting the issuance of
nonvoting equity securities to the extent required by section 1123(a) of the
Bankruptcy Code. As of the Effective Date, Newco will have outstanding only
one class of capital stock with voting power. Accordingly, the Plan satisfies
the requirement of section 1123(a)(6) of the Bankruptcy Code that a plan of
reorganization provide for an appropriate distribution of voting power among
the classes of securities possessing voting power.
d. SECTION 1123(a)(7) -- SELECTION OF DIRECTORS AND OFFICERS IN
A MANNER CONSISTENT WITH THE INTERESTS OF CREDITORS AND EQUITY
SECURITY HOLDERS AND PUBLIC POLICY.
(i) The Plan provides that the initial directors of Newco
will be designated by EALP prior to the Confirmation Hearing. Such initial
directors will be the four directors designated in the Disclosure Statement.
The members of the initial board of directors will serve from and after the
Effective Date until their successors are duly elected or appointed and
6
<PAGE> 11
qualified or until their earlier death, resignation, retirement,
disqualification or removal in accordance with the terms of the Newco
Certificate of Incorporation and Newco Bylaws.
(ii) The Plan provides that (a) the initial chief executive
officer and chairman of Newco shall be designated by EALP and (b) the other
officers of Newco will be identified, prior to the Confirmation Hearing. In
accordance with such designation, the initial President and Chief Executive
Officer of Newco will be Larry E. Lenig, Jr. Each executive officer of Newco
will serve from and after the Effective Date until his or her successor is
elected or appointed and qualified in accordance with the terms of the Newco
Certificate of Incorporation and Newco Bylaws, any applicable employment
agreement and applicable corporation or similar law, or until the earlier death,
resignation, retirement, disqualification or removal of any such officer.
(iii) The initial officers and directors of Newco have been
selected in a manner consistent with the interests of the holders of Claims and
Interests and public policy.
e. SECTION 1123(b)(1)-(2) -- IMPAIRMENT OF CLAIMS AND INTERESTS
AND ASSUMPTION, ASSUMPTION AND ASSIGNMENT OR REJECTION OF
EXECUTORY CONTRACTS AND UNEXPIRED LEASES.
Article III of the Plan impairs or leaves unimpaired, as the case may
be, each Class of Claims and Interests. In accordance with section 1123(b)(2)
of the Bankruptcy Code, Article VI of the Plan provides for the assumption,
assumption and assignment or rejection of the executory contracts and unexpired
leases of the Debtor that have not been previously assumed, assumed and assigned
or rejected pursuant to section 365 of the
7
<PAGE> 12
Bankruptcy Code and appropriate authorizing orders of the Court and that are
not the subject of any motion regarding assumption, assumption and assignment
or rejection that is pending as of the Confirmation Date.
f. SECTION 1123(b)(3) -- RETENTION, ENFORCEMENT AND SETTLEMENT OF
CLAIMS HELD BY THE DEBTOR.
Section 5.1.1.1 of the Plan provides that, except as otherwise
provided in the Plan, Newco will purchase any claims and rights of action not
released pursuant to Sections 5.6.1.1 and 5.6.1.2 of the Plan. Newco or its
successors may pursue such retained claims or rights of action as appropriate,
in accordance with the best interests of Newco or the successor holding such
claims or rights of action.
g. SECTION 1123(b)(5) -- OTHER PROVISIONS NOT INCONSISTENT WITH
APPLICABLE PROVISIONS OF THE BANKRUPTCY CODE.
The Plan includes additional appropriate provisions that are not
inconsistent with applicable provisions of the Bankruptcy Code, including: (i)
the provisions of Article VI of the Plan governing the assumption, assumption
and assignment or rejection of executory contracts and unexpired leases; (ii)
the provisions of Article VII of the Plan governing distributions on account of
Allowed Claims and Interests, particularly as to the timing and calculation of
amounts to be distributed; (iii) the provisions of Article VIII of the Plan
establishing procedures for resolving Disputed Claims and making distributions
on account of such Disputed Claims once resolved; and (iv) the provisions of
Article XII of the Plan regarding retention of jurisdiction by the
8
<PAGE> 13
Bankruptcy Court over certain matters subsequent to the Effective Date.
2. SECTION 1129(a)(2) -- COMPLIANCE OF THE DEBTOR WITH APPLICABLE
PROVISIONS OF THE BANKRUPTCY CODE.
The Debtor has complied with all applicable provisions of the
Bankruptcy Code, as required by section 1129(a)(2) of the Bankruptcy Code,
including, without limitation, sections 1125 and 1126 of the Bankruptcy Code and
Bankruptcy Rules 3017 and 3018. The Disclosure Statement and the procedures by
which the ballots for acceptance or rejection of the Plan were solicited and
tabulated were fair, properly conducted and in accordance with sections 1125 and
1126 of the Bankruptcy Code, Bankruptcy Rules 3017 and 3018 and the Disclosure
Statement Order. The Debtor, EALP, the Official Committee and its members and
their respective directors, officers, employees, agents and professionals, as
applicable, have acted in "good faith," within the meaning of section 1125(e) of
the Bankruptcy Code.
3. SECTION 1129(a)(3) -- PROPOSAL OF THE PLAN IN GOOD FAITH.
The Debtor and EALP proposed the Plan in good faith and not by any
means forbidden by law. In determining that the Plan has been proposed in good
faith, the Court has examined the totality of the circumstances surrounding the
formulation of the Plan. Based on the uncontroverted evidence presented at the
Confirmation Hearing, the Court finds and concludes that the Plan has been
proposed with the legitimate and honest purpose of reorganizing the business
affairs of the Debtor and maximizing the returns available to creditors and
Interest holders. Moreover,
9
<PAGE> 14
the Plan itself and the arms-length negotiations among the Debtor, EALP, the
Official Committee and the Debtor's other major creditor constituencies leading
to the Plan's formulation provide independent evidence of the good faith of the
Debtor and EALP in proposing the Plan.
4. SECTION 1129(a)(4) -- BANKRUPTCY COURT APPROVAL OF CERTAIN PAYMENTS
AS REASONABLE.
Section 2.1.3 of the Plan provides that Professionals or other
entities requesting compensation or reimbursement of expenses pursuant to
sections 327, 328, 330, 331, 503(b) and 1103 of the Bankruptcy Code for services
rendered before the Effective Date (including compensation requested pursuant to
section 503(b)(3) and (4) of the Bankruptcy Code by any Professional or other
entity for making a substantial contribution in any Reorganization Case) must
file and serve an application for final allowance of compensation and
reimbursement of expenses no later than 30 days after the Effective Date, which
the Court will review for reasonableness under sections 328 and 330 of the
Bankruptcy Code and any applicable case law.
5. SECTION 1129(a)(5) -- DISCLOSURE OF IDENTITY AND AFFILIATIONS OF
PROPOSED MANAGEMENT, COMPENSATION OF INSIDERS AND CONSISTENCY OF
MANAGEMENT PROPOSALS WITH THE INTERESTS OF CREDITORS AND PUBLIC
POLICY.
The Debtor has disclosed the identity and affiliations of the
proposed directors and officers of Newco and the identity and the compensation
of insiders who will be employed or retained by Newco. The directors and
executive officers were chosen by the Debtor and EALP in a manner consistent
with the interests of the holders of Claims and Interests and with public
policy.
10
<PAGE> 15
6. SECTION 1129(a)(6) -- APPROVAL OF RATE CHANGES.
The Debtor's current businesses do not involve the establishment of
rates over which any regulatory commission has or will have jurisdiction after
Confirmation.
7. SECTION 1129(a)(7) -- BEST INTERESTS OF HOLDERS OF CLAIMS AND
INTERESTS.
With respect to each impaired Class of Claims or Interests for the
Debtor, each holder of a Claim or Interest in such impaired Class has accepted
the Plan or, as demonstrated by the liquidation analysis appended to and
referenced in the Disclosure Statement and other evidence presented at the
Confirmation Hearing, will receive or retain under the Plan on account of such
Claim or Interest property of a value, as of the Effective Date, that is not
less than the amount such holder would receive or retain if the Debtor were
liquidated on the Effective Date under chapter 7 of the Bankruptcy Code.
8. SECTION 1129(a)(8) -- ACCEPTANCE OF THE PLAN BY EACH IMPAIRED CLASS.
Pursuant to sections 1124 and 1126 of the Bankruptcy Code (a) as
indicated in Article III of the Plan, Classes 1, 2 and 4 are Classes of
unimpaired Claims and (b) as indicated in the Voting Declaration, all impaired
Classes voting have accepted the Plan. Because the Plan provides that the
holders of Allowed Claims and Interests in Classes 9, 10 and 11 will not receive
or retain any property on account of these Claims and Interests, these Classes
are deemed not to have accepted the Plan pursuant to section 1126(g) of the
Bankruptcy Code. Notwithstanding the lack of compliance with section 1129(a)(8)
of the Bankruptcy Code with
11
<PAGE> 16
respect to Classes 9, 10 and 11, the Plan is confirmable because, as is more
fully set forth in Section I.B.14 of this Confirmation Order, the Plan satisfies
section 1129(b)(1) of the Bankruptcy Code with respect to such Classes.
9. SECTION 1129(a)(9) -- TREATMENT OF CLAIMS ENTITLED TO PRIORITY
PURSUANT TO SECTION 507(A) OF THE BANKRUPTCY CODE.
The Plan provides for treatment of Administrative Claims, Priority
Tax Claims and Claims entitled to priority pursuant to sections 507(a)(3)-(6)
of the Bankruptcy Code in the manner required by section 1129(a)(9) of the
Bankruptcy Code.
10. SECTION 1129(a)(10) -- ACCEPTANCE BY AT LEAST ONE IMPAIRED CLASS.
As indicated in the Voting Declaration and as reflected in the record
of the Confirmation Hearing, at least one Class of Claims or Interests that is
impaired under the Plan has accepted the Plan, determined without including any
acceptance of the Plan by any insider.
11. SECTION 1129(a)(11) -- FEASIBILITY OF THE PLAN.
While the Debtor's businesses are highly competitive and while it is
impossible to predict with certainty the precise future profitability of the
industry, Confirmation is not likely to be followed by the liquidation of, or
the need for further financial reorganization of, the Debtor, Newco or any
successor to Newco under the Plan. Based on the testimony presented at the
Confirmation Hearing, upon the Effective Date, the fair value of Newco's assets
will exceed its liabilities, and Newco will have sufficient cash flow and
capital resources to pay its liabilities
12
<PAGE> 17
as they become due and to satisfy the company's capital needs for the conduct
of its business.
12. SECTION 1129(a)(12) -- PAYMENT OF BANKRUPTCY FEES.
Section 13.2 of the Plan provides that, on or before the Effective
Date, fees payable pursuant to section 1930 of title 28 of the United States
Code, 28 U.S.C. Section 1930, will be paid.
13. SECTION 1129(a)(13) -- RETIREE BENEFITS.
The Plan provides that, from and after the Effective Date, Newco will
be obligated to pay retiree benefits (as defined in section 1114(a) of the
Bankruptcy Code) in accordance with the terms of the retiree benefit plans, if
any, governing the payment of such benefits, subject to any rights to amend,
modify or terminate such retiree benefits under the terms of the applicable
retiree benefits plan or applicable nonbankruptcy law.
14. SECTION 1129(b) -- CONFIRMATION OF THE PLAN OVER THE NONACCEPTANCE
OF CERTAIN IMPAIRED CLASSES.
Pursuant to section 1129(b)(1) of the Bankruptcy Code, the Plan is
confirmable notwithstanding that the Claims and Interests in Classes 9, 10 and
11 are impaired and that such Classes are deemed to have rejected the Plan
pursuant to section 1126(g) of the Bankruptcy Code. The Plan does not
discriminate unfairly and is fair and equitable with respect to the holders of
Claims and Interests in Classes 9, 10 and 11. No holder of Claims or Interests
junior to the Claims and Interests classified in Classes 9, 10 and 11 will
receive or retain any property under the Plan on account of such junior Claims
or Interests and no Class of Claims or Interests senior to Classes 9,
13
<PAGE> 18
10 or 11 is receiving more than full payment on account of the Claims or
Interests in such Class.
15. SECTION 1129(d).
The primary purpose of the Plan is not avoidance of taxes or
avoidance of the requirements of Section 5 of the Securities Act, and there has
been no objection filed by any governmental unit asserting such avoidance.
C. NEWCO AND EALP.
The transactions between Newco and the Debtor contemplated by the
Plan have not been entered into fraudulently or for a fraudulent purpose and do
not amount to a consolidation, merger or de facto merger of the Debtor into
Newco. Neither Newco nor EALP is a continuation or other successor of the
Debtor. Neither Newco nor EALP has expressly or impliedly assumed any debts,
liabilities, obligations or commitments of the Debtor or any of the Debtor's
direct or indirect subsidiaries other than as explicitly set forth in the Plan.
D. SATISFACTION OF CONDITIONS TO CONFIRMATION.
Each of the conditions precedent to the entry of this Confirmation
Order, as set forth in Section 9.1 of the Plan, has been satisfied.
II. CONCLUSIONS OF LAW.
A. JURISDICTION AND VENUE.
As set forth in Section I.A. of this Confirmation Order, this Court
has jurisdiction over the Chapter 11 Case and this core proceeding and venue in
the District of Delaware is proper.
14
<PAGE> 19
B. TECHNICAL MODIFICATIONS TO THE PLAN.
The Technical Modifications to the Debtor's Second Amended Plan of
Reorganization, dated September 12, 1997 (the "Modifications"): (1) comply in
all respects with section 1127 of the Bankruptcy Code, Bankruptcy Rule 3019 and
all other provisions of the Bankruptcy Code; and (2) do not adversely change the
treatment under the Plan of any Claims or Interests. In light of the technical
or immaterial nature of each of the Modifications, no additional disclosure
under section 1125 of the Bankruptcy Code is required with respect to the
Modifications. Accordingly, pursuant to section 1127 of the Bankruptcy Code and
Bankruptcy Rule 3019, all holders of Claims and Interests that have accepted
or are conclusively presumed to have accepted the Plan as filed on August 5,
1997 are deemed to have accepted the Modifications thereto.
C. COMPLIANCE WITH SECTION 1129 OF THE BANKRUPTCY CODE.
As set forth in Section I.B of this Confirmation Order, the Plan
complies in all respects with the applicable requirements of section 1129 of the
Bankruptcy Code.
D. APPROVAL OF THE SETTLEMENTS AND RELEASES PROVIDED UNDER THE PLAN AND
CERTAIN OTHER MATTERS.
Pursuant to section 1123(b)(3) of the Bankruptcy Code and Bankruptcy
Rule 9019(a): the settlements, compromises, discharges, releases and
injunctions set forth in the Plan, including, without limitation, the
settlements, compromises, discharges, releases and injunctions set forth in
Article V of the Plan, hereby are approved as an integral part of the Plan and
are
15
<PAGE> 20
fair, equitable, reasonable and in the best interests of the Debtor, its estate,
GGI and holders of Claims and Interests.
E. AGREEMENTS AND OTHER DOCUMENTS.
The Debtor has disclosed all material facts regarding: Newco's
certificate of incorporation and bylaws, the selection of Newco's directors and
officers, the Newco Credit Facility and the content, adoption, execution and
delivery of all contracts, leases, instruments, releases and other agreements
related to the foregoing; the adoption, execution and implementation of
employment, retirement and indemnification agreements, incentive compensation
programs, welfare benefit plans and other employee plans and related agreements;
and the other matters provided for under the Plan involving corporate action to
be taken by or required of the Debtor, GGI and Newco. Entry into the documents
referred to in the immediately preceding sentence in substantially the form set
forth in the Exhibits to the Plan is hereby approved. Such documents may be
amended or modified prior to the Effective Date with the consent of the Debtor,
EALP and the Creditors' Committee.
III. ORDER.
ACCORDINGLY, THE COURT HEREBY ORDERS, ADJUDGES AND DECREES THAT:
A. CONFIRMATION OF THE PLAN.
The Plan hereby is confirmed pursuant to section 1129 of the
Bankruptcy Code; provided, however, that if there is any direct conflict
between the terms of the Plan and the terms of this Confirmation Order, the
terms of this Confirmation Order will
16
<PAGE> 21
control. The Modifications hereby are deemed expressly incorporated by
reference.
B. EFFECTS OF CONFIRMATION.
1. IMMEDIATE EFFECTIVENESS; SUCCESSORS AND ASSIGNS.
Subject to the provisions of Section 9.2 of the Plan, immediately
upon the entry of this Confirmation Order, the terms of the Plan shall be, and
hereby are, deemed binding upon the Proponents, any and all holders of Claims
or Interests (irrespective of whether such Claims or Interests are impaired
under the Plan or whether the holders of such Claims or Interests accepted,
rejected or are deemed to have accepted or rejected the Plan), any and all
non-Debtor parties to executory contracts and unexpired leases with any of the
Debtor and any and all entities who are parties to or are subject to the
settlements, compromises, releases, discharges and injunctions set forth in the
Plan and the respective heirs, executors, administrators, successors or
assigns, if any, of any of the foregoing.
2. INJUNCTIONS AND STAYS REMAIN IN EFFECT UNTIL EFFECTIVE DATE.
All injunctions and stays pursuant to sections 105 and 362 of the
Bankruptcy Code or otherwise shall remain in full force and effect until the
Effective Date of the Plan, except that nothing herein shall bar the filing of
financing documents or the taking of such other actions as are necessary to
effectuate the transactions contemplated by the Plan or by this Confirmation
Order.
17
<PAGE> 22
C. MATTERS RELATING TO IMPLEMENTATION OF THE PLAN.
1. IMPLEMENTATION OF THE NEWCO PURCHASE TRANSACTION.
The Debtor shall take all such actions as may be necessary or
appropriate to effect the transactions contemplated by the Plan on the terms
and subject to the conditions set forth in the Plan.
2. CORPORATE GOVERNANCE.
As of the Effective Date, the Newco Certificate of
Incorporation and the Newco Bylaws shall be substantially in the forms of
Exhibits B and C, respectively, to the Plan. After the Effective Date, Newco
may amend and restate the Newco Certificate of Incorporation or Newco Bylaws as
permitted by applicable law.
3. NEWCO PURCHASE OF MADELEINE CLAIMS.
On or before the Effective Date, EALP (or an affiliate of EALP)
shall purchase the Claims of Madeleine, L.L.C., pursuant to the terms and
conditions agreed to between such parties.
4. REASONABLE ACCESS TO BOOKS AND RECORDS.
In order to permit the discharge of their duties by the Official
Committee and the Unsecured Creditors Trustee, GGI and Newco shall afford the
Official Committee and the Unsecured Creditors Trust reasonable access to the
books and records of the Debtor, GGI and Newco.
5. ESTABLISHMENT OF UNSECURED CREDITORS TRUST, APPROVAL OF TRUSTEE AND
RELIANCE BY TRUSTEE ON DOCUMENTS, MISTAKES OR ADVICE OF COUNSEL.
The establishment of the Unsecured Creditors Trust pursuant to the
GGI Creditors Trust and Disbursement Agreement, and the designation of Stephen
Fisher as the trustee thereunder
18
<PAGE> 23
(the "Trustee") hereby are approved. Except as otherwise provided in the GGI
Creditors Trust and Disbursement Agreement, the Trustee may rely and shall be
protected from liability for acting upon any resolution, certificate, statement,
instrument, opinion, report, notice, request, consent, order or other paper or
document believed by him to be genuine and to have been presented by an
authorized party, including without limitation the Voting Declaration and the
tally of elections made on creditor ballots. Also, the Trustee is not liable
if he acts based on a mistake of fact before he has actual knowledge of an
event. The Trustee shall not be liable for any action taken or suffered by
him in reasonably relying upon the advice of counsel or other professionals
engaged by him in accordance with the GGI Creditors Trust and Disbursement
Agreement.
D. ADDITIONAL ACTIONS IN FURTHERANCE OF THE PLAN.
The approvals and authorizations specifically set forth in Section
5.4.4 of the Plan or this Confirmation Order are nonexclusive and are not
intended to limit the authority of the Debtor or Newco, subject to the prior
consent of the Official Committee, which consent shall not be unreasonably
withheld. To the extent that, under applicable nonbankruptcy law, any of the
foregoing actions would otherwise require the consent or approval of the
directors or stockholders of the Debtor or Newco, this Confirmation Order will
constitute such consent or approval, and such actions shall be, and hereby are,
deemed to have been taken by unanimous action of the directors and stockholders
of the Debtor or Newco.
19
<PAGE> 24
E. DISCHARGE, TERMINATION AND INJUNCTION.
1. CERTAIN LIABILITIES.
Newco shall not be liable for any of the debts, liabilities,
obligations or commitments of the Debtor or any of the Debtor's direct or
indirect subsidiaries, including, without limitation, any debt, liability,
obligation or commitment which may be alleged under any theory of successor
liability, other than as explicitly set forth in the Plan.
2. SETOFF OF EALP ASSIGNED CLAIMS AGAINST NEWCO PAYMENT OBLIGATIONS.
If EALP assigns to Newco any Administrative Claims (including,
without limitation, Claims arising under (a) that certain Term Sheet dated
March 14, 1997 between the Debtor and EALP and (b) the Order Under Section
363(b) of the Bankruptcy Code Approving Break-Up Fee Protections in Connection
with Proposal for Joint Plan of Reorganization dated April 9, 1997), Secured
Claims or Priority Claims that EALP holds or has purchased from the holders of
such Claims (collectively, the "EALP Assigned Claims"), Newco hereby is
authorized to set off the aggregate Allowed Amount of the EALP Assigned Claims
against the amount of Cash to be paid by Newco to GGI pursuant to Section
5.1.1.4 of the Plan; provided, however, that such setoff shall have no adverse
economic effect on the Debtor, its Estate or GGI. Nothing contained herein
shall limit the right of any party in interest, subject to the terms and
conditions set forth in the Plan, to object to the allowance of any EALP
Assigned Claim.
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F. RETENTION OF JURISDICTION.
Notwithstanding the entry of this Confirmation Order or the
occurrence of the Effective Date, the Court will retain such jurisdiction over
the Reorganization Case as is legally permissible, including jurisdiction over
the matters set forth in Article XII of the Plan, which provisions are
incorporated herein by reference.
G. REFERENCE TO PLAN PROVISIONS.
The failure to reference any particular provision of the Plan
in this Confirmation Order shall have no effect on the binding effect,
enforceability or legality of such provisions and such provisions shall have
the same binding effect, enforceability or legality as every other provision of
the Plan.
H. NOTICE OF ENTRY OF CONFIRMATION ORDER AND ESTABLISHMENT OF ADMINISTRATIVE
CLAIM BAR DATES.
a. Pursuant to Bankruptcy Rules 2002(f)(7) and 3020(c), the
Debtor hereby is directed to serve a notice of the entry of this Confirmation
Order and the establishment of bar dates for certain Administrative Claims
hereunder, substantially in the form of Exhibit B attached hereto and
incorporated herein by reference (the "Confirmation Notice"), on all holders of
Claims or Interests that received notice of the Confirmation Hearing, no later
than 14 days after the Confirmation Date; provided, however, that the Debtor
shall be obligated to serve the Confirmation Notice only on the record holders
of such Claims or Interests as of the close of business on the Business Day
immediately preceding the Effective Date.
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<PAGE> 26
b. The Debtor hereby is directed to publish the Confirmation
Notice once in The Wall Street Journal (national edition) no later than 14 days
after the Confirmation Date.
IT IS SO ORDERED.
Dated: Wilmington, Delaware
September 15, 1997
BY ORDER OF THE COURT
/s/ Helen S. Balick
---------------------------------------
Helen S. Balick
United States Bankruptcy Judge
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<PAGE> 27
EXHIBIT A
23
<PAGE> 28
EXHIBIT B
24
<PAGE> 29
IN THE UNITED STATES BANKRUPTCY COURT
FOR THE DISTRICT OF DELAWARE
IN RE: ) CHAPTER 11
)
GRANT GEOPHYSICAL, INC., ) CASE NO. 96-1936 (HSB)
)
DEBTOR. )
NOTICE OF ENTRY OF CONFIRMATION ORDER
TO ALL HOLDERS OF CLAIMS AGAINST AND INTERESTS IN GRANT GEOPHYSICAL, INC. (THE
"DEBTOR"), AND ALL OTHER PARTIES IN INTEREST, PLEASE TAKE NOTICE THAT:
CONFIRMATION OF THE PLAN
By Order dated September 15, 1997 (the "Confirmation Order"), this
Court has confirmed the Debtor's Second Amended Plan of Reorganization (as
modified, the "Plan"). Unless otherwise defined in this Notice, capitalized
terms and phrases used herein have the meanings ascribed thereto in the Plan
and the Confirmation Order.
DISCHARGE AND RELEASE
Except as otherwise provided in the Plan or the Confirmation Order,
the rights afforded under the Plan and the treatment of Claims and Interests
under the Plan shall be in exchange for and in full and complete satisfaction,
discharge and release of all Claims and satisfaction or termination of all
Interests, including any interest accrued on Claims from and after December 6,
1996. Except as otherwise provided in the Plan or the Confirmation Order, the
Debtor is, as of the Effective Date, discharged from all Claims or other debts
that arose before the Effective Date, and all debts of the kind specified in
sections 502(g), 502(h) or 502(i) of the Bankruptcy Code, whether or not (a) a
proof of Claim based on such debt is filed or deemed filed pursuant to section
501 of the Bankruptcy Code, (b) a Claim based on such debt is allowed pursuant
to section 502 of the Bankruptcy Code or (c) the holder of a Claim based on
such debt has accepted the Plan. In addition, except as otherwise provided in
the Plan or Confirmation Order, entry of the Confirmation Order is deemed to
satisfy or terminate all Interests and other rights of equity security holders
in the Debtor. In accordance with the foregoing, except as provided in the
Plan or the Confirmation Order, any judgment obtained against the Debtor at any
time, to the extent that such judgment relates to a discharged Claim or
satisfied or terminated Interest, is void.
<PAGE> 30
INJUNCTION
Except as provided in the Plan or Confirmation Order, as of the
Effective Date, all entities that have held, currently hold or may hold a Claim
or other debt or liability that is discharged or an Interest or other right of
an equity security holder that is terminated pursuant to the terms of the Plan
are permanently enjoined from taking any of the following actions on account of
any such discharged Claims, debts or liabilities or terminated Interests or
rights: (a) commencing or continuing in any manner any action or other
proceeding against the Debtor, GGI, the Official Committee, Newco or EALP or
their respective property; (b) enforcing, attaching, collecting or recovering
in any manner any judgment, award, decree or order against the Debtor, GGI, the
Official Committee, Newco or their respective property; (c) creating,
perfecting or enforcing any lien or encumbrance against the Debtor, GGI, the
Official Committee, Newco or their respective property; and (d) commencing or
continuing any action, in any manner, in any place that does not comply with or
is inconsistent with the provisions of the Plan and the Confirmation Order.
As of the Effective Date, except as otherwise provided in the Plan
or the Confirmation Order, all entities that have held, currently hold or may
hold a claim, demand, debt, right, cause of action or liability that is
released pursuant to the Plan are permanently enjoined from taking any of the
following actions on account of such released claims, demands, debts, rights,
causes of action or liabilities: (a) commencing or continuing in any manner
any action or other proceeding; (b) enforcing, attaching, collecting or
recovering in any manner any judgment, award, decree or order; (c) creating,
perfecting or enforcing any lien or encumbrance; and (d) commencing or
continuing any action, in any manner, in any place that does not comply with or
is inconsistent with the provisions of the Plan and the Confirmation Order.
BAR DATES
Unless previously filed (including Claims filed asserting status of
Administrative Claims, and except as provided below and in Section 2.1.3 of the
Plan, requests for payment of Administrative Claims must be filed and served on
GGI and the Official Committee no later than 30 days after the Effective Date.
Holders of Administrative Claims that are required to file and serve a request
for payment of such Claims and that do not file and serve a request by the
applicable Bar Date shall be forever barred from asserting such Claims against
the Debtor, GGI, Newco or their respective property. Objections to such
requests must be filed and served on GGI and the requesting party not later
than 30 days after the date on which the applicable request for payment was
filed.
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<PAGE> 31
Professionals or other entities requesting compensation or
reimbursement of expenses pursuant to sections 327, 328, 330, 331, 503(b) or
1103 of the Bankruptcy Code for services rendered before the Effective Date
(including compensation requested pursuant to section 501(b)(3) and (4) of the
Bankruptcy Code) shall file and serve on GGI and the Official Committee an
application for final allowance of compensation and reimbursement of expenses
no later than 30 days after the Effective Date, unless such deadline is
extended by order of this Court. Objections to applications of professionals
or other entities for compensation or reimbursement of expenses must be filed
and served on GGI, the Official Committee, counsel for GGI, counsel for the
Official Committee and the requesting professional not later than 30 days after
the filing of the applicable application for compensation or reimbursement.
If the rejection of an executory contract or unexpired lease pursuant
to Article VI of the Plan gives rise to a Claim by the other party or parties
to such contract or lease, such Claim shall be forever barred and shall not be
enforceable against the Debtor, GGI, their respective successors or their
respective properties unless (a) a Stipulation of Amount and Nature of Claim
has been entered into and approved by the Bankruptcy Court with respect to the
rejection of such executory contract or unexpired lease or (b) a proof of Claim
is filed and served on GGI, the Official Committee, counsel for GGI and counsel
for the Official Committee within 30 days after the Effective Date or such
earlier date as established by order of this Court.
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<PAGE> 32
Copies of the Confirmation Order may be obtained by written request
from: Logan and Company, Inc., 615 Washington Street, Hoboken, New Jersey
07030.
Dated: Wilmington, Delaware
September 15, 1997
BY ORDER OF THE COURT
/s/ Helen S. Balick
----------------------------------------
The Honorable Helen S. Balick
United States Bankruptcy Judge
David S. Kurtz C. Robert Bunch
Timothy R. Pohl KING & PENNINGTON, L.L.P.
Kathleen M. Boege 3100 South Tower, Pennzoil Place
JONES, DAY, REAVIS & POGUE 711 Louisiana Street
77 West Wacker Houston, Texas 77002
Chicago, Illinois 60601-1692 (713) 225-8400
(312) 782-3939
Counsel for the Debtor
Counsel for Elliott Associates, L.P.
Laura Davis Jones
Scott D. Cousins
Neil B. Glassman YOUNG, CONAWAY, STARGATT & TAYLOR
BAYARD HANDELMAN & MURDOCH, P.A. Rodney Square North
902 Market Street, 13th Floor 11th Floor
Wilmington, Delaware 19899 P. O. Box 391
(302) 655-5000 Wilmington, Delaware 19899-0391
(302) 571-6600
Co-Counsel for Elliott Associates, L.P.
Co-Counsel for the Debtor
James Donnell
Andrews & Kurth, L.L.P. Christopher Fuller
4200 Texas Commerce Tower SCOTT, DOUGLASS
Houston, Texas 77002 & MCCONNICO, L.L.P.
600 Congress, Suite 1500
Austin, Texas 78701
(512) 495-6300
Special Counsel for the Debtor
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<PAGE> 1
[GRANT GEOPHYSICAL INC. LETTERHEAD]
FOR IMMEDIATE RELEASE
CONTACT: LARRY E. LENIG, JR.
PRESIDENT
281-647-5201
OR MICHAEL P. KEIRNAN
CHIEF FINANCIAL OFFICER
281-647-5203
NEWS RELEASE
GRANT GEOPHYSICAL REORGANIZATION PLAN CONFIRMED
CLOSING DATE SET FOR SEPTEMBER 30
Houston, Texas - September 15, 1997 - Grant Geophysical announced that the
bankruptcy court has confirmed the Company's plan of reorganization. Grant said
that all classes of creditors and shareholders eligible to vote were heavily in
favor of the plan with the approval percentages running from 94% to 98%.
"Completion of the recapitalization process signals a new beginning for the
organization" said Larry Lenig, president of Grant. "Renewed financial strength
coupled with Grant's experience base and expanded, focused technical and
business initiatives will enable the new company to offer a broader array of
products and services to its clients. The success of the plan is the result of
dedicated effort by Grant employees worldwide combined with strong support from
the Company's customers and suppliers. We are truly appreciative of the effort
and support received during the process."
Under the plan, which is scheduled to become effective on September 30, Elliott
Associates L.P. of New York will acquire, through a subsidiary, substantially
all of the assets of Grant. The purchase price is $47.5 million in cash plus
the assumption of certain of Grant's liabilities. Elliott's ownership could be
reduced to approximately 65% following completion of a rights offering called
for in the plan. From the cash proceeds, secured creditors will be paid in
full and unsecured creditors will receive an estimated 50% recovery of their
allowed claims.
On the effective date of the plan, Grant's existing common stock and all series
of its existing preferred stock will be canceled. Grant will deregister as a
publicly traded company, and trading in any of the existing Grant securities
will cease as of the close of business on September 29, 1997, the day prior to
the scheduled effective date of the plan.
--MORE--
<PAGE> 2
Grant Geophysical, Inc. News Release
September 15, 1997
Page 2 of 2
Holders of Grant's convertible, exchangeable preferred stock and its junior
preferred stock, as well as certain unsecured creditors, will have the right,
subject to the effectiveness of a registration statement to be filed with the
Securities and Exchange Commission, to participate in a rights offering.
Pricing of shares available in the rights offering will be determined prior to
the issuance of the rights. The rights offering period is not expected to
commence until sometime in 1998. Information and instructions concerning the
rights will be mailed to record holders of unsecured claims, convertible,
exchangeable preferred stock and junior preferred stock upon the initiation of
the rights offering. Holders of Grant's common stock and other series of
preferred stock will not be eligible to participate in the rights offering and
will not receive any distribution under the plan.
Grant Geophysical, Inc. and its subsidiaries and affiliates provide land and
transition zone seismic services in the United States, Latin America, Central
America and the Far East. The Company employs approximately 2,500 people in
its worldwide operations.
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