UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report (Date of earliest event reported):December 2, 1998
(November 18, 1998)
Bradlees, Inc.
(Exact Name of Registrant As Specified In Its Charter)
Massachusetts
(State Or Other Jurisdiction of Incorporation)
1-11134 04-3156108
(Commission File Number) (IRS Employer Identification No.)
One Bradlees Circle, Braintree, Massachusetts 02184
(Address Of Principal Executive Offices) (Zip Code)
(781) 380-3000
(Registrant's telephone number, including area code)
Not Applicable
(Former name or former address, if changed since last report)
Exhibit Index on Page 11
Page 1 of 14 (Including Exhibit 20)
The following discussions, as well as other portions of this
filing, include certain statements which are or may be construed
as forward looking about the Company's business, sales and
expenses, and operating and capital requirements. Any such
statements are subject to risks that could cause the actual
results or requirements to vary materially. For example,
certain of the disclosures in the attached amended plan of
reorganization, along with planned and forecasted amounts
included under Item 5, are dependent on the Company's future
operating performance and ability to meet its financial
obligations, which is further dependent upon, among other
things, continued acceptance of the Company's new merchandising
and marketing initiatives, competitive conditions, changes in
consumer spending and consumer spending habits, weather,
economic and political conditions, availability and cost of
sufficient labor, and changes in import duties, tariffs and
quotas.
Item 3: CONFIRMATION OF PLAN OF REORGANIZATION
(1) & (2) Identity of Court and Date of Order
On November 18, 1998, the United States Bankruptcy
Court for the Southern District of New York (the "Bankruptcy
Court") entered an order (the "Confirmation Order") confirming
the First Amended and Modified Joint Plan of Reorganization of
Bradlees Stores, Inc. and Affiliates dated November 17, 1998
(the "Plan"). The Confirmation Order is attached as Exhibit
2.1. The Plan is expected to be effective by February 1, 1999
(the "Effective Date"). Descriptions of the Plan herein are
qualified in their entirety by reference to the Plan, which is
attached as Exhibit 2.2.
(3) Summary of Plan
A. Classification and Treatment Under the
Plan of Reorganization
The Plan creates 24 classes of claims
against, and interests in, Bradlees, Inc. and its subsidiaries
(the "Company"). The Company operates its stores through
Bradlees Stores Inc., an indirect wholly-owned subsidiary of
Bradlees, Inc. On the Effective Date, each of the subsidiaries
of Bradlees, Inc. listed under "Impaired Classes of Claims" in
Section 2. below will merge into Bradlees Stores, Inc. except
for Bradlees Administrative Co. Inc., which will merge into
Bradlees, Inc., and New Horizons of Yonkers, Inc., which will
remain in Chapter 11 at this time and a subsidiary of Bradlees
Stores, Inc.
The Plan provides for
approximately $165 million in distributions to creditors
inclusive of $16 million of administrative claim payments, $7
million in tax and cure notes, $3 million in other
distributions, $14 million in cash, $40 million in notes (the
"New Notes") primarily payable to the Company's pre-Chapter 11
bank group, and new common stock with an estimated value of $85
million. As previously reported, all existing stock will be
canceled upon the Company's emergence from bankruptcy and such
shareholders will not receive a distribution under the Plan.
1. Unimpaired Classes of Claims.
Administrative Claims. Administrative claims are claims for
costs and expenses of administration allowed under the
Bankruptcy Code, including: (a) the actual and necessary costs
and expenses incurred after the Chapter 11 filing date (the
"Petition Date") of preserving the respective estates and
operating the business of the debtors (including, without
limitation, wages, salaries, commissions for services and
payments for inventories, leased equipment and premises); (b)
compensation for legal, financial advisory, accounting and other
services and reimbursement of expenses awarded or allowed under
the Bankruptcy Code; (c) all fees and charges assessed against
the estates and (d) allowed reclamation claims. Except as
otherwise set forth in the Plan each holder of an allowed
administrative claim shall receive cash equal to the amount of
such administrative claim (unless the holder of such claim
agrees to other treatment) on the latest of: (i) 30 days after
the Effective Date, (ii) the first business date which is 30
days after the date on which an order allowing such claim
becomes final, and (iii) such other time or times that are
agreed on by the holder of the administrative claim and the
reorganized corporations. The Plan provides for specific
treatment of statutory fees, DIP Claims (as defined in the Plan)
and payment of the State Street Administrative Claim (as defined
in the Plan).
Federal Priority Tax Claims. Federal priority tax claims are
claims of the United States of America that are entitled to
priority in payment pursuant to the Bankruptcy Code. Unless
otherwise agreed to by the debtors and the IRS, the IRS shall
receive deferred cash payments over a period not exceeding six
years from the date of assessment of such claims. Payments
shall be made in equal quarterly installments of principal, plus
simple interest accruing from the Effective Date at a rate equal
to nine percent (9%) per annum on the unpaid portion of each
claim; provided, however, that in the event that the Effective
Date does not occur on or before February 1, 1999, interest on
the tax note shall begin to accrue on February 1, 1999. The
first payment shall be due on the latest of: (i) 90 days after
the Effective Date, (ii) 90 days after the date on which an
order allowing any such claim becomes final and (iii) such other
date that is agreed on by the IRS and the Company; provided,
however, that the Company shall have the right to pay any
federal priority tax claim, or any remaining balance of such
claim, in full, at any time on or after the Effective Date,
without premium or penalty.
Other Priority Tax Claims. Priority
tax claims are claims if allowed, asserted against the debtors,
which claim is entitled to priority pursuant to the Bankruptcy
Code, other than a federal priority tax claim. Unless otherwise
agreed to by the parties, each holder of an other priority tax
claim shall receive deferred cash payments over a period not
exceeding six years from the date of assessment of such claim.
Payments shall be made similar to the above federal priority tax
claims with similar note terms.
Other Non-Tax Priority Claims.
Other non-tax priority claims are all other claims asserted
against the debtors, which are accorded priority under the
Bankruptcy Code. Each holder of an allowed priority claim shall
receive one hundred percent (100%) of the allowed amount of such
claim in cash on the later of: (i) 30 days after the Effective
Date or as soon thereafter as reasonably practicable; or (ii)
the first business day after the date that is 30 days after the
date such claim becomes an allowed claim or as soon thereafter
as practicable.
Convenience Claims.
Convenience claims are claims in the amount of $500 or less or
more than $500, if the holder has elected on the ballot, within
the time fixed by the Bankruptcy Court for completing and
returning such ballot, to accept $500 in cash in full
satisfaction, discharge and release of such claim. Each holder
of an allowed convenience claim shall be paid one hundred
percent (100%) of the amount of such claim in cash in an amount
not to exceed $500 for each such claim on the later of (i) 30
days after the Effective Date or as soon thereafter as
reasonably practicable; or (ii) the first business day after the
date that is 30 days after the date such claim becomes an
allowed claim or as soon thereafter as practicable.
2. Impaired Classes of Claims.
Each debtor shall make the following
distributions, where applicable, on the Effective Date or as
soon thereafter as practicable, but in any event no more that
thirty (30) days after the Effective Date (the "Initial
Distribution Date") unless another date is otherwise provided
herein or elsewhere in the Plan.
Bank Group Claims. Bank group claims
are claims of the banks identified in the bank documents and
their successors and assigns, including, without limitation,
Gabriel Capital, L.P. (the "Bank Group"), which arise under the
bank documents against each and every debtor. The bank group
claim shall be allowed as a claim against each of the debtors'
estates in the amount of $96 million. Each holder of a bank
group claim shall receive and/or retain on the Effective Date,
pro rata distributions as follows:
(i) Cash equal to the sum of
(a) all adequate protection payments received by the
Bank Group (less any disbursements thereof made or
payments required to be made by Bankers Trust, as the
agent bank, including without limitation, any
professional fees), which shall continue unabated and
without modification through the Effective Date (and
prorated for the month in which the Effective Date occurs),
(b) $7,000,000 and (c) any required prepayments applicable
to the Bank Group's distribution of New Notes; (ii)
New Notes in an original aggregate principal amount equal
to $36 million less the sum of(a) any required prepayments
applicable thereto, and (b) 90%, not to exceed $900,000, in
an aggregate principal amount, of the amount of any New
Notes distributed to holders of certain claims; and
(iii) (a) 4,909,091 shares of new common stock of the Company
and (b) if the aggregate amount of allowed general
unsecured claims and disputed general unsecured claims
asserted against the Company (excluding the Bank Group
claim and the intercompany claim-see below) is less than
$240 million, a supplemental ratable distribution in the
amount of 0.98 shares of the new common stock for every
$100 by which the aggregate amount of allowed general
unsecured claims plus disputed general unsecured claims
are less than $250 million.
SPE Claims. SPE claims are claims
arising under the SPE (Special Purpose Entity) pre-petition
financing documents of the SPE Group (composed of Bankers Trust
Company, as agent, and the SPE banks or their respective
successors and assigns). For purposes of the Plan, the SPE
claims shall be allowed as a claim against each of the debtors'
estates in the amount of $18,232,677 (subject to reduction to
reflect (a) the amount of cash received by the SPE Group from
the sale of the SPE Providence property and (b) the net proceeds
received by the SPE Group from the SPE Philadelphia property).
Each holder of an allowed SPE Claim shall receive a single pro
rata distribution as follows:
(i) Cash from any
required prepayments made to the SPE Group; (ii) New Notes in a
principal amount equal to $4,000,000 less the sum of (x)
any cash distributions received by holders of SPE claims
from any required prepayments and (y) ten percent
(10%) not to exceed $100,000 of the aggregate original
principal amount of all New Notes issued to holders
of certain claims under the Plan; and (iii)
The SPE Deficiency Claim (as defined in the Plan) will be
treated as an allowed unsecured claim of BSI (see below).
Bradlees, Inc. Each holder of an allowed Bradlees, Inc. ("BI")
general unsecured ("GEN") claim shall receive a ratable
distribution of new warrants. For purposes of this plan, the
Bond Claim (as defined in the Plan) shall be allowed as a claim
solely against BI in the amount of $233,417,000. Holders of
allowed BI-equity ("EQT") interests shall receive no
distribution under the Plan.
Bradlees Administrative Co., Inc. ("BAC"). Holders
of allowed BAC-GEN claims shall receive no distribution.
Holders of allowed BAC-EQT interests shall retain their
interests in BAC.
Bradlees Stores, Inc. ("BSI") Capital Lease
("CAP") Claims: The holder of the allowed BSI-CAP claim shall
receive a note, which shall bear interest at a rate equal to
nine percent(9.0%) per annum, payable quarterly in arrears at
such times as principal payments are due. Principal shall be
payable in twelve (12) equal quarterly installments commencing
three months following the Effective Date, until the note,
including unpaid interest, is paid in full.
BSI-Mechanic's Lien ("MEC") Claim:
The holder of the allowed BSI-MEC claim shall receive a cash
distribution in the amount of $4,750.
BSI-Intercompany ("INTER") Claim:
After giving effect to BI's prior capital contribution to BSI,
the amount of the intercompany claim shall be allowed in the
amount of $96 million for purposes of the Plan. The entire
class of BSI-INTER claims shall be satisfied through the
issuance of shares of the new common stock of reorganized BI and
cash, which distributions shall be made to the holders of the
Bank Group claims.
BSI-GEN Claims:
Each holder of an allowed BSI-GEN Claim shall receive (i) cash
equal to a pro rata distribution of $7,000,000, (ii) two shares
of new common stock of reorganized BI for every $100 in allowed
claims, and (iii) if the aggregate amount of allowed general
unsecured claims and disputed general unsecured claims against
BSI (excluding the Bank Group claim and the intercompany claim)
is less than $240 million, a supplemental ratable distribution
in the amount of 1.02 shares of new common stock for every $100
that the aggregate allowed general unsecured claims plus
disputed general unsecured claims against BSI (excluding the
Bank Group claim and the intercompany claim) are less than $250
million.
BSI-Convenience
("CON") Claims: Each holder of a BSI-CON claim shall receive a
cash distribution equal to the lesser of (i) one hundred percent
(100%) of their BSI-Con claim or (ii)$500.
BSI-Common Stock
("EQT") Interests: Holders of BSI-EQT interests shall retain
their interest in BSI.
Dostra Realty
Co., Inc. ("DOS") General Unsecured Claims: Holders of DOS-GEN
claims shall receive no distribution.
DOS-Common Stock
Interests: Holders of DOS-EQT interests shall retain their
interest in DOS.
Maximedia
Services, Inc. ("MAX") General Unsecured Claims: Holders of
MAX-GEN claims shall receive no distribution.
MAX-Common
Stock Interests: Holders of MAX-EQT interests shall retain
their interest in MAX.
New Horizons of Yonkers, Inc. ("YON") General Unsecured Claims: On
or about the Yonkers Effective Date (as defined in the Plan),
each holder of a YON-GEN claim shall receive a ratable
distribution of (i) cash equal to the net proceeds from the sale
of the Yonkers property multiplied by the Yonkers Fraction (as
defined in the Plan), but not to exceed 0.83 percent of such net
proceeds and (ii) New Notes in a principal amount up to 0.83
percent of the aggregate principal amount of the New Notes which
are distributed under the Plan minus cash distributions made to
holders of YON-GEN claims under this Plan.
YON-Common Stock Interests: Holders of YON-EQT interests shall
retain their interest in YON.
New Horizons of Bruckner, Inc. ("BRU") General Unsecured Claims:
Each holder of a BRU-GEN claim shall receive a ratable
distribution of: (i) cash equal to the net proceeds from the
sale of the real property formerly owned by BRU multiplied by
the Bruckner Fraction (as defined in the Plan), but not to
exceed 0.83 percent of such net proceeds, and (ii) New Notes in
a principal amount up to 0.83 percent of the aggregate principal
amount of the New Notes which are distributed under the Plan
minus cash distributions made to holders of BRU-GEN claims under
the Plan. The cash distribution set forth in this section shall
be made as soon as practicable after the sale of the Union
Square property, or at such earlier time as the reorganized
corporations shall decide, but in no event, before the Effective
Date.
BRU-Common Stock Interests: Holders of BRU-EQT
interests shall retain their interest in BRU.
New Horizons of Westbury, Inc. ("WES") General
Unsecured Claims: Each holder of a WES-GEN claim shall receive
a ratable distribution of: (i) cash equal to the net proceeds
from the sale of the real property formerly owned by WES
multiplied by the Westbury Fraction (as defined in the Plan),
but not to exceed 0.83 percent of such net proceeds, and (ii)
New Notes in a principal amount up to 0.83 percent of the
aggregate principal amount of the New Notes which are
distributed under the Plan minus cash distributions made to
holders of WES-GEN claims under the Plan. The cash distribution
set forth in this section shall be made as soon as practicable
after the sale of the Union Square property, or at such earlier
time as the reorganized corporation shall decide, but in no
event, before the Effective Date.
WES-Common Stock
Interests: Holders of WES-EQT interests shall retain their
interest in WES.
B. Certain
Additional Provisions of the Plan
1. Cancellation of Common Stock
As of the Effective Date, by virtue of the Plan and in all events
without any action on the part of the holders thereof, each
share of old common stock of BI issued and outstanding or held
in treasury, shall be canceled and retired and no consideration
will be paid or delivered with respect thereto. Holders of old
common stock of BI shall not be required to surrender such
stock to the debtors.
2. Issuance of New Common Stock
Reorganized BI shall issue a single class of up to 40,000,000
shares of new common stock. New common stock of reorganized BI
is to be distributed under the Plan to holders of allowed claims
in the BSI-GEN Class, holders of the Bank Group claim and
holders of the SPE claims. In aggregate, no more than 10,909,090
of such shares shall be distributed to holders of allowed claims
under the Plan. The debtors are registering the new common
stock to be received by Gabriel Capital L.P., Elliott
Associates, L.P. and Westgate International, L.P. for resale
with the Securities and Exchange Commission (the "SEC") under
the Securities Act of 1933 and the debtors intend to continue to
file periodic reports under the Securities and Exchange Act of
1934. Reorganized BI shall use all reasonable efforts to have
the new common stock listed on a nationally recognized stock
exchange after the Effective Date.
3. New Credit Facility
The Company has a commitment
for a $270 million post-emergence financing facility, which
would become effective upon the Effective Date, which includes a
$20 million junior secured "last in-last out" facility,
with BankBoston, N.A. as Administrative Agent and Issuing Bank
(the "BankBoston Facility"). Under the BankBoston Facility, the
Company will be allowed to borrow for general corporate
purposes, working capital and inventory purchases. The
BankBoston Facility will replace the current $250 million DIP
facility and is secured by liens on substantially all of the
Company's non-real estate assets. A copy of the commitment for
the BankBoston Facility is expected to be filed with the SEC by
the end of December, 1998.
This facility is for a
term of up to three years and may not exceed the maximum
principal amount of $270 million. Under the terms of the
BankBoston Facility, the Company has agreed to certain financial
covenants, including: maintaining a
minimum level of earnings before interest, taxes,
depreciation and amortization;
capping capital expenditures at $20 million annually; and
agreeing not to let certain financial ratios which measure
debt coverage and accounts payable to inventory ratios drop
below specified levels.
4. Conditions to Occurrence of Effective Date
The Effective Date for the Plan may not occur unless each of the
conditions set forth below is satisfied. Except as otherwise
provided in the Plan, any one or more of the following
conditions may be waived at any time by the debtors with the
unanimous consent of the Creditors' Committee, the
Unofficial Committee and the Bank Group.
(a) The confirmation order shall have
been entered and be a final order.
(b) Each reorganized debtor's
respective articles of organization and amended
by-laws shall have been amended as provided in the Plan.
(c) Reorganized BI and
reorganized BSI shall each have sufficient cash on
hand or available to pay the consummation costs
and make such other timely distributions of cash as may be
required under the Plan.
(d) Reorganized BSI
shall have established a revolving line of credit or other
liquidity facility with a bank or other financial
institution in a drawable principal amount of at least
$250 million, with terms satisfactory to
reorganized BSI and the lenders under the new credit
facility, in their sole discretion.
(e) The aggregate amount of allowed general unsecured claims
and disputed generalunsecured claims (i) against BSI
(excluding the Bank Group claim and the intercompany claim)
shall have been reduced, either through agreement or order
of the Bankruptcy Court, to less than $300 million and (ii)
against each debtor other than BI, BSI and BAC (other than
the intercompany claims, the Bank Group claim and SPE
claims) shall have been reduced, either through agreement or
order of the Bankruptcy Court, to an amount of less than $1
million.
(f) Reorganized BSI shall have granted to vendors who provide
retail merchandise to reorganized BSI after the Effective
Date, or who have provided merchandise to BSI before the
Effective Date which is not paid for as of the Effective
Date, a trade vendors' lien to secure payment to such trade
vendors of amounts owed by reorganized BSI. The trade
vendors' lien, which shall be held by the trade
vendors'collateral agent, shall be subordinated to the lien
securing the new credit facility to the satisfaction of the
holders of the liens securing the new credit facility and
shall attach to all of reorganized BSI's inventory (but not
any other assets of reorganized BSI).
(g) Each of the Creditors' Committee, the Bank Group and the
Unofficial Committee have approved in form and substance
each of the Exhibits to the Plan, such approval not to be
unreasonably withheld.
(h) (i) As of or prior to the Effective Date, one or more shelf
registration statements, in form and substance reasonably
satisfactory to Gabriel Capital L.P. and other members of
the Bank Group, pursuant to which those creditors shall have
the right to re-sell the new common stock and New Notes
distributed to them under the Plan (whether as a holder of a
Bank Group claim or a General Unsecured claim), shall
have been declared effective by the SEC under applicable
securities laws, and (ii) on the Effective Date, reorganized
BI shall have committed to maintain the effectiveness of the
foregoing registration statements, pursuant to a reasonably
acceptable registration rights agreement, for so long as
Gabriel Capital L.P. may be deemed an affiliate of
reorganized BI. However, the foregoing requirement in
sub-paragraph (i) shall be deemed waived if, prior to the
Effective Date, the SEC shall have advised Reorganized BI in
writing that such registration statements shall be declared
effective subject only to the occurrence of the Effective
Date or the issuance of the reorganization securities by
Reorganized BI.
5. Information as to Assets and Liabilities
Information concerning the assets and liabilities of the Company
as of October 31, 1998, the most recent completed fiscal month,
is attached as Exhibit 20. Pro forma financial information has
been provided in the Company's Pre-Effective Amendment No. 1 to
Form S-1 Registration Statement (SEC File No. 333-66953) filed
on November 25, 1998 and will be updated in a forthcoming filing
for the quarter ended October 31, 1998.
C. Appeal of the Confirmation Order
A lessor of one of the Company's stores has filed an appeal
from the Confirmation Order (the "Appeal") and an application in
the United States District Court for the Southern District of
New York seeking a stay of the Confirmation Order pending the
outcome of the Appeal (the "Stay Application"). The Appeal and
Stay Application have not yet been decided. A hearing on the
Stay Application is scheduled for December 15, 1998.
Item 5: OTHER EVENTS
Beginning on December 2, 1998, Bradlees Inc. (the "Company")
will distribute to its banks and other credit providers
summaries of its third quarter (thirteen weeks) and year-to-date
(thirty-nine weeks) financial results ended October 31, 1998,
including a comparison to the Company's summary financial
forecast (the "Forecast") and plan (the "Plan") for the fiscal
year ending January 30, 1999 ("Fiscal 1998") filed on Forms 8-K
dated September 22, 1998 and February 11, 1998, respectively.
The Fiscal 1998 third quarter and year-to-date results compared
to the Forecast and Plan are attached hereto as Exhibit 20.
Total sales for the third quarter ended October 31, 1998 were
$18.6 million or 5.4% below Forecast due primarily to
unseasonably warm weather that hurt Fall apparel sales and weak
sales of toys. Comparable store sales declined 2.0% in the
third quarter. EBITDA before restructuring and property gains
(as defined in the exhibit) fell short of Forecast by $2.4
million due principally to the below-Forecast sales and
associated gross margin, partially offset by a favorable gross
margin rate and favorable selling, store operating,
administrative and distribution (SG&A) expenses. The gross
margin rate exceeded Forecast in the third quarter due primarily
to favorable allowances, while SG&A expenses were below Forecast
mostly due to favorable home office, advertising and store
payroll expenses.
Year-to-date total sales were $18.6 million
or 1.9% below Forecast, while year-to-date comparable store
sales increased 4.7%. Year-to-date EBITDA before restructuring
and property gains was $2.3 million below Forecast due to the
below-Forecast sales and associated gross margin, partially
offset by a favorable gross margin rate and favorable SG&A
expenses. The Fiscal 1998 year-to-date gross margin rate was
above Forecast and the year-to-date SG&A expenses were below
Forecast due to the same reasons mentioned above for the third
quarter. Also, it should be noted that last year's third
quarter EBITDA results benefited from certain one-time expense
reductions that resulted in a $3.6 million credit to SG&A
expenses.
The Company reported a net loss
of $7.2 million for this year's third quarter, compared to a
forecasted net loss of $9.9 million and last year's third
quarter net income of $0.4 million. Last year's third quarter
results benefited from the one-time expense reductions mentioned
above and $7.0 million in reorganization credits compared to
$2.7 million of such credits in this year's third quarter. The
year-to-date net loss was $34.6 million compared to a forecasted
year-to-date net loss of $37.3 million and the prior
year-to-date net loss of $48.5 million.
Unrestricted
cash was $0.2 million below Forecast at October 31, 1998.
Inventories were $8.5 million, or 2.7%, above Forecast.
Accounts payable was $24.2 million above Forecast and
outstanding borrowings under the Company's DIP facility were
$14.5 million below Forecast.
The Company is distributing the quarterly
performance against its Forecast (the "Forecast Performance
Information") to its banks and other credit providers to
facilitate their credit analyses. The Forecast Performance
Information should not be relied upon for any other purpose and
should be read in conjunction with the Company's Forms 8-K dated
February 11, 1998 and September 22, 1998, Forms 10-Q for the
first, second and third quarters ended May 2, 1998, August 1,
1998 and October 31, 1998, respectively, and Form 10-K for the
fiscal year ended January 31, 1998 (fiscal 1997). The Forecast
Performance Information is being reported publicly solely
because it is being distributed to a large number of the
Company's vendors for purposes of their credit analyses.
Although the Company is publicly disclosing the Forecast
Performance Information, the Company does not believe it is
obligated to provide such information indefinitely, and the
Company may cease making such disclosures and updates at any
time. The Forecast Performance Information was not examined,
reviewed or compiled by the Company's independent public
accountants. The Company is not obligated to update the
Forecast Performance Information to reflect subsequent events or
developments. The Forecast Performance Information is subject
to future adjustments, if any, that could materially affect such
information.
Item 7: FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION
AND EXHIBITS
Exhibit 2.1 Confirmation Order dated November 18, 1998.
2.2 First Amended and Modified Joint Plan of
Reorganization of Bradlees Stores, Inc.
and Affiliates dated November 17, 1998.
20 Summary Financial Results for the 13 and 39
Weeks ended October 31, 1998.
INDEX TO EXHIBITS
Exhibit No. Exhibit
2.1 Confirmation Order dated November 18, 1998.
2.2 First Amended and Modified Joint Plan
of Reorganization of Bradlees Stores, Inc.
and Affiliates dated November 17, 1998.
20 Summary Financial Results for the 13
and 39 Weeks ended October 31, 1998.
BRADLEES, INC.
AND SUBSIDIARIES
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of
1934, the registrant has duly caused this report to be signed on
its behalf by the undersigned thereunto duly authorized.
BRADLEES, INC.
Date: December 2, 1998 By /s/ PETER THORNER
Peter Thorner
Chairman and
Chief Executive Officer
Date: December 2, 1998 By /s/ CORNELIUS F. MOSES III
Cornelius F. Moses III
Senior Vice President,
Chief Financial Officer
Hearing Date: November 18, 1998 Exhibit 2.1
Time: 10:00 a.m.
UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF NEW YORK
- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - --
x
In re
BRADLEES STORES, INC., et al.,
Debtors.
:
:
:
:
Chapter 11
Case Nos. 95 B 42777
through 95 B 42784 (BRL)
(Jointly Administered)
- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - --
x
ORDER CONFIRMING FIRST AMENDED AND MODIFIED PLAN OF
REORGANIZATION FOR
BRADLEES STORES, INC. AND AFFILIATES
UNDER CHAPTER 11 OF THE BANKRUPTCY CODE
The First Amended and Modified Joint Plan of Reorganization of
Bradlees Stores, Inc. and Affiliates under Chapter 11 of the
Bankruptcy Code, dated November 17, 1998 (the "Plan"),1 a copy
of which is annexed hereto as Exhibit A, having been filed by
Bradlees Stores, Inc., New Horizons of Yonkers, Inc., Bradlees,
Inc., Bradlees Administrative Co., Inc., Dostra Realty Co.,
Inc., Maximedia Services, Inc., New Horizons of Bruckner, Inc.
and New Horizons of Westbury, Inc., debtors and
debtors-in-possession herein (collectively, the "Debtors"), and
the Debtor's First Amended Disclosure Statement dated October 2,
1998 having been approved by Order of this Court dated October
5, 1998 (the "Disclosure Statement Order") as containing
"adequate information" as such term is defined under section
1125 of the Bankruptcy Code; and the Debtors having filed
Motions dated November 13, 1998 and November 17, 1998 (together,
as amended at or prior to the Confirmation Hearing, the "Plan
Modification Motions") in connection with certain modifications
to the Debtors' Plan (and the Debtors having withdrawn on the
record of the Confirmation Hearing certain of the proposed
modifications to Section 4.02 of the Plan); and certificates of
service and/or certifications of publication having been filed
with the Court demonstrating compliance with the service and
publication requirements of the Disclosure Statement Order;
acceptances and rejections of the Plan by those holders of
Claims that voted thereon having been duly received and
tabulated by the Debtors with the assistance of Donlin, Recano
and Company, Inc. ("Donlin Recano"), the voting agent; and
certifications by Donlin Recano of ballots accepting or
rejecting the Plan having been filed with the Court; and upon
the Debtors' memorandum of law in support of confirmation of the
Plan; and the Court having considered all objections to
confirmation of the Plan; and all objections to the Plan having
been voluntarily withdrawn or overruled or denied by the Court;
and upon all of the evidence adduced and the arguments of
counsel made at the November 18, 1998 hearing to consider, inter
alia, confirmation of the Plan (the "Confirmation Hearing"); and
upon the entire record of the Chapter 11 Cases; and after due
deliberation, and sufficient cause appearing therefor; and
IT HAVING BEEN FOUND
AND DETERMINED by this Court that: A. This Court has
jurisdiction over these Chapter 11 Cases pursuant to 28 U.S.C. '
1334. Confirmation of the Plan is a "core proceeding" pursuant
to 28 U.S.C. ' 157(b)(2), and this Court has jurisdiction to
enter a Final Order with respect thereto. Venue of the
Reorganization Cases is proper in this District pursuant to 28
U.S.C. '' 1408 and 1409. B. The plan
modifications (other than certain of the proposed modifications
to Section 4.02 of the Plan which were withdrawn on the record
of the Confirmation Hearing) (collectively, the "Plan
Modifications") described in the Plan Modification Motions and
on the record at the Confirmation Hearing and contained in the
First Amended and Modified Joint Plan of Reorganization do not
adversely change the treatment of the claim of any creditor or
the interest of any equity security holder who has not accepted
in writing any such Plan Modification and thus comply with the
requirements of Bankruptcy Rule 3019 and accordingly, all
creditors and equity security holders who have previously
accepted the Plan are deemed to have accepted each of the Plan
Modifications. Each of the Bank Group, the Creditors' Committee
and Unofficial Committee have consented to each of the Plan
Modifications.
C. This Court takes judicial notice of the docket of the
Chapter 11 Cases maintained by the Clerk of the Court and/or its
duly appointed agent, including, without limitation, all
pleadings and other documents filed, all orders entered, and all
evidence and arguments made, proffered or adduced at, the
hearings held before the Court during the pendency of the
Chapter 11 Cases.
D. The classification of Claims and Interests in
Article III of the Plan is necessary and reasonable to implement
the Plan, and satisfies the requirements of section 1122(a) of
the Bankruptcy Code.
E. Article III of the Plan adequately and properly
identifies and classifies all Claims and Interests, thereby
satisfying the requirements of section 1123(a)(1) of the
Bankruptcy Code, and each Claim or Interest in each such Class
is substantially similar to the other Claims or Interests in
such Class, thereby satisfying the requirements of section
1122(a) of the Bankruptcy Code.
F. Article V of the Plan identifies
the Classes of Claims and Interests which are not impaired and
which are impaired. Therefore, the Plan satisfies the
requirements of section 1123(a)(2) of the Bankruptcy Code.
G. Article VI of the Plan specifies
the treatment of each impaired Class of Claims and thereby
satisfies the requirements of section 1123(a)(3) of the
Bankruptcy Code. H. The Plan provides for
the same treatment for each Claim or Interest in a particular
Class and thereby satisfies the requirements of section
1123(a)(4) of the Bankruptcy Code. I. The Plan provides
adequate means for its implementation, thereby satisfying
Section 1123(a)(5) of the Bankruptcy Code, including, among
other things: (a) the amendment of the respective Certificates
of Incorporation and By-Laws of the Reorganized Corporations,
(b) the appointment of new directors to the respective Boards of
Directors of the Reorganized Corporations, (c) the undertaking
of such actions as may be necessary to effect the Combination
Transactions, (d) the procedures specified in the Plan under
which the Debtors will make Distributions to Holders of Claims
and Interests, (e) the cancellation of the Old Capital Stock of
BI and the Bonds, (f) the termination of the Debtors' DIP
Facility, (g) the entry into the New Credit Facility, and (h)
sale of the Yonkers Property and the Union Square Property and
the provision of first liens on such properties to the holders
of New Notes pending the sale of such properties.
J. The Plan provides that the
Debtors shall not issue nonvoting equity securities. The Plan
also provides that the Articles of Incorporation of the
Reorganized Corporations, as amended, shall each prohibit the
issuance of nonvoting equity securities. Hence, the Plan
satisfies section 1123(a)(6) of the Bankruptcy Code.
K. The provisions of the
Plan regarding the selection of any officer, director or trustee
under the Plan, including any successor to any such officer,
director or trustee, are consistent with the interests of
Creditors and with public policy, and satisfy the requirements
of section 1123(a)(7) of the Bankruptcy Code.
L. The Debtors' assumption of
executory contracts and unexpired leases of nonresidential real
property pursuant to section 365 of the Bankruptcy Code, as
authorized by section 1123(b)(2) of the Bankruptcy Code and as
provided for in Article IX of the Plan, are reasonable exercises
of sound business judgment and are in the best interests of the
Debtors and their estates.
M. The Plan complies with all applicable
provisions of the Bankruptcy Code, thereby satisfying the
requirements of section 1129(a)(1) of the Bankruptcy Code and,
as required by Bankruptcy Rule 3016(a), is dated and
specifically identifies the Debtors as the proponents of the
Plan. N. The Debtors, as
proponents of the Plan, have complied with the applicable
provisions of the Bankruptcy Code, the Bankruptcy Rules and the
Local Bankruptcy Rules and Orders of this Court with respect to
the Plan. Good, sufficient and timely notice of the
Confirmation Hearing has been given to holders of Claims and
Interests and to other parties-in-interest to whom notice is
required to be given. The solicitation of votes was made in
good faith and in compliance with the applicable provisions of
the Bankruptcy Code and Bankruptcy Rules and all other rules,
laws and regulations. Ballots of holders of Claims entitled to
vote on the Plan were properly solicited and tabulated. Holders
of at least two-thirds in amount and one-half in number of the
Claims in the following Classes actually voting, have accepted
the Plan, without including the votes of any insiders: BI-BANK,
BI-SPE, BI-GEN, BAC-SPE, BAC-BANK, BSI-SPE, BSI-BANK, BSI-GEN,
DOS-SPE, DOS-BANK, MAX-SPE, MAX-BANK, YON-SPE, YON-BANK,
YON-GEN, BRU-SPE, BRU-BANK, BRU-GEN, WES-SPE, WES-BANK, and
WES-GEN. Therefore, the Debtors have satisfied the requirements
of section 1129(a)(2) of the Bankruptcy Code.
O. With respect to Class BSI-CAP, by
stipulation, BTM Capital Corporation changed its vote in such
class and has agreed to accept the Plan. Therefore, Class
BSI-CAP has voted to accept the Plan.
P. The Debtors, as proponents of
the Plan, have complied with the applicable provisions of the
Disclosure Statement Order, the Bankruptcy Code, the Bankruptcy
Rules and the Local Bankruptcy Rules and Orders of this Court
with respect to the notice and disclosure of the Plan, and
therefore, the notice and disclosure of the Plan is adequate and
appropriate, and no further or other notice or disclosure is
necessary or required. Q. Pursuant to
Section 4.02 of the Plan, the New Notes will be secured by a
first lien (the "Leasehold Mortgages") on the Yonkers Property
and the Union Square Property. The Leasehold Mortgages are an
integral element of the Plan and constitute a material
consideration to the creditors receiving the New Notes. The
landlord of the Yonkers Property (the "Yonkers Landlord") and
the landlord of the Union Square Property (the "Union Square
Landlord") have each timely received the Disclosure Statement,
the Plan and notice of the Confirmation Hearing. The Yonkers
Landlord has not objected to confirmation of the Plan. The
Union Square Landlord has objected to certain provisions of the
Plan but has not objected to the Leasehold Mortgages or any
other aspect of Section 4.02 of the Plan.
R. The Plan has been proposed in good faith and not by
any means forbidden by law, as evidenced by, among other things,
the totality of the circumstances surrounding the formulation of
the Plan, the record of the Chapter 11 Cases, and by the
recoveries of holders of Claims thereunder. Therefore, the Plan
satisfies the requirements of section 1129(a)(3) of the
Bankruptcy Code. S. Any payment made or to be made under the
Plan or by any person acquiring property under the Plan, for
services or for costs and expenses in, or in connection with,
the Chapter 11 Case, or in connection with the Plan and incident
to the Chapter 11 Case, has been approved by, or will be subject
to the approval of, the Court as reasonable, thereby satisfying
the requirements of section 1129(a)(4) of the Bankruptcy Code.
T. The Debtors as proponents of the Plan have
disclosed the identity of the directors and officers proposed to
serve after confirmation of the Plan, their affiliation with the
Debtors and any compensation to be received by them, thus
satisfying the requirements of section 1129(a)(5) of the
Bankruptcy Code. U. Section 1129(a)(7) of the
Bankruptcy Code requires each holder of a Claim or Interest in
an impaired Class to accept the Plan, or receive or retain under
the Plan property having a value, as of the Effective Date of
the Plan, that is not less than the amount that such holder
would receive on account of such Claim or Interest if the Debtor
liquidated under Chapter 7 of the Bankruptcy Code. The
following classes are impaired under the Plan: BI-BANK, BI-SPE,
BI-GEN, BSI-BANK, BSI-SPE, BSI-CAP, BSI-MEC, BSI-GEN, YON-BANK,
YON-SPE, YON-GEN, BRU-BANK, BRU-SPE, BRU-GEN, WES-BANK, WES-SPE
and WES-GEN. Each holder of a Claim in such Classes has either
accepted the Plan, or will receive or retain under the Plan
property having a value, as of the Effective Date of the Plan,
that is not less than the amount that such holder would receive
or retain if the Debtor liquidated under Chapter 7 of the
Bankruptcy Code on such date. The Plan, therefore, satisfies
the requirements of section 1129(a)(7) of the Bankruptcy Code.
V. Section
1129(a)(8) of the Bankruptcy Code requires that for each Class
of Claims or interests under the Plan, such Class has either
accepted the Plan or is not impaired under the Plan. Impaired
Classes BI-BANK, BI-SPE, BI-GEN, BAC-SPE, BAC-BANK, BSI-SPE,
BSI-BANK, BSI-CAP, BSI-GEN, DOS-SPE, DOS-BANK, MAX-SPE,
MAX-BANK, YON-SPE, YON-BANK, YON-GEN, BRU-SPE, BRU-BANK,
BRU-GEN, WES-SPE, WES-BANK, and WES-GEN have accepted the Plan,
and unimpaired Classes BAC-EQT, BSI-EQT, DOS-EQT, MAX-EQT,
YON-EQT, BRU-EQT, and WES-EQT are conclusively presumed to have
accepted the Plan without the solicitation of acceptances or
rejections pursuant to section 1126(f) of the Bankruptcy Code.
Therefore, the Plan satisfies the requirements of section
1129(a)(8) of the Bankruptcy Code.
W. The Plan satisfies the requirements of
section 1129(a)(9) of the Bankruptcy Code since, except to the
extent that the holder of a particular Claim has agreed to a
different treatment of such Claim, the Plan provides that (i)
the holder of each Allowed Administrative Claim shall be paid in
full, in Cash, or, if such Administrative Claim is not yet due
in the ordinary course, such Claim shall be assumed and paid by
the relevant Reorganized Corporation; (ii) the holder of each
Allowed Federal Priority or Other Priority Tax Claim (i.e., an
Allowed Claim of a kind specified in sections 502(i) and
507(a)(8) of the Bankruptcy Code) shall be paid in full, in Cash
or with a Tax Note; and (iii) the holder of each Allowed Other
Non-Tax Priority Claim, shall be paid in full in Cash on or
before the Effective Date. X. The provisions of section
1129(a)(10) of the Bankruptcy Code are satisfied because at
least one impaired Class of Claims for each Debtor has accepted
the Plan, determined without inclusion of any acceptance of the
Plan by any insider. Y. Section 1129(a)(11) of the
Bankruptcy Code requires that a plan must be "feasible" and for
the Court to determine that the Debtors are not likely to
require liquidation or further financial reorganization.
Reliable and credible evidence was presented at the Confirmation
Hearing demonstrating that the Plan is feasible and the Debtors
are not likely to require liquidation or further financial
reorganization. Among other things, the evidence showed that
the Distributions required to be made under the Plan can be
made, and that the Reorganized Corporations will be able to
perform their obligations under the Plan following confirmation
and the Effective Date. Therefore, the Plan satisfies the
requirements of section 1129(a)(11) of the Bankruptcy Code.
Z. The Debtors have
paid, or shall pay as provided by the Plan, all amounts then due
under 28 U.S.C. ' 1930, thereby satisfying the requirements of
section 1129(a)(12) of the Bankruptcy Code.
AA. Section 1129(a)(13) of the
Bankruptcy Code is satisfied because the Plan provides for the
continuation after the Effective Date of payment of all retiree
benefits, as that term is defined in section 1114 of the
Bankruptcy Code, at the level established pursuant to subsection
(e)(1)(B) or (g) of section 1114 of the Bankruptcy Code, at any
time prior to confirmation of the Plan, for the duration of the
period the Debtors have obligated themselves to provide such
benefits. BB. Classes BAC-GEN, DOS-GEN, and
MAX-GEN either have no Creditors in such Class or, based on the
testimony introduced at the Confirmation Hearing, which was
credible, there will be no Creditors in such Classes and
accordingly, such Classes are not deemed to have voted against
the Plan. CC. Class BI-EQT (the
"Rejecting Class") is an impaired Class Interests which is
deemed to have rejected the Plan pursuant to Section 1126(g) of
the Bankruptcy Code. This is the only Class which has not
accepted, or been deemed not to have accepted, the Plan.
Pursuant to Section 1129(b) of the Bankruptcy Code, the Court
finds that the Plan does not discriminate unfairly, and is fair
and equitable, with respect to the Rejecting Class.
Specifically, with respect to BI-EQT and to Old Common Stock of
BI, such Interests have no value. Thus, the Plan satisfies
Section 1129(b).
DD. No governmental unit has maintained that the principal
purpose of the Plan is the avoidance of taxes or the avoidance
of the requirements of section 5 of the Securities Act of 1933,
and the principal purpose of the Plan is not the avoidance of
such obligations. Therefore, the Plan satisfies the
requirements of section 1129(d) of the Bankruptcy Code.
EE. Each of the discharge, release,
indemnification, and exculpation provisions of Article VIII of
the Plan: (i) falls within the jurisdiction of this
Court under 28 U.S.C. '' 1334(a), (b) and (d);
(ii) is an essential means of implementing
the Plan pursuant to section 1123(a)(5) of the Bankruptcy Code;
(iii) is an integral element of the
transactions incorporated into the Plan;
(iv) confers material benefit on, and is
in the best interests of, the Debtors, their estates, and their
Creditors; (v) is important to the overall objectives
of the Plan to finally resolve all claims among or against the
parties in interest in the Chapter 11 Cases with respect to the
Debtors, their organization, capitalization, operation and
reorganization; and (vi) is consistent with sections 105, 1123,
1129, and other applicable provisions of the Bankruptcy Code.
FF. All entities which are benefited by the
discharge, release, indemnification, and exculpation provisions
of the Plan have contributed and/or will contribute value to the
Debtors and their estate under the Plan.
GG. The failure to effect the discharge, release,
indemnification and exculpation provisions of the Plan would
seriously impair the Debtors' ability to confirm the Plan.
HH. All conditions precedent to confirmation set forth in
Section 10.01 of the Plan have been satisfied or duly waived.
II. Accordingly, it is hereby ORDERED, ADJUDGED AND DECREED
that:
1. The Plan is confirmed as to each of the Debtors, having
satisfied all of the requirements of Chapter 11 of the
Bankruptcy Code.
2. The Plan Modification Motions are granted in
their entirety (except as to any aspect of the Plan Modification
Motions withdrawn on the record of the Confirmation Hearing).
3. Each objection to the Plan and any response or
request for continuance regarding confirmation of the Plan not
resolved by the terms of this Order, by a separate order entered
contemporaneously herewith, or by a statement announced on the
record of the Confirmation Hearing and not otherwise withdrawn,
waived or settled, is overruled and denied.
4. The record of the Confirmation Hearing is closed.
5. The findings of fact and conclusions of law of the Court
set forth herein and at the Confirmation Hearing shall
constitute findings of fact and conclusions of law pursuant to
Bankruptcy Rule 7052, as made applicable herein by Bankruptcy
Rule 9014, and the findings and conclusions of the Court at the
Confirmation Hearing are incorporated herein by reference.
6. Subject to the conditions in the Plan, the
Debtors are duly and validly authorized by the necessary
corporate power and authority to execute and consummate the
transactions contemplated by the Plan, and the form and content
of the Plan. 7. Effective as of the Effective
Date, the Old Common Stock of BI shall be canceled and be deemed
null and void and worthless. 8. Except as otherwise expressly
provided in the Plan or in that certain Order of this Court
dated December 22, 1997, to the fullest extent permitted by
applicable law (including, without limitation, section 105 of
the Bankruptcy Code), the occurrence of (a) the Effective Date
as to all Debtors other than YON and (b) the Yonkers Effective
Date as to YON, shall discharge and release the Debtors, the
Reorganized Corporations, and their respective successors and
assigns, and the assets or properties of any of the foregoing,
as of the Confirmation Date, from any and all Claims, debts,
liens, security interests, encumbrances and interests that arose
prior to the Confirmation Date, including, without limitation,
any Claim of the kind specified in sections 502(g), (h) or (i)
of the Bankruptcy Code, and any Claim for interest earned or
accrued after the Petition Date. 9. Except as
otherwise expressly set forth in the Plan or in that certain
Order of this Court dated December 22, 1997, on (a) the
Effective Date as to all Debtors other than YON and (b) the
Yonkers Effective Date as to YON, and to the fullest extent
permitted by applicable law (including, without limitation,
section 105 of the Bankruptcy Code), each holder (and trustees
and agents on behalf of each holder) of a Claim or Interest, in
consideration of the obligations of the Debtors and the
Reorganized Corporations under the Plan, shall be deemed to have
forever waived, released and discharged the Debtors, the
Reorganized Corporations, all current and former officers,
directors, agents, employees and representatives of the Debtors,
members of the Creditors' Committee (including present and
former members), members of the Unofficial Committee (including
present and former members), members of the Bank Group
(including present and former members) and others, including
(without limitation) professional persons retained by the
Debtors and the Creditors' Committee, the members of the
Creditors' Committee (including present and former members), the
members of the Unofficial Committee, members of the Bank Group,
and the agent for the Bank Group from any and all rights, claims
and liabilities arising prior to the Effective Date, or in the
case of YON, prior to the Yonkers Effective Date, out of or
relating to such Claim or Interest of any such holder or
otherwise relating to the business or activities of the Debtors,
or the Reorganized Corporations, except as otherwise set forth
in the Plan; provided, however, that to the extent that
applicable state law would permit a state to seek the payment of
taxes owed to it prior to the Petition Date by one or more
Debtors from a current or former officer of the Debtors
designated as a "responsible person" under such state law,
nothing herein shall act to discharge or release any current or
former officer of the Debtors from any such liability in the
event that any Debtor or Reorganized Corporation fails to repay
any such tax obligations pursuant to the terms of the Plan.
Persons deemed to have released Claims pursuant to this
paragraph of the Plan shall be forever precluded from asserting
any such Claims against any released Person. Nothing contained
herein or in the Plan shall be construed as discharging,
releasing or relieving the Debtors, the Reorganized
Corporations, or any other party, in any capacity, from any
liability with respect to the retirement plans of the Debtors to
which such party is subject under any law or regulatory
provision. Notwithstanding the foregoing, nothing contained in
the Plan shall preclude the Reorganized Corporations from
exercising its right to amend, modify or terminate the
retirement plans of the Debtors following the Effective Date, or
in the case of YON, following the Yonkers Effective Date, in
accordance with then existing provisions of applicable law.
10. Except as
otherwise expressly provided in the Plan or in that certain
Order of this Court dated December 22, 1997, and in accordance
with section 1141(d)(1) of the Bankruptcy Code, to the fullest
extent permitted by applicable law (including, without
limitation, section 105 of the Bankruptcy Code), subject to the
occurrence of the (a) the Effective Date as to all Debtors other
than YON and (b) the Yonkers Effective Date as to YON, as of the
Confirmation Date, all Creditors or other Persons that have
held, currently hold or may hold a Claim or other debt or
liability that is discharged or released pursuant to the Plan
shall be permanently barred and enjoined from taking any of the
following actions on account of any such discharged Claims,
debts or liabilities, other than actions brought to enforce any
rights or obligations under the Plan: (i) commencing or
continuing in any manner any action or other proceeding against
the Debtors, the Reorganized Debtors or their respective
property, officers, directors, agents, employees and
representatives and others including (without limitation) the
Creditors' Committee (including present and former members), the
Bank Group (including present and former members), the
Unofficial Committee (including present and former members), and
professional persons retained by the Debtors, the Creditors'
Committee, members of the Creditors' Committee, the Bank Group
and the Unofficial Committee; (ii) enforcing, attaching,
collecting or recovering in any manner any judgment, award,
decree or order against the Debtors, the Reorganized Debtors or
their respective property, officers, directors, agents,
employees and representatives and others including (without
limitation) the Creditors' Committee (including present and
former members), the Bank Group (including present and former
members), the Unofficial Committee (including present and former
members), and professional persons retained by the Debtors, the
Creditors' Committee, members of the Creditors' Committee, the
Bank Group and the Unofficial Committee; (iii) creating,
perfecting or enforcing any lien or encumbrance against the
Debtors, the Reorganized Debtors or their respective property,
officers, directors, agents, employees and representatives and
others including (without limitation) the Creditors' Committee
(including present and former members), the Bank Group
(including present and former members), the Unofficial Committee
(including present and former members), and professional persons
retained by the Debtors, the Creditors' Committee, members of
the Creditors' Committee, the Bank Group and the Unofficial
Committee; (iv) asserting a setoff, right of subrogation,
contribution, indemnification or recoupment of any kind against
any claim, debt, liability or obligation due to the Debtors, the
Reorganized Debtors or their respective property, officers,
directors, agents, employees and representatives and others
including (without limitation) the Creditors' Committee
(including present and former members), the Bank Group
(including present and former members), the Unofficial Committee
(including present and former members), and professional persons
retained by the Debtors, the Creditors' Committee, members of
the Creditors' Committee, the Bank Group and the Unofficial
Committee; and (v) commencing or continuing, in any manner or in
any place, any action that does not comply with or is
inconsistent with the provisions of the Plan or the Confirmation
Order. 11. Except as otherwise provided in the
Plan or in that certain Order of this Court dated December 22,
1997, the Debtors, the Reorganized Corporations, their
affiliates and their respective directors, officers, employees,
agents, representatives, professionals, attorneys, accountants
and financial advisors (acting in such capacity); the Creditors'
Committee, its members (including present and former members);
the Unofficial Committee, its members (including present and
former members); the heirs, executors, administrators,
successors and assigns of each of the foregoing shall neither
have nor incur any liability to any Person for any act taken or
omitted to be taken in good faith prior to (a) the Effective
Date as to all Debtors other than YON and (b) the Yonkers
Effective Date as to YON, in connection with or related to the
formulation, preparation, dissemination, implementation,
confirmation or consummation of the Plan, the Disclosure
Statement, or any contract, instrument, release or other
agreement or document created or entered into, or any other act
taken or omitted to be taken prior to the Effective Date or the
Yonkers Effective Date, as the case may be, in connection with
the Plan or the Chapter 11 Cases, including, without limitation,
any pleadings filed with, or actions taken in, the Bankruptcy
Court in connection with the formulation, preparation,
dissemination, implementation, confirmation or consummation of
the Plan, or the Disclosure Statement.
12. As of (a) the Effective Date as
to all Debtors other than YON and (b) the Yonkers Effective Date
as to YON, all pre-petition executory contracts and unexpired
leases listed on the "Schedule of Assumed and Assumed and
Assigned Executory Contracts and Unexpired Leases" (the
"Schedule of Assumptions") which the Debtors have filed with the
Court, a copy of which is annexed hereto as Exhibit B, shall be
deemed assumed pursuant to Bankruptcy Code Section 365.
13. Reorganized BSI's time to
exercise its rights under sections 363 and 365 of the Bankruptcy
Code with respect to BSI's unexpired real property lease
pursuant to which BSI leases the Union Square Property (the
"Union Square Lease"), including, without limitation, the right
to assume, assume and assign or reject the Union Square Lease,
shall be extended through the date that is the later of (a) one
year after the occurrence of the Effective Date, or (b) such
later period as this Court by subsequent Order may grant. This
Court shall retain jurisdiction with respect to the Union Square
Lease, such rights and any issues related to the foregoing.
14. YON's time to exercise its
rights under Sections 363 and 365 of the Bankruptcy Code with
respect to YON's unexpired real property lease pursuant to which
YON leases the Yonkers Property (the "Yonkers Lease"),
including, without limitation, the right to assume, assume and
assign or reject the Yonkers Lease, shall be extended through
the date that is the Yonkers Effective Date. The Bankruptcy
Court shall retain jurisdiction with respect to such rights and
any issues related thereto. 15. The
Yonkers Landlord and the Union Square Landlord each are estopped
from asserting or claiming in any judicial proceeding, that
granting or creating either or both of the Leasehold Mortgages
violates, or constitutes a default, or an event of default
under, the respective leases relating to the Yonkers Property
and the Union Square Property. 16. Each
landlord under a lease of real property to any of the Debtors
(including the Union Square Lease and the Yonkers Lease) is
permanently enjoined from asserting, or claiming in any judicial
proceeding, that any action taken by any or all of the Debtors
and/or the Reorganized Corporations in furtherance or pursuant
to the Plan, is a violation of, or a default under, any such
lease. 17.
As of the Effective Date, the executory contracts of R.R.
Donnelly & Sons Company and J. Baker, Inc., as each are amended,
shall each be deemed assumed as provided in the Plan.
18. Except as otherwise provided herein or in the Plan, all
pre-petition executory contracts and pre-petition unexpired
leases which (a) have not been or are not currently the subject
of a motion to assume or assume and assign filed pursuant to
section 365 of the Bankruptcy Code by any of the Debtors, (b)
are not listed on the Schedule of Assumptions, (c) are not
assumed or assumed and assigned pursuant to the provisions of
the Plan, or (d) are not referenced in Paragraphs 13, 14 or 17
hereof, shall be deemed rejected as of the Effective Date;
provided, however, that, with respect to any agreement,
obligation, security interest, transaction or similar
undertaking that the relevant Debtor believes is not executory,
is expired or is not a contract or is not a lease, and which is
later determined by the Court to be an executory contract or
unexpired lease that is subject to assumption or rejection under
section 365 of the Bankruptcy Code (the "Contract/Lease
Determination"), such executory contract or unexpired lease
shall not be deemed rejected hereby and the time of the
applicable Debtor or Reorganized Corporation to exercise its
rights under Bankruptcy Code section 365 with respect to any
such contract or lease shall be extended through the date which
is twenty days after the entry of an Order with respect to such
Contract/Lease Determination. 19. The rejection by any Debtor
of an executory contract or unexpired lease shall cause such
rejection to be a breach prior to the Petition Date under
sections 365(g) and 502(g) of the Bankruptcy Code. All proofs
of claim for Claims arising from the rejection of Executory
Contracts must be filed with the Court and served upon counsel
for the applicable Debtor, (i) within fifteen days after
service of the later of (a) notice of this Order, (b) other
notice that the executory contract or unexpired lease has been
rejected, or (c) in the event that any Debtor rejects any
executory contract or unexpired lease after the Confirmation
Date, within fifteen days of the date of such rejection or (ii)
within such other time as the Bankruptcy Court may order. Any
such Claims, proofs of which are not timely filed, will be
forever barred from assertion against or payment from the
Debtor, its estate or the Reorganized Corporations. Objections
to any such proof of claim for Claims arising from the rejection
of Executory Contracts shall be filed by the later of (a) 120
days after such proof of claim is filed, or (b) such later date
as may be set by the Bankruptcy Court. 20. At
the election of the relevant Debtor, monetary defaults under
each assumed executory contract and unexpired lease shall be
satisfied pursuant to section 365(b)(1) of the Bankruptcy Code,
in one of the following ways: (a) by payment of the default
amount in Cash on the Effective Date; (b) by issuance of a Cure
Note; or (c) on such other terms as agreed to by the parties to
such executory contract or unexpired lease; provided, however,
that with respect to the following entities, to the extent that
the Debtors assume their leases with such entities, any default
under such lease which is required to be cured pursuant to
Bankruptcy Code section 365 shall be cured by a Cash payment,
subject to Paragraph 18 hereof, on the Effective Date: Ventnor
Plaza Company, Prudential Real Estate Investors, Inc., Lend
Lease Real Estate Investments, New Plan Excel Realty Trust,
Inc., Federal Realty Investment Trust, Medford Associates
Limited Partnership, FNM Trust, Harold Cohen Associates, Inc.,
Trustees of Portland Associates Trust, Independence Mall Group
and Senpike Mall Company (relative to the Sangertown Square Mall
lease, New Hartford, New York).
21. In the event of a dispute regarding: (i) the
amount of any Cure Payment; (ii) the ability of the Debtor that
is a party thereto to provide adequate assurance of future
performance under the contract or lease to be assumed or to be
assumed and assigned; or (iii) any other matter pertaining to
assumption or to be assumed and assigned, the Cure Payments
shall be made following the entry of a Final Order of this Court
resolving the dispute and approving assumption or approving
assumption and assignment, as the case may be. The Court shall
retain jurisdiction to with respect to any such disputes.
22. Executory contracts and unexpired leases entered
into and other obligations incurred after the Petition Date by
any Debtor shall be performed by such Debtor or by such
Reorganized Corporation liable thereunder in the ordinary course
of its business. Accordingly, such executory contracts,
unexpired leases and other obligations shall survive and remain
unaffected by entry of this Order.
23. Unless otherwise ordered by the Court, all (a)
final Fee Applications based on services rendered in connection
with these Chapter 11 Cases prior to the Effective Date or (b)
pursuant to sections 503(b) and 507 of the Bankruptcy Code for
services rendered, or costs and expenses of preserving the
estates of the Debtors, shall be filed with the Bankruptcy Court
and served upon counsel for the Reorganized Corporations, the
Bank Group, the agent for the Bank Group, Gabriel Capital, L.P.,
the Creditors' Committee, the Unofficial Committee and the
Office of the United States Trustee, no later than forty-five
days after the Effective Date; provided, however, that
Professionals ("Ordinary Course Professionals") retained
pursuant to the Ordinary Course Professionals' Compensation
Order shall not be required to file a fee application.
24. Any Professional
(other than an Ordinary Course Professional) or other Person or
Creditor that fails timely to file a Fee Application for final
allowance of compensation and reimbursement of expenses shall be
forever barred from asserting such Claims against the Debtors or
the Reorganized Corporations, and the Debtors and the
Reorganized Corporations shall be discharged from such Claims,
and neither the Debtors nor the Reorganized Corporations shall
be obligated to pay such Claims; provided, that, in any event,
any Professional or other Person that is subject to the Ordinary
Course Professionals' Compensation Order or other order of the
Bankruptcy Court may continue to receive payments as provided
therein for services rendered and expenses incurred. Objections
to Fee Applications, if any, shall be filed and served on
Counsel for the Reorganized Corporations, the Bank Group, the
Creditors' Committee, the Unofficial Committee and the Office of
the U.S. Trustee, and the requesting Person no later than
seventy-five days after the Effective Date. Final allowance of
such Fee Claims shall be subject to approval by the Court
following a hearing. The Court shall retain jurisdiction to
determine such fee requests, and the right to extend or change
the timetables established herein. 25. Notwithstanding
anything herein to the contrary, counsel for the Debtors shall
not be required to file any applications for allowance of fees
and reimbursement of expenses for services rendered to YON after
(a) the date which is the Effective Date and (b) through the
Yonkers Effective Date. YON or the Reorganized Corporations
shall be authorized to pay any such fees and reimburse any such
expenses in the ordinary course of its or their business.
26. Except as
otherwise provided herein or as otherwise ordered by the Court,
any objection to any Claim, all Claims objections shall be Filed
and served on the applicable claimant no later than the
Effective Date, or in the case of Yonkers, the Yonkers Effective
Date, or, if a Claim is permitted to be Filed thereafter, within
thirty (30) days after such Claim has been Filed. Any Claim
which is (a) Allowed under the terms of this Plan or pursuant to
an Order of the Bankruptcy Court prior to the Effective Date, or
with respect to YON, the Yonkers Effective Date or (b) not the
subject of a Claim objection pending before the Bankruptcy Court
by the Effective Date, or in the case of YON, the Yonkers
Effective Date, shall be deemed Allowed for all purposes. After
the Effective Date, or in the case of YON, the Yonkers Effective
Date, and pursuant to the provisions of the Bankruptcy Code, the
Reorganized Corporations may settle or compromise any Disputed
Claim without approval of the Bankruptcy Court.
27.
28. (a) Pursuant to
Section 1146(c) of the Bankruptcy Code, the issuance, transfer,
or exchange of any security, or the making, delivery, filing, or
recording of any instrument of transfer, under the Plan shall
not be taxed under any law imposing a recording tax, stamp tax,
transfer tax, or similar tax.
(b) Without limiting the
generality of subparagraph (a) of this paragraph, the making,
delivery, filing, or recording at any time of any deed, bill of
sale, mortgage, leasehold mortgage, deed of trust, leasehold
deed of trust, memorandum of lease, notice of lease, assignment,
leasehold assignment, security agreement, financing statement,
or other instrument of absolute or collateral transfer required
by, or deemed necessary or desirable by the Debtors or
Reorganized Corporations, with respect to any of the
transactions contemplated by the Plan, including, without
limitation, any mortgage with respect to the Union Square
Property or the Yonkers Property, shall not be so taxed.
(c) All
filing or recording officers, wherever located and by whomever
appointed, are hereby directed to accept for filing or
recording, and to file or record immediately upon presentation
thereof, all such deeds, bills of sale, mortgages, leasehold
mortgages, deeds of trust, leasehold deeds of trust, memoranda
of lease, notices of lease, assignments, leasehold assignments,
security agreements, financing statements, and other instruments
of absolute or collateral transfer without payment of any
recording tax, stamp tax, transfer tax, or similar tax imposed
by federal, state or local law. Notice in the form annexed to
this Confirmation Order as Exhibit C, (i) shall have the effect
of an order of the Court, (ii) shall constitute sufficient
notice of the entry of this Confirmation Order to such filing
and recording officers, and (iii) shall be a recordable
instrument notwithstanding any contrary provisions of
nonbankruptcy law. This Court specifically retains jurisdiction
to enforce the foregoing direction, by contempt or otherwise.
29. To the extent, if any, that they
constitute "securities," the issuance and distribution of the
(i) Tax Notes, (ii) New Notes, (iii) CAP Notes, (iv) Cure Notes,
(v) New Warrants or (vi) the New Common Stock, have been duly
authorized, and when issued as provided in the Plan, will be
validly issued, fully paid and nonassessable. The offer and
sale of the foregoing is in exchange for Claims, or principally
in exchange for Claims and partly for cash or property, within
the meaning of Section 1145(a)(1) of the Bankruptcy Code. In
addition, under Section 1145 of the Bankruptcy Code, to the
extent, if any, that the above-listed items constitute
"securities," (I) the offering of such items is exempt and the
issuance and distribution of such items will be exempt from
Section 5 of the Securities Act of 1933 and any state or local
law requiring registration prior to the offering, issuance,
distribution or sale of securities, and (II) all of the
above-described items (including, without limitation, any New
Common Stock acquired upon the exercise of New Warrants) will be
freely tradable by the recipients thereof, subject to the
provisions of Section 1145(b)(1) of the Bankruptcy Code relating
to the definition of an underwriter in Section 2(11) of the
Securities Act of 1933, as amended, and compliance with any
rules and regulations of the Securities and Exchange Commission,
if any, applicable at the time of any future transfer of such
securities or instruments.
30. Notwithstanding the entry of this Order and the
occurrence of the Effective Date, this Court shall retain such
jurisdiction over the Chapter 11 Cases after the Effective Date
as is legally permissible, including, without limitation,
jurisdiction to: (a) Determine the allowability of Claims
and Interests upon objection to such Claims or Interests by a
Debtor, the Reorganized Debtors, other successors to any of the
Debtors, or any other party in interest and the validity,
extent, priority and nonavoidability of consensual and
nonconsensual liens and other encumbrances;
(b) Determine tax liability pursuant
to section 505 of the Bankruptcy Code;
(c) Approve, pursuant to section 365 of
the Bankruptcy Code, all matters related to the assumption,
assumption and assignment, or rejection of any executory
contract or unexpired lease of any of the Debtors, including,
without limitation, assumption and assignment of the Union
Square Property; (d) Determine
requests for payment of administrative expenses entitled to
priority under section 507(a)(1) of the Bankruptcy Code,
including compensation of parties entitled thereto under section
330 of the Bankruptcy Code; (e)
Resolve controversies and disputes regarding this Plan or its
interpretation and to enforce the terms of this Order; (f)
Implement the provisions of this Plan and entry of Orders in
aid of confirmation and consummation of this Plan, subject to
Paragraph 23 of that certain Order dated December 22, 1997,
including, without limitation, appropriate Orders to protect the
Debtors and their successors from actions by creditors and/or
Interest holders of the Debtors or any of them and resolving
disputes and controversies regarding property of the Estates and
the Reorganized Corporations that is subject to restructuring
negotiations on and after the Confirmation Date;
(g) Modify the Plan pursuant to section 1127 of the
Bankruptcy Code;
(h) Adjudicate any causes of action that arose prior
to the Confirmation Date or in connection with the
implementation of this Plan, including avoidance actions,
brought by a Debtor, Reorganized Corporation, other successors
of any of the Debtors as the representative of the Debtors'
Estates or a party in interest (as a representative of any
Debtor's Estate); and (i) Enter a Final Order closing the
Chapter 11 Cases. 31. All Persons holding Claims or
Interests which are dealt with under the Plan are hereby
directed in accordance with the terms of the Plan to execute,
deliver, file, or record any document, and to take any action
necessary to implement, effectuate and consummate the Plan in
accordance with its terms, and all such entities shall be bound
by the terms and provisions of all documents to be executed by
them in connection with the Plan.
32. In the event of any conflict or
inconsistency between the terms of (a) the Plan, (b) this
Confirmation Order, and (c) the Disclosure Statement, the terms
of this Confirmation Order shall control; provided, however,
that if the terms of the Plan or the Confirmation Order (i) do
not expressly resolve the issue under consideration, or (ii) are
ambiguous with regard to such issue, the Reorganized
Corporations or other parties-in-interest, on such notice as may
be appropriate, may seek such relief from this Court as may be
necessary. 33. To the
extent provided by the Plan, the Debtors shall continue to
exist on and after the Effective Date, or in the case of YON,
the Yonkers Effective Date, as the Reorganized Corporations,
with all the rights and powers of such corporations under
applicable law. Except as otherwise provided in the Plan or in
that certain Order of this Court dated December 22, 1997, on or
after the Effective Date, or in the case of YON, the Yonkers
Effective Date, any and all assets and properties of the
estates, and any and all assets and properties acquired by the
Debtors or the Reorganized Corporations under any provision of
the Plan, shall vest in the Reorganized Corporations, free and
clear of any and all Claims, Liens, charges or other
encumbrances. Except as otherwise provided by the Plan on and
after the Effective Date, or in the case of YON, the Yonkers
Effective Date, the Reorganized Corporations may operate their
businesses and may use, acquire and dispose of assets and
properties and compromise or settle any claims against it
without supervision or approval by the Bankruptcy Court and free
of any restrictions of the Bankruptcy Code or Bankruptcy Rules,
other than those restrictions expressly imposed by the Plan,
this Order, any other agreement to which the applicable
Reorganized Corporation is a party and which survives the
Effective Date (or in the case of YON, the Yonkers Effective
Date), or applicable law. Without limiting the foregoing, the
Reorganized Corporations may pay the charges that it incurs
after the Effective Date, or in the case of YON, the Yonkers
Effective Date, for professional fees, disbursements, expenses
or related support services without application to the
Bankruptcy Court. 34. On the Effective Date, the Creditors'
Committee shall be deemed dissolved and the members of the
Creditors' Committee shall be deemed released and discharged
from all rights and duties arising from or related to the
Chapter 11 Cases. The Professionals retained by the Creditors'
Committee and the members thereof shall not be entitled to
compensation or reimbursement of expenses for any services
rendered after the Effective Date, except for services rendered
and expenses incurred in connection with any applications for
allowance of compensation and reimbursement of expenses pending
on the Effective Date or Filed after the Effective Date pursuant
to Section 12.07(b) of the Plan.
35. Pursuant to Section 1141 of the Bankruptcy Code,
effective as of the Confirmation Date, but subject to the
occurrence of the Effective Date, or in the case of YON, the
occurrence of the Yonkers Effective Date, and except as
expressly provided in the Plan or this Confirmation Order, the
provisions of the Plan (including the Exhibits to, and all
documents and agreements executed pursuant to, the Plan) and
this Confirmation Order shall be binding upon (a) the Debtors,
(b) the Reorganized Corporations, (c) all holders of Claims
against or Interests in the Debtors, whether or not impaired
under the Plan and whether or not, if impaired, such holders
accepted the Plan, (d) each Person acquiring property under the
Plan, (e) any other party in interest, (f) any Person making an
appearance in the Chapter 11 Cases, and (g) each of the
foregoing 's respective heirs, successors, assigns, trustees,
executors, administrators, affiliates, officers, directors,
agents, representatives, attorneys, beneficiaries or guardians.
36. The Debtors are authorized and
empowered (a) to execute, deliver, modify (to the extent such
modification does not materially and adversely affect the rights
of another Person unless the Debtor or Debtors, as the case may
be, obtains the written consent of such Person) and/or file all
Exhibits to the Plan, documents and agreements introduced into
evidence at the Confirmation Hearing (including all exhibits and
attachments thereto) and any and all other documents and
agreements necessary to consummate and implement the Plan and
(b) to perform any and all corporate acts and/or actions in
implementing the Plan. 37. If this Confirmation Order is
vacated because, inter alia, the Effective Date does not occur,
then (a) the Plan, and (b) any settlement or compromise embodied
in the Plan (including the fixing or limiting to an amount
certain any Claim or Class of Claims), assumption or rejection
of executory contracts or leases affected by the Plan, and any
document or agreement executed pursuant to the Plan, shall be
null and void in all respects. In such event, nothing contained
in the Plan or this Confirmation Order, and no acts taken in
preparation for consummation of the Plan, shall (w) constitute a
waiver or release of any Claims by or against any of the Debtors
or any other Person, (x) prejudice in any manner the rights of
the Debtors or any other Person, (y) constitute an admission of
any sort by any of the Debtors or any other Person, or (z) be
construed as a finding of fact or conclusion of law with respect
thereto. 38. Notwithstanding anything
to the contrary contained in the Plan or herein, the Plan shall
not affect, nor constitute a release, discharge or waiver of,
any rights of Senpike Mall Company ("Senpike") relative to (a)
the lease dated on or about June 30, 1980, as amended, of
nonresidential real property located at the Riverside Mall,
Utica, New York (the "Senpike Lease") and (b) the Payment
Agreement dated on or about September 1, 1994 between Senpike
and BSI (the "Payment Agreement"), to (i) offset any mutual debt
owing by Senpike to BSI or Reorganized BSI under the Senpike
Lease or the Payment Agreement pursuant to Sections 553 and 506
of the Bankruptcy Code; (ii) assert rights of recoupment against
BSI or Reorganized BSI in accordance with applicable law with
respect to matters pertaining to the Senpike Lease and the
Payment Agreement; or (iii) exercise any such offsets or rights
of recoupment; all such rights, debts, and claims, if any, are
specifically preserved and reserved notwithstanding any release,
discharge, satisfaction, or settlement under the Plan or this
Order, and Senpike's claims and liens, if any, shall survive
confirmation of the Plan. This Court retains jurisdiction with
respect to the foregoing and any disputes which may arise
between Senpike and BSI or the Reorganized Corporations with
respect thereto. The parties reserve all of their rights with
respect to Senpike's Motion dated November 5, 1998 seeking an
Order terminating the automatic stay.
39. This Order is and shall be
deemed to be a separate Order with respect to each of the
Debtors for all purposes. The Clerk of the Bankruptcy Court is
directed to file and docket this Order in the Chapter 11 Case of
each of the Debtors. 40. The failure
specifically to include or reference any particular provision of
the Plan in this Confirmation Order shall not diminish or impair
the effectiveness of such provision, it being the intent of the
Court that the Plan be confirmed in its entirety.
41. This Order
(without Exhibit A) shall be served as soon as reasonably
practical after the date hereof, by first class mail, upon (a)
the United States Trustee, and (b) all Persons who were mailed
copies of the Disclosure Statement pursuant to the Solicitation
Procedures Order. As soon as reasonably practical after the
date hereof, the Debtors shall cause to be published one time in
the New York Times (national edition) and the Boston Globe a
notice of entry of this Confirmation Order. Dated: New
York, New York
November 18, 1998
UNITED STATES
BANKRUPTCY COURT Exhibit 2.2
SOUTHERN DISTRICT OF NEW YORK
- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -x
In re :
Chapter 11 BRADLEES STORES, INC., et al.,
Case Nos. 95 B 42777
through 95 B 42784 (BRL)
Debtors. :
(Jointly Administered) - - - - - - - - - - - - - - - - - - - -x
FIRST AMENDED AND MODIFIED JOINT PLAN OF
REORGANIZATION OF BRADLEES STORES, INC.
AND AFFILIATES UNDER CHAPTER 11 OF THE BANKRUPTCY CODE
Stuart Hirshfield (SH-0099)
Sandor E. Schick (SS-4991)
Hugh M. McDonald (HM-2667)
Marc Hirschfield (MH-1537)
DEWEY BALLANTINE LLP
1301 Avenue of the Americas
New York, New York 10019-6092
(212) 259-8000
Attorneys for Bradlees Stores, Inc., New Horizons of Yonkers,
Inc., Bradlees, Inc., Bradlees Administrative Co., Inc., Dostra
Realty Co., Inc., Maximedia Services, Inc., New Horizons of
Bruckner, Inc. and New Horizons of Westbury, Inc., Debtors and
Debtors-in-Possession
Dated: New York, New York
November 17, 1998
INTRODUCTION
Bradlees Stores, Inc. ("BSI"), a Massachusetts corporation,
together with its affiliated debtors, Bradlees, Inc. ("BI"), a
Massachusetts corporation, Bradlees Administrative Co., Inc.
("BAC"), a Massachusetts corporation, Maximedia Services, Inc.
("MAX"), a Delaware corporation, Dostra Realty Co., Inc.
("DOS"), a Delaware corporation, New Horizons of Yonkers, Inc.
("YON"), a Delaware corporation, New Horizons of Bruckner, Inc.
("BRU"), a Delaware corporation, and New Horizons of Westbury,
Inc. ("WES"), a Delaware corporation (collectively, "Bradlees"
or the "Debtors"), as debtors and debtors-in-possession in the
above-captioned Chapter 11 cases, hereby propose the following
first amended and modified joint plan of reorganization (the
"Plan") pursuant to section 1121(a) of title 11 of the United
States Code. Reference is made to the Debtors' Disclosure
Statement (as defined herein) for a discussion of the Debtors'
history, businesses, properties, results of operations,
projections for future operations, a summary and analysis of the
Plan and other related matters. The Debtors are the proponents
of the Plan within the meaning of section 1129 of the Bankruptcy
Code (as defined herein). These reorganization cases have been
consolidated for procedural purposes only and are being jointly
administered pursuant to an order of the United States
Bankruptcy Court for the Southern District of New York. This
Plan does not contemplate the substantive consolidation of any
of the Debtors for any purpose, including voting or distribution
purposes. Certain of the Debtors will be dissolved or merged
(or combined in another form of transaction) with another Debtor
as a means of implementing this Plan. For voting and
distribution purposes, the Plan contemplates separate classes
for each Debtor. The cash and reorganization securities of the
Debtors, as reorganized, will be distributed to the claimants
and equity interest holders in each of the classes of each of
the Debtors, as set forth herein.
Under section 1125(b) of the Bankruptcy
Code, a vote to accept or reject the Plan cannot be solicited
from a holder of a claim or interest until such time as the
Disclosure Statement has been approved by the Bankruptcy Court
(as defined herein) and distributed to holders of claims and
interests. ALL HOLDERS OF CLAIMS AGAINST THE DEBTORS ARE
ENCOURAGED TO READ THE PLAN AND THE RELATED DISCLOSURE STATEMENT
IN THEIR ENTIRETY BEFORE VOTING TO ACCEPT OR TO REJECT THE PLAN.
SUBJECT TO CERTAIN RESTRICTIONS AND REQUIREMENTS SET FORTH IN
THE PLAN, THE DEBTORS RESERVE THE RIGHT TO ALTER, AMEND, MODIFY,
REVOKE OR WITHDRAW THE PLAN PRIOR TO ITS SUBSTANTIAL
CONSUMMATION. Article I
DEFINITIONS, RULES OF
INTERPRETATION AND
CONSTRUCTION A. Scope of
Definitions. Except as
expressly provided or unless the context otherwise requires, all
capitalized terms not otherwise defined shall have the meanings
assigned to them in this Article I. Any term used in the Plan
that is not defined herein, 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.
B.
Definitions.
Section 1.01 "Additional Quarterly Distribution"
means a Distribution on a Quarterly Distribution Date to each
holder of Allowed Claims, as the case may be, from the Disputed
Claims Reserve for such holder's Class of Claims.
Section 1.02 "Adequate Protection Payments"
means the payments made by the Debtors to the Bank Group
pursuant to the Agreed Order Regarding Adequate Protection of
the Senior Bank Group's Interests and Related Relief, dated
October 24, 1995.
Section 1.03 "Administrative Claim"
means a Claim for costs and expenses of administration
allowed under sections 503(b), 507(b) or 1114(e)(2) of the
Bankruptcy Code, including: (a) the actual and necessary costs
and expenses incurred after the Petition Date of preserving the
respective Estates and operating the business of the Debtors
(including, without limitation, wages, salaries, commissions for
services and payments for inventories, leased equipment and
premises); (b) compensation for legal, financial advisory,
accounting and other services and reimbursement of expenses
awarded or allowed under sections 330(a) or 331 of the
Bankruptcy Code; (c) all fees and charges assessed against the
Estates under chapter 123 of title 28, United States Code, 28
U.S.C. '' 1911-1930; and (d) Allowed Reclamation Claims.
Section 1.04 "Affiliates"
shall have the meaning given
such term by section 101(2) of the Bankruptcy Code.
Section 1.05 "Allowed"
means, with respect to a Claim
or Interest, to the extent such Claim or Interest is either:
(a) scheduled by a Debtor pursuant to the Bankruptcy Code and
Bankruptcy Rules in a liquidated amount and that is not listed
as contingent, unliquidated or disputed; or (b) proof of which
has been timely Filed, or deemed timely Filed under applicable
law or order of the Court, with the Court pursuant to the
Bankruptcy Code, the Bankruptcy Rules and any applicable orders
of the Court, or late Filed with leave of the Court after notice
and a hearing; and which: (i) has not been objected to within
the period fixed by the Bankruptcy Code, the Bankruptcy Rules
and applicable orders of the Court; (ii) has otherwise been
allowed by a Final Order or as set forth in this Plan. An
Allowed Claim: (A) includes a Disputed Claim to the extent such
Disputed Claim becomes allowed after the Effective Date in the
manner described in section (b)(ii) of this Section, when the
context so requires; and (B) shall be net of any valid setoff
exercised with respect to such Claim pursuant to the provisions
of the Bankruptcy Code. Unless otherwise specified herein, in
section 506(b) of the Bankruptcy Code or by order of the
Bankruptcy Court, "Allowed Claim," shall not, for purposes of
distributions under the Plan, include (x) for Prepetition
Claims, interest on such Claim or Claims accruing from or after
the Petition Date, (y) punitive or exemplary damages or (z) any
fine, penalty or forfeiture.
Section 1.06 "Allowed Administrative Claim"
means an Administrative Claim to the extent it is Allowed.
Section 1.07 "Allowed Claim"
means a Claim to the extent it is Allowed.
Section 1.08 "Allowed Convenience Claim"
means a Convenience Claim to the extent it is Allowed.
Section 1.09 "Allowed Intercompany Claim"
means an Intercompany Claim to the extent it is Allowed.
Section 1.10 "Allowed Priority Claim"
means a Priority Claim to the extent it is Allowed.
Section 1.11 "Allowed Reclamation Claim"
means a Claim arising under section 546(c)(2) of the Bankruptcy
Code which has become Allowed pursuant to the Bankruptcy Court
Order dated November 12, 1996.
Section 1.12 "Amended By-Laws"
means the Amended and Restated By-laws of Reorganized BI and
Reorganized BSI, a copy of each of which shall be filed with the
Bankruptcy Court on or before the Exhibit Filing Date as Exhibit
A hereto.
Section 1.13 "Amended Certificate of Incorporation"
means the Amended and Restated Certificate of Incorporation of
Reorganized BI and Reorganized BSI, a copy of each of which
shall be filed with the Bankruptcy Court on or before the
Exhibit Filing Date as Exhibit B hereto.
Section 1.14 "Available Unclaimed Property"
means Unclaimed Property that is unclaimed on the second
anniversary of the date of Distribution of such property
(together with any interest thereon and proceeds thereof).
Section 1.15 "Ballot"
means the ballot distributed to a holder of a Claim on which
ballot such holder of a Claim may, inter alia, (a) vote for or
against the Plan; and (b) to the extent that such holder holds a
General Unsecured Claim, elect to have its General Unsecured
Claim treated as a Convenience Claim in the relevant Class.
Section 1.16 "Bank Documents"
means the Credit Agreement among Bradlees, Inc., Various Lending
Institutions and Bankers Trust Company, as Agent, dated as of
March 3, 1993, as amended, pursuant to which the Debtors
maintained a revolving credit facility.
Section 1.17 "Bank Group"
means Bankers Trust Company, as Agent, and the banks identified
as "Banks" in the Bank Documents and their successors and
assigns, including, without limitation, Gabriel Capital, L.P.
Section 1.18 "Bank Group Claim"
means the Claim of the Bank Group, which arises under the Bank
Documents against each and every Debtor.
Section 1.19 "Bankruptcy Code"
means the Bankruptcy Reform Act of 1978, as amended and codified
at title 11 of the United States Code, 11 U.S.C. '' 101 et seq.
Section 1.20 "Bankruptcy Court"
means the United States Bankruptcy Court for the Southern
District of New York which has jurisdiction over the Chapter 11
Cases.
Section 1.21 "Bankruptcy Rules"
means the Federal Rules of Bankruptcy Procedure and the Official
Bankruptcy Forms, as amended, the Federal Rules of Civil
Procedure, as amended, as applicable to the Chapter 11 Cases,
and the Local Rules of the Bankruptcy Court.
Section 1.22 "Bonds"
means the (i) 11% Senior Subordinated Notes due August 1, 2002
in the original principal amount of $125,000,000 and (ii) 9-1/4%
Senior Subordinated Notes due March 3, 2003 in the original
principal amount of $100,000,000.
Section 1.23 "Bond Claims"
means the claims arising under the Bonds.
Section 1.24 "Bond Indenture Trustee"
means State Street Bank and Trust Company as the Indenture
Trustee under certain indentures acting on behalf of Bonds.
Section 1.25 "Bruckner Escrow Funds"
means the funds held in escrow from the sale of the property
formerly owned by BRU pursuant to the Bankruptcy Court Order
dated January 7, 1998.
Section 1.26 "Bruckner Fraction"
means the fraction, the numerator of which shall be the amount
of BRU-GEN Claims and the denominator of which shall be the sum
of the amount of (a) BRU-BANK Claims, (b) BRU-SPE Claims and (c)
BRU-GEN Claims.
Section 1.27 "BTM"
means BTM Capital Corporation f/k/a BOT Financial Corporation.
Section 1.28 "BTM Stipulation"
means the Settlement Stipulation dated June 4, 1996, approved by
Bankruptcy Court Order dated June 25, 1996, among BSI, BI and
BTM.
Section 1.29 "Business Day"
means any day on which commercial banks are open for business in
New York, New York.
Section 1.30 "Cap Notes"
means the new notes of Reorganized BSI described in Section 4.03
hereof, issued on and after the Effective Date and distributed
in the manner provided in this Plan to holders of Capital Lease
Claims.
Section 1.31 "Capital Lease"
means any putative lease of equipment in which any of the
Debtors has a financial interest and regarding which the Court
has entered an Order holding, or with which the putative lessor
is in agreement, that such putative lease constitutes a
financing transaction.
Section 1.32 "Cash"
means cash and cash equivalents.
Section 1.33 "Cash Distributions"
means a Distribution of Cash.
Section 1.34 "Chapter 11 Cases"
means case numbers 95 B 42777 through 95 B 42784 (BRL),
inclusive, commenced by the Debtors under Chapter 11 of the
Bankruptcy Code on the Petition Date in the Bankruptcy Court,
and styled "In re Bradlees Stores, Inc., et al., Debtors."
Section 1.35 "Claim"
means (a) any right to payment from any of the Debtors,
whether or not such right is reduced to judgment, liquidated,
unliquidated, fixed, contingent, matured, unmatured, disputed,
undisputed, legal, equitable, secured or unsecured or (b) any
right to an equitable remedy for breach of performance if such
breach gives rise to a right of payment from any of the Debtors,
whether or not such right to an equitable remedy is reduced to
judgment, fixed, contingent, matured, unmatured, disputed,
undisputed, secured or unsecured.
Section 1.36 "Class"
means a category of holders of Claims or Interests as described
in Article II.
Section 1.37 "Class [___] Claim"
Section 1.38
means a Claim in the particular Class of Claims identified and
described in Article III.
Section 1.39
Section 1.40
Section 1.41
Section 1.42
Section 1.43
Section 1.44
Section 1.45
Section 1.46 "Combination Transaction"
means a consolidation, merger, contribution of assets or other
transaction in which a Combining Debtor merges with or transfers
substantially all of its assets and liabilities to Reorganized
BSI or an affiliated corporation on or about the Effective Date,
as set forth in the Disclosure Statement.
Section 1.47 "Combining Debtors"
means the Debtors shown as entering into a Combination
Transaction in Exhibit 3 to the Disclosure Statement.
Section 1.48 "Confirmation Date"
means the date on which the Clerk of the Bankruptcy Court enters
the Confirmation Order.
Section 1.49 "Confirmation Order"
means the order, entered by the Bankruptcy Court, confirming the
Plan in accordance with the provisions of Chapter 11 of the
Bankruptcy Code.
Section 1.50 "Consummation Costs"
means all Cash Distributions required to be made under, or to
give effect to, this Plan on or about the Effective Date other
than Cash Distributions made to holders of the Bank Group Claim,
SPE Claims, BRU-Gen Claims, BSI-Gen Claims, and WES-Gen Claims.
Section 1.51 "Consummation Funds"
shall mean: (i) the Westbury Escrow Funds, (ii) the Bruckner
Escrow Funds, and (iii) Tax Refund proceeds.
Section 1.52 "Convenience Claim"
means a Claim against BSI that would otherwise be classified as
a Class BSI-GEN Claim that is asserted in the amount of $500 or
less or that is more than $500, if the holder has elected on the
Ballot, within the time fixed by the Bankruptcy Court for
completing and returning such Ballot, to accept $500 in Cash in
full satisfaction, discharge and release of such Claim.
Section 1.53 "Court"
shall have the same meaning as Bankruptcy Court.
Section 1.54 "Creditor"
means any Person that has a Claim.
Section 1.55 "Creditors' Committee"
means the Official Committee of Unsecured Creditors originally
appointed by the United States Trustee on July 6, 1995 pursuant
to Bankruptcy Code section 1102.
Section 1.56 "Cure Notes"
means the new notes of Reorganized BSI described in Section 4.04
hereof, issued on and after the Effective Date and distributed
in the manner provided in this Plan.
Section 1.57 "Cure Payments"
means the payment in Cash or with a Cure Note with respect to
the assumption of an executory contract or unexpired lease,
pursuant to section 365(b) of the Bankruptcy Code, of an amount
equal to all matured but unpaid monetary obligations, without
interest, under such executory contract or unexpired lease to
the extent such obligations are enforceable under the Bankruptcy
Code and applicable non-bankruptcy law.
Section 1.58 "D&O Insurance"
means the officers and directors insurance maintained by the
Debtors which covers the Debtors' officers and directors.
Section 1.59 "Debtor"
means one of the Debtors.
Section 1.60 "Debtors"
refers collectively to Bradlees Stores, Inc., New Horizons of
Yonkers, Inc., Bradlees, Inc., Bradlees Administrative Co.,
Inc., Dostra Realty Co., Inc., Maximedia Services, Inc., New
Horizons of Bruckner, Inc., and New Horizons of Westbury, Inc.,
debtors-in-possession in the Chapter 11 Cases.
Section 1.61 "DIP Agreement" or "DIP Facility"
means the Revolving Credit and Guaranty Agreement, dated as of
December 23, 1997, as approved by order of the Bankruptcy Court
dated December 22, 1997, among BSI (as borrower), BI, BAC and
the subsidiaries of BSI (as guarantors), BankBoston, N.A. (as
Administrative Agent and as Issuing Bank), BankBoston Retail
Finance, Inc., (as Agent), The CIT Group/Business Credit, Inc.
and Congress Financial Corporation (New England) (each as
Co-Agent) and those entities identified as "Lenders" therein and
their respective successors and assigns.
Section 1.62 "DIP Claims"
means all Claims arising under the DIP Agreement, including
Claims against BSI and Claims arising under the guarantees
issued by each of the other Debtors.
Section 1.63 "Disbursing Agent"
means Reorganized BSI or such other person, which shall be
duly bonded at all times, as may be retained by Reorganized BSI
with approval of the Bankruptcy Court to hold and distribute the
Distributions and such other property as may be required by the
Bankruptcy Court.
Section 1.64 "Disclosure Statement"
means the written disclosure statement, dated October 2, 1998,
that relates to the Plan, as amended, supplemented or modified
from time to time, and as approved by the Bankruptcy Court under
section 1125 of the Bankruptcy Code and Bankruptcy Rule 3017.
Section 1.65 "Disclosure Statement Order"
means the order of the Court approving the Disclosure Statement
as containing adequate information pursuant to section 1125 of
the Bankruptcy Code.
Section 1.66 "Disputed Administrative Claims"
means any Administrative Claims as to which the Debtors or any
other party in interest has interposed an objection in
accordance with the Bankruptcy Code and the Bankruptcy Rules,
which objection has not been withdrawn or determined by a Final
Order. Section 1.67 "Disputed Claim"
means (a) if no proof of Claim has been timely Filed or
deemed timely Filed under applicable law or order of the Court,
a Claim that has been listed on a Debtor's Schedules of
Liabilities as other than disputed, contingent or unliquidated,
but as to which no later than the Effective Date an objection
has been Filed; or (b) if a proof of Claim has been Filed or
deemed timely Filed under applicable law or order of the Court,
a Proof of Claim as to which an objection has been timely Filed
and has not been (i) withdrawn, (ii) overruled or denied by a
Final Order or (iii) granted in whole by a Final Order. For the
purposes of the Plan, a Claim shall be considered a Disputed
Claim only if, unless otherwise ordered by the Bankruptcy Court,
an objection has been Filed with respect to such Claim no later
than the Effective Date or if a Claim is permitted to be Filed
thereafter, no later than thirty days after such Claim has been
Filed. For purposes of this Plan, a Disputed Claim means only
that portion of a Claim which is Disputed (i.e., only to the
extent of the difference between the amount asserted in the
Proof of Claim and the amount admitted by the Debtors as
constituting an Allowed Claim in their objection). The portion
of a Claim that is not in dispute pursuant to a timely Filed
objection shall be an Allowed Claim and paid upon the Initial
Distribution Date pursuant to the Plan. Section 1.68 "Disputed
Claims Reserve" means a reserve of
Cash or Reorganization Securities for the relevant Class,
established herein for, inter alia, the payment of (a) Disputed
Claims that become Allowed Claims after the Effective Date, and
(b) Additional Quarterly Distributions to holders of previously
Allowed Claims, which shall be held in trust for the benefit of
the holders of the above-referenced types of Claims and shall
not constitute property of the Debtors' estates or the
Reorganized Corporations. Section 1.69
"Distribution" means the
distribution in accordance with this Plan of: (a) Cash, or (b)
Reorganization Securities, as the case may be.
Section 1.70 "Distribution Address"
means the address set forth in the relevant proof of claim, as
such address may have been updated pursuant to Bankruptcy Rule
2002(g). If no proof of claim is Filed in respect of a
particular Claim, such defined term means the address set forth
in the relevant Debtor's Schedules, as such address may have
been updated pursuant to Bankruptcy Rule 2002(g).
Section 1.71 "Effective Date"
means a Business Day selected by the Debtors which is no later
than the first Business Day after the later of (a) sixty (60)
days after the Confirmation Order is entered by the Bankruptcy
Court, or (b) the first day of the first fiscal year of the
Reorganized Debtors after the Confirmation Order is entered;
provided, however, that no stay of the Confirmation Order is
then in effect. The Effective Date may be extended by the
Debtors, upon notice to and subject to the unanimous consent of
the Creditors' Committee, the Bank Group and the Unofficial
Committee, without leave or order of the Bankruptcy Court and
without any other action, or by order of the Bankruptcy Court,
if such consent is not obtained.
Section 1.72 "Estate"
means, as to each Debtor, the estate of such Debtor in its
Chapter 11 Case created by section 541 of the Bankruptcy Code
upon the commencement of such Chapter 11 Case.
Section 1.73 "Exhibit"
means an exhibit to either this Plan or the Disclosure
Statement.
Section 1.74 "Exhibit Filing Date"
means the last date by which forms of the Exhibits to
the Plan shall be Filed with the Court, which date shall be as
specified in this Plan for each such Exhibit, but in any event,
or where no such date is specified, no later than thirty days
after the Confirmation Date.
Section 1.75 "Face Amount"
means (a) with respect to any Claim for which a proof of
claim is Filed, an amount equal to: (i) the liquidated amount,
if any, set forth therein; and/or (ii) any other amount
estimated by the Court in accordance with section 502(c) of the
Bankruptcy Code and the relevant provisions of this Plan; or (b)
if no proof of claim is Filed and such Claim is scheduled in the
relevant Debtor's Schedules, the amount of the Claim scheduled
as undisputed, noncontingent and liquidated.
Section 1.76 "Federal Priority Tax Claim"
means a Claim of the United States of America that is entitled
to priority in payment pursuant to section 507(a)(8) of the
Bankruptcy Code.
Section 1.77 "File" or "Filed"
means filed with the Bankruptcy Court in the Chapter 11 Cases.
Section 1.78 "Final Order"
means an order or judgment, the operation or effect of which has
not been stayed, reversed or amended and as to which order or
judgment (or any revision, modification or amendment thereof),
the time to appeal or seek review or rehearing has expired and
as to which no appeal or review or rehearing that was Filed is
pending.
Section 1.79 "Fractional Shares"
means the fractions of New Common Stock or New Warrants not
Distributed pursuant to Section 7.09(d) hereof.
Section 1.80 "GAAP"
means generally accepted accounting principles.
Section 1.81 "General Unsecured Claim"
shall have the same meaning as Unsecured Claim.
Section 1.82 "Indenture"
means an agreement to which BI is a party and under which the
Bonds were issued.
Section 1.83 "Indenture Trustee"
means the entity appointed by Reorganized BSI (which is
reasonably acceptable to the holders of the Bank Group Claims)
which shall (a) serve as indenture trustee with respect to the
New Notes and (b) hold all liens with respect to the
Post-Effective Date Collateral pursuant to Section 4.02 hereof.
Section 1.84 "Initial Distribution Date"
means the applicable date or dates on which initial
Distributions are made under this Plan, which shall be the
Effective Date or, as soon thereafter as practicable, but in any
event no more than thirty (30) days after the Effective Date.
Section 1.85 "Intercompany Claim"
means the Claim of BI against BSI. The amount
of the Intercompany Claim, as allowed pursuant to the provisions
of this Plan, gives effect to a previously made (subject to
confirmation of the Plan) capital contribution by BI to BSI in
an amount equal to $160,181,000. As is set forth in Section
6.05 hereof and after giving effect to BI's capital contribution
to BSI, the amount of the Intercompany Claim shall be Allowed,
with prejudice and without defense, in the amount of $96.0
million for purposes of this Plan, subject to the entry of the
Confirmation Order and the occurrence of the Effective Date.
Section 1.86 "Interest"
means (a) share in a corporation, whether
or not transferable or denominated "stock," or similar security;
(b) interest of a limited partner in a limited partnership; (c)
warrant or right, other than a right to convert, to purchase,
sell or subscribe to a share, security or interest of a kind
specified in subparagraphs (a) and (b) of this paragraph; or (d)
interest of a general partner in a limited or general
partnership. Section 1.87 "IRS"
means the Internal Revenue Service.
Section 1.88 "M&R"
means M&R Heating and Air Conditioning
Services, Inc. For purposes of this Plan, M&R shall have an
Allowed BSI-MEC Claim in the amount of $4,750.00 and an Allowed
BSI-GEN Claim in the amount of $3,950.00.
Section 1.89 "Majority Banks"
means Gabriel Management, in its capacity as a
holder of the Bank Group Claim.
Section 1.90 "Net Proceeds"
means the proceeds from the sale of a property
which is part of the estate of any Debtor minus the Debtors'
costs of selling such property.
Section 1.91 "New Common Stock"
means the shares of common stock of
Reorganized BI provided for under the Plan and authorized under
the Amended Certificate of Incorporation of such Reorganized
Corporation. Section 1.92 "New Credit Facility"
means the new Credit Agreement
among Reorganized BSI and BankBoston, N.A., as Agent for itself
and the other financial institutions signatory thereto, pursuant
to which the revolving credit facility as described in Section
7.19 hereof will be offered to Reorganized BSI.
Section 1.93 "New Credit Facility Agent"
means the entity designated as the "agent"
under the New Credit Facility.
Section 1.94 "New Credit Facility Notes"
means the new notes of Reorganized BSI
described in Section 7.19 hereof, issued on and after the
Effective Date and distributed in the manner provided in the New
Credit Facility. Section 1.95 "New Notes"
means the new notes of
Reorganized BSI described in Section 4.02 hereof, issued on and
after the Effective Date and distributed in the manner provided
in this Plan. Section 1.96 "New
Warrants" means the new
warrants of Reorganized BI described in Section 4.05 hereof,
issued on and after the Effective Date and distributed in the
manner provided in this Plan. Section 1.97 "Old
Common Stock of [___]" means, when used
with reference to a particular Debtor or Debtors, the common
stock issued by such Debtor or Debtors and outstanding
immediately prior to the Effective Date. Section 1.98
"Ordinary Course Professionals' Compensation Order" means the
Bankruptcy Court Order dated December 21, 1995 authorizing the
Debtors to retain and compensate Ordinary Course Professionals
(as defined in such Order). Section 1.99
"Other Priority Claim" means any
Claim, other than a Priority Tax Claim or an Administrative
Claim, asserted against the Debtors, which Claim is accorded
priority under subsection 507(a) of the Bankruptcy Code.
Section 1.100
"Other Priority Tax Claim" means a
Claim, other than a Federal Priority Tax Claim, that is entitled
to priority in payment pursuant to section 507(a)(8) of the
Bankruptcy Code.
Section 1.101 "Paying Agent"
means the Disbursing Agent, any indenture trustee, stock
transfer agents, agents contractually authorized and/or
obligated to make Distributions to certain claimants and similar
intermediaries and agents participating in making or conveying
Distributions as required by the Plan, each of whom shall be
duly bonded at all times.
Section 1.102 "Person"
means an individual, corporation, partnership,
joint venture, association, joint stock company, trust, estate,
unincorporated organization, government (or agency or political
subdivision thereof) or other entity.
Section 1.103 "Petition Date"
means June 23, 1995, the date on which each of the
Debtors filed its voluntary petition for reorganization, thereby
commencing the Chapter 11 Cases.
Section 1.104 "Plan"
means this Chapter 11 plan of reorganization,
either in its present form or as it may be altered, amended or
modified by the Debtors from time to time.
Section 1.105 "Post-Effective Date Collateral"
means assets as to which the Indenture Trustee shall
be granted a first priority security interest to secure the
obligations of Reorganized BSI under the New Notes.
Section 1.106 "Prepetition Claim"
means any Allowed Claim against any of the Debtors
arising on or prior to the Petition Date.
Section 1.107 "Primary Obligor"
means a Debtor against whom a Claim has been asserted
in respect of which a Secondary Liability Claim is also asserted
against another Debtor.
Section 1.108 "Priority Claim"
means any Claim, if Allowed, which is entitled to priority
pursuant to section 507(a) of the Bankruptcy Code, other than:
(a) an Administrative Claim; or (b) a Tax Claim.
Section 1.109 "Priority Tax Claim"
means any Claim, if Allowed, asserted against the Debtors, which
Claim is entitled to priority pursuant to section 507(a)(8) of
the Bankruptcy Code, other than a Federal Priority Tax Claim.
Section 1.110 "Professional Fees"
means a Claim of a professional retained in the Chapter 11 Cases
pursuant to sections 327 and 1103 of the Bankruptcy Code or
otherwise, for compensation or reimbursement of costs and
expenses relating to services incurred during the period from
the Petition Date through and including the Effective Date,
pursuant to sections 330, 331 or 503(b) of the Bankruptcy Code,
and unpaid as of the Effective Date.
Section 1.111 "Pro Rata" means (a) with regard to a
Claim asserted in a particular Class, a proportionate share, so
that the ratio of the Distribution on account of an Allowed
Claim is the same as the ratio of the amount of the Distribution
on account of all of the Allowed Claims and Disputed Claims in
the Class of which the Allowed Claim is a member to the total
amount of all of the Allowed Claims in such Class and (b) with
regard to Classes of Claims, a ratio equal to the amount
available for Distribution to such Classes divided by the amount
equal to the sum of Allowed Claims and Disputed Claims in such
class. Section 1.112 "Ratable" or "Ratable Share"
means a number (expressed as a percentage) equal
to the proportion that an Allowed Claim in a particular Class
bears to the aggregate amount or number of: (a) Allowed Claims
plus (b) Disputed Claims (in their aggregate Face Amount) in
such Class as of the date of determination.
Section 1.113 "Record Date"
means the date which is five Business Days
following entry of the Confirmation Order.
Section 1.114 "Reinstated"
means leaving unaltered the legal, equitable
and contractual rights to which a Claim entitles the holder of
such Claim, in accordance with section 1124 of the Bankruptcy
Code, including: (a) curing all prepetition and postpetition
defaults other than defaults relating to the insolvency or
financial condition of a Debtor or its status as a debtor under
the Bankruptcy Code; (b) reinstating the maturity date of the
Claim; and (c) compensating the holder of such Claim for damages
incurred as a result of its reasonable reliance on a provision
allowing the Claim's acceleration.
Section 1.115 "Reorganized Corporation"
means each Debtor or its successor
corporation, on and after the Effective Date, as reorganized
pursuant to the Plan. Section 1.116 "Reorganization
Securities" means, collectively: (a) Tax
Notes, (b) New Notes, (c) CAP Notes, (d) New Warrants, (e) Cure
Notes and (f) New Common Stock. The form of certain
Reorganization Securities are annexed hereto as Exhibit H.
Section 1.117
"Reorganized [_____]" means, when
used with reference to a particular Debtor, such Debtor on and
after the Effective Date. Section 1.118
"Required Prepayments" means that
portion of the Net Proceeds, not to exceed the aggregate amount
of $40 million, arising from the sale of the Yonkers Property
and/or the Union Square Property prior to the Effective Date,
which shall be distributed on the Effective Date to holders of
Claims receiving New Notes under the Plan in lieu of a like
amount of New Notes. Section 1.119
"Schedules" means the
Schedules of Assets and Liabilities and the Statements of
Financial Affairs filed by the Debtors, on October 20, 1995, as
subsequently amended, in accordance with section 521 of the
Bankruptcy Code and the Official Bankruptcy Forms of the
Bankruptcy Rules, as such schedules or statements may be amended
or supplemented from time to time in accordance with Bankruptcy
Rule 1009.
Section 1.120 "Secondary Liability Claim"
means a Claim (other than (i) an Intercompany Claim, (ii) Bank
Group Claim and (iii) SPE Claim) that arises from a Debtor being
liable as a guarantor of, or otherwise jointly, severally or
secondarily liable for, any contractual, tort or other
obligation of another Debtor, including any Claim based upon:
(a) guaranties of payment, collection or performance; (b)
indemnity bonds, obligations to indemnify, obligations to hold
harmless or for contribution; (c) performance bonds; (d)
contingent liabilities arising out of contractual obligations or
out of undertakings (including any assignment or other transfer)
with respect to leases, operating agreements, management
contracts or other similar obligations made or given by a Debtor
relating to the performance of a Debtor; (e) vicarious
liability; or (f) any other joint or several liability that any
Debtor may have in respect of any obligation that is the basis
of a Claim. Section 1.121 "Secured Claim"
means a Claim, if Allowed, against any Debtor
held by any entity or judgment creditor of such Debtor, to the
extent of the value, as determined by the Bankruptcy Court
pursuant to subsection 506(a) of the Bankruptcy Code, of any
interest in property of the estate securing such Allowed Claim.
Section 1.122 "SPE Agent"
shall have the meaning which the term
"Agent" is given in the SPE Documents.
Section 1.123 "SPE Claims"
means Claims arising under the SPE
Documents of the SPE Group. Section 1.124 "SPE Deficiency
Claim" means that Allowed Unsecured
Claim, solely against BSI, arising from the SPE Documents, the
SPE Transaction, and the SPE Stipulation held by the SPE Group
in an amount equal to $12,732,677 less the amount by which the
net proceeds actually distributed to the SPE Group from the sale
of the SPE Philadelphia Property exceeds $2,000,000.
Section 1.125 "SPE Documents"
means the Credit Agreement among State Street Bank and
Trust Company, not in its individual capacity, except as
expressly stated herein, but solely as Owner Trustee, as
Borrower, Various Lending Institutions and Bankers Trust
Company, as Agent, dated September 30, 1994, as amended,
pursuant to which the SPE Properties were purchased.
Section 1.126 "SPE Group"
means Bankers Trust Company, as Agent,
and the banks identified as "Banks" in the SPE Documents or
their respective successors and assigns.
Section 1.127 "SPE Philadelphia Property"
means the property located in
Philadelphia, Pennsylvania which was financed pursuant to the
SPE Documents. Section 1.128 "SPE
Properties" means together,
the SPE Philadelphia Property and the SPE Providence Property.
Section 1.129 "SPE
Providence Property" means the
property located in Providence, Rhode Island, which was financed
pursuant to the SPE Documents. Section 1.130
"SPE Stipulation" means that
certain Stipulation and Order, dated March 27, 1998, among the
Debtors, the SPE Agent, the SPE Group, State Street (as Owner
Trustee) and BRE Funding, Inc. pursuant to which, among other
things, (a) the SPE Transaction was recharacterized as a
financing transaction, (b) the amount of the SPE Claim was fixed
and (c) the Debtors' liability for the State Street
Administrative Claim was capped.
Section 1.131 "SPE Transaction"
means the transaction by which the SPE Properties were acquired
as provided in the SPE Documents.
Section 1.132 "State Street"
means State Street Bank and Trust Company.
Section 1.133 "State Street Administrative Claim"
means the administrative claim asserted by State Street based
upon the SPE Documents, which, pursuant to the SPE Stipulation,
is capped at $100,000.
Section 1.134 "Supplemental Bank Group Distribution"
shall have the meaning ascribed to such term in Section
6.01(iii) hereof.
Section 1.135 "Supplemental BSI-GEN Distribution"
shall have the meaning ascribed to such term in Section
6.05 hereof.
Section 1.136 "Tax Claim"
means Other Priority Tax Claims and Federal Priority Tax
Claims. Section 1.137 "Tax Note"
means a note issued by Reorganized BSI with respect to a
particular Tax Claim which has a value equal to the Allowed
amount of such Tax Claim payable over the term set forth in
section 1129(a)(9)(C) of the Bankruptcy Code, as more
particularly described in the Disclosure Statement.
Section 1.138 "Tax Refund"
means the amount which the Debtors received as a refund for the
overpayment of their tax obligations. Pursuant to an Order
dated April 29, 1996, such amounts are held in escrow by the
Debtors. Section 1.139 "Trade Vendors' Collateral Agent"
means the entity appointed by the Creditors' Committee
(which is reasonably acceptable to Reorganized BSI), which shall
hold all liens with respect to the Trade Vendors' Lien pursuant
to Section 10.02(f) hereof.
Section 1.140 "Trade Vendors' Lien"
means any liens granted to the Trade Vendors' Collateral
Agent, as of the Effective Date, pursuant to Section 10.02(f)
hereof. Section 1.141 "Trust Indenture"
means the trust indenture referenced in Section 4.02
hereof. Section 1.142 "Unclaimed Property"
means any Cash and Reorganization Securities unclaimed on
or after the applicable Initial Distribution Date or date on
which an Additional Quarterly Distribution would have been made
in respect of the relevant Allowed Claim. Unclaimed Property
shall include: (a) checks (and the funds represented thereby)
and Reorganization Securities (i) mailed to a Distribution
Address and returned as undeliverable without a proper
forwarding address or (ii) not mailed or delivered because no
Distribution Address to mail or deliver such property was
available, and (b) funds for checks delivered but uncashed.
Section 1.143 "Union Square Property"
means that certain leasehold
interest owned by BSI, located at 14th Street and Broadway in
New York, New York. Section 1.144 "Unofficial
Committee" means the Unofficial
Committee of Trade Claim Holders formed by Stonington Management
Corporation and Anvil Investment Partners. Section 1.145
"Unsecured Claim" means any
Claim that is not an Administrative Claim, Bank Group Claim,
Intercompany Claim, Other Priority Claim, Other Priority Tax
Claim, Priority Claim, Priority Tax Claim, or Secured Claim.
Section 1.146 "Westbury Escrow Funds"
means the funds held in escrow from the sale of the real
property formerly owned by WES pursuant to the Bankruptcy Court
Orders dated May 29, 1996 and February 25, 1998.
Section 1.147 "Westbury Fraction"
means the fraction, the numerator of which shall be the
amount of WES-GEN Claims and the denominator of which shall be
the sum of the amount of (a) WES-BANK Claims, (b) WES-SPE Claims
and (c) WES-GEN Claims.
Section 1.148 "Yonkers Effective Date"
means the Business Day which is the later of (i) the
Effective Date, (ii) twenty days after the date on which the
sale of the Yonkers Property closes and (iii) twenty days after
the inventory and fixtures located at the Bradlees store at the
Yonkers Property are sold; provided, however, that no stay of
the Confirmation Order is then in effect. The Yonkers Effective
Date may be extended by the Debtors subject to the unanimous
consent of the Creditors' Committee, the Bank Group, and the
Unofficial Committee, but without any further notice and without
leave or order of the Bankruptcy Court and without any formal
action. Section 1.149 "Yonkers Fraction"
means the fraction, the numerator of which shall be the
amount of YON-GEN Claims and the denominator of which shall be
the sum of the amount of (a) YON-BANK Claims, (b) YON-SPE Claims
and (c) YON-GEN Claims.
Section 1.150 "Yonkers Property"
means that certain leasehold interest owned by YON located
in Yonkers, New York.
C. Rules of Construction.
Section 1.151 Generally .
For purposes of the Plan, (a) any reference in the Plan to an
existing document or Exhibit Filed or to be Filed means such
document or Exhibit as it may have been or may be amended,
modified or supplemented; (b) unless otherwise specified, all
references in the Plan to Sections, Articles, Schedules and
Exhibits are references to Sections, Articles, Schedules and
Exhibits of or to the Plan; and (c) the rules of construction
set forth in section 102 of the Bankruptcy Code and the
Bankruptcy Rules shall apply unless superseded herein or in the
Confirmation Order.
Section 1.152 Exhibits
. All Exhibits are incorporated into and are a part of
the Plan as if set forth in full herein and, to the extent not
annexed hereto, such Exhibits shall be Filed with the Bankruptcy
Court on or before the Exhibit Filing Date. Copies of Exhibits
can be obtained upon written request to Dewey Ballantine LLP,
1301 Avenue of the Americas, New York, New York 10019-6092
(Attn: Stuart Hirshfield, Esq.), counsel to the Debtors.
Section 1.153 Time Periods
. In computing any period of time prescribed or allowed
by the Plan, the provisions of Bankruptcy Rule 9006(a) shall
apply. Section 1.154 Miscellaneous Rules
. (i) The words "herein," "hereof," "hereunder," and
other words of similar import refer to this Plan as a whole, not
to any particular Section, subsection, or clause, unless the
context requires otherwise; (ii) whenever it appears appropriate
from the context, each term stated in the singular or the plural
includes the singular and the plural, and each pronoun stated in
the masculine, feminine or neuter includes the masculine,
feminine and the neuter; (iii) captions and headings to Articles
and Sections of the Plan are inserted for convenience or
reference only and are not intended to be a part or to affect
the interpretation of the Plan; and (iv) the rules of
construction set forth in section 102 of the Bankruptcy Code
shall apply, unless superceded herein or in the Confirmation
Order. Article II
CLASSIFICATION OF CLAIMS AND INTERESTS
Section 2.01 General Rules of Classification.
All Claims and Interests, other than Administrative Claims and
Tax Claims, if any, have been classified in the Classes set
forth below. In accordance with section 1123(a)(1) of the
Bankruptcy Code, Administrative Claims and Tax Claims have not
been classified and thus are excluded from the Classes set forth
below.
A Claim or Interest is classified in a particular Class only to
the extent that the Claim or Interest falls within the
description of that Class and is classified in other Class(es)
to the extent that any remainder of the Claim or Interest falls
within the description of such other Class(es). A Claim is also
placed in a particular Class for the purpose of receiving
Distributions pursuant to the Plan only to the extent that such
Claim is an Allowed Claim in that Class and such Claim has not
been paid, released, or otherwise settled prior to the Effective
Date.
Section 2.02 Administrative, Tax and Other Priority Claims
against any Debtor.
Administrative Claims (including DIP Claims) and Tax Claims are
not classified for each Debtor. Priority Claims are classified
for each Debtor. For instance, Priority Claims against BI are
classified in the BI-PTY Class.
Section 2.03 Undersecured Claims against any Debtor.
To the extent that the amount of an Allowed Claim is greater
than the value of the collateral securing such Claim as of the
applicable valuation date, subject to section 1111(b) of the
Bankruptcy Code, such Claim is classified in both a Secured
Claim Class for the secured portion of such Claim and a General
Unsecured Claim Class for the excess of such Claim over the
value of the collateral. Each such Secured Claim against a
particular Debtor is in a separate Class of such Debtor if the
collateral securing such Secured Claim materially differs from
the collateral securing other Allowed Secured Claims against the
same Debtor. For instance, if two Allowed Secured Claims
against BSI are secured by different collateral of BSI, each
such Claim is separately classified. Notwithstanding anything
to the contrary herein, absent an Order of the Bankruptcy Court
or agreement fixing the allowed amount of a Secured Claim or the
scheduling of such Claim as liquidated, nondisputed and
noncontingent on the relevant Debtor's Schedule, the relevant
Debtor is not bound by a classification made or implied herein
with respect to any particular Claim.
Section 2.04 Capital Lease Claims.
Each claim arising from a Capital Lease against BSI
is separately classified against BSI.
Section 2.05 Mechanic's Lien Claims.
The Secured Claim of M&R against BSI is separately
classified against BSI.
Section 2.06 Intercompany Claim.
The Allowed Intercompany Claim is separately classified
as a claim against BSI.
Section 2.07 Unsecured Claims against any Debtor.
Allowed Unsecured Claims against any Debtor are classified for
each such Debtor in separate Unsecured Claims Classes and
Convenience Claims Classes.
Section 2.08 Allowed Convenience Claims are Classified for BSI.
Allowed Convenience Claims are classified against BSI. Each
Convenience Claim is a General Unsecured Claim for which the
holder thereof has elected on the Ballot to be treated as a
Convenience Claim in the relevant Class. Each holder of an
Allowed General Unsecured Claim against BSI may elect
Convenience Claim treatment for all, but not part, of its
aggregate Allowed General Unsecured Claim against BSI. A
claimant may elect to treat all, but not a part, of its Allowed
General Unsecured Claim against BSI as one Convenience Claim and
may retain its Allowed General Unsecured Claim against another
Debtor as a General Unsecured Claim against such Debtor.
Notwithstanding anything to the contrary herein, each holder of
a General Unsecured Claim that is Allowed in an amount that is
less than or equal to $500 shall be deemed to have elected to
treat such Claim as a Convenience Claim.
Section 2.09 Equity Interests in any Debtor.
The Interests in each Debtor are separately
classified. For instance, the Interests in BSI are classified
in the BSI-EQT Class.
Article III
CLASSIFICATION OF CLAIMS AND INTERESTS BY DEBTOR
The following sets forth the classification of each type
of Claim against, and Interest in, each of the Debtors.
Section 3.01 Bradlees, Inc.
Class BI-PTY (BI-Priority Claims): Class BI-PTY consists
of all Priority Claims against BI.
Class BI-BANK (BI-Bank Group Claims): Class BI-BANK
consists of all Bank Group Claims against BI.
Class BI-SPE (BI-SPE Claims): Class BI-SPE consists
of the SPE Claim against BI.
Class BI-GEN (BI-General Unsecured Claims): Class
BI-GEN consists of all General Unsecured Claims, including Bond
Claims, against BI.
Class BI-EQT (BI-Common Stock Interests): Class BI-EQT
consists of all Interests based on the Old Common Stock of BI.
Section 3.02 Bradlees Administrative Co., Inc.
Class BAC-PTY (BAC-Priority Claims): Class BAC-PTY
consists of all Priority Claims against BAC. Class BAC-SPE
(BAC-SPE Claims): Class BAC-SPE consists of the SPE Claim
against BAC. Class BAC-BANK (BAC-Bank Group Claims):
Class BAC-BANK consists of all Bank Group Claims against BAC.
Class BAC-GEN (BAC-General Unsecured
Claims): Class BAC-GEN consists of all General Unsecured Claims
against BAC. Class BAC-EQT (BAC-Common Stock Interests):
Class BAC-EQT consists of all Interests based
on the Old Common Stock of BAC.
Section 3.03 Bradlees Stores, Inc.
Class BSI-PTY (BSI-Priority Claims): Class
BSI-PTY consists of all Priority Claims against BSI.
Class BSI-CAP (BSI-Capital Lease Claims):
Class BSI-CAP consists of all Capital Lease Claims against BSI.
Each Creditor holding a BSI-CAP Claim is separately
subclassified as set forth in Exhibit C hereto.
Class BSI-MEC (BSI-Secured
Claim of M&R): Class BSI-MEC consists of the Secured Claim of
M&R against BSI. Class BSI-SPE (BSI-SPE
Claims): Class BSI-SPE consists of the SPE Claim against BSI.
Class BSI-BANK (BSI-Bank
Group Claims): Class BSI-BANK consists of all Bank Group Claims
against BSI. Class BSI-INTER
(BSI-Intercompany Claims): Class BSI-INTER consists of the
Intercompany Claims. Class BSI-GEN
(BSI-General Unsecured Claims): Class BSI-GEN consists of all
General Unsecured Claims against BSI and the SPE Deficiency
Claim. Class
BSI-CON (BSI-Convenience Claims): Class BSI-CON consists of all
Convenience Class Claims against BSI. Class
BSI-EQT (BSI-Common Stock Interests): Class BSI-EQT consists of
all Interests based on the Old Common Stock of BSI. Section 3.04
Dostra Realty Co., Inc. Class DOS-PTY
(DOS-Priority Claims): Class DOS-PTY consists of all Priority
Claims against DOS. Class DOS-SPE
(DOS-SPE Claims): Class DOS-SPE consists of the SPE Claim
against DOS. Class
DOS-BANK (DOS-Bank Claims): Class DOS-BANK consists of all Bank
Group Claims against DOS. Class
DOS-GEN (DOS-General Unsecured Claims): Class DOS-GEN consists
of all General Unsecured Claims against DOS. Class
DOS-EQT (DOS-Common Stock Interests): Class DOS-EQT consists of
all Interests based on the Old Common Stock of DOS. Section 3.05
Maximedia Services, Inc. Class MAX-PTY
(MAX-Priority Claims): Class MAX-PTY consists of all Priority
Claims against MAX. Class MAX-SPE
(MAX-SPE Claims): Class MAX-SPE consists of the SPE Claim
against MAX. Class
MAX-BANK (MAX-Bank Claims): Class MAX-BANK consists of all Bank
Group Claims against MAX. Class
MAX-GEN (MAX-General Unsecured Claims): Class MAX-GEN consists
of all General Unsecured Claims against MAX. Class
MAX-EQT (MAX-Common Stock Interests): Class MAX-EQT consists of
all Interests based on the Old Common Stock of MAX. Section 3.06
New Horizons of Yonkers, Inc. Class
YON-PTY (YON-Priority Claims): Class YON-PTY consists of all
Priority Claims against YON.
Class YON-SPE (YON-SPE Claims): Class YON-SPE consists of the
SPE Claim against YON.
Class YON-BANK (YON-Bank Claims): Class YON-BANK consists of
all Bank Group Claims against YON.
Class YON-GEN (YON-General Unsecured Claims): Class YON-GEN
consists of all General Unsecured Claims against YON.
Class YON-EQT (YON-Common Stock Interests): Class YON-EQT
consists of all Interests based on the Old Common Stock of YON.
Section 3.07 New Horizons of Bruckner, Inc.
Class BRU-PTY (BRU-Priority Claims): Class BRU-PTY consists of
all Priority Claims against BRU.
Class BRU-SPE (BRU-SPE Claims): Class BRU-SPE consists of the
SPE Claim against BRU.
Class BRU-BANK (BRU-Bank Claims): Class BRU-BANK consists of
all Bank Group Claims against BRU.
Class BRU-GEN (BRU-General Unsecured Claims): Class BRU-GEN
consists of all General Unsecured Claims against BRU.
Class BRU-EQT (BRU-Common Stock Interests): Class BRU-EQT
consists of all Interests based on the Old Common Stock of BRU.
Section 3.08 New Horizons of Westbury, Inc.
Class WES-PTY (WES-Priority Claims): Class WES-PTY consists of
all Priority Claims against WES.
Class WES-SPE (WES-SPE Claims): Class WES-SPE consists of the
SPE Claim against WES. Class WES-BANK (WES-Bank Claims):
Class WES-BANK consists of all Bank Group Claims against WES.
Class WES-GEN (WES-General Unsecured Claims): Class WES-GEN
consists of all General Unsecured Claims against WES.
Class WES-EQT (WES-Common Stock Interests): Class WES-EQT
consists of all Interests based on the Old Common Stock of WES.
Article IV
REORGANIZATION SECURITIES
Reorganized BSI shall issue the following new securities on or
about the Effective Date to be distributed to holders of certain
Allowed Claims of each of the Debtors (as set forth herein):
Section 4.01 Tax Notes.
Subject to the election of the relevant Debtor to distribute
Cash to any holder of an Allowed Tax Claim, each holder of an
Allowed Tax Claim shall receive a Tax Note as set forth in
Sections 5.02 and 5.03 of this Plan.
Section 4.02 New Notes. Reorganized BSI shall issue
to the holders of (i) the Bank Group Claims, (ii) the SPE
Claims, (iii) YON-GEN Claims, (iv) BRU-GEN Claims and (v)
WES-GEN Claims, New Notes in an aggregate principal amount to
be determined prior to the Effective Date equal to the
difference between (a) $40 million and (b) any Required
Prepayment. Required Prepayments shall be distributed to
holders of Claims in the foregoing classes in the following
proportion: (a) 0.83 percent to holders of YON-GEN Claims; (b)
0.83 percent to holders of BRU-GEN Claims; (c) 0.83 percent to
holders of WES-GEN Claims; (d) 9.75 percent to holder of SPE
Claims; and (e) 87.75 percent to holders of the Bank Group
Claims. If not paid sooner, all amounts outstanding with
respect to the New Notes shall be due on the first Business Day
after the date which is five years after the Effective Date.
The New Notes shall (a) be a full recourse obligation of
Reorganized BSI, (b) be secured by a first lien on the Yonkers
Property and the Union Square Property (provided that YON or
BSI, as the case may be, have not sold its interest in such
property on the date of issuance of such New Notes), (c) be
prepaid Pro Rata without penalty from the Net Proceeds of any
equity offering and the sale of the Yonkers Property and the
Union Square Property and (d) bear interest at a rate equal to
nine percent (9%) per annum payable semi-annually on January 1
and July 1 of each year. The lien securing the New Notes, as
provided in this Section, shall be held by the Indenture Trustee
in accordance with the Trust Indenture. The holders of the New
Notes shall have the option to convert the New Notes to New
Common Stock of Reorganized BI in accordance with the terms set
forth in Exhibit G hereto. The Debtors intend to register the
New Notes received by Gabriel Capital L.P., Elliot Associates,
L.P. and/or Westgate International, L.P. for resale with the
Securities and Exchange Commission under the Securities Act of
1934. The Trust Indenture, a copy of which will be annexed
hereto as Exhibit J, will be filed with the Court on or before
the Exhibit Filing Date. Reorganized BI will guaranty
Reorganized BSI's obligations under the New Notes.
Section 4.03 CAP Note.
In accordance with Section 6.05
hereof, Reorganized BSI may issue a CAP Note to the holder of
the Class BSI-CAP Claim in the principal amount equal to
$627,094 less the amount of all adequate protection payments
received by BTM from BSI under the BTM Stipulation after
November 13, 1998, which amount shall be calculated as of the
Effective Date. The CAP Notes shall bear interest at a rate
equal to nine percent (9.0%) per annum, payable quarterly in
arrears at such times as principal payments are due. Principal
shall be payable in twelve (12) equal successive installments
commencing three months following the Effective Date, until the
Note, including unpaid interest, is paid in full. The CAP Note
delivered to BTM shall be and remain secured by a first lien on
the property on which BTM holds a valid first priority security
interest as recognized by the BTM Stipulation.
Section 4.04 Cure Notes.
In accordance with Section 9.05
hereof, Reorganized BSI may issue Cure Notes in conjunction with
the assumption of executory contracts in a principal amount to
be determined prior to the Effective Date but in any event not
to exceed $3,400,000. The Cure Notes shall be unsecured and
shall bear interest at the rate of nine percent (9%) per annum.
If not paid sooner, all amounts outstanding with respect to the
Cure Notes shall be due on the first Business Day after the date
which is three years from the Effective Date.
Section 4.05 New Warrants.
Reorganized BI shall issue to holders of
BI-GEN Claims a Ratable Distribution of New Warrants to purchase
an aggregate amount of 1,000,000 shares of New Common Stock of
Reorganized BI. The New Warrants shall be exercisable over a
five-year period after the Effective Date. The exercise price
of the New Warrants for each share of New Common Stock of
Reorganized BI shall be $7.00 per share. Reorganized BI shall
use all reasonable efforts to have the New Warrants listed on a
nationally recognized stock exchange after the Effective Date.
Section 4.06 New Common Stock
of Reorganized BI. Reorganized BI shall issue a
single class of up to 40,000,000 shares of New Common Stock.
New Common Stock of Reorganized BI is to be distributed under
this Plan to holders of Allowed Claims in the BSI-GEN Class,
holders of the Bank Group Claim and holders of the SPE Claims.
In aggregate, no more than 10,909,090 of such shares shall be
distributed to holders of Allowed Claims under this Plan. The
Debtors intend to register the New Common Stock to be received
by Gabriel Capital L.P., Elliott Associates, L.P. and Westgate
International, L.P. for resale with the Securities and Exchange
Commission under the Securities Act of 1934 and the Debtors
intend to continue to file periodic reports under such Act.
Reorganized BI shall use all reasonable efforts to have the New
Common Stock listed on a nationally recognized stock exchange
after the Effective Date.
Article V
TREATMENT OF UNIMPAIRED CLASSES
Section 5.01 Administrative Claims.
(a) Payment of Administrative Claims in General. Except as
specified below in this Section 5.01 or otherwise set forth in
the Plan, and subject to the bar date provisions herein, each
holder of an Allowed Administrative Claim (including an Allowed
Reclamation Claim) shall receive Cash equal to the amount of
such Administrative Claim (unless the holder of such Claim
agrees to other treatment) on the latest of: (i) 30 days after
the Effective Date, (ii) the first business date which is 30
days after the date on which an order allowing such Claim
becomes a Final Order, and (iii) such other time or times that
are agreed on by the holder of the Administrative Claim and the
applicable Debtor or Reorganized Corporation.
(b) Payment of Statutory Fees. On or before the
Effective Date, or as soon thereafter as practicable all fees
payable pursuant to section 1930 of Title 28 of the United
States Code, 28 U.S.C. ' 1930, as determined by the Bankruptcy
Court at the hearing on Confirmation, shall be paid in cash
equal to the amount of such Claim. Subsequent payments after
the Effective Date shall be made as required by statute.
(c) Payment of DIP Claims. On the
Effective Date or at a later date pursuant to the DIP Agreement,
all DIP Claims against the Debtors under or evidenced by the DIP
Agreement shall be paid in Cash in an amount equal to the amount
of such DIP Claims. (d) Payment of State Street
Administrative Claim. The State Street Administrative Claim
shall only be paid to the extent and at the time set forth in
the SPE Stipulation. Section 5.02 Federal
Priority Tax Claims. Pursuant to section
1129(a)(9)(C) of the Bankruptcy Code, unless otherwise agreed to
by the Debtors and the IRS, the IRS shall receive from
Reorganized BSI, on account of any Federal Priority Tax Claim,
deferred cash payments over a period not exceeding six years
from the date of assessment of such Claims. Payments shall be
made in equal quarterly installments of principal, plus simple
interest accruing from the Effective Date at a rate equal to
nine percent (9%) per annum on the unpaid portion of each
Federal Priority Tax Claim; provided, however, that in the event
that the Effective Date does not occur on or before February 1,
1999, interest on the Tax Note shall begin to accrue on February
1, 1999. The first payment shall be due on the latest of: (i)
90 days after the Effective Date, (ii) 90 days after the date on
which an order allowing any such Claim becomes a Final Order and
(iii) such other date that is agreed on by the IRS and BSI or
Reorganized BSI; provided, however, that Reorganized BSI shall
have the right to pay any Federal Priority Tax Claim, or any
remaining balance of such Claim, in full, at any time on or
after the Effective Date, without premium or penalty.
Section 5.03 Other Priority Tax Claims.
Pursuant to section 1129(a)(9)(C) of the Bankruptcy Code, unless
otherwise agreed to by the parties, each holder of an Other
Priority Tax Claim shall receive from Reorganized BSI, on
account of such Claim, deferred cash payments over a period not
exceeding six years from the date of assessment of such Claim.
Payments shall be made in equal quarterly installments of
principal, plus simple interest accruing from the Effective Date
at a rate equal to nine percent (9%) per annum on the unpaid
portion of each Other Priority Tax Claim; provided, however,
that in the event that the Effective Date does not occur on or
before February 1, 1999, interest on the Tax Note shall begin to
accrue on February 1, 1999. The first payment shall be due on
the latest of: (i) 90 days after the Effective Date, (ii) 90
days after the date on which an order allowing any such Claim
becomes a Final Order and (iii) such other date that is agreed
on by the holder of such Claim and BSI or Reorganized BSI;
provided, however, that Reorganized BSI shall have the right to
pay any Other Priority Tax Claim, or any remaining balance of
such Claim, in full, at any time on or after the Effective Date,
without premium or penalty.
Section 5.04 Other Non-Tax Priority Claims.
Except as otherwise provided below, each holder of an
Allowed Priority Claim shall receive one hundred percent (100%)
of the allowed amount of such Claim in Cash on the later of:
(i) 30 days after the Effective Date or as soon thereafter as
reasonably practicable; or (ii) the first Business Day after the
date that is 30 days after the date such Claim becomes an
Allowed Claim or as soon thereafter as practicable.
Section 5.05 Convenience Claims.
Each holder of an Allowed Convenience Claim shall be
paid one hundred percent (100%) of the amount of such Claim in
Cash in an amount not to exceed $500 for each such Claim on the
later of (i) 30 days after the Effective Date or as soon
thereafter as reasonably practicable; or (ii) the first Business
Day after the date that is 30 days after the date such Claim
becomes an Allowed Claim or as soon thereafter as practicable.
Article VI
TREATMENT OF IMPAIRED CLAIMS AND INTERESTS
Each Debtor shall make the following Distributions,
where applicable, on or about the Initial Distribution Date
unless another date is otherwise provided herein or elsewhere in
this Plan:
Section 6.01 Bank Group Claims.
Class BI-BANK, Class BAC-BANK, Class BSI-BANK, Class DOS-BANK,
Class MAX-BANK, Class YON-BANK, Class BRU-BANK and Class
WES-BANK. For purposes of this Plan, the Bank Group Claim shall
be allowed, with prejudice and without defense, as a claim
against each of the Debtors' estates in the amount of $96
million. Each holder of a BI-BANK Claim, BAC-BANK Claim,
BSI-BANK Claim, DOS-BANK Claim, MAX-BANK Claim, YON-BANK Claim,
BRU-BANK Claim and WES-BANK Claim shall receive, in respect of
its Claim against each of BI, BAC, BSI, DOS, MAX, YON, BRU and
WES, and/or retain on the Effective Date, Pro Rata Distributions
as follows:
(i) Cash equal to the sum of (a) all Adequate Protection
Payments heretofore and hereafter received by the Bank Group
(less any disbursements thereof made or payments required to be
made by Bankers Trust, as the Agent Bank, including without
limitation, any professional fees), which shall continue
unabated and without modification through the Effective Date
(and prorated for the month in which the Effective Date occurs),
(b) $7,000,000 and (c) any Required Prepayments applicable to
the Bank Group's Distribution of New Notes pursuant to Section
6.01(ii); (ii) New Notes in an original aggregate
principal amount equal to $36 million less the sum of (a) any
Required Prepayments applicable thereto, and (b) 90%, not to
exceed $900,000, in an aggregate principal amount, of the amount
of any New Notes distributed to holders of Allowed YON-GEN
Claims, Allowed BRU-GEN Claims and Allowed WES-GEN Claims; and
(iii) (a) 4,909,091 shares of New Common
Stock of Reorganized BI and (b) if the aggregate amount of
Allowed General Unsecured Claims and Disputed General Unsecured
Claims asserted against BSI (excluding the Bank Group Claim and
the Intercompany Claim) is less than $240,000,000, a
supplemental Ratable Distribution in the amount of 0.98 shares
of New Common Stock of Reorganized BI for every $100 by which
the aggregate amount of Allowed General Unsecured Claims plus
Disputed General Unsecured Claims against BSI (excluding the
Bank Group Claim and the Intercompany Claim) are less than
$250,000,000 (such supplemental distribution of shares of New
Common Stock, the "Supplemental Bank Group Distribution").
Section 6.02 SPE
Claims. Class BI-SPE, Class
BAC-SPE, Class DOS-SPE, Class MAX-SPE, Class YON-SPE, Class
BRU-SPE and Class WES-SPE. For purposes of this Plan, the SPE
Claims shall be Allowed, with prejudice and without defense, as
a claim against each of the Debtors' estates in the amount of
$18,232,677 (subject to reduction, pursuant to the SPE
Stipulation, to reflect (a) the amount of Cash received by the
SPE Group from the sale of the SPE Providence Property and (b)
the net proceeds received by the SPE Group from the SPE
Philadelphia Property). Each holder of an Allowed BI-SPE Claim,
BAC-SPE Claim, BSI-SPE Claim, DOS-SPE Claim, MAX-SPE Claim,
YON-SPE Claim, BRU-SPE Claim and WES-SPE Claim shall receive, in
respect of its aggregate Allowed Claim against BI, BAC, BSI,
DOS, MAX, YON, BRU and WES, a single Pro Rata Distribution as
follows: (i) Cash from any Required Prepayments made to the SPE
Group; (ii) New Notes in a principal amount equal to $4,000,000
less the sum of (x) any Cash Distributions received by holders
of SPE Claims from any Required Prepayments and (y) ten percent
(10%) not to exceed $100,000 of the aggregate original principal
amount of all New Notes issued to holders of YON-GEN, WES-GEN
and BRU-GEN Claims under this Plan; and
(iii) in accordance with Section 3.03 hereof, the SPE
Deficiency Claim will be treated as an Allowed BSI-GEN Claim.
Section 6.03 Bradlees, Inc.
Class BI-GEN (BI-General Unsecured Claims): Each Holder of
an Allowed BI-GEN Claim shall receive a Ratable Distribution of
New Warrants. For purposes of this Plan, the Bond Claim shall
be Allowed with prejudice and without defense as a Claim solely
against BI in the amount of $233,417,000.
Class BI-EQT (BI-Common Stock Interests): Holders of Allowed
BI-EQT Interests shall receive no distribution.
Section 6.04 Bradlees Administrative Co., Inc.
Class BAC-GEN (BAC-General Unsecured Claims): Holders of
Allowed BAC-GEN Claims shall receive no distribution.
Class BAC-EQT (BAC-Common Stock Interests): Holders of
Allowed BAC-EQT Interests shall retain their Interests in BAC.
Section 6.05 Bradlees Stores, Inc.
Class BSI-CAP (BSI-Capital Lease Claims): The holder of the
Allowed BSI-CAP Claim shall receive a CAP Note, in form and
substance reasonably satisfactory to the holder of such BSI-CAP
Claim, in such principal amount with such interest rate, and on
such other terms as set forth in Section 4.03 hereof.
Class BSI-MEC (BSI-Mechanic's Lien Claims): The holder of the
Allowed BSI-MEC Claim shall receive a Cash Distribution in the
amount of $4,750.
Class BSI-INTER (BSI-Intercompany Claim): After giving effect
to BI's prior capital contribution to BSI, the amount of the
Intercompany Claim shall be Allowed in the amount of $96.0
million for purposes of this Plan. The entire Class BSI-INTER
Claim shall be satisfied through the issuance of shares of the
New Common Stock of Reorganized BI and Cash, which
Distributions shall be made to the holders of the Bank Group
Claims pursuant to Section 6.01 hereof.
Class BSI-GEN (BSI-General Unsecured Claims):
Each holder of an Allowed BSI-GEN Claim shall receive (i) Cash
equal to a Pro Rata Distribution of $7,000,000 (ii) two shares
of New Common Stock of Reorganized BI for every $100 in Allowed
Claims, and (iii) if the aggregate amount of Allowed General
Unsecured Claims and Disputed General Unsecured Claims against
BSI (excluding the Bank Group Claim and the Intercompany Claim)
is less than $240,000,000, a supplemental Ratable Distribution
in the amount of 1.02 shares of New Common Stock for every $100
that the aggregate Allowed General Unsecured Claims plus
Disputed General Unsecured Claims against BSI (excluding the
Bank Group Claim and the Intercompany Claim) are less than
$250,000,000 (such supplemental distribution of shares of New
Common Stock, the "Supplemental BSI-GEN Distribution"). To the
extent that any Disputed Claim in the BSI-GEN Class becomes
disallowed by a Final Order or is withdrawn, then on the next
Quarterly Distribution Date thereafter, a supplemental Pro Rata
Distribution of that portion of the initial $7,000,000 Cash
Distribution to the BSI-GEN Class allocated to such formerly
Disputed Claim shall be (x) made to the holders of Allowed
Claims in the BSI-GEN Class and (y) in the case of any remaining
Disputed Claims in the BSI-GEN Class, held in the Disputed
Claims Reserve for such Disputed Claims. Class BSI-CON
(BSI-Convenience Claims): Each holder of a BSI-CON Claim shall
receive a Cash Distribution equal to the lesser of (i) one
hundred percent (100%) of their BSI-CON Claim or (ii) $500.
Class
BSI-EQT (BSI-Common Stock Interests): Holders of BSI-EQT
Interests shall retain their Interest in BSI.
Section 6.06 Dostra Realty Co., Inc.
Class DOS-GEN (DOS-General Unsecured Claims): Holders of
DOS-GEN Claims shall receive no distribution.
Class DOS-EQT (DOS-Common Stock Interests): Holders of
DOS-EQT Interests shall retain their Interest in DOS.
Section 6.07 Maximedia Services, Inc.
Class MAX-GEN (MAX-General Unsecured Claims): Holders of
MAX-GEN Claims shall receive no distribution.
Class MAX-EQT (MAX-Common Stock Interests): Holders of
MAX-EQT Interests shall retain their Interest in MAX.
Section 6.08 New Horizons of Yonkers, Inc.
Class YON-GEN (YON-General Unsecured Claims): On or about the
Yonkers Effective Date, each holder of a YON-GEN Claim shall
receive a Ratable Distribution of: (i) Cash equal to the Net
Proceeds from the sale of the Yonkers Property multiplied by the
Yonkers Fraction, but not to exceed 0.83 percent of such Net
Proceeds and (ii) New Notes in a principal amount up to 0.83
percent of the aggregate principal amount of the New Notes
which are distributed under this Plan minus Cash Distributions
made to holders of YON-GEN Claims under this Plan. Class YON-EQT
(YON-Common Stock Interests): Holders of YON-EQT Interests
shall retain their Interest in YON.
Section 6.09 New Horizons of Bruckner, Inc.
Class BRU-GEN (BRU-General Unsecured Claims): Each holder of a
BRU-GEN Claim shall receive a Ratable Distribution of: (i) Cash
equal to the Net Proceeds from the sale of the real property
formerly owned by BRU multiplied by the Bruckner Fraction, but
not to exceed 0.83 percent of such Net Proceeds, and (ii) New
Notes in a principal amount up to 0.83 percent of the aggregate
principal amount of the New Notes which are Distributed under
this Plan minus Cash Distributions made to holders of BRU-GEN
Claims under this Plan. The Cash Distribution set forth in this
Section shall be made as soon as practicable after the sale of
the Union Square Property, or at such earlier time as the
Reorganized Corporations shall decide, but in no event, before
the Effective Date.
Class BRU-EQT (BRU-Common Stock Interests): Holders of BRU-EQT
Interests shall retain their Interest in BRU.
Section 6.10 New Horizons of Westbury, Inc.
Class WES-GEN (WES-General Unsecured Claims): Each holder of a
WES-GEN Claim shall receive a Ratable Distribution of: (i) Cash
equal to the Net Proceeds from the sale of the real property
formerly owned by WES multiplied by the Westbury Fraction, but
not to exceed 0.83 percent of such Net Proceeds, and (ii) New
Notes in a principal amount up to 0.83 percent of the aggregate
principal amount of the New Notes which are Distributed under
this Plan minus Cash Distributions made to holders of WES-GEN
Claims under this Plan. The Cash Distribution set forth in this
Section shall be made as soon as practicable after the sale of
the Union Square Property, or at such earlier time as the
Reorganized Corporation shall decide, but in no event, before
the Effective Date.
Class WES-EQT (WES-Common Stock Interests): Holders of WES-EQT
Interests shall retain their Interest in WES.
Article VII
IMPLEMENTATION
Section 7.01 Reorganized BI and Reorganized BSI.
BI and BSI shall each continue to exist after the Effective Date
as Reorganized BI and Reorganized BSI, respectively, each with
all of the powers of a corporation under applicable law. The
Certificate of Incorporation and Amended By-Laws of each of
Reorganized BI and Reorganized BSI shall, inter alia, (i)
prohibit the issuance of nonvoting stock to the extent required
by section 1123(a) of the Bankruptcy Code and (ii) contain no
"anti-takeover" provisions. After the Effective Date,
Reorganized BI and Reorganized BSI may each amend or modify
their Certificate of Incorporation and Amended By-Laws as
permitted under applicable law and/or such certificate of
incorporation and Amended By-Laws.
Section 7.02 Directors of the Reorganized
Corporations. Upon the Effective Date, the existing
Board of Directors of each Reorganized Corporation shall be
dismissed. Not later than the date of the commencement of the
hearing on the confirmation of this Plan, the Debtors shall have
disclosed the identity and affiliations of any individuals
proposed to serve as Directors for Reorganized BI and
Reorganized BSI. The Board of Directors shall each consist of
nine members, who shall be designated, to serve effective as of
the Effective Date, as follows: (i) BI and BSI shall
designate Peter Thorner, one other member of management of the
Debtors and one outside individual; (ii) the Bank Group
shall designate two individuals; (iii) the Unofficial
Committee shall designate one individual; (iv) the Creditors'
Committee shall designate one individual; and (v) the Bank
Group, the Unofficial Committee and the Creditors' Committee,
acting by unanimous consent, or absent such consent, by vote of
two such groups, shall designate two individuals who shall be
reasonably acceptable to the Debtors. Notwithstanding the
foregoing, in order to be eligible to serve on the Board of
Directors of each of Reorganized BI and Reorganized BSI, (i)
each proposed Board Member designated pursuant to this provision
shall have relevant experience which would qualify him or her to
so serve and (ii) the outside individual selected by BI and BSI
shall be reasonably acceptable to the Bank Group, Unofficial
Committee and Creditors' Committee. The initial term of each
Board Member shall be for one year from the Effective Date and
Peter Thorner shall serve as Chairman of the Board of Directors
of each of Reorganized BI and Reorganized BSI.
Section 7.03 Employment, Retirement, Indemnification and Other
Agreements and Incentive Compensation Programs.
To the extent that any of the Debtors have in place as of the
Effective Date employment, retirement, indemnification and other
agreements with their respective active directors, officers and
employees or retirement income plans, welfare benefit plans and
other plans for active employees, such agreements, programs and
plans shall remain in place after the Effective Date and
Reorganized BI and Reorganized BSI, as the case may be, shall
continue to honor such agreements, programs and plans. However,
as of the Effective Date, Reorganized BI and Reorganized BSI
shall each have the authority to terminate, amend or enter into
employment, retirement, indemnification and other agreements
with their respective active directors, officers and employees
and to terminate, amend or implement retirement income plans,
welfare benefit plans and other plans for active employees.
Such agreements and plans may include equity, bonus and other
incentive plans in which officers and other employees of the
Reorganized Debtors may be eligible to participate; provided,
however, that management of Reorganized BI and Reorganized BSI
shall receive stock options in the amount of 750,000 shares of
Reorganized BI which shall vest according to the following
schedule: one-third on the Effective Date, one-third on the one
year anniversary of the Effective Date, and one-third on the two
year anniversary of the Effective Date. The exercise price of
such options shall be the lowest ten-day rolling average of
closing prices of Reorganized BI New Common Stock within the
period between sixty and ninety days after the Effective Date.
All such options shall be exercisable for a period of five years
from the Effective Date. In addition, the Board of Directors of
Reorganized BI shall have the right to distribute to management
of Reorganized BI and Reorganized BSI options with respect to
250,000 additional shares of Reorganized BI at such price and on
such terms as the Board of Directors of Reorganized BI shall
determine. In addition, except for the retirement and disability
benefit plans referred to below in Section 7.06, on the Exhibit
Filing Date, BI and BSI shall each file a schedule and general
summary of the existing employment, retirement, indemnification
and other agreements and incentive compensation programs that
are to remain in effect as of the Effective Date as Exhibit D to
the Plan. By the date of the commencement of the hearing on
confirmation of this Plan, the Debtors shall file with the Court
as Exhibit K hereto a schedule disclosing the individuals who
are proposed to serve as officers of the Reorganized
Corporations following the Effective Date and the nature of the
compensation for such individuals.
Section 7.04 Management Emergence Bonus.
On the Effective Date, the Equity Appreciation Plan
which was approved by Order of the Bankruptcy Court dated
October 24, 1995 shall be deemed terminated. The Reorganized
Corporations shall pay to certain of the Debtors' managerial
employees, selected prior to the Effective Date by the Chief
Executive Officer of BI and BI's pre-Effective Date Board of
Directors, an emergence bonus in Cash in amounts up to the
aggregate amount of $3.0 million, which shall be paid to such
employees in two installments as follows: (x) on the Effective
Date, the amount of $1.0 million and (y) on the later of (i) the
one-year anniversary of the Effective Date and (ii) the date
that the New Notes are fully repaid or converted to equity, the
amount of $2.0 million; provided, however, that no payment of an
emergence bonus shall be made in the event there exists any
continuing default notice outstanding under the New Credit
Facility or any successor working capital facility at the time
of such payment; provided, further, however, that if any person
who receives an installment of such emergence bonus leaves the
employ of either of the Reorganized Corporations within one year
after the payment of either such installment by reason of (a)
an involuntary separation for "Cause" (as defined in such
employee's employment agreement to the extent one exists, or if
there is no such employment agreement, as commonly defined) or
(b) voluntary separation for other than "Good Reason" (as
defined in such employee's employment agreement to the extent
one exists, or if there is no such employment agreement, as
commonly defined), such person shall (i) be obligated to
promptly repay to the Reorganized Corporations an amount equal
to the amount of the most recently paid installment multiplied
by a fraction, the numerator of which is three hundred
sixty-five minus the number of days between the date that the
most recently paid installment was required to be paid pursuant
to this provision and such person's date of departure from the
Reorganized Corporations, and the denominator of which is three
hundred sixty-five, and (ii) forfeit any further right to
receive an installment of the emergence bonus; provided,
further, however, that if any person who would be entitled to
receive an emergence bonus leaves the employ of either of the
Reorganized Corporations prior to receiving the payment of both
installments of the emergence bonus as a result of (a) an
involuntary separation for other than for "Cause" (as defined in
such employee's employment agreement to the extent one exists,
or if there is no such employment agreement, as commonly
defined) or (b) voluntary separation for "Good Reason" (as
defined in such employee's employment agreement to the extent
one exists, or if there is no such employment agreement, as
commonly defined), such person shall not be required to return
any portion of the emergence bonus previously paid to such
person and such person shall be entitled to the immediate
accelerated payment of any portion of the emergence bonus not
previously paid to such person. Section 7.05
Corporate Action. Each of the
matters provided for under the Plan involving the corporate
structure of any Debtor or Reorganized Debtor or corporate
action to be taken by or required of any Debtor or Reorganized
Debtor shall, as of the Effective Date, be deemed to have
occurred and be effective as provided herein, and shall be
authorized and approved in all respects without any requirement
of further action by stockholders or directors of any of the
Debtors or the Reorganized Debtors.
Section 7.06 Certain Retiree Health, Medical and Life Insurance
Benefits.
On and after the Effective Date, pursuant to section 1129(a)(13)
of the Bankruptcy Code, Reorganized BSI shall continue to pay
all retiree benefits (as defined in section 1114(a) of the
Bankruptcy Code) of the Debtors' respective nonunion employees
who retired as of or prior to the Petition Date, at the levels
and for the duration established prior to the Effective Date in
either: (a) a Bankruptcy Court order entered pursuant to
section 1114(g) of the Bankruptcy Code or (b) agreements reached
pursuant to section 1114(e) of the Bankruptcy Code; provided,
however, that prior to the Confirmation Date, the Debtors
reserve the right to seek an order declaring that the Debtors
may amend or terminate such retiree benefits at the conclusion
of the period, if any, that the Debtors are obligated to provide
such retiree benefits under the terms of their respective
retiree benefit plans. Section 7.07 Combination
Transactions. On the Effective Date
(or in the case of YON, the Yonkers Effective Date), each
Combining Debtor shall take such actions as may be necessary or
appropriate to effect the relevant Combination Transaction.
Such actions may include: (a) the execution and delivery of
appropriate agreements or other documents of merger,
consolidation or reorganization containing terms that are
consistent with the terms of this Plan and that satisfy the
requirements of applicable law; (b) the execution and delivery
of appropriate instruments of transfer, assignment, assumption
or delegation of any property, right, liability, duty or
obligation on terms consistent with the terms of this Plan; (c)
the filing of appropriate certificates of merger or
consolidation with the appropriate governmental authorities
under applicable law; and (d) all other actions that such Debtor
determines are necessary or appropriate, including the making of
filings or recordings in connection with the relevant
Combination Transaction. The form of each Combination
Transaction shall be determined by the respective Boards of
Directors of such Combining Debtor and Reorganized BSI and
Reorganized BI. Upon the consummation of a Combination
Transaction, each Combining Debtor shall cease to exist as a
separate corporate entity. On and after the Effective Date,
Reorganized BSI shall assume and perform the obligations of each
Combining Debtor under this Plan. Section 7.08 Distributions to
Holders of Claims and Interests. (a) Source of Cash and
Reorganization Securities for Distributions. On the Effective
Date, Reorganized BI and Reorganized BSI shall each deliver to
the Disbursing Agent sufficient Cash and Reorganization
Securities to make Distributions to: (a) the holders of each
relevant Debtor's Allowed Claims; and (b) the Disputed Claims
Reserves, as set forth below. Without any further act or action
required, upon written request by the Disbursing Agent (which
may be made by telecopy or other electronic means reducible to
written form) received by Reorganized BI or Reorganized BSI at
least 10 Business Days prior to the relevant Distribution
hereunder, Reorganized BI or Reorganized BSI, as the case may
be, is authorized to and shall timely issue sufficient
Reorganization Securities to permit the Disbursing Agent to make
Distributions required hereunder. Any reference herein to
Reorganization Securities in a Disputed Claims Reserve shall
include any Reorganization Securities that are available to be
issued by the Reorganized Corporation pursuant to this section.
(b) Initial Distributions. For each Class, no
Distributions will be made under the Plan until an Initial
Distribution Date is established for such Class. On the
applicable Initial Distribution Date, the Disbursing Agent shall
make a Distribution to: (i) each holder of an Allowed Claim in
an amount equal to its Ratable Share (calculated as of the
applicable Initial Distribution Date) of Cash or Reorganization
Securities in accordance with the terms of the Plan; (ii) each
Paying Agent in an amount equal to the aggregate Ratable Share
(calculated as of the applicable Initial Distribution Date) of
the Cash or Reorganization Securities in accordance with the
terms of the Plan that such Paying Agent shall Distribute to
holders of Allowed Claims in the relevant Class; and (iii) if
applicable, the Disbursing Agent shall make a Distribution to
the relevant Disputed Claims Reserve of the remaining Cash and
Reorganization Securities allocated in accordance with the terms
of this Plan. The amount of Cash to be paid on the Initial
Distribution Date to holders of Allowed BSI-GEN Claims will be
calculated as if each Disputed Claim were an Allowed Claim in
its Face Amount. (c) Disputed Claims Reserves. On the
Effective Date, and after making all Distributions required to
be made on the Effective Date, Reorganized BI and Reorganized
BSI shall each establish a separate Disputed Claims Reserve for
each of its Classes and the Classes of the other Debtors, each
of which shall be administered by the Disbursing Agent. Cash
placed into the Disputed Claims Reserve shall be held in an
interest bearing account. Any payment made to the holder of an
Allowed Claim which was previously a Disputed Claim from the
Disputed Claims Reserve shall include any accrued interest
thereon at the rate earned in such interest bearing account. If
the Initial Distribution Date is not the Effective Date for a
particular Class, all Cash and Reorganization Securities
allocable to the relevant Class hereunder shall be distributed
by the Disbursing Agent to the relevant Disputed Claims Reserve
on or as soon as practicable after the Effective Date. Each
Disputed Claims Reserve shall be terminated by Reorganized BI or
Reorganized BSI, as the case may be, upon the receipt of a
written certification of the Disbursing Agent that all
Distributions and other dispositions of all Cash and/or
Reorganization Securities required hereunder have been made in
accordance with the terms of this Plan. Such written
certification shall be sent by the Disbursing Agent to
Reorganized BI or Reorganized BSI, as the case may be, within 15
days of the satisfaction of the condition set forth in the
immediately preceding sentence. With respect to the
Reorganization Securities held in the Disputed Claims Reserve,
neither the Disbursing Agent, nor any other party, shall be
entitled to vote any shares of the New Common Stock held in the
Disputed Claims Reserve. In the event that any matter requires
the approval of the shareholders of Reorganized BI prior to the
Distribution of the Reorganization Securities held in the
Disputed Claims Reserve, solely with respect to such vote, the
shares of New Common Stock held by the Disbursing Agent shall be
deemed not to have been issued.
(d) Tax Requirements for Income Generated by Disputed Claims
Reserves. The Disbursing Agent shall pay, or cause to be paid,
out of the funds held in a particular Disputed Claims Reserve,
any tax imposed by any federal, state or local taxing authority
on the income generated by the funds held in such Disputed
Claims Reserve. The applicable Disbursing Agent shall also
File, or cause to be Filed any tax or information return related
to the Disputed Claims Reserve that is required by any federal,
state or local taxing authority.
(e) Estimation of Claims. The Debtors or the Reorganized
Corporations may, at any time, request that the Bankruptcy Court
estimate any Claim subject to estimation under section 502(c) of
the Bankruptcy Code and for which the Debtors may be liable
under this Plan, including any Claim for Taxes, to the extent
permitted by section 502(c) of the Bankruptcy Code regardless of
whether the Debtors, the Creditors' Committee, the Unofficial
Committee, the Bank Group or the Reorganized Corporations have
previously objected to such Claim, and the Bankruptcy Court will
retain jurisdiction to estimate any Claim pursuant to section
502(c) of the Bankruptcy Code at any time during litigation
concerning any objection to any Claim, including during the
pendency of any appeal relating to any such objection. In the
event that the Bankruptcy Court estimates any contingent or
unliquidated Claim, that estimated amount will constitute either
the Allowed amount of such Claim or a maximum limitation on such
Claim, as determined by the Bankruptcy Court. If the estimated
amount constitutes a maximum limitation on such Claim, the
Debtors or the Reorganized Corporations may elect to pursue any
supplemental proceedings to object to any ultimate allowance on
such Claim. The Debtors may, at any time, request that the
Bankruptcy Court estimate any claim pursuant to section 502(c)
of the Bankruptcy Code for purposes of satisfying the
requirements of Section 10.02(e) hereof. All of the
aforementioned Claims objection, estimation and resolution
procedures are cumulative and not necessarily exclusive of one
another. Claims may be estimated and subsequently compromised,
settled, withdrawn or resolved by any mechanism approved by the
Bankruptcy Court. (f) Initial Distribution. When
a Disputed Claim Becomes an Allowed Claim. On the first
Business Day after the end of each calendar quarter (i.e., March
31, June 30, September 30 and December 31 of each calendar year)
immediately following the applicable Initial Distribution Date,
or as soon thereafter as practicable (the "Quarterly
Distribution Date"), the Disbursing Agent shall make Ratable
Distributions or other Distribution in accordance with the
provisions of this Plan (calculated as of the later of the: (i)
immediately preceding Quarterly Distribution Date, or (ii) the
applicable Initial Distribution Date) of Cash or Reorganization
Securities reserved for any Disputed Claim that has become an
Allowed Claim during the preceding calendar quarter to the
holder of such Allowed Claim or the relevant Paying Agent, as
the case may be. Holders of Disputed Claims that are ultimately
Allowed will also be entitled to receive any dividends or other
distributions received on and after the Effective Date on
account of the shares of the New Common Stock distributed to
such holder on account of its Allowed Claim.
(g) Additional Quarterly Distributions on Account of Previously
Allowed Claims. On each Quarterly Distribution Date, the
Disbursing Agent shall distribute to each holder of a previously
Allowed Claim or the relevant Paying Agent, as the case may be,
on account of such Claim an amount of Cash or Reorganization
Securities, as the case may be, equal to: (i) the Distribution
from the relevant Disputed Claims Reserve that such claimant
would have received in accordance with the Plan had it not
received any prior Distributions in respect of its Allowed
Claim, less (ii) the total amount of any Distributions
previously received in respect of its Allowed Claim. The
Supplemental Bank Group Distribution and the Supplemental
BSI-GEN Distribution of New Common Stock shall be made from the
applicable Disputed Claims Reserve once the General Unsecured
Claims against BSI (excluding the Bank Group Claim and the
Intercompany Claims) are reduced to below $240 million in
accordance with Sections 6.01 and 6.05 hereof. Such Additional
Quarterly Distributions shall continue until the relevant
Disputed Claims Reserve is depleted of Cash or Reorganization
Securities held in such Disputed Claims Reserve, other than as
set forth in the next subsection. Notwithstanding anything to
the contrary herein, no Distribution shall be made on any
Quarterly Distribution Date unless the aggregate Distribution on
such Quarterly Distribution Date would be in excess of $10,000
in value (as such value is set forth herein and/or in the
Disclosure Statement). The restriction on Additional Quarterly
Distributions hereunder imposed by the immediately preceding
sentence shall no longer apply as of the date on which all
Disputed Claims in the relevant Class have been resolved. Each
such Distribution shall also include, on the basis of the amount
so distributed, any dividends or other Distributions received on
and after the Effective Date on account of the shares of the New
Common Stock or interest earned on Cash distributed to each
holder receiving a Distribution on a Quarterly Distribution Date
on account of its Allowed Claim. Section 7.09 Miscellaneous
Distribution Provisions. (a) Method of Cash
Distributions. Cash payments made pursuant to the Plan shall be
in United States dollars by checks drawn on a domestic bank
selected by the applicable Debtor or Reorganized Corporation, or
by wire transfer from a domestic bank, at the option of the
applicable Debtor or Reorganized Corporation; provided, however,
that cash payments made to foreign creditors, if any, holding
Allowed Claims may be paid, at the option of the applicable
Debtor or Reorganized Corporation, in such funds and by such
means as are necessary or customary in a particular foreign
jurisdiction. (b)
Distributions on Non-Business Days. Any payment or Distribution
due on a day other than a Business Day shall be made, without
interest, on the next Business Day. (c) Accrual
of Postpetition Interest. Unless otherwise provided for in the
Plan, no holder of a pre-petition Allowed Claim shall be
entitled to the accrual of interest on account of such Claim.
(d) No Distribution of Fractional Securities. Notwithstanding
any other provisions of the Plan, only whole numbers of shares
of New Common Stock and New Warrants shall be issued. When any
Distribution on account of an Allowed Claim would otherwise
result in the issuance of a number of shares of the New Common
Stock and New Warrants that is not a whole number, the
Disbursing Agent shall aggregate and sell all Fractional Shares
of the New Common Stock and New Warrants otherwise then
distributable in accordance with the Plan at then prevailing
prices and distribute the net proceeds to the Persons otherwise
entitled thereto. Notwithstanding the foregoing, if a Person
holds more than one claim, the fractional securities that such
Person otherwise would be entitled to on account of each such
Claim held by such Person shall be aggregated and, after taking
into account such aggregation, such Person shall receive on
account thereof (in addition to any whole number of shares of
New Common Stock, New Warrants or other Distribution such Person
is entitled to under this Plan prior to such aggregation) (i)
any resulting whole number of shares of New Common Stock and New
Warrants and (ii) the net proceeds for any remaining Fractional
Share. (e) No Distribution in Excess of Allowed
Amount of Claim. Notwithstanding anything to the contrary
herein, no holder of an Allowed Claim shall receive in respect
of such Claim any Distribution (of a value set forth herein or
in the Disclosure Statement) in excess of the Allowed Amount of
such Claim. Except as expressly provided herein, no Prepetition
Claim shall be allowed to the extent that it is for Postpetition
Interest or other similar charges.
Section 7.10 De Minimis Distributions.
Notwithstanding anything to the contrary contained in the
Plan, the Disbursing Agents shall not be required to distribute
Cash to the holder of an Allowed Claim if the amount of cash to
be distributed on account of such Claim is less than $25. Any
holder of an Allowed Claim on account of which the amount of
Cash to be distributed is less than $25 shall have such Claim
discharged and shall be forever barred from asserting any such
Claim against the Debtors, the Reorganized Corporation, or their
respective property. Any Cash not distributed pursuant to this
provision shall be the property of the applicable Reorganized
Corporation, free of any restrictions thereon, and any such Cash
held by the Disbursing Agent shall be returned to the applicable
Reorganized Corporation.
Section 7.11 Compliance with Tax Requirements.
In connection with the Plan, to the extent applicable, each
Disbursing Agent shall comply with all withholding and reporting
requirements imposed on it by federal, state and local taxing
authorities, and all Distributions shall be subject to such
withholding and reporting requirements.
Section 7.12 Setoffs.
The Reorganized Corporations are authorized, pursuant to section
553 of the Bankruptcy Code, to set off against any Allowed Claim
and the Distributions to be made on account of such Claim, the
claims, rights and causes of action of any nature that the
applicable Debtor may hold against the holder of such Allowed
Claim; provided, however, that neither the failure to effect
such a setoff nor the allowance of any Claim hereunder shall
constitute a waiver or release by the applicable Debtor of any
such claims, rights and causes of action that the Debtors may
possess against such holder.
Section 7.13 Intercompany Claims.
All Claims between and among the Debtors, except the
Intercompany Claim, which shall be treated in accordance with
the provisions of Section 6.05 hereof, shall be deemed released,
waived and discharged as of the Effective Date.
Section 7.14 Unclaimed Property.
(a) Escrow of Unclaimed Property. Unclaimed Property (and
all interest, dividends, and other Distributions thereon) shall
be delivered promptly to the Disbursing Agent by each Paying
Agent. The Disbursing Agent shall deposit such Unclaimed
Property and such Unclaimed Property held by the Disbursing
Agent in trust (for the benefit of the holders of Claims and
Interests entitled thereto under the terms of this Plan) in a
subaccount of the relevant Disputed Claims Reserve. For a
period of two years following the Effective Date, Unclaimed
Property, including any interest, dividends, and other
Distributions thereon shall be: (i) held in such subaccount
solely for the benefit of the holders of Allowed Claims that
have failed to claim such property; and (ii) released from such
subaccount and delivered to the holder of an Allowed Claim upon
presentation of proper proof by such holder of its entitlement
thereto. (b) Investment of
Unclaimed Cash. All Cash held in each such subaccount shall be
invested in accordance with section 345 of the Bankruptcy Code,
as modified by the relevant Orders of the Court for investments
made by the Debtors during the Chapter 11 Cases. The earnings
on such investments shall be held in trust as an addition to the
balance of the subaccount for the benefit of the holders of
Allowed Claims entitled to such Unclaimed Property, and shall
not constitute property of the Debtors' estate or of the
Reorganized Corporations. (c) Distribution
of Unclaimed Property. At the end of two years following the
relevant Distribution date of particular Cash or Reorganization
Securities, the holders of Allowed Claims theretofore entitled
to Unclaimed Property shall cease to be entitled thereto (such
holders, the "Unclaimed Holders"), and the Unclaimed Property
for each Unclaimed Holder shall then be distributed Pro Rata to
the other holders of Allowed Claims in the Class of that
Unclaimed Holder in accordance with Section 7.09 hereof.
Section 7.15 Withdrawal
of the Plan. Each Debtor may only
alter, amend, modify, revoke or withdraw this Plan as the plan
of reorganization for such Debtor's Case and the Cases of its
subsidiaries with the express unanimous consent of the
Creditors' Committee, the Bank Group and the Unofficial
Committee. Each Debtor reserves the right to make
non-substantive changes in any Plan, which changes may be
necessary to facilitate the withdrawal of another Debtor from
the Plan. Any such revocation or withdrawal by a Debtor shall
not affect this Plan as the plan of reorganization of the other
Debtors. If a Debtor revokes or withdraws from this Plan: (a)
nothing contained herein shall be deemed to constitute a waiver
or release of any Claims by or against such Debtor, including
(without limitation) the Intercompany Claim or any other claim
of one Debtor against another Debtor, or to prejudice in any
manner the rights of such Debtor or any persons in any further
proceedings involving such Debtor, including (without
limitation) objecting to any Intercompany Claim; and (b) any
provisions of any Confirmation Order with respect to such Debtor
shall be null and void (and such Debtor shall not be benefited
by the Confirmation Order) and all such rights of or against
such Debtor shall exist as though this Plan had not been filed
and no actions taken to effectuate it.
Section 7.16 Cancellation of Capital Stock.
As of the Effective Date, by virtue of the Plan and in
all events without any action on the part of the holders
thereof, each share of Old Common Stock of BI issued and
outstanding or held in treasury, shall be cancelled and retired
and no consideration will be paid or delivered with respect
thereto. Notwithstanding anything herein to the contrary,
holders of Old Common Stock of BI shall not be required to
surrender such stock to the Debtors. Section 7.17 Surrender of
Outstanding Securities. Except as otherwise
provided herein, each holder of an instrument or certificated
security evidencing an Allowed Claim against a Debtor (other
than if the Claim or Interest that such instrument or
certificated security evidences is Reinstated) shall surrender
such instrument or certificated security to the relevant Debtor
or Paying Agent with a duly executed letter of transmittal. No
Distribution hereunder shall be made to or on behalf of any
holder of such Claim unless and until such instrument or
certificated security is received or the nonavailability of such
instrument or certificated security is established to the
satisfaction of the Disbursing Agent or Paying Agent, as the
case may be. Such Disbursing Agent or Paying Agent, as the case
may be, may reasonably require security and/or indemnity from
the purported holder of such instrument or certificated security
to hold it harmless in respect of such instrument or
certificated security and any Distributions made in respect
thereof. Any such holder that fails to surrender such
instrument or satisfactorily explain its nonavailability to the
Disbursing Agent or the relevant Paying Agent, as the case may
be, within two years of the Effective Date shall be deemed to
have no further Claim against the relevant Debtor, Reorganized
Corporation or its property in respect of such Claim and shall
not participate in any Distribution hereunder. Notwithstanding
anything in the immediately preceding sentence, any such holder
of a Disputed Claim shall not be required to surrender a
required instrument or certificated security until the time such
Disputed Claim is allowed or disallowed.
Section 7.18 Termination of DIP Facility.
Except to the extent that the DIP Facility
otherwise provides, on the Effective Date, all obligations of
the Debtors under the DIP Facility shall be paid or otherwise
satisfied in full in accordance with the terms of the DIP
Facility. Without limiting the foregoing, with the consent of
the lenders under the DIP Facility, any letters of credit that
have not expired shall be replaced or backed-up with letters of
credit as a part of Reorganized BSI's New Credit Facility. Upon
payment or satisfaction in full of all obligations under the DIP
Facility in accordance with the terms thereof, all liens and
security interests granted to secure such obligations shall be
deemed terminated and shall be of no further force and effect.
Section 7.19 New Credit Facility.
BSI expects to enter into the New Credit Facility and to issue
the New Credit Facility Notes effective as of the Effective
Date. The initial advance thereunder shall be used to satisfy
in full the Debtors' obligations under the DIP Facility and to
provide working capital to Reorganized BSI.
Such documents as may exist which evidence the New Credit
Facility shall be filed by BSI with the Bankruptcy Court no
later than the Exhibit Filing Date as Exhibit E hereto. Copies
of, and notice of any modification to, the New Credit Facility
after its execution shall be provided to the Creditors'
Committee, the Bank Group and the Unofficial Committee. The
terms and conditions of the New Credit Facility shall include in
all respects the terms and conditions of the commitment letter
between BSI and the New Credit Facility Agent and a New Credit
Facility term sheet, except to the extent that BSI and the New
Credit Facility Agent agree otherwise. BSI shall, on or after
the Confirmation Date, execute such other documents as the New
Credit Facility Agent may require in order to effectuate the
treatment afforded to the lenders under the New Credit Facility.
Copies of any such documents shall be provided to the Creditors'
Committee, the Bank Group and the Unofficial Committee prior to
the Effective Date. The New Credit Facility Notes shall be in a
principal amount to be determined prior to the Effective Date
but, in any event, of at least $270 million, on such terms and
at such interest rates as shall be agreed upon by Reorganized
BSI and the Agent under the New Credit Facility.
Section 7.20 Sale of Yonkers Property and
Union Square Property. In the event that either or both of the
Yonkers Property and the Union Square Property remains unsold on
the Effective Date, the Yonkers Property and the Union Square
Property and the proceeds from any sale of such properties shall
be pledged to the Indenture Trustee to secure the obligations of
Reorganized BSI under the New Notes as is set forth in Section
4.02, and Reorganized BSI and Reorganized YON, as the case may
be, shall continue the Debtors' efforts to sell such properties.
The Debtors shall use all reasonable efforts to sell such
properties. Section 7.21 Adequate Protection Payments.
The Debtors shall continue to pay to the Bank Group
through the Effective Date the Adequate Protection Payments in
the amounts required by the Agreed Order Regarding Adequate
Protection of the Senior Bank Group's Interests and Related
Relief, dated October 24, 1995.
Section 7.22 Plan Funding.
Consummation Costs shall be paid by the
Consummation Funds. Section 7.23 Disputed Payments.
If any dispute arises as to the identity
of a holder of an Allowed Claim who is to receive any
Distribution, the Disbursing Agent may, in lieu of making such
Distribution to such Person, make such Distribution into an
escrow account to be held in trust for the benefit of such
holder and shall not constitute property of the Debtors, their
estates or the Reorganized Corporations. Such Distribution
shall be held in escrow until the disposition thereof shall be
determined by order of the Bankruptcy Court or by written
agreement among the interested parties to such dispute.
Section 7.24
Withholding Taxes. Any federal
or state withholding taxes or other amounts required to be
withheld under any applicable law shall be deducted and withheld
from any Distributions hereunder. Section 7.25
Obligations Incurred After the Confirmation Date. Payment
obligations incurred after the date and time of entry of the
Confirmation Order shall not be subject to application or proof
of claim and may be paid by the Debtors, Reorganized BI or
Reorganized BSI, as the case may be, in the ordinary course of
business and without further Bankruptcy Court approval as
Administrative Claims.
Section 7.26 Cancellation of Bonds and Agreements.
On the Effective Date, except as otherwise provided for therein,
the Bonds and any other note, bond, indenture or other
instrument or document evidencing or creating any indebtedness
or obligation of the Debtors will be deemed cancelled and of no
further force or effect without any further action on the part
of the Bankruptcy Court, any Person or any governmental entity
or agency. The holders of such cancelled Bonds and notes will
have no rights arising from or relating to such Bonds or the
cancellation thereof, except the rights provided pursuant to the
Plan.
Following the Effective Date, holders of Bonds will receive from
the respective indenture trustee, agent, servicer or the
Disbursing Agent, specific instructions regarding the time and
manner in which the Bonds are to be surrendered. Pending such
surrender, such Bonds will be deemed cancelled and shall
represent only the right to receive the distributions to which
the holder is entitled under this Plan.
Any Bond which is lost, stolen, mutilated or destroyed, shall be
deemed surrendered when the holder of a Claim or Interest based
thereon delivers to the applicable indenture trustee, agent,
servicer or the Disbursing Agent (a) evidence satisfactory to
the indenture trustee, agent, servicer or the Disbursing Agent
of the loss, theft, mutilation or destruction of such instrument
or certificate, and (b) such security or indemnity as may be
required by the indenture trustee, agent, servicer or the
Disbursing Agent to hold each of them harmless with respect
thereto. Each indenture or other agreement that governs the
rights of the holder of a Claim and that is administered by an
indenture trustee, an agent or a servicer shall continue in
effect solely for the purposes of (a) allowing such indenture
trustee, agent or servicer to make the Distributions to be made
on account of such Claims under this Plan, (b) permitting such
indenture trustee, agent or servicer to maintain any rights or
liens it may have for fees, costs, expenses and indemnification
under such indenture or other agreement and to be paid or
reimbursed for such prepetition and postpetition fees, costs,
expenses and indemnification only from the Distributions (until
payment in full of such fees, costs, expenses or
indemnification) that are governed by the respective indenture
or other agreement in accordance with the provisions set forth
therein and (c) the obligations of, and/or Claims against, the
Debtors under, relating or pertaining to any agreements,
indentures or certificates of designations, governing the Bonds
and any other note, bond, indenture or other instrument or
documents evidencing or creating any indebtedness or obligation
of the Debtors shall be released and discharged; provided,
however, that each indenture or other agreement that governs the
rights of the holder of a Claim and that is administered by an
indenture trustee, an agent or a servicer shall continue in
effect solely for the purposes of allowing such indenture
trustee, agent or servicer to make the Distributions to be made
on account of such claims under this Plan; provided, further,
that the provisions of the foregoing proviso shall not affect
the discharge of Debtors' liabilities under the Bankruptcy Code
and the Confirmation Order or result in any expense or liability
to the Reorganized Corporations.
Section 7.27 Instructions to Disbursing Agent.
Prior to any Distribution on account of any Bonds,
the indenture trustee, agent or servicer of the Bonds shall (a)
inform the Disbursing Agent as to the amount of properly
surrendered Bonds and (b) instruct the Disbursing Agent, in a
form and manner that the Disbursing Agent reasonably determines
to be acceptable, of the names of the holders of Bonds with
allowed BI-GEN Claims and denominations of New Warrants to be
issued and distributed to or on behalf of such holders of
Allowed BI-GEN Claims in exchange for properly surrendered
Bonds. Section 7.28 Record Date
for Distributions to Holders of Bonds. At the close of business
on the Record Date, the transfer ledgers of the indenture
trustees, agent and servicers of the Bonds shall be closed, and
there shall be no further changes in the record holders of the
Bonds. The Reorganized Corporations and the indenture trustees,
agents and servicers for such Bonds and the Disbursing Agent
shall have no obligation to recognize any transfer of such Bonds
occurring after the Record Date. The Reorganized Corporations
and the indenture trustees, agents and servicers for such Bonds
and the Disbursing Agent shall be entitled instead to recognize
and deal for all purposes hereunder with only those record
holders stated on the transfer ledgers as of the close of
business on the Record Date.
Section 7.29
Termination of Subordination. Effective as of the date on which
each holder of a Bank Group Claim has received all Distributions
to which, pursuant to this Plan, each such holder is entitled to
receive, each holder of a Bank Group Claim shall be deemed to
have waived all contractual, legal and equitable subordination
rights which it may have, whether arising under general
principles of equitable subordination, section 510(c) of the
Bankruptcy Code or otherwise, with respect to the Distribution
to be made hereunder to holders of Bond Claims. On the
Effective Date, all contractual, legal or equitable
subordination rights that each holder of a Bank Group Claim has
individually and collectively with respect to any Distribution
made pursuant to this Plan to holders of Bond Claims shall be
discharged and terminated, and all actions related to the
enforcement of such subordination rights will be permanently
enjoined.
Article VIII
EFFECT OF THE PLAN ON CLAIMS AND INTERESTS
Section 8.01 Discharge.
(a) Scope. Except as otherwise provided in the Plan,
Confirmation Order or DIP Facility, in accordance with section
1141(d)(1) of the Bankruptcy Code, when the Confirmation Order
becomes a Final Order, the Plan and the Confirmation Order shall
discharge, effective as of the Effective Date, all debts of,
Claims against, liens on, and Interests in each of the Debtors,
their assets, or properties, which debts, Claims, liens, and
Interests arose at any time before the entry of the Confirmation
Order. The discharge of the Debtors shall be effective as to
each Claim or Interest, regardless of whether a proof of Claim
or Interest therefor was filed, whether the Claim is an Allowed
Claim, or whether the holder thereof votes to accept the Plan.
On the Effective Date, as to every discharged Claim and
Interest, any holder of such Claim or Interest (including,
without limitation, any options to purchase Old Common Stock of
BI) shall be precluded from asserting against any Debtor
formerly obligated with respect to such Claim or Interest, or
against such Debtor's assets or properties, any other or further
Claim or Interest based upon any document, instrument, act,
omission, transaction, or other activity of any kind or nature
that occurred before the Confirmation Date.
(b) Injunction. Except as otherwise
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: (1) commencing or continuing in any manner
any action or other proceeding against the Debtors, the
Reorganized Debtors or their respective property, officers,
directors, agents, employees and representatives and others
including (without limitation) the Creditors' Committee
(including present and former members), the Bank Group
(including present and former members), the Unofficial Committee
(including present and former members), and professional persons
retained by the Debtors, the Creditors' Committee, members of
the Creditors' Committee, the Bank Group and the Unofficial
Committee; (2) enforcing, attaching, collecting or recovering in
any manner any judgment, award, decree or order against the
Debtors, the Reorganized Debtors or their respective property,
current and former officers, directors, agents, employees and
representatives and others including (without limitation) the
Creditors' Committee (including present and former members), the
Bank Group (including present and former members), the
Unofficial Committee (including present and former members), and
professional persons retained by the Debtors, the Creditors'
Committee, members of the Creditors' Committee, the Bank Group
and the Unofficial Committee; (3) creating, perfecting or
enforcing any lien or encumbrance against the Debtors, the
Reorganized Debtors or their respective property, current and
former officers, directors, agents, employees and
representatives and others including (without limitation) the
Creditors' Committee (including present and former members), the
Bank Group (including present and former members), the
Unofficial Committee (including present and former members), and
professional persons retained by the Debtors, the Creditors'
Committee, members of the Creditors' Committee, the Bank Group
and the Unofficial Committee; (4) asserting a setoff, right of
subrogation or recoupment of any kind against any obligation due
to the Debtors, the Reorganized Debtors or their respective
property, current and former officers, directors, employees and
representatives and others including (without limitation) the
Creditors' Committee (including present and former members), the
Bank Group (including present and former members), the
Unofficial Committee (including present and former members), and
professional persons retained by the Debtors, the Creditors'
Committee, members of the Creditors' Committee, the Bank Group
and the Unofficial Committee; and (5) 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. (c)
Release of Collateral. Unless a particular Secured Claim is
Reinstated or the holder thereof receives a Distribution of a
Reorganization Security in respect of such Claim under this
Plan: (i) each holder of: (A) a Secured Claim; and/or (B) a
Claim that is purportedly secured shall on or immediately before
the Effective Date: (x) turn over and release to the relevant
Debtor (or its successor, as the case may be) any and all
property of the relevant Debtor that secures or purportedly
secures such Claim; and (y) execute such documents and
instruments as such Reorganized Corporation requires to evidence
such claimant's release of such property; and (ii) on the
Effective Date, all claims, right, title and interest in such
property shall revert to the relevant Reorganized Corporation
(or the successor to any Debtor that does not survive a
Combination Transaction or to Reorganized BSI in respect of the
property of a Dissolving Debtor) free and clear of all Claims
and Interests, including (without limitation) liens, charges,
pledges, encumbrances and/or security interests of any kind. No
Distribution hereunder shall be made to or on behalf of any
holder of such Claim unless and until such holder executes and
delivers to the relevant Debtor or Reorganized Corporation such
release of liens. Any such holder that fails to execute and
deliver such release of liens within 180 days of the Effective
Date shall be deemed to have no further Claim against the
relevant Debtor, Reorganized Corporation or their property in
respect of such Claim and shall not participate in any
Distribution hereunder. Notwithstanding the immediately
preceding sentence, any such holder of a Disputed Claim shall
not be required to execute and deliver such release of liens
until the time such Claim is allowed or disallowed.
(d) Applicability. Notwithstanding anything contained
herein to the contrary, none of the provisions of this section
shall be deemed applicable to any rights, claim, or cause of
action, whether asserted or yet to be asserted, against any
person or entity other than as specifically referred to in this
Section 8.01.
Section 8.02 Revesting and Vesting.
Subject to the Combination Transactions each of the Debtors
shall, as a Reorganized Corporation, continue to exist after the
Effective Date as a separate corporate entity, with all the
powers of a corporation under applicable law, without prejudice
to any right to terminate such existence (whether by merger or
otherwise) under applicable law after the Effective Date.
Except as otherwise provided in this Plan, on the Effective Date
all property comprising the Estates of each Debtor (other than a
Dissolving Debtor) shall revest in the relevant Reorganized
Corporation or its successor as a result of a Combination
Transaction, free and clear of all Claims, liens, charges,
encumbrances and Interests of creditors and equity security
holders (other than as expressly provided herein). On the
Effective Date, any property of a Dissolving Debtor not
previously distributed under this Plan shall vest in Reorganized
BSI, free and clear of all Claims, liens, charges, encumbrances
and Interests of creditors and equity security holders of such
Dissolving Debtor (other than as expressly provided herein). As
of the Effective Date, each Reorganized Corporation may operate
its businesses and use, acquire and dispose of property and
settle and compromise claims or interests arising after the
Effective Date without supervision of the Court free of any
restrictions of the Bankruptcy Code or Bankruptcy Rules, other
than those restrictions expressly imposed by the Plan and
Confirmation Order. Without limiting the foregoing, each
Reorganized Corporation may pay the charges it incurs for
Professional Fees, disbursements, expenses, or related support
services after the Effective Date without any application to the
Court.
Section 8.03 Secondary Liability Claims.
After notice and a hearing, Secondary Liability Claims shall be
estimated by the Court under section 502(c) of the Bankruptcy
Code. Each such Claim against any Debtor in respect of such
Debtor's guaranty of obligations of any Primary Obligor that is
a Debtor shall be allowed against such guarantor Debtor in the
amount of the deficiency in recovery on the related claim
against such Primary Obligor.
Section 8.04 Release of Primary Obligors.
Except as provided otherwise herein, all holders of Claims
against and Interests in any of the Debtors receiving, or
entitled to receive, payments or Distributions pursuant to this
Plan, in consideration for the promises and obligations of the
Debtors under this Plan, shall be deemed to have waived and
released all rights or claims they had or might have had against
any current or former officer, director or employee of each of
the Debtors based upon any claim against a Primary Obligor that
also gives rise to a Secondary Liability Claim; provided,
however, except as expressly provided above in this subsection,
no such Claim or Interest holder shall be deemed by virtue of
this subsection to have waived or released any right or claim it
may have against any person other than the Debtors or the
current and former officers, directors and employees of each of
them. The release of any person or entity under this section
additionally acts as an injunction against the commencement or
continuation of any action, employment of process or act to
collect, offset or recover the claims released hereby.
Section 8.05 Survival of Certain Indemnification Obligations.
Except as otherwise provided in this Plan, the obligations of
the Debtors to indemnify individuals who serve or served as
their respective directors, officers, agents, employees,
representatives, and others, including (without limitation)
professional persons retained by any Debtor, pursuant to such
Debtor's respective certificates of incorporation, Amended
By-Laws, applicable statutes and agreements in respect of all
present and future actions, suits, and proceedings against any
of such officers, directors, agents, employees, representatives,
and others, including (without limitation) professional persons
retained by any Debtor, based upon any act or omission related
to service with, for, or on behalf of any of the Debtors on or
after the Petition Date as such obligations were in effect at
the time of any such act or omission (but excluding such
indemnity obligations, if any, arising under the Bank Documents,
SPE Documents, Indenture, or any other similar such agreement or
any unexpired lease or executory contract which is not assumed
by any Debtor or Reorganized Corporation which gave rise to or
could give rise to a Claim against any of the Debtors prior to
the Petition Date), shall not be discharged or impaired by
confirmation or consummation of this Plan but shall survive
unaffected by the reorganization contemplated by this Plan and
shall be performed and honored by each respective Debtor or
Reorganized Corporation (or its successor) regardless of such
confirmation, consummation, and reorganization.
Section 8.06 Release of Officers, Directors, Employees and
Representatives.
Except as provided in Section 8.07 hereof, each Debtor (and its
successor Reorganized Corporation) hereby waives, releases and
discharges: all current and former officers, directors, agents,
employees and representatives of the Debtors, members of the
Creditors' Committee (including present and former members),
members of the Unofficial Committee, members of the Bank Group
(including present and former members) and others, including
(without limitation) professional persons retained by the
Debtors and the Creditors' Committee, the members of the
Unofficial Committee, members of the Bank Group, the agent for
the Bank Group, from any claim (as such term "claim" is defined
in section 101(5) of the Bankruptcy Code) arising prior to the
Confirmation Date; provided, however, that to the extent that
applicable law would permit a holder of a Tax Claim to seek the
payment of such Tax Claim from a current or former officer or
director of the Debtors designated as a "responsible person"
under such law, nothing herein shall act to discharge or release
any such person from any liability with respect to such Tax
Claim in the event that any Reorganized Corporation fails to pay
any such claim pursuant to the terms of this Plan. With respect
to the current and former members of the Creditors' Committee,
the Unofficial Committee and the Bank Group, the foregoing
release shall only apply to any claims, if any, which one or
more of the Debtors may have against such entity or entities in
their capacity as a member of the Creditors' Committee,
Unofficial Committee or Bank Group, as the case may be. With
respect to the Debtors' current and former officers or
directors, the foregoing release shall not apply to claims, if
any, which may exist against such persons for which (and only to
the extent) there is D&O Insurance. In any proceeding brought
with respect to any such claims against the Debtors' current or
former officers or directors, any recovery (i) will be limited
to amounts which may be payable from the D&O Insurance, and (ii)
will not under any circumstances come from the personal assets
of any such current or former officer or director, as the case
may be, and in no event shall the Debtors, Reorganized
Corporations or any other Person seek to execute on any judgment
against any current or former officer or director except with
respect to the D&O Insurance, even if no D&O Insurance is
determined to exist, the D&O carrier declines coverage, or the
D&O Insurance coverage is insufficient to satisfy in full any
claim or judgment obtained against such current or former
officer or director. The foregoing shall not preclude, restrict
or limit any officer or director against whom such a claim is
asserted from defending against or opposing any such claim.
Claimants and holders of Interests in any of the Debtors shall
be enjoined from commencing or continuing any action, employment
of process or act to collect, offset or recover any such claim
that could be brought on behalf of or in the name of any of each
such Debtor, without any independent cause of action belonging
to the claimant or equity interest holder asserting such claim.
Section 8.07 Release of Certain
Claims. Notwithstanding anything to the
contrary in the Plan or in any instrument, contract, release or
other agreement entered into in connection with the Plan or an
order of the Bankruptcy Court, on the Effective Date, each
Debtor shall be deemed to have released all claims, rights and
causes of action arising under section 547 of the Bankruptcy
Code. Section 8.08 Claims and
Interest Objections. Unless otherwise ordered
by the Bankruptcy Court, all Claims objections shall be Filed
and served on the applicable claimant no later than the
Effective Date or, if a Claim is permitted to be Filed
thereafter, within thirty (30) days after such Claim has been
Filed. Any Claim which is (a) Allowed under the terms of this
Plan or pursuant to an Order of the Bankruptcy Court prior to
the Effective Date or (b) not the subject of a Claim objection
pending before the Bankruptcy Court by the Effective Date shall
be deemed Allowed for all purposes. After the Effective Date
and pursuant to the provisions of the Bankruptcy Code, the
Reorganized Corporations may settle or compromise any Disputed
Claim without approval of the Bankruptcy Court.
Section 8.09 Preservation of Insurance.
The provisions of this Plan shall not diminish or impair in any
manner the enforceability and coverage of any insurance policies
that may cover Claims against the Debtors, Reorganized
Corporations or any other Person.
Article IX
EXECUTORY CONTRACTS
Section 9.01 Executory Contracts and Unexpired Leases.
As of the Effective Date, all executory contracts and unexpired
leases of each Debtor shall be deemed rejected by such Debtor
pursuant to the provisions of section 365 of the Bankruptcy
Code, except: (a) any executory contract or unexpired lease
that has been or is the subject of a motion to assume or assume
and assign filed pursuant to section 365 of the Bankruptcy Code
by any of the Debtors before the Effective Date; (b) any
executory contract or unexpired lease listed in the "Schedule of
Assumed and Assumed and Assigned Executory Contracts and
Unexpired Leases" to be filed by the Debtors with the Court
before the entry of the Confirmation Order; (c) any executory
contract or unexpired lease assumed or assumed and assigned
pursuant to the provisions of this Plan; (d) any agreement,
obligation, security interest, transaction or similar
undertaking that the relevant Debtor believes is not executory
or is not a lease, and which is later determined by the Court
to be an executory contract or unexpired lease that is subject
to assumption or rejection under section 365 of the Bankruptcy
Code; and (e) the Union Square Property, which is subject to the
provisions of Section 9.02 hereof. The rejection by any Debtor
of an executory contract or unexpired lease shall cause such
rejection to be a breach prior to the Petition Date under
sections 365(g) and 502(g) of the Bankruptcy Code.
Section 9.02 Lease
Under Which Bradlees Leases Union Square Property.
Reorganized BSI shall have
until the date that is one year after the occurrence of the
Effective Date, or such later period as the Bankruptcy Court may
grant, to exercise its rights under sections 363 and 365 of the
Bankruptcy Code with respect to BSI's unexpired real property
lease pursuant to which BSI leases the Union Square Property,
including, without limitation, the right to assume, assume and
assign or reject the lease under which Bradlees leases the Union
Square Property. The Bankruptcy Court shall retain jurisdiction
with respect to such rights and any issues related thereto.
Section 9.03 Executory Contract
of R.R. Donnelly & Sons Company. BSI's executory contract with
R.R. Donnelly & Sons Company ("R.R. Donnelly") shall, as of the
Effective Date, (i) be deemed assumed by Reorganized BSI, (ii)
R.R. Donnelly shall waive any cure payments upon assumption of
such contract to which it might be entitled pursuant to the
provisions of the Bankruptcy Code and (iii) BSI shall waive any
cause of action which it may have against R.R. Donnelly under
section 547 of the Bankruptcy Code. Section 9.04 Executory
Contract of J.Baker, Inc. As of the Effective
Date, BSI's executory contract with J.Baker, Inc. ("J.Baker")
shall be deemed amended to, inter alia, extend the term of the
contract for three years following the Effective Date and, as
amended, be assumed by Reorganized BSI. In respect of the $1.8
million Claim of J.Baker, Reorganized BSI shall, on the
Effective Date or as soon thereafter as practicable, make a Cash
Distribution to J.Baker in the amount of $360,000. Reorganized
BSI shall make additional Cash Distributions to J.Baker in the
amount of $1,440,000, to be paid in equal monthly installments
commencing thirty days after the first payment, with interest at
a rate equal to J.Baker's borrowing rate, but not to exceed nine
percent (9%); provided, however, that no interest shall accrue
during the first six months after the Effective Date; provided,
further, however, that the obligation of Reorganized BSI to make
the foregoing payments owed to J.Baker shall accelerate and
become immediately due and payable should (a) Reorganized BSI
enter into a third party transaction which would constitute a
change of control or (b) Peter Thorner's employment with
Reorganized BSI terminate for any reason. Section 9.05 Cure.
At the election of
the relevant Debtor, any monetary defaults under each executory
contract and unexpired lease to be assumed under this Plan shall
be satisfied pursuant to section 365(b)(1) of the Bankruptcy
Code, in one of the following ways: (a) by payment of the
default amount in Cash on the Effective Date; (b) by issuance
of a Cure Note; or (c) on such other terms as agreed to by the
parties to such executory contract or unexpired lease; provided,
however, any landlord which filed a timely objection with the
Court to the First Amended Joint Plan of Reorganization of
Bradlees Stores, Inc. and Affiliates Under Chapter 11 of the
Bankruptcy Code, pursuant to the procedures prescribed in the
Order dated October 5, 1998, objecting to the cure of defaults
under a lease to which such landlord is a party by means of a
Cure Note, shall be paid Cash in accordance with the provisions
of Section 5.01(a) hereof to cure any defaults under such lease
if it is assumed pursuant to the provisions of this Plan. In
the event of a dispute regarding: (i) the amount of any Cure
Payments; (ii) the ability of the Debtor that is a party thereto
to provide adequate assurance of future performance under the
contract or lease to be assumed; or (iii) any other matter
pertaining to assumption, the cure payments required by section
365(b)(1) of the Bankruptcy Code shall be made following the
entry of a Final Order resolving the dispute and approving
assumption.
Section 9.06 Rejection Damages Bar Date.
If the rejection by any Debtor, pursuant to the Plan or
otherwise, of an executory contract or unexpired lease results
in a Claim, then such Claim shall be forever barred and shall
not be enforceable against such Debtor or Reorganized
Corporation or the properties of either of them unless a proof
of claim is filed with the clerk of the Bankruptcy Court and
served upon counsel to the Debtors (i) within fifteen (15) days
after service of the later of (a) notice of the Confirmation
Order, (b) other notice that the executory contract or unexpired
lease has been rejected, or (c) in the event that any Debtor
rejects any executory contract or unexpired lease after the
Confirmation Date, within fifteen (15) days of the date of such
rejection or (ii) within such time as the Bankruptcy Court may
order. Section 9.07 Executory Contracts and
Unexpired Leases Entered Into and Other Obligations Incurred
After the Petition Date. Executory contracts and unexpired
leases entered into and other obligations incurred after the
Petition Date by any Debtor shall be performed by such Debtor or
by such Reorganized Corporation liable thereunder in the
ordinary course of its business. Accordingly, such executory
contracts, unexpired leases and other obligations shall survive
and remain unaffected by entry of the Confirmation Order.
Article X
CONDITIONS TO CONFIRMATION
AND OCCURRENCE OF EFFECTIVE DATE
Section 10.01 Conditions to
Confirmation. This Plan may not be
confirmed unless each of the conditions set forth below is
satisfied. Except as provided in Section 10.03 below, any one
or more of the following conditions may be waived at any time by
the Debtors with the unanimous consent of the Creditors'
Committee, the Unofficial Committee and the Bank Group.
(a) The
Disclosure Statement Order shall have been entered and be a
Final Order.
(b) The Confirmation Order shall be in form reasonably
acceptable to Debtors, the Creditors' Committee, the Unofficial
Committee and the Bank Group. The Confirmation Order shall,
among other things, provide that:
(i) The Reorganized Corporation shall be deemed to
succeed to, by operation of law, all executory contracts or
unexpired leases assumed by the Debtors during the Chapter 11
Cases, (including pursuant to the provisions of the Plan), which
contracts and leases shall remain in full force and effect
notwithstanding any provision in such contract or lease
(including those described in sections 365(b)(2) and (f) of the
Bankruptcy Code) that prohibits assignment or transfer or that
enables or requires the termination of such contract or lease;
(ii) except as expressly provided in this
Plan, the Debtors are discharged effective upon the Effective
Date from any "debt" (as that term is defined in section 101(12)
of the Bankruptcy Code), and the liability in respect thereof is
extinguished completely, whether reduced to judgment or not,
liquidated or unliquidated, contingent or noncontingent,
asserted or unasserted, fixed or unfixed, matured or unmatured,
disputed or undisputed, legal or equitable, known or unknown, or
that arose from any agreement of the Debtors entered into or
obligation of the Debtors occurred before the Petition Date, or
from any conduct of the Debtors prior to the Petition Date, or
that arose before the Petition Date, including, without
limitation, all interest, if any, on any such debts, whether
such interest accrued before or after the Petition Date;
(iii) a finding by the
Bankruptcy Court that the Plan complies with all applicable
provisions of the Bankruptcy Code, including that the Plan was
proposed in good faith and that the Confirmation Order was not
procured by fraud; and (iv) except as expressly
provided in this Plan, all Interests shall be terminated
effective upon the Effective Date. Section 10.02
Conditions to Occurrence of Effective Date. The Effective Date
for this Plan may not occur unless each of the conditions set
forth below is satisfied. Except as provided in Section 10.03
below, any one or more of the following conditions may be waived
at any time by the Debtors with the unanimous consent of the
Creditors' Committee, the Unofficial Committee and the Bank
Group. (a) The
Confirmation Order shall have been entered and be a Final Order.
(b)
Each Reorganized Debtor's respective Certificate of
Incorporation and Amended By-Laws shall have been amended as
provided in this Plan.
(c) Reorganized BI and Reorganized BSI shall each have
sufficient Cash on hand to pay the Consummation Costs and make
such other timely Distributions of Cash as may be required
hereunder. (d) Reorganized BSI shall have established a
revolving line of credit or other liquidity facility with a bank
or other financial institution in a drawable principal amount of
at least $250 million, with terms satisfactory to Reorganized
BSI and the lenders under the New Credit Facility, in their sole
discretion. (e) Subject to Section 7.08(e) hereof, the aggregate
amount of Allowed General Unsecured Claims and Disputed General
Unsecured Claims (i) against BSI (excluding the Bank Group
Claim and the Intercompany Claim) shall have been reduced,
either through agreement or order of the Bankruptcy Court, to
less than $300 million and (ii) against each Debtor other than
BI, BSI and BAC (other than the Intercompany Claims, the Bank
Group Claim and SPE Claims) shall have been reduced, either
through agreement or order of the Bankruptcy Court, to an amount
of less than $1 million.
(f) Reorganized BSI shall have granted to vendors
who provide retail merchandise to Reorganized BSI after the
Effective Date, or who have provided merchandise to BSI before
the Effective Date which is not paid for as of the Effective
Date, a Trade Vendors' Lien to secure payment to such trade
vendors of amounts owed by Reorganized BSI. The Trade Vendors'
Lien, which shall be held by the Trade Vendors' Collateral
Agent, shall be subordinated to the lien securing the New Credit
Facility to the satisfaction of the holders of the liens
securing the New Credit Facility and shall attach to all of
Reorganized BSI's inventory (but not any other assets of
Reorganized BSI). If a new lender or group of lenders replaces
the lenders under the New Credit Facility, then the Trade
Vendors' Lien shall be subordinated to the liens of such
replacement lender or lenders. The Trade Vendors' Lien shall
terminate on the earliest to occur of (i) two years after the
Plan Effective Date, (ii) at the sole option of Reorganized BSI,
the date on which the ratio of the amount of accounts payable of
Reorganized BSI to the amount of Inventory of Reorganized BSI,
computed on a cost basis, for any rolling three-month period is
more than five percentage points less than such ratio on a
comparable store basis for the same period in the prior year,
(iii) the consummation of a transaction pursuant to which
Reorganized BI or Reorganized BSI merges or otherwise combines
with another company or companies, (iv) at the sole option of
Reorganized BSI, as to any individual trade vendor, at such time
as such vendor fails to provide merchandise to Reorganized BSI
on terms which are at least as favorable to Reorganized BSI as
the credit terms under which such vendor provided merchandise to
BSI in the year prior to the Effective Date and (v) at the sole
option of Reorganized BSI, as to any individual trade vendor
that initially provides retail merchandise to Reorganized BSI
after the Effective Date, at such time as such vendor fails to
provide retail merchandise to Reorganized BSI on terms which are
as favorable to Reorganized BSI as the initial credit terms
which such vendor provide retail merchandise to Reorganized BSI;
provided, however, that any termination by Reorganized BSI of
the Trade Vendors' Lien will not be effective until the
thirtieth day after Reorganized BSI gives (a) actual notice to
the Trade Vendors' Collateral Agent and (b) (x) in the case of
trade vendors generally, notice by publication in The New York
Times (national edition), of its intent to terminate the Trade
Vendors' Lien and actual notice to trade vendors to whom,
according to the books and records of Reorganized BSI, amounts
are then due and owing, or (y) in the case of an individual
trade vendor, actual notice of such termination to the trade
vendor whose Trade Vendors' Lien Reorganized BSI proposes to
terminate. The documents giving rise to the Trade Vendors' Lien
shall be annexed hereto as Exhibit I and shall be filed with the
Court on or before the Exhibit Filing Date. Such documents
shall (i) be consistent with the terms of this Plan, and (ii)
not provide for payment by the Debtors or the Reorganized
Corporations of any legal or other fees or costs except (a) such
reasonable fees to the Trade Vendors' Collateral Agent as the
Debtors or the Reorganized Corporations and the Trade Vendors'
Collateral Agent shall agree to, and (b) such reasonable
attorneys' fees as may be incurred in connection with the filing
of financing statements with respect to such documents, such
modifications or revisions to Exhibit I as the Reorganized
Corporations may agree to, or in the event of a default under
such documents. (g) Each of the Creditors'
Committee, the Bank Group and the Unofficial Committee have
approved in form and substance each of the Exhibits to this
Plan, such approval not to be unreasonably withheld.
(h) (i) As of or prior
to the Effective Date, one or more shelf registration
statements, in form and substance reasonably satisfactory to
Gabriel Capital L.P. and other members of the Bank Group,
pursuant to which those creditors shall have the right to
re-sell the New Common Stock and New Notes distributed to them
under this Plan (whether as a holder of a Bank Group Claim or a
General Unsecured Claim), shall have been declared effective by
the Securities and Exchange Commission under applicable
securities laws, and (ii) on the Effective Date, Reorganized BI
shall have committed to maintain the effectiveness of the
foregoing registration statements, pursuant to a reasonably
acceptable Registration Rights Agreement, for so long as Gabriel
Capital L.P. may be deemed an affiliate of Reorganized BI.
However, the foregoing requirement in sub-paragraph (i)
shall be deemed waived if, prior to the Effective Date, the
Securities and Exchange Commission shall have advised
Reorganized BI in writing that such registration statements
shall be declared effective subject only to the occurrence of
the Effective Date or the issuance of the Reorganization
Securities by Reorganized BI. Section 10.03 Waiver of Conditions
to Confirmation and Occurrence of Effective Date.
Each of the conditions to
confirmation of this Plan or to the occurrence of the Effective
Date is for the benefit of the Debtors, the Creditors'
Committee, the Bank Group and the Unofficial Committee. Other
than the requirement that the Disclosure Statement Order and the
Confirmation Order must be entered, the requirement that a
particular condition be satisfied may be waived in whole or part
by the Debtors, with the unanimous consent of the Creditors'
Committee, the Bank Group and the Unofficial Committee without
notice and a hearing, and the relevant Debtors' benefits under
the "mootness doctrine" shall be unaffected by any provision
hereof. Section 10.04 Effect of
Nonoccurrence of the Conditions to Occurrence of Effective Date.
If each of the conditions to
the occurrence of the Effective Date have not been satisfied or
duly waived on or before the date which is no later than the
first Business Day after the later of (a) sixty (60) days after
the Confirmation Order is entered, or (b) the first day of the
first fiscal year of the Reorganized Corporations after the
Confirmation Order is entered, or by such later date as is
approved, after notice and a hearing, by the Court, then upon
motion by any party in interest made before the time that each
of the conditions has been satisfied or duly waived, the
Confirmation Order may be vacated by the Court; provided,
however, that, notwithstanding the filing of such a motion, the
Confirmation Order shall not be vacated if each of the
conditions to occurrence of the Effective Date is either
satisfied or duly waived before the Court enters an order
granting the relief requested in such motion. If the
Confirmation Order is vacated pursuant to this Section, the Plan
shall be null and void in all respects, and nothing contained in
the Plan shall: (a) constitute a waiver or release of any
Claims by or against or Interests in the Debtors; or (b)
prejudice in any manner the rights of any of the Debtors or of
any other party in interest, including, without limitation, the
right to seek a further extension of the exclusivity periods
under section 1121(d) of the Bankruptcy Code.
Article XI
CONFIRMABILITY AND SEVERABILITY
OF A PLAN AND CRAMDOWN
Section 11.01 Confirmability and Severability of a Plan.
The confirmation requirements of section 1129 of the
Bankruptcy Code must be satisfied separately with respect to
each Debtor. Subject to the unanimous consent of the Creditors'
Committee, the Bank Group, and the Unofficial Committee, the
Debtors reserve the right to alter, amend, modify, revoke or
withdraw the Plan as it applies to any particular Debtor. A
determination by the Bankruptcy Court that the Plan, as it
applies to any particular Debtor, is not confirmable pursuant to
section 1129 of the Bankruptcy Code shall not limit or affect:
(1) the confirmability of the Plan as it applies to any other
Debtor; or (2) the Debtors' ability to modify the Plan, as it
applies to any particular Debtor, to satisfy the confirmation
requirements of section 1129 of the Bankruptcy Code. Each
provision of this Plan shall be considered separable and, if for
any reason any provision or provisions herein are determined to
be invalid and contrary to any existing or future law, the
balance of this Plan shall be given effect without relation to
the invalid provision. Section 11.02 Cramdown.
The Debtors request confirmation under
section 1129(b) of the Bankruptcy Code if any impaired Class
does not accept the Plan pursuant to section 1126 of the
Bankruptcy Code. In that event, the Debtors reserve the right
to modify the Plan to the extent, if any, that confirmation
pursuant to section 1129(b) of the Bankruptcy Code requires
modification. Article XII
ADMINISTRATIVE PROVISIONS
Section 12.01 Retention of Jurisdiction.
Notwithstanding confirmation of this Plan or occurrence of the
Effective Date, the Court shall retain jurisdiction for all
purposes permitted under applicable law, including without
limitation the following purposes:
(a) Determination of the allowability of Claims and Interests
upon objection to such Claims or Interests by a Debtor, the
Reorganized Debtors, other successors to any of the Debtors, or
any other party in interest and the validity, extent, priority
and nonavoidability of consensual and nonconsensual liens and
other encumbrances;
(b) Determination of tax liability pursuant to section 505 of
the Bankruptcy Code;
(c) Approval, pursuant to section 365 of the Bankruptcy Code,
of all matters related to the assumption, assumption and
assignment, or rejection of any executory contract or unexpired
lease of any of the Debtors, including, without limitation,
assumption and assignment of the Union Square Property;
(d) Determination of requests for payment of
administrative expenses entitled to priority under section
507(a)(1) of the Bankruptcy Code, including compensation of
parties entitled thereto under section 330 of the Bankruptcy
Code; (e) Resolution of controversies and
disputes regarding the interpretation of this Plan;
(f) Implementation of the provisions of
this Plan and entry of Orders in aid of confirmation and
consummation of this Plan, subject to Paragraph 23 of that
certain Order dated December 22, 1997 including, without
limitation, appropriate Orders to protect the Debtors and their
successors from actions by creditors and/or Interest holders of
the Debtors or any of them and resolving disputes and
controversies regarding property of the Estates and the
Reorganized Corporations that is subject to restructuring
negotiations on and after the Confirmation Date;
(g) Modification of the Plan pursuant to section 1127 of the
Bankruptcy Code;
(h) Adjudication of any causes of action that arose prior to the
Confirmation Date or in connection with the implementation of
this Plan, including avoidance actions, brought by a Debtor,
Reorganized Corporation, other successors of any of the Debtors
as the representative of the Debtors' Estates or a party in
interest (as a representative of any Debtor's Estate); and
(i) Entry of a Final Order closing the Chapter 11 Cases.
Section 12.02 Governing Law.
Except to the extent the Bankruptcy Code, Bankruptcy Rules, or
other federal laws apply and except for Reinstated Claims
governed by another jurisdiction's law, the rights and
obligations arising under this Plan shall be governed by the
laws of the State of New York, without giving effect to
principles of conflicts of law.
Section 12.03 Fees and Expenses of Bank Group.
The agent for and certain members of the Bank Group have
received reimbursement of or payment for the professionals
retained by them during the pendency of these Chapter 11 cases
from the Adequate Protection Payments. Such payments shall
continue through the Effective Date. Neither the Bank Group,
its agents nor its members shall seek reimbursement for the fees
and expenses of its professionals other than from the Adequate
Protection Payments. No later than ten (10) days after the
Effective Date, the Bank Group shall deliver to the Reorganized
Corporations a summary in form reasonably satisfactory to the
Reorganized Corporations of the fees and expenses paid to all
professionals retained by the Bank Group during the Chapter 11
cases. Such summary shall include a month by month breakdown of
fees and expenses paid to each such professional by the Bank
Group and the net amount of the Adequate Protection Payments
remaining after the payment of such professional fees and
expenses.
Section 12.04 Fees and Expenses of Unofficial Committee.
Subject to the approval of the Bankruptcy Court on appropriate
application as set forth in Section 12.07(b) hereof, the
reasonable fees and expenses of the Unofficial Committee during
the course of the Chapter 11 Cases shall be allowed as
administrative expenses of BSI, pursuant to 11 U.S.C. ' 503(b).
Section 12.05 Professional Fees and Expenses of Loomis Sayles.
Subject to the approval of the Bankruptcy Court on appropriate
application as set forth in Section 12.07(b) hereof, the
reasonable professional fees and expenses of Loomis Sayles
during the course of these cases shall each be allowed as
administrative expenses of the Debtors, pursuant to 11 U.S.C. '
503(b), not to exceed, in the aggregate, the amount of $300,000.
Section 12.06 Fees and Expenses of Bond Indenture
Trustee. Subject to the approval of the Bankruptcy Court on
appropriate application as set forth in Section 12.07(b) hereof,
the reasonable fees and expenses of the Bond Indenture Trustee
during the course of the Chapter 11 Cases shall be allowed as
administrative expenses of the appropriate Debtor, pursuant to
11 U.S.C. ' 503(b).
Section 12.07 Administrative Bar Date.
(a) General Provisions. Except as provided below in Section
12.07(b) for Administrative Claims of Professionals requesting
compensation or reimbursement of expenses and in Section
12.07(c) for liabilities incurred by a Debtor in the ordinary
course of its business, requests for payment of Administrative
Claims must be Filed no later than 30 days after the Effective
Date. Holders of Administrative Claims who are required to File
a request for payment of such Claims and who do not File such
requests by the applicable bar date shall be forever barred from
asserting such Claims against the Debtors, the Reorganized
Debtors or their respective property.
(b) Professionals. All 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 by any Professional or other
entity for making a substantial contribution in any Case) shall
File an application for final allowance of compensation and
reimbursement of expenses no later than 45 days after the
Effective Date; provided, however, that any Professional who may
receive compensation or reimbursement of expenses pursuant to
the Ordinary Course Professionals' Compensation Order may
continue to receive such compensation and reimbursement of
expenses for services rendered before the Effective Date,
without further Bankruptcy Court review or approval, pursuant to
the Ordinary Course Professionals' Compensation Order.
Notwithstanding anything to the contrary contained in the
Ordinary Course Professionals' Compensation Order, no
Professional subject to that Order shall be required to apply to
the Bankruptcy Court for compensation and reimbursement of
expenses. Objections to applications of Professionals or other
entities for compensation or reimbursement of expenses must be
Filed no later than 75 days after the Effective Date. All
compensation and reimbursement of expenses allowed by the
Bankruptcy Court shall be paid to the applicable Professional on
or before ten days after an order allowing such fees and
expenses becomes a Final Order, or as soon thereafter as
practicable. (c) Ordinary
Course Liabilities. Holders of Administrative Claims based on
liabilities incurred by a Debtor in the ordinary course of
business shall not be required to File any request for payment
of such Claims. Such Administrative Claims shall be assumed and
paid by the applicable Reorganized Debtor pursuant to the terms
and conditions of the particular transaction giving rise to such
Administrative Claim, without any further action by the holders
of such Claims. Section 12.08
Corporate Action. The adoption
of any new or amended and restated Certificates of Incorporation
and Amended By-Laws of each Reorganized Corporation, the
adoption, execution, and implementation of any employment
agreement described in the Plan and the other matters provided
for under the Plan involving the corporate or entity structure
of any Debtor, Reorganized Corporation or corporate action, as
the case may be, to be taken by or required of any Debtor or
Reorganized Corporation, as the case may be, shall be deemed to
have occurred and be effective as provided herein and shall be
authorized and approved in all respects, without any requirement
of further action by stockholders or directors of any of the
Debtors or Reorganized Corporations, as the case may be.
Without limiting the foregoing, Reorganized BSI shall be
authorized, without any further act or action required, to issue
all Reorganization Securities, any other securities and any
instruments required to be issued hereunder, including
sufficient New Common Stock in respect of any exercise of stock
options as set forth in the Plan.
Section 12.09 Effectuating Documents and Further
Transactions. Each Debtor and Reorganized Corporation shall be
authorized to execute, deliver, file, or record such documents,
contracts, instruments, releases, and other agreements and take
such other action as may be necessary to effectuate and further
evidence the terms and conditions of the Plan.
Section 12.10 Limitation of Liability.
Neither the Debtors, the Reorganized Corporations, the
Creditors' Committee (including their present and former
members), the Unofficial Committee (including their present and
former members), the Bank Group (including the Majority Banks)
any of their respective officers, directors, employees, agents
(acting in such capacity), representatives nor any professional
persons employed by any of them shall have or incur any
liability to any entity for any action taken or omitted to be
taken in connection with or related to (i) the formulation,
preparation, dissemination, implementation, confirmation, or
consummation of the cases, the Plan, the Disclosure Statement,
or any contract, release, or other agreement or document created
or entered into, or any other action taken or omitted to be
taken in connection with the Plan, and (ii) actions taken or
omitted to be taken in connections with the Chapter 11 Cases or
the operations of administration of the Debtors during the
Chapter 11 Cases that arose out or relate to the period prior to
the Effective Date; provided, however, that the provision of
this section shall have no effect on the liability of any entity
that would otherwise result from any action or omission to the
extent that such action or omission is determined in a Final
Order to have constituted gross negligence or willful
misconduct. Section 12.11 Amendments.
(a) Preconfirmation Amendment.
Subject to Sections 7.15 and 11.01 of this Plan, the Debtors may
modify the Plan at any time prior to the entry of the
Confirmation Order provided that the Plan, as modified, and the
Disclosure Statement pertaining thereto meet applicable
Bankruptcy Code requirements. (b)
Post-confirmation Amendment Not Requiring Resolicitation. After
the entry of the Confirmation Order, the Debtors may modify the
Plan to remedy any defect or omission or to reconcile any
inconsistencies in the Plan or in the Confirmation Order, as may
be necessary to carry out the purposes and effects of the Plan,
provided that: (i) the Debtors obtain approval of the
Bankruptcy Court for such modification, after notice and a
hearing; and (ii) such modification shall not materially and
adversely affect the interests, rights, treatment, or
Distributions of any Class under the Plan.
(c) Post-confirmation Amendment
Requiring Resolicitation. After the Confirmation Date and before
the Effective Date of the Plan, the Debtors may modify the Plan
in a way that materially or adversely affects the interests,
rights, treatment, or Distributions of a class of Claims or
Interests provided that: (i) the Plan, as modified, meets
applicable Bankruptcy Code requirements; (ii) the Debtors obtain
Bankruptcy Court approval for such modification, after notice
and a hearing; (iii) such modification is accepted by at least
two-thirds in amount, and more than one-half in number, of
Allowed Claims voting in each class affected by such
modification; and (iv) the Debtors comply with section 1125 of
the Bankruptcy Code with respect to the Plan as modified.
Section 12.12
Successors and Assigns. The rights,
benefits, and obligations of any Person named or referred to in
the Plan shall be binding upon, and shall inure to the benefit
of, the heir, executor, administrator, successor or assign of
such Person. Section
12.13 Confirmation Order and Plan Control. To the
extent the Confirmation Order and/or this Plan is inconsistent
with the Disclosure Statement, any other agreement entered into
between or among any Debtor(s), or any of them and any third
party, this Plan controls the Disclosure Statement and any such
agreements and the Confirmation Order (and any other orders of
the Court) controls this Plan. Section 12.14
Notices. Any notice
required or permitted to be provided under the Plan shall be in
writing and served by either (a) certified mail, return receipt
requested, postage prepaid, (b) hand delivery or (c) overnight
delivery service, freight prepaid, and addressed as follows:
For the
Debtors and the Reorganized Corporations
Bradlees Stores, Inc.
One Bradlees Circle
P.O. Box 9051
Braintree, MA 02184-9051
Attn: David L. Schmitt., Esq.
Senior Vice President and General Counsel
with copies to:
Dewey Ballantine LLP
1301 Avenue of the Americas
New York, New York 10019-6092
Attn: Stuart Hirshfield, Esq.
For the Unofficial Committee
Mr. Vincent J. Intrieri
Stonington Management Corp.
712 Fifth Avenue
New York, New York 10019
And
Mr. Mark Zucker
Anvil Capital
100 Wilshire Blvd.
Santa Monica, California 90401
with copies to:
Milbank, Tweed, Hadley & McCloy
1 Chase Manhattan Plaza
New York, New York 10005
Attention: Ellen R. Werther, Esq.
Michael J. Edelman, Esq.
For the Bank Group
Bankers Trust Company
1 Bankers Trust Plaza
130 Liberty Street
New York, New York 10006
Attention: Allan M. Stewart
with copies to: Skadden, Arps, Slate, Meagher & Flom
333 West Wacker Drive
Chicago, IL 60606
Attention: John Wm. Butler, Jr., Esq.
For the Majority Banks
Gabriel Capital, L.P.
450 Park Avenue
New York, NY 10022
Attention: Jack Mayer
With copies to:
Kasowitz, Benson, Torres & Friedman
1301 Avenue of the Americas
36th Floor
New York, NY 10019
Attention: David Friedman, Esq.
For the Creditors' Committee
Copies to:
Co-chairs of the Creditors' Committee, c/o
Otterbourg Steindler Houston & Rosen, P.C.
230 Park Avenue
New York, New York 10169
Attention: Glenn Rice, Esq.
Section 12.15 Committees.
On the Effective Date, the Creditors' Committee shall be deemed
dissolved and the members of the Creditors' Committee shall be
deemed released and discharged from all rights and duties
arising from or related to the Chapter 11 Cases. The
Professionals retained by the Creditors' Committee and the
members thereof shall not be entitled to compensation or
reimbursement of expenses for any services rendered after the
Effective Date, except for services rendered and expenses
incurred in connection with any applications for allowance of
compensation and reimbursement of expenses pending on the
Effective Date or Filed after the Effective Date pursuant to
Section 12.07(b) above. Prior to the dissolution of the
Creditors' Committee, the Creditors' Committee may appoint a
committee of one or more financial representatives to become
effective on the Effective Date, whose sole duties shall be to
provide directions, on behalf of the
trade vendors, to the Trade Vendors'
Collateral Agent referred to in this Plan; provided however,
that such appointee or appointees shall serve without right to
receive any fees, reimbursement of expenses or other
remuneration, directly or indirectly, from the Debtors' estates
or the Reorganized Corporations. Dated:
Braintree, Massachusetts
November 17, 1998
Bradlees
Stores, Inc., New Horizons of Yonkers, Inc., Bradlees, Inc.,
Bradlees Administrative Co., Inc., Dostra Realty Co., Inc.,
Maximedia Services, Inc., New Horizons of Bruckner, Inc., and
New Horizons of Westbury, Inc., Debtors and
Debtors-in-Possession
By: /s/Peter Thorner
----------------
Name: Peter Thorner
Title: Chairman and Chief
Executive Officer
TABLE OF CONTENTS
Page
ARTICLE I DEFINITIONS, RULES OF INTERPRETATION AND
CONSTRUCTION 2
Section 1.01 "Additional Quarterly Distribution" 2
Section 1.02 "Adequate Protection Payments" 2
Section 1.03 "Administrative Claim" 2
Section 1.04 "Affiliates" 2
Section 1.05 "Allowed" 2
Section 1.06 "Allowed Administrative Claim" 3
Section 1.07 "Allowed Claim" 3
Section 1.08 "Allowed Convenience Claim" 3
Section 1.09 "Allowed Intercompany Claim" 3
Section 1.10 "Allowed Priority Claim" 3 3
Section 1.12 "Amended By-Laws" 3
Section 1.13 "Amended Certificate of Incorporation" 3
Section 1.14 "Available Unclaimed Property" 3
Section 1.15 "Ballot"3
Section 1.16 "Bank Documents"4
Section 1.17 "Bank Group" 4
Section 1.18 "Bank Group Claim" 4
Section 1.19 "Bankruptcy Code" 4
Section 1.20 "Bankruptcy Court" 4
Section 1.21 "Bankruptcy Rules" 4
Section 1.22 "Bonds" 4
Section 1.23 "Bond Claims" 4
Section 1.24 "Bond Indenture Trustee"4
Section 1.25 "Bruckner Escrow Funds"4
Section 1.26 "Bruckner Fraction" 4
Section 1.27 "BTM" 5
Section 1.28 "BTM Stipulation" 5
Section 1.29 "Business Day" 5
Section 1.30 "Cap Notes" 5
Section 1.31 "Capital Lease"5
Section 1.32 "Cash" 5
Section 1.33 "Cash Distributions" 5
Section 1.34 "Chapter 11 Cases" 5
Section 1.35 "Claim" 5
Section 1.36 "Class" 5
Section 1.37 "Class [___] Claim" 5
Section 1.38 means a Claim in the particular Class of Claims
identified and described in Article III. "Combination
Transaction" 5
Section 1.39 "Combining Debtors" 6
Section 1.40 "Confirmation Date" 6
Section 1.41 "Confirmation Order" 6
Section 1.42 "Consummation Costs" 6
Section 1.43 "Consummation Funds" 6
Section 1.44 "Convenience Claim" 6
Section 1.45 "Court" 6
Section 1.46 "Creditor" 6
Section 1.47 "Creditors' Committee" 6
Section 1.48 "Cure Notes" 6
Section 1.49 "Cure Payments" 6
Section 1.50 "D&O Insurance" 7
Section 1.51 "Debtor" 7
Section 1.52 "Debtors" 7
Section 1.53 "DIP Agreement" or "DIP Facility" 7
Section 1.54 "DIP Claims" 7
Section 1.55 "Disbursing Agent" 7
Section 1.56 "Disclosure Statement" 7
Section 1.57 "Disclosure Statement Order" 7
Section 1.58 "Disputed Administrative Claims" 7
Section 1.59 "Disputed Claim" 8
Section 1.60 "Disputed Claims Reserve" 8
Section 1.61 "Distribution 8
Section 1.62 "Distribution Address" 8
Section 1.63 "Effective Date" 8
Section 1.64 "Estate" 9
Section 1.65 "Exhibit" 9
Section 1.66 "Exhibit Filing Date" 9
Section 1.67 "Face Amount" 9
Section 1.68 "Federal Priority Tax Claim" 9
Section 1.69 "File" 9
Section 1.70 "Final Order" 9
Section 1.71 "Fractional Shares" 9
Section 1.72 "GAAP" 9
Section 1.73 "General Unsecured Claim" 9
Section 1.74 "Indenture" 9
Section 1.75 "Indenture Trustee" 9
Section 1.76 "Initial Distribution Date" 10
Section 1.77 "Intercompany Claim" 10
Section 1.78 "Interest" 10
Section 1.79 "IRS" 10
Section 1.80 "M&R" 10
Section 1.81 "Majority Banks" 10
Section 1.82 "Net Proceeds" 10
Section 1.83 "New Common Stock" 10
Section 1.84 "New Credit Facility" 10
Section 1.85 "New Credit Facility Agent" 11
Section 1.86 "New Credit Facility Notes" 11
Section 1.87 "New Notes" 11
Section 1.88 "New Warrants" 11
Section 1.89 "Old Common Stock of [___]" 11
Section 1.90 "Ordinary Course Professionals' Compensation
Order" 11
Section 1.91 "Other Priority Claim" 11
Section 1.92 "Other Priority Tax Claim" 11
Section 1.93 "Paying Agent" 11
Section 1.94 "Person" 11
Section 1.95 "Petition Date" 11
Section 1.96 "Plan" 12
Section 1.97 "Post-Effective Date Collateral" 12
Section 1.98 "Prepetition Claim" 12
Section 1.99 "Primary Obligor" 12
Section 1.100 "Priority Claim" 12
Section 1.101 "Priority Tax Claim" 12
Section 1.102 "Professional Fees" 12
Section 1.103 "Pro Rata" 12
Section 1.104 "Ratable" or "Ratable Share" 12
Section 1.105 "Record Date" 12 Section
1.106 "Reinstated" 13 Section
1.107 "Reorganized Corporation" 13 Section
1.108 "Reorganization Securities" 13 Section
1.109 "Reorganized [_____]" 13 Section
1.110 "Required Prepayments" 13 Section
1.111 "Schedules" 13 Section
1.112 "Secondary Liability Claim" 13 Section
1.113 "Secured Claim" 14 Section
1.114 "SPE Agent" 14 Section
1.115 "SPE Claims" 14 Section
1.116 "SPE Deficiency Claim" 14 Section
1.117 "SPE Documents" 14 Section
1.118 "SPE Group" 14 Section
1.119 "SPE Philadelphia Property" 14 Section
1.120 "SPE Properties" 14 Section
1.121 "SPE Providence Property" 14 Section
1.122 "SPE Stipulation" 14 Section
1.123 "SPE Transaction" 15 Section
1.124 "State Street" 15 Section
1.125 "State Street Administrative Claim" 15 Section
1.126 "Supplemental Bank Group Distribution" 15 Section
1.127 "Supplemental BSI-GEN Distribution" 15 Section
1.128 "Tax Claim" 15 Section
1.129 "Tax Note" 15 Section
1.130 "Tax Refund" 15 Section
1.131 "Trade Vendors' Collateral Agent" 15 Section
1.132 "Trade Vendors' Lien" 15 Section
1.133 "Trust Indenture" 15 Section
1.134 "Unclaimed Property" 15 Section
1.135 "Union Square Property" 16 Section
1.136 "Unofficial Committee" 16 Section
1.137 "Unsecured Claim" 16 Section
1.138 "Westbury Escrow Funds" 16 Section
1.139 "Westbury Fraction" 16 Section
1.140 "Yonkers Effective Date" 16 Section
1.141 "Yonkers Fraction" 16 Section
1.142 "Yonkers Property" 16 Section
1.143 Generally 16 Section
1.144 Exhibits 17 Section
1.145 Time Periods 17 Section
1.146 Miscellaneous Rules 17 ARTICLE II
CLASSIFICATION OF CLAIMS AND INTERESTS 17 Section
2.01 General Rules of Classification. 17 Section
2.02 Administrative, Tax and Other Priority Claims against
any Debtor. 18 Section 2.03
Undersecured Claims against any Debtor. 18 Section 2.04
Capital Lease Claims. 18 Section 2.05
Mechanics' Lien Claims. 18 Section 2.06
Intercompany Claim. 18 Section 2.07
Unsecured Claims against any Debtor. 18 Section 2.08
Allowed Convenience Claims are Classified for BSI. 19
Section 2.09
Equity Interests in any Debtor. 19 ARTICLE III
CLASSIFICATION OF CLAIMS AND INTERESTS BY DEBTOR 19
Section
3.01 Bradlees, Inc. 19 Section
3.02 Bradlees Administrative Co., Inc. 19 Section
3.03 Bradlees Stores, Inc. 20 Section
3.04 Dostra Realty Co., Inc. 20 Section
3.05 Maximedia Services, Inc. 21 Section 3.06
New Horizons of Yonkers, Inc.21 Section 3.07
New Horizons of Bruckner, Inc.22 Section 3.08 New
Horizons of Westbury, Inc.22 ARTICLE IV
REORGANIZATION SECURITIES 22 Section
4.01 Tax Notes. 22 Section
4.02 New Notes. 23 Section
4.03 CAP Note. 23 Section
4.04 Cure Notes. 23 Section
4.05 New Warrants. 24 Section
4.06 New Common Stock of Reorganized BI.24 ARTICLE V
TREATMENT OF UNIMPAIRED CLASSES 24 Section
5.01 Administrative Claims. 24 Section
5.02 Federal Priority Tax Claims. 25 Section
5.03 Other Priority Tax Claims. 25 Section
5.04 Other Non-Tax Priority Claims. 26 Section
5.05 Convenience Claims. 26 ARTICLE
VI TREATMENT OF IMPAIRED CLAIMS AND INTERESTS 26 Section
6.01 Bank Group Claims. 26 Section
6.02 SPE Claims. 27 Section
6.03 Bradlees, Inc. 28 Section
6.04 Bradlees Administrative Co., Inc. 28 Section
6.05 Bradlees Stores, Inc. 28 Section
6.06 Dostra Realty Co., Inc. 29 Section
6.07 Maximedia Services, Inc. 29 Section
6.08 New Horizons of Yonkers, Inc. 29 Section
6.09 New Horizons of Bruckner, Inc. 30 Section
6.10 New Horizons of Westbury, Inc. 30 ARTICLE
VII IMPLEMENTATION 30 Section 7.01
Reorganized BI and Reorganized BSI. 30 Section 7.02
Directors of the Reorganized Corporations. 31 Section 7.03
Employment, Retirement, Indemnification and Other Agreements and
Incentive Compensation Programs. 31 Section 7.04
Management Emergence Bonus. 32 Section 7.05
Corporate Action. 33 Section 7.06
Certain Retiree Health, Medical and Life Insurance Benefits. 33
Section 7.07
Combination Transactions. 34 Section 7.08
Distributions to Holders of Claims and Interests. 34
Section 7.09
Miscellaneous Distribution Provisions.37 Section 7.10
De Minimis Distributions.38 Section 7.11
Compliance with Tax Requirements.38 Section 7.12
Setoffs. 38 Section 7.13
Intercompany Claims. 38 Section 7.14
Unclaimed Property. 38 Section 7.15
Withdrawal of the Plan. 39 Section 7.16
Cancellation of Capital Stock. 40 Section 7.17
Surrender of Outstanding Securities. 40 Section 7.18
Termination of DIP Facility. 40 Section 7.19
New Credit Facility. 41 Section 7.20
Sale of Yonkers Property and Union Square Property. 41
Section 7.21
Adequate Protection Payments. 41 Section 7.22
Plan Funding. 41 Section 7.23
Disputed Payments. 42 Section 7.24
Withholding Taxes. 42 Section 7.25
Obligations Incurred After the Confirmation Date. 42
Section 7.26
Cancellation of Bonds and Agreements. 42 Section 7.27
Instructions to Disbursing Agent. 43 Section 7.28
Record Date for Distributions to Holders of Bonds. 43
Section 7.29
Termination of Subordination. 44 ARTICLE VIII
EFFECT OF THE PLAN ON CLAIMS AND INTERESTS 44 Section 8.01
Discharge. 44 Section 8.02
Revesting and Vesting. 46 Section 8.03
Secondary Liability Claims. 46 Section 8.04
Release of Primary Obligors. 46 Section 8.05
Survival of Certain Indemnification Obligations.47
Section 8.06
Release of Officers, Directors, Employees and
Representatives. 47
Section 8.07 Release of Certain Claims. 48
Section 8.08 Claims and Interest Objections. 48
Section 8.09 Preservation of Insurance. 49
ARTICLE IX EXECUTORY CONTRACTS 49
Section 9.01 Executory Contracts and Unexpired Leases.49
Section 9.02 Lease Under Which Bradlees Leases Union Square
Property. 49
Section 9.03 Executory Contract of R.R. Donnelly & Sons
Company. 49
Section 9.04 Executory Contract of J.Baker, Inc. 50
Section 9.05 Cure. 50
Section 9.06 Rejection Damages Bar Date. 50
Section 9.07 Executory Contracts and Unexpired Leases Entered
Into and Other Obligations Incurred After the Petition Date.51
ARTICLE X CONDITIONS TO CONFIRMATION AND OCCURRENCE OF EFFECTIVE
DATE 51
Section 10.01 Conditions to Confirmation. 51
Section 10.02 Conditions to Occurrence of Effective Date. 52
Section 10.03 Waiver of Conditions to Confirmation and
Occurrence of Effective Date. 54
Section 10.04 Effect of Nonoccurrence of the Conditions to
Occurrence of Effective Date. 54
ARTICLE XI CONFIRMABILITY AND SEVERABILITY OF A PLAN AND
CRAMDOWN 55
Section 11.01 Confirmability and Severability of a Plan. 55
Section 11.02 Cramdown. 55
ARTICLE XII ADMINISTRATIVE PROVISIONS 56
Section 12.01 Retention of Jurisdiction.56
Section 12.02 Governing Law. 57
Section 12.03 Fees and Expenses of Bank Group. 57
Section 12.04 Fees and Expenses of Unofficial Committee. 57
Section 12.05 Professional Fees and Expenses of Loomis
Sayles. 57
Section 12.06 Fees and Expenses of Bond Indenture Trustee.
57 Section 12.07 Administrative Bar Date. 58
Section 12.08 Corporate Action. 58
Section 12.09 Effectuating Documents and Further
Transactions. 59
Section 12.10 Limitation of Liability. 59 Section
12.11 Amendments. 59
Section 12.12 Successors and Assigns. 60
Section 12.13 Confirmation Order and Plan Control. 60
Section 12.14 Notices. 60 Section
12.15 Committees. 62
EXHIBITS
(not yet included)
A Amended By-Laws of Reorganized BI and Reorganized BSI
B Amended Certificates of Incorporation of Reorganized BI and
Reorganized BSI
C Schedule of BSI-CAP Claims
D Schedule of Existing Employment, Retirement and Other
Agreements and Incentive Compensation Programs That Are To
Remain Effective As Of the Effective Date
E New Credit Facility
F Intentionally Omitted
G Conversion of New Notes
H Form of Reorganization Securities
I Documents Giving Rise To Trade Vendors' Lien
J Trust Indenture
K Officers of Reorganized Corporations
vii
NY-44779.11
PLAN-68
NY-249550.3
<TABLE>
<CAPTION>
BRADLEES, INC. Exhibit 20
THIRD QUARTER RESULTS VS. FORECAST Page 1 of
(Unaudited)
(In Millions)
Third Quarter 1998 Year-to-Date
Actual Forecast* Plan** Last Year Actual Forecast* Plan** Last Year
<S> <C> <C> <C> <C> <C> <C> <C> <C>
INCOME SUMMARY:
Owned Sales $310.5 $327.9 $327.5 $328.7 $901.8 $919.1 $890.7 $890.3
Food Service Sales 1.6 1.7 1.7 1.7 4.6 4.7 4.9 4.9
Leased Department Sales 11.0 12.1 12.0 11.9 32.8 34.0 35.0 35.5
Total Sales 323.1 341.7 341.2 342.3 939.2 957.8 930.6 930.7
Gross Margin $ 94.7 98.4 97.6 97.1 271.0 274.7 269.0 269.7
Gross Margin % (based on owned sales) 30.5% 30.0% 29.8% 29.5% 30.1% 29.9% 30.2% 30.3%
SG&A Expenses (95.5) (97.3) (93.9) (93.8) (280.3) (282.1) (281.4) (289.8)
Other Income 3.0 3.5 3.2 3.3 8.8 9.2 9.3 8.7
EBITDA before Restructuring and Prop. Gains 2.2 4.6 6.9 6.6 (0.5) 1.8 (3.1) (11.4)
Gain on Disposition of Properties - - - 0.8 1.6 1.6 - 1.0
EBITDA before Restructuring 2.2 4.6 6.9 7.4 1.1 3.4 (3.1) (10.4)
Cash Impact from Restructuring (0.5) (0.4) (0.2) (2.3) (3.2) (3.1) (2.1) (5.6)
EBITDA after Restructuring 1.7 4.2 6.7 5.1 (2.1) 0.3 (5.2) (16.0)
Add back Cash Impact from Restructuring 0.5 0.4 0.2 2.3 3.2 3.1 2.1 5.6
Less Gain on Dispos. of Properties (in Reorg - - - (0.8) (1.9) (1.9) - (1.0)
Depreciation & Amortization Expense (7.8) (7.9) (8.5) (9.0) (24.4) (24.5) (26.3) (27.6)
Interest and Debt Expense (4.3) (4.5) (4.6) (4.2) (12.0) (12.1) (12.4) (11.7)
Reorganization Items 2.7 (2.1) (2.1) 7.0 2.6 (2.2) (6.3) 2.2
Net Income (Loss) ($7.2) ($9.9) ($8.3) $0.4 ($34.6) ($37.3) ($48.1) ($48.5)
BALANCE SHEET SUMMARY: Balance at End
Unrestricted Cash and Cash Equivalents $11.0 $11.2 $11.3 $11.3
Restricted Cash and Cash Equivalents 25.1 25.1 25.1 9.4
Inventories 318.9 310.4 326.6 335.4
Other Current Assets 22.9 23.4 23.5 33.0
Total Current Assets 377.9 370.1 386.5 389.1
Net Fixed Assets 141.6 143.9 142.2 156.6
Long Term Assets 141.9 141.7 147.0 154.3
Total Assets $661.4 $655.7 $675.7 $700.0
Accounts Payable $179.4 $155.2 $163.3 $196.3
DIP Borrowings 157.4 171.9 185.0 131.5
Other Current Liabilities 30.3 31.4 37.5 41.8
Total Current Liabilities 367.1 358.5 385.8 369.6
Long-Term Liabilities 66.1 67.1 64.4 82.0
Liabilities Subject to Settlement 548.8 553.4 559.1 560.1
Paid-in-Capital 137.1 137.1 137.3 137.3
Accumulated Deficit (457.7) (460.4) (470.9) (449.0)
Total Stockholders' Equity (Deficiency) (320.6) (323.3) (333.6) (311.7)
Total Liabilities and Stockholders' Equity (Deficiency) $661.4 $655.7 $675.7 $700.0
NOTE: EBITDA before restructuring and property gains is earnings (loss) before gains on disposition of
properties, interest and debt expense, income taxes, restructuring and non-recurring items, asset impairment
charge, reorganization and extraordinary items, and depreciation and amortization expense. At the time cash is
received or expended for restructuring and non-recurring items, the cash amount is included in the calculation of
EBITDA after restructuring.
* Forecast amounts are from the Form 8-K dated September 22, 1998.
** Plan amounts are from the Form 8-K dated February 11, 1998 with reclassifications between other current and
long-term liabilities to be consistent with this year's actual presentation.
</TABLE>
<TABLE> Exhibit 20
<CAPTION> Page 2 of 2
BRADLEES, INC.
THIRD QUARTER RESULTS VS. FORECAST
(Unaudited)
(In Millions)
Third Quarter 1998 Year-to-Date
Actual Forecast* Plan** Actual Forecast * Plan**
<S> <C> <C> <C> <C> <C> <C> <C> <C>
CASH FLOW SUMMARY:
Beginning Unrestricted Cash & Cash Equivalen $8.1 $8.1 $10.0 $10.9 $10.9 $9.5
Cash Used in Operations:
Net Loss (7.2) (9.9) (8.3) (34.6) (37.3) (48.1)
Depreciation & Amortization Expense 7.8 7.9 8.5 24.4 24.5 26.3
Amortization of Deferred Financing Costs 0.4 0.4 0.4 1.2 1.1 1.0
Inventory (Increase) Decrease (79.3) (70.9) (82.3) (80.3) (71.7) (90.3)
Accounts Payable Increase (Decrease) 58.3 34.0 53.3 55.1 30.9 58.1
Other, Including Reorganization Items (16.1) (10.0) (13.5) (24.8) (18.8) (20.7)
Net Cash Provided by (Used in) Operations (36.1) (48.5) (41.9) (59.0) (71.3) (73.7)
Investing Activities:
Capital Spending (4.9) (7.2) (5.0) (10.4) (12.8) (15.0)
Increase in Restricted Cash and Cash Equiv. (0.3) (0.2) (0.2) (8.3) (8.3) (8.3)
Financing Activities:
Payments of Capital Leases & Def. Fin. Costs (0.3) (0.3) (0.3) (0.9) (0.8) (0.8)
Proceeds from Disposition of Properties - - - 12.0 12.0 7.8
Payments of Liabilities Subject to Settl. (1.3) (1.0) (1.0) (6.5) (6.2) (3.1)
Net Borrowings (Payments) under DIP Facility 45.8 60.3 49.7 73.2 87.7 94.9
Total Financing Activities 44.2 59.0 48.4 77.8 92.7 98.8
Incr.(Decr.) in Unrestricted Cash and Cash Eq. 2.9 3.1 1.3 0.1 0.3 1.8
Ending Unrestricted Cash and Cash Equivalents $11.0 $11.2 $11.3 $11.0 $11.2 $11.3
* Forecast amounts are from the Form 8-K dated September 22, 1998.
** Plan amounts are from the Form 8-K dated February 11, 1998 with a reclassification of planned proceeds from
disposition of properties from "All Other" to "Financing Activities" to be consistent with this year's
actual presentation.
</TABLE>
