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EXHIBIT 2.1
UNITED STATES BANKRUPTCY COURT
SOUTHERN DISTRICT OF TEXAS
VICTORIA DIVISION
IN RE: (S)
(S)
SOUTHERN MINERAL CORPORATION, (S) CASE NO. 99-60359-V2-11
SMC PRODUCTION COMPANY, (S) CASE NO. 99-60360-V2-11
AMERAC ENERGY CORPORATION, (S) CASE NO. 99-60361-V2-11
BEC ENERGY, INC., (S) CASE NO. 99-60362-V2-11
SMC ECUADOR, INC., (S) CASE NO. 99-60363-V2-11
(S)
Debtors. (S) Jointly Administered Under
CASE NO. 99-60359-V2-11
FINDINGS OF FACT AND CONCLUSIONS OF LAW FOR THE CONFIRMATION OF
DEBTORS' SECOND AMENDED PLAN FILED ON MAY 2, 2000, AS AMENDED
The Debtors' Second Amended Plan of Reorganization Filed May 2, 2000
amended: (i) on June 19, 2000 by the Modification to Debtors' Second Amended
Plan of Reorganization Filed May 2, 2000; (ii) on June 29, 2000 by the Second
Modification to Debtors' Second Amended Plan of Reorganization Filed May 2,
2000; and (iii) on July 5, 2000 by the Third Modification to Debtors' Second
Amended Plan of Reorganization Filed May 2, 2000 came on for confirmation
hearing before the undersigned on July 5, 2000 and continued to July 19, 2000.
Appearances are reflected in the Court's record of the hearing. All timely filed
objections to confirmation were withdrawn prior to the commencement of the
confirmation hearing, and the hearing proceeded without objection to
confirmation.
This Court having considered the evidence submitted by the Debtors, the
arguments of counsel, and this Court's records in the above-captioned chapter 11
cases; and good cause appearing,
NOW, THEREFORE, THIS COURT MAKES THE FOLLOWING Findings of Fact and
Conclusions of Law:
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FINDINGS OF FACT
1. These Findings of Fact and Conclusions of Law constitute this Court's
findings of fact and conclusions of law under Federal Rule of Civil Procedure
52, as made applicable by Federal Rules of Bankruptcy Procedure ("Bankruptcy
Rules") 7052 and 9014. Any and all findings of fact shall constitute findings of
fact even if they are stated as conclusions of law, and any and all conclusions
of law shall constitute conclusions of law even if they are stated as findings
of fact.
2. The Debtors are the debtors and debtors-in-possession in the
above-captioned cases under chapter 11 of the Bankruptcy Code. The Debtors filed
the "Debtors' Second Amended Plan Filed May 2, 2000" (the "Original Plan") on
May 2, 2000, together with the Disclosure Statement/1/. This Court approved the
Disclosure Statement as containing adequate information within the meaning of
Bankruptcy Code (S)1125 in its order entered on May 2, 2000.
3. The Debtors served the Original Plan and the Disclosure Statement on
all Creditors and holders of Interests entitled to vote on the Original Plan.
4. On June 19, 2000, the Debtors filed their "Modification to Debtors'
Second Amended Plan of Reorganization Filed May 2, 2000" (the "First
Modification"). On June 29, 2000, the Debtors filed their "Second Modification
to Debtors' Second Amended Plan of Reorganization Filed May 2, 2000" (the
"Second Modification"). The Original Plan was further amended on July 5, 2000 by
the filing of the "Third Modification to Debtors' Second Amended Plan of
Reorganization Filed May 2, 2000" (the "Third Modification") (the Original Plan
amended by the First Modification, Second Modification and Third Modification is
hereinafter designated the "Plan").
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/1/ Capitalized terms used herein that are defined in the Plan shall have the
meaning set forth therein.
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5. As a result of the modifications to the Original Plan, at the
conclusion of the hearing on Confirmation on July 5, 2000, this Court required
that notice be sent to the holders of Class 4 Debenture Claims who had
previously voted on the Original Plan advising them of (i) the change in their
treatment and change in the treatment of the Class 6 holders of Interests, (ii)
the opportunity to object to the Plan, (iii) the opportunity to change their
vote, and (iv) the continued confirmation hearing set for July 19, 2000 (the
"Notice").
6. Class 1 is unimpaired and therefore each Creditor is conclusively
presumed to have accepted the Original Plan. The following Classes of Creditors
and Interests voted to accept the Original Plan:
a. The Class 3 Unsecured Claims of Convenience Creditors;
b. The Class 5 Claims of Unsecured Creditors; and
c. The Class 6 holders of Interests.
7. As a result of the Debtors' agreement to change their treatment as
set forth in the First Modification, the Class 2 Secured Creditors consisting of
the Secured Claims of Compass Bank and First Union National Bank voted to accept
the Original Plan.
8. The Class 4 Unsecured Claims of Creditors holding Debentures voted to
reject the Original Plan. Pursuant to the Notice, and based on Class 4 Creditors
who have filed a change of votes, Class 4 has now voted to accept the Plan.
9. There are no material adverse changes in the treatment provided to
the Classes of Creditors in the Original Plan when compared to the treatment
provided in the Plan. The amendments contained in the modifications enhance the
treatment of the Class 2 Secured Creditors, Class 4 holders of Debentures and
Class 6 holders of Interests.
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CONCLUSIONS OF LAW
10. The Plan complies with the applicable provisions of the Bankruptcy
Code. The Plan, therefore, complies with Bankruptcy Code (S)1129(a)(1).
11. The Debtors, as the proponents of the Plan, have complied with the
applicable provisions of the Bankruptcy Code. The Plan, therefore, complies with
Bankruptcy Code (S)1129(a)(2).
12. The Plan has been proposed in good faith and not by any means
forbidden by law. The plan, therefore, complies with Bankruptcy Code
(S)1129(a)(3).
13. Any payment made or to be made by the Debtors for services or for
costs and expenses in connection with the chapter 11 cases, or in connection
with the Plan and incident to the chapter 11 cases, has been approved by, or is
subject to the approval of, this Court as reasonable. The Plan, therefore,
complies with Bankruptcy Code (S)1129(a)(4).
14. The Debtors have disclosed the identity and affiliation of the
proposed directors of the Reorganized Southern Mineral. The Debtors' current
officers will continue to serve in such capacities following Confirmation. The
Plan, therefore, complies with Bankruptcy Code (S)1129(a)(5).
15. There is no governmental regulatory commission with jurisdiction,
after confirmation of the Plan, over the rates of the Debtors. Therefore,
Bankruptcy Code (S)1129(a)(6) is not applicable.
16. With respect to each impaired Class of Claims or Interests, the
holder of such Claim or Interest will retain under the Plan on account of such
Claim or Interest property of a value as of the Effective Date of the Plan, that
is not less than the amount that such holder would
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so receive or retain if the Debtors were liquidated under chapter 7 of the
Bankruptcy Code on such date. The Plan, therefore, complies with Bankruptcy Code
(S)1129(a)(7).
17. Classes 2, 3, 5 and 6 have accepted the Original Plan. Because the
changes to the Plan do not materially adversely affect any Class that accepted
the Original Plan, such votes shall, therefore, count as votes in favor of the
Plan under Bankruptcy Rule 3019 and Bankruptcy Code (S)1127(a).
18. In accordance with the Notice, and pursuant to Bankruptcy Rule
3018(a), this Court concludes that cause has been shown to allow the holders of
certain Class 4 Claims to change their rejection of the Original Plan to an
acceptance of the Plan. The Plan, therefore, complies with Bankruptcy Code
(S)1129(a)(8) with respect to all Classes.
19. Except to the extent that the holder of a particular Allowed Claim
has agreed to different treatment of such Allowed Claim, the Plan provides for
payment of priority claims in full compliance with Bankruptcy Code
(S)1129(a)(9).
20. With respect to each of the Classes listed as having accepted the
Plan in paragraphs 17 and 18 above, that Class has accepted the Plan without
including any acceptance of the Plan by any insider. The Plan, therefore,
complies with Bankruptcy Code (S)1129(a)(10).
21. There is no evidence that confirmation of the Plan is likely to be
followed by liquidation or need for further financial reorganization of the
Debtors. The Plan, therefore, complies with Bankruptcy Code (S)1129(a)(11).
22. The Plan provides for the payment of all fees payable pursuant to 28
U.S.C. (S)1930 on or before the Effective Date and, therefore, complies with
Bankruptcy Code (S)1129(a)(12).
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23. The Debtors have no retiree benefit plans within the meaning of
Bankruptcy Code (S)1114 and, therefore, the Plan complies with Bankruptcy Code
(S)1129(a)(13).
24. Regardless of the change in votes referred to in paragraph 8 above,
with respect to Class 4 Unsecured Claims of holders of Debentures that did not
accept the Original Plan, the Plan complies with Bankruptcy Code
(S)1129(b)(2)(B), because each holder of a Class 4 Claim will receive under the
Plan on account of such Claim property of a value, as of the Effective Date of
the Plan, equal to the allowed amount of such Claim.
25. The notices to all creditors and parties in interest referenced
herein were adequate under all of the facts and circumstances of the present
case.
DATED: July 19, 2000.
/s/ WESLEY W. STEEN
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WESLEY W. STEEN
UNITED STATES BANKRUPTCY JUDGE
After entry please return to:
S. Margie Venus
Akin, Gump, Strauss, Hauer & Feld, L.L.P.
711 Louisiana, Suite 1900
Houston, Texas 77002
(713) 220-5800
(713) 236-0822 facsimile
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