Joint Plan of Reorganization - Collins & Aikman Corp.
IN THE UNITED STATES BANKRUPTCY COURT
EASTERN DISTRICT OF MICHIGAN
SOUTHERN DIVISION
In re: ) Chapter 11
)
COLLINS & AIKMAN CORPORATION, et al.(1) ) Case No. 05-55927 (SWR)
) (Jointly Administered)
Debtors. )
) (Tax Identification #13-3489233)
)
) Honorable Steven W. Rhodes
JOINT PLAN OF REORGANIZATION OF
COLLINS & AIKMAN CORPORATION AND ITS DEBTOR SUBSIDIARIES
KIRKLAND & ELLIS LLP CARSON FISCHER, P.L.C.
Richard M. Cieri (NY RC 6062) Joseph M. Fischer (P13452)
Citigroup Center Lawrence A. Lichtman (P35403)
153 East 53rd Street 4111 West Andover Road -- Second Floor
New York, New York 10022 Bloomfield Hills, Michigan 48302
Telephone: (212) 446-4800 Telephone: (248) 644-4840
Facsimile: (212) 446-4900 Facsimile: (248) 644-1832
-and- Co-Counsel for the Debtors
David L. Eaton (IL 3122303)
Ray C. Schrock (IL 6257005)
Marc J. Carmel (IL 6272032)
Scott R. Zemnick (IL 6276224)
200 East Randolph Drive
Chicago, Illinois 60601
Telephone: (312) 861-2000
Facsimile: (312) 861-2200
Co-Counsel for the Debtors Dated: August 30, 2006
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(1) The Debtors in the jointly administered cases include: Collins & Aikman
Corporation; Amco Convertible Fabrics, Inc., Case No. 05-55949; Becker
Group, LLC (d/b/a/ Collins & Aikman Premier Mold), Case No. 05-55977; Brut
Plastics, Inc., Case No. 05-55957; Collins & Aikman (Gibraltar) Limited,
Case No. 05-55989; Collins & Aikman Accessory Mats, Inc. (f/k/a the Akro
Corporation), Case No. 05-55952; Collins & Aikman Asset Services, Inc.,
Case No. 05-55959; Collins & Aikman Automotive (Argentina), Inc. (f/k/a
Textron Automotive (Argentina), Inc.), Case No. 05-55965; Collins & Aikman
Automotive (Asia), Inc. (f/k/a Textron Automotive (Asia), Inc.), Case No.
05-55991; Collins & Aikman Automotive Exteriors, Inc. (f/k/a Textron
Automotive Exteriors, Inc.), Case No. 05-55958; Collins & Aikman Automotive
Interiors, Inc. (f/k/a Textron Automotive Interiors, Inc.), Case No.
05-55956; Collins & Aikman Automotive International, Inc., Case No.
05-55980; Collins & Aikman Automotive International Services, Inc. (f/k/a
Textron Automotive International Services, Inc.), Case No. 05-55985;
Collins & Aikman Automotive Mats, LLC, Case No. 05-55969; Collins & Aikman
Automotive Overseas Investment, Inc. (f/k/a Textron Automotive Overseas
Investment, Inc.), Case No. 05-55978; Collins & Aikman Automotive Services,
LLC, Case No. 05-55981; Collins & Aikman Canada Domestic Holding Company,
Case No. 05-55930; Collins & Aikman Carpet & Acoustics (MI), Inc., Case No.
05-55982; Collins & Aikman Carpet & Acoustics (TN), Inc., Case No.
05-55984; Collins & Aikman Development Company, Case No. 05-55943; Collins
& Aikman Europe, Inc., Case No. 05-55971; Collins & Aikman Fabrics, Inc.
(d/b/a Joan Automotive Industries, Inc.), Case No. 05-55963; Collins &
Aikman Intellimold, Inc. (d/b/a M&C Advanced Processes, Inc.), Case No.
05-55976; Collins & Aikman Interiors, Inc., Case No. 05-55970; Collins &
Aikman International Corporation, Case No. 05-55951; Collins & Aikman
Plastics, Inc., Case No. 05-55960; Collins & Aikman Products Co., Case No.
05-55932; Collins & Aikman Properties, Inc., Case No. 05-55964; Comet
Acoustics, Inc., Case No. 05-55972; CW Management Corporation, Case No.
05-55979; Dura Convertible Systems, Inc., Case No. 05-55942; Gamble
Development Company, Case No. 05-55974; JPS Automotive, Inc. (d/b/a PACJ,
Inc.), Case No. 05-55935; New Baltimore Holdings, LLC, Case No. 05-55992;
Owosso Thermal Forming, LLC, Case No. 05-55946; Southwest Laminates, Inc.
(d/b/a Southwest Fabric Laminators Inc.), Case No. 05-55948; Wickes Asset
Management, Inc., Case No. 05-55962; and Wickes Manufacturing Company, Case
No. 05-55968.
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TABLE OF CONTENTS
PAGE
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ARTICLE I. DEFINED TERMS, RULES OF INTERPRETATION AND COMPUTATION OF
TIME.......................................................... 1
A. Defined Terms.................................................. 1
1. "2008 Fiscal Year Audit".................................. 1
2. "Accrued Professional Compensation"....................... 1
3. "Administrative Claim".................................... 1
4. "Agent"................................................... 1
5. "Allowed"................................................. 1
6. "Allowed ... Claim"....................................... 2
7. "Allowed Equity Interest"................................. 2
8. "Ballot".................................................. 2
9. "Bankruptcy Code"......................................... 2
10. "Bankruptcy Court"........................................ 2
11. "Bankruptcy Rules"........................................ 2
12. "Bar Date"................................................ 2
13. "Bar Date Order".......................................... 2
14. "Beneficial Holder"....................................... 2
15. "Business Day"............................................ 2
16. "Carve Out Account"....................................... 2
17. "Cash".................................................... 2
18. "Cash Investment Yield"................................... 2
19. "Cash Management Order"................................... 2
20. "Cause of Action"......................................... 2
21. "Chapter 11 Case"......................................... 3
22. "Claim"................................................... 3
23. "Claims Objection Bar Date"............................... 3
24. "Class"................................................... 3
25. "Confirmation"............................................ 3
26. "Confirmation Date"....................................... 3
27. "Confirmation Hearing".................................... 3
28. "Confirmation Order"...................................... 3
29. "Consummation"............................................ 3
30. "Core Group".............................................. 3
31. "Creditors Committee"..................................... 3
32. "Cure Amount Claim"....................................... 3
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33. "Debtor".................................................. 3
34. "Debtor Releasees"........................................ 3
35. "Debtors"................................................. 3
36. "Deemed".................................................. 4
37. "Derivative Claim"........................................ 4
38. "DIP Agent"............................................... 4
39. "DIP Credit Agreement".................................... 4
40. "DIP Facility"............................................ 4
41. "DIP Facility Claims"..................................... 4
42. "DIP Lenders"............................................. 4
43. "Disbursing Agent"........................................ 4
44. "Disclosure Statement".................................... 4
45. "Disputed . . . Claim".................................... 4
46. "Distribution Record Date"................................ 5
47. "Document Reviewing Centers".............................. 5
48. "Effective Date".......................................... 5
49. "English Insolvency Law".................................. 5
50. "Entity".................................................. 5
51. "Equity Incentive Plan"................................... 5
52. "Equity Interest"......................................... 5
53. "Estate".................................................. 5
54. "Estates"................................................. 5
55. "European Debtors"........................................ 5
56. "Exculpated Parties"...................................... 5
57. "Executory Contract"...................................... 5
58. "Face Amount"............................................. 5
59. "Fee Claim"............................................... 6
60. "Fee Order"............................................... 6
61. "File" or "Filed"......................................... 6
62. "Final Decree"............................................ 6
63. "Final DIP Order"......................................... 6
64. "Final Order"............................................. 6
65. "General Unsecured Claims"................................ 6
66. "Holder".................................................. 6
67. "Impaired"................................................ 6
68. "Impaired Claim".......................................... 6
69. "Impaired Claim Note"..................................... 6
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70. "Indenture Trustees"...................................... 6
71. "Insured Claim"........................................... 7
72. "Intercompany Claims"..................................... 7
73. "KERP".................................................... 7
74. "Litigation Recovery Interests"........................... 7
75. "Litigation Trust"........................................ 7
76. "Litigation Trust Agreement".............................. 7
77. "Litigation Trust Assets"................................. 7
78. "Litigation Trust Claims"................................. 7
79. "Litigation Trust Funding Amount"......................... 7
80. "Master Ballots".......................................... 7
81. "New Bank Facility"....................................... 7
82. "New Common Stock"........................................ 7
83. "Nominee"................................................. 7
84. "Non-Released Parties".................................... 7
85. "OEMs".................................................... 7
86. "OEM Administrative DIP Claims"........................... 7
87. "OEM Administrative DIP Loan"............................. 7
88. "OEM Bankruptcy Rule 9019 Settlements".................... 8
89. "OEM Earn-Out"............................................ 8
90. "OEM Junior Secured DIP Claims"........................... 8
91. "OEM Subordinated DIP Loan"............................... 8
92. "OPEB Liability".......................................... 8
93. "Ordinary Course Professionals Order"..................... 8
94. "Other Priority Claims"................................... 8
95. "Other Secured Claims".................................... 8
96. "PBGC Claims"............................................. 8
97. "Person".................................................. 8
98. "Petition Date"........................................... 8
99. "Plan".................................................... 8
100. "Plan Objection Deadline"................................. 8
101. "Prepetition Credit Agreement"............................ 8
102. "Prepetition Facility".................................... 9
103. "Prepetition Facility Claims"............................. 9
104. "Prepetition Lenders"..................................... 9
105. "Priority Claims"......................................... 9
106. "Priority Tax Claims"..................................... 9
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107. "Pro Rata"................................................ 9
108. "Professional"............................................ 9
109. "Professional Escrow Account"............................. 9
110. "Quarterly Distribution Date"............................. 9
111. "Real Property Executory Contract and Unexpired Lease".... 9
112. "Reinstated" or "Reinstatement"........................... 9
113. "Releasing Parties"....................................... 10
114. "Reorganized C&A Corporation"............................. 10
115. "Reorganized Debtors"..................................... 10
116. "Required Prepetition Lenders"............................ 10
117. "Restructuring Transactions".............................. 10
118. "Schedules"............................................... 10
119. "Secondary Liability Claim"............................... 10
120. "Secured Claim"........................................... 10
121. "Securities Act".......................................... 10
122. "Senior Note Claims"...................................... 10
123. "Senior Note Indenture"................................... 10
124. "Senior Note Indenture Trustee"........................... 11
125. "Senior Notes"............................................ 11
126. "Senior Subordinated Note Claims"......................... 11
127. "Senior Subordinated Note Indenture"...................... 11
128. "Senior Subordinated Note Indenture Trustee".............. 11
129. "Senior Subordinated Notes"............................... 11
130. "Shareholders Agreement".................................. 11
131. "Steering Committee"...................................... 11
132. "Stipulation of Amount and Nature of Claim"............... 11
133. "Subordinated Securities Claims".......................... 11
134. "Subscription Record Date"................................ 11
135. "Success Sharing Plan".................................... 11
136. "Tax Note"................................................ 11
137. "Third Party Disbursing Agent"............................ 11
138. "Tort Claim".............................................. 12
139. "Unexpired Lease"......................................... 12
140. "Unimpaired".............................................. 12
141. "Uninsured Claim"......................................... 12
142. "Unsecured Claims"........................................ 12
143. "Voting Deadline"......................................... 12
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144. "Voting Instructions"..................................... 12
145. "Warrants"................................................ 12
146. "Workers' Compensation Order"............................. 12
B. Rules of Interpretation and Computation of Time................ 12
1. Rules of Interpretation................................... 12
2. Computation of Time....................................... 13
ARTICLE II. CLASSES OF CLAIMS AND EQUITY INTERESTS....................... 13
A. Unimpaired Classes of Claims................................... 13
1. Class 1 (Other Secured Claims)............................ 13
2. Class 2 (Other Priority Claims)........................... 13
B. Impaired Classes of Claims and Equity Interests................ 13
1. Class 3 (Prepetition Facility Claims)..................... 13
2. Class 4 (OEM Junior Secured DIP Claims)................... 13
3. Class 5 (General Unsecured Claims)........................ 13
4. Class 6 (Senior Note Claims).............................. 13
5. Class 7 (PBGC Claims)..................................... 13
6. Class 8 (Senior Subordinated Note Claims)................. 13
7. Class 9 (Equity Interests)................................ 13
8. Class 10 (Subordinated Securities Claims)................. 13
9. Class 11 (Intercompany Claims)............................ 13
ARTICLE III. TREATMENT OF CLAIMS AND EQUITY INTERESTS.................... 14
A. Unclassified Claims............................................ 14
1. Payment of Administrative Claims.......................... 14
(a) Administrative Claims in General...................... 14
(b) Statutory Fees........................................ 14
(c) Ordinary Course Liabilities........................... 14
(d) DIP Facility Claims................................... 14
(e) OEM Administrative DIP Claims......................... 14
(f) Administrative Claims of Indenture Trustees........... 14
(g) Bar Dates for Administrative Claims................... 15
(i) General Bar Date Provisions...................... 15
(ii) Bar Dates for Certain Administrative Claims...... 15
(A) Professional Compensation.................... 15
(B) Ordinary Course Liabilities.................. 15
(C) DIP Facility Claims.......................... 15
(D) OEM Administrative DIP Claims................ 15
2. Payment of Priority Tax Claims............................ 15
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B. Unimpaired Classes of Claims................................... 16
1. Class 1 Claims (Other Secured Claims)..................... 16
2. Class 2 Claims (Other Priority Claims).................... 16
C. Impaired Classes of Claims and Equity Interests................ 16
1. Class 3 Claims (Prepetition Facility Claims).............. 16
2. Class 4 Claims (OEM Junior Secured DIP Claims)............ 17
3. Class 5 Claims (General Unsecured Claims)................. 17
4. Class 6 Claims (Senior Note Claims)....................... 17
5. Class 7 Claims (PBGC Claims).............................. 17
6. Class 8 Claims (Senior Subordinated Note Claims).......... 17
7. Class 9 Equity Interests (Equity Interests)............... 18
8. Class 10 Claims (Subordinated Securities Claims).......... 18
9. Class 11 Claims (Intercompany Claims)..................... 18
D. Special Provisions Regarding Sale of Entire Business........... 18
E. Special Provisions Regarding Indenture Trustees' Administrative
Claims and Allowed Claims................................... 18
F. Special Provisions Regarding the Treatment of Allowed Secondary
Liability Claims............................................ 18
ARTICLE IV. MEANS FOR IMPLEMENTATION OF THE PLAN......................... 19
A. Continued Corporate Existence and Vesting of Assets in the
Reorganized Debtors........................................ 19
B. Restructuring Transactions..................................... 19
1. Restructuring Transactions Generally...................... 19
2. Obligations of Any Surviving Corporation in a
Restructuring Transaction.............................. 19
C. Corporate Governance, Directors and Officers,
Employment-Related Agreements and Compensation Programs...... 20
1. Certificate of Incorporation and By-Laws of Reorganized
C&A Corporation........................................ 20
2. Board of Directors of Reorganized C&A Corporation......... 20
3. New Employment, Retirement, Indemnification and Other
Related Agreements and Incentive Compensation
Programs............................................... 20
4. Equity Incentive Plan..................................... 20
5. Corporate Action.......................................... 21
D. New Bank Facility, Obtaining Cash for Plan Distributions and
Transfers of Funds Among the Debtors........................ 21
E. Authorization and Issuance of New Common Stock................. 21
F. The Litigation Trust........................................... 21
G. Preservation of Rights of Action............................... 22
1. Maintenance of Causes of Action........................... 22
2. Preservation of All Causes of Action Not Expressly Settled
or Released............................................ 23
H. Certain Employee, Retiree and Workers' Compensation Benefits... 23
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1. Employee Benefits......................................... 23
2. Retiree Medical Benefits.................................. 23
3. Pension Plan.............................................. 23
4. Workers' Compensation Benefits............................ 23
5. Implementation of the KERP and Success Sharing Plan....... 23
I. Limitations on Amounts to Be Distributed to Holders of Allowed
Insured Claims.............................................. 24
J. Cancellation and Surrender of Instruments, Securities and Other
Documentation............................................... 24
K. Creation of Professional Escrow Account........................ 24
L. Release of Liens............................................... 24
M. Effectuating Documents; Further Transactions; Exemption from
Certain Transfer Taxes...................................... 24
ARTICLE V. TREATMENT OF EXECUTORY CONTRACTS AND UNEXPIRED LEASES......... 25
A. Executory Contracts and Unexpired Leases to Be Assumed or
Assumed and Assigned........................................ 25
1. Assumption and Assignment Generally....................... 25
2. Assumptions and Assignments of Real Property Executory
Contracts and Unexpired Leases......................... 25
3. Assignments Related to the Restructuring Transactions..... 25
4. Approval of Assumptions and Assignments................... 25
B. Payments Related to the Assumption of Executory Contracts and
Unexpired Leases............................................ 26
C. Executory Contracts and Unexpired Leases to Be Rejected........ 26
D. Bar Date for Rejection Damages................................. 26
E. Special Executory Contract and Unexpired Lease Issues.......... 26
1. Obligations to Indemnify Directors, Officers and
Employees.............................................. 26
2. Reinstatement of Allowed Secondary Liability Claims
Arising From or Related to Executory Contracts or
Unexpired Leases Assumed by the Debtors................ 27
F. Contracts and Leases Entered into After the Petition Date...... 27
G. Assumption and Assignment of D&O Insurance..................... 27
ARTICLE VI. PROVISIONS GOVERNING DISTRIBUTIONS........................... 28
A. Distributions for Claims Allowed as of the Effective Date...... 28
B. Method of Distributions to Holders of Claims................... 28
C. Compensation and Reimbursement for Services Related to
Distributions............................................... 28
D. Delivery of Distributions and Undeliverable or Unclaimed
Distributions............................................... 28
1. Delivery of Distributions................................. 28
(a) Generally............................................. 28
(b) Special Provision for Distribution to Holders of
Prepetition Facility Claims........................ 28
(c) Special Provisions for Distributions to Holders of
Senior Note Claims................................. 29
2. Undeliverable Distributions Held by Disbursing Agents..... 29
(a) Holding and Investment of Undeliverable
Distributions..................................... 29
(b) After Distributions Become Deliverable................ 29
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(c) Failure to Claim Undeliverable Distributions.......... 29
E. Distribution Record Date....................................... 29
F. Means of Cash Payments......................................... 30
G. Timing and Calculation of Amounts to Be Distributed............ 30
1. Allowed Claims............................................ 30
2. De Minimis Distributions.................................. 30
3. Compliance with Tax Requirements.......................... 30
H. Setoffs........................................................ 30
I. Surrender of Canceled Instruments or Securities................ 31
1. Tender of Senior Notes.................................... 31
2. Lost, Stolen, Mutilated or Destroyed Senior Notes......... 31
3. Failure to Surrender Senior Notes......................... 31
ARTICLE VII. PROCEDURES FOR RESOLVING DISPUTED CLAIMS.................... 31
A. Prosecution of Objections to Claims............................ 31
1. Objections to Claims...................................... 31
2. Authority to Prosecute Objections......................... 32
B. Treatment of Disputed Claims................................... 32
C. Distributions on Account of Disputed Claims Once Allowed....... 32
ARTICLE VIII. CONDITIONS PRECEDENT TO CONFIRMATION AND CONSUMMATION OF
THE PLAN.............................................................. 32
A. Conditions to Confirmation..................................... 32
B. Conditions Precedent to Consummation........................... 33
C. Waiver of Conditions........................................... 34
D. Effect of Non-Occurrence of Conditions to Consummation......... 34
ARTICLE IX. CRAMDOWN..................................................... 34
ARTICLE X. SETTLEMENT, RELEASE, INJUNCTION AND RELATED PROVISIONS........ 34
A. Compromise and Settlement...................................... 34
B. Releases by the Debtors........................................ 35
C. Third Party Release............................................ 35
D. Exculpation.................................................... 36
E. Indemnification................................................ 36
F. Discharge of Claims and Termination of Equity Interests........ 37
G. Injunction..................................................... 37
ARTICLE XI. RETENTION OF JURISDICTION.................................... 38
ARTICLE XII. MISCELLANEOUS PROVISIONS.................................... 39
A. Dissolution of the Creditors' Committee........................ 39
B. Modification of the Plan....................................... 39
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C. Revocation of the Plan......................................... 39
D. Severability of Plan Provisions................................ 40
E. Consultation................................................... 40
F. Successors and Assigns......................................... 40
G. Service of Certain Plan Exhibits and Disclosure Statement
Exhibits.................................................... 40
H. Service of Documents........................................... 40
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TABLE OF EXHIBITS(1)
EXHIBIT A Nonexclusive List of Causes of Action(2)
EXHIBIT B Terms of Litigation Trust Agreement(3)
EXHIBIT C Terms of New Bank Facility(3)
EXHIBIT D Terms of New Common Stock(2)
EXHIBIT E Terms of OEM Earn-Out(2)
EXHIBIT F Terms of Shareholders Agreement(2)
EXHIBIT G Terms of Warrants(2)
EXHIBIT H Certificate of Incorporation of Reorganized C&A Corporation(3)
EXHIBIT I By-Laws of Reorganized C&A Corporation(3)
EXHIBIT J Initial Grants under the Equity Incentive Plan(3)
EXHIBIT K Terms of Equity Incentive Plan(3)
EXHIBIT L Employment and Other Agreements and Plans (that are in effect or
will take effect as of the Effective Date)(3)
EXHIBIT M Schedule of Executory Contracts and Unexpired Leases to Be Assumed
and Assigned(3)
EXHIBIT N Nonexclusive Schedule of Executory Contracts and Unexpired Leases to
Be Rejected(3)
EXHIBIT O List of Manufacturing Facilities (at which the Debtors will obtain
cost savings or implement a plant rationalization strategy)(2)
EXHIBIT P Terms of Tax Note(2)
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(1) Except as otherwise indicated, all Exhibits will be available for review
after they are Filed during regular business hours at the Document
Reviewing Centers.
(2) To be Filed and available for review at the Document Reviewing Centers no
later than ten days before the hearing on the Disclosure Statement.
(3) To be Filed and available for review at the Document Reviewing Centers no
later than ten days before the Confirmation Hearing.
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INTRODUCTION
Collins & Aikman Corporation and the other Debtors propose the following
Plan for the resolution of the outstanding claims against and equity interests
in the Debtors. The Debtors are proponents of the Plan within the meaning of
section 1129 of the Bankruptcy Code. Reference is made to the Debtors'
Disclosure Statement, filed contemporaneously with the Plan, for a discussion of
the Debtors' history, businesses, results of operations, historical financial
information, projections and properties, and for a summary and analysis of the
Plan. There also are other agreements and documents, which are or will be filed
with the Bankruptcy Court, that are referenced in the Plan or the Disclosure
Statement and that will be available for review.
ARTICLE I.
DEFINED TERMS, RULES OF INTERPRETATION
AND COMPUTATION OF TIME
A. DEFINED TERMS
As used in the Plan, capitalized terms have the meanings set forth below.
Any capitalized term that is not otherwise defined herein, but that is used in
the Bankruptcy Code or the Bankruptcy Rules, will have the meaning given to that
term in the Bankruptcy Code or the Bankruptcy Rules, as applicable.
1. "2008 FISCAL YEAR AUDIT" means the audited financial statements for the
Reorganized Debtors' 2008 fiscal year.
2. "ACCRUED PROFESSIONAL COMPENSATION" means, at any time, all accrued fees
and expenses (including, as applicable, success fees) for services rendered by
all Professionals in the Chapter 11 Cases that the Bankruptcy Court has not
denied by Final Order, to the extent such fees and expenses have not been paid
regardless of whether a fee application has been filed for such amount. To the
extent a court denies by Final Order a Professional's fees or expenses, such
amounts will no longer be considered Accrued Professional Compensation.
3. "ADMINISTRATIVE CLAIM" means a Claim for costs and expenses of
administration of the Chapter 11 Cases 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 businesses of the Debtors (such as wages, salaries,
commissions for services and payments for inventories, leased equipment and
premises), including Claims under the DIP Credit Agreement; (b) compensation for
legal, financial advisory, accounting and other services rendered after the
Petition Date, and reimbursement of expenses incurred in connection therewith,
awarded or allowed under sections 330(a) or 331 of the Bankruptcy Code,
including Fee Claims; (c) all fees and charges assessed against the Estates
under chapter 123 of title 28, United States Code, 28 U.S.C. Sections 1911-1930;
and (d) any Claims for reclamation allowed in accordance with section 546(c)(2)
of the Bankruptcy Code and section 2-702 of the Uniform Commercial Code.
4. "AGENT" means JPMorgan Chase Bank, N.A., as administrative agent under
the Prepetition Credit Agreement.
5. "ALLOWED" means, with respect to Claims or Equity Interests, (a) any
Claim against or Equity Interest in a Debtor, proof of which is timely Filed, or
by order of the Bankruptcy Court is not or will not be required to be Filed, (b)
any Claim that has been or is hereafter listed in the Schedules as neither
disputed, contingent nor unliquidated, and for which no timely proof of Claim
has been Filed or (c) any Claim or Equity Interest Allowed pursuant to the Plan;
provided that with respect to any Claim or Equity Interest described in clauses
(a) or (b) above, such Claim or Equity Interest will be Allowed only if (i) no
objection to the allowance thereof has been interposed within the applicable
period of time fixed by the Plan, the Bankruptcy Code, the Bankruptcy Rules or
the Bankruptcy Court or (ii) such an objection is so interposed and the Claim or
Equity Interest has been Allowed by a Final Order (but only if such allowance
was not solely for the purpose of voting to accept or reject the Plan). Except
as otherwise specified in the Plan or a Final Order of the Bankruptcy Court, the
amount of an Allowed Claim will not include interest on such Claim from and
after the Petition Date.
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6. "ALLOWED ... CLAIM" means an Allowed Claim in the particular Class or
category specified. Any reference herein to a particular Allowed Claim includes
both the secured and unsecured portions of such Claim.
7. "ALLOWED EQUITY INTEREST" means an Allowed Equity Interest in Class 9.
8. "BALLOT" means the form or forms distributed to each Holder of an
Impaired Claim entitled to vote on the Plan on which the Holder indicates
acceptance or rejection of the Plan or any election for treatment of such Claim
under the Plan.
9. "BANKRUPTCY CODE" means title 11 of the United States Code, 11 U.S.C.
Sections 101-1330, as now in effect or hereafter amended and, in each case,
applicable to the Chapter 11 Cases.
10. "BANKRUPTCY COURT" means the United States District Court having
jurisdiction over the Chapter 11 Cases and, to the extent of any reference made
pursuant to 28 U.S.C. Section 157, the bankruptcy unit of such District Court.
11. "BANKRUPTCY RULES" means, collectively, the Federal Rules of Bankruptcy
Procedure and the local rules for the Bankruptcy Court, as now in effect or
hereafter amended and, in each case, applicable to the Chapter 11 Cases.
12. "BAR DATE" means the applicable bar date by which a proof of Claim must
be or must have been Filed, as established by an order of the Bankruptcy Court,
including the Bar Date Order and the Confirmation Order.
13. "BAR DATE ORDER" means that certain Order Establishing a Bar Date for
Filing Proofs of Claim and Approving the Manner and Notice Thereof entered by
the Bankruptcy Court on November 22, 2005 [Docket No. 1803].
14. "BENEFICIAL HOLDER" means the Person or Entity holding the beneficial
interest in a Claim or Equity Interest.
15. "BUSINESS DAY" means any day, other than a Saturday, Sunday or "legal
holiday" (as defined in Bankruptcy Rule 9006(a)).
16. "CARVE OUT ACCOUNT" means that certain segregated trust account
maintained at JPMorgan Chase Bank, N.A. pursuant to the DIP Credit Agreement for
the benefit of the Professionals, which account contains funds for the payment
of fees and expenses incurred by the Professionals and is not property of an
Estate.
17. "CASH" means cash and cash equivalents.
18. "CASH INVESTMENT YIELD" means the net yield earned by the applicable
Disbursing Agent from the investment of cash held pending distribution pursuant
to the Plan, which investment will be in a manner consistent with the
Reorganized Debtors' investment and deposit guidelines.
19. "CASH MANAGEMENT ORDER" means that certain First Day Order (A)
Authorizing (I) Continued Use of Existing Cash Management System on an Interim
Basis, (II) Maintenance of Existing Bank Accounts and (III) Continued Use of
Existing Business Forms; and (B) (I) Granting Administrative Priority Status to
Postpetition Intercompany Claims and (II) Authorizing Continued Performance
Under Intercompany Arrangement and Historical Practices entered by the
Bankruptcy Court on May 17, 2005 [Docket No. 0040].
20. "CAUSE OF ACTION" means any and all claims, causes of action, demands,
rights, actions, suits, obligations, liabilities, accounts, defenses, offsets,
powers, privileges, licenses and franchises of any kind or character whatsoever,
known or unknown, contingent or non-contingent, matured or unmatured, suspected
or unsuspected, foreseen or unforeseen, currently existing or hereafter arising,
in contract or in tort, in law or in equity, or under any other theory of law.
Without limiting the generality of the foregoing, when referring to Causes
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of Action of the Debtors or their Estates, "Causes of Action" will include, but
not be limited to (a) rights of setoff, counterclaim or recoupment and claims on
contracts or for breaches of duties imposed by law; (b) the right to object to
Claims or Equity Interests; (c) Claims pursuant to sections 362, 510, 542, 543,
544 through 550, or 553 of the Bankruptcy Code; and (d) such Claims and defenses
as fraud, mistake, duress and usury.
21. "CHAPTER 11 CASE" means (a) when used with reference to a particular
Debtor, the chapter 11 case pending for that Debtor in the Bankruptcy Court and
(b) when used with reference to all Debtors, the chapter 11 cases pending for
the Debtors in the Bankruptcy Court.
22. "CLAIM" means a "claim," as defined in section 101(5) of the Bankruptcy
Code, against any Debtor.
23. "CLAIMS OBJECTION BAR DATE" means, for all Claims that have not been
Allowed, the latest of: (a) 180 days after the Effective Date; (b) 180 days
after the Filing of a proof of Claim for such Claim; and (c) such other period
of limitation as may be specifically fixed by the Plan, the Confirmation Order,
the Bankruptcy Rules or a Final Order for objecting to such Claim.
24. "CLASS" means a class of Claims or Equity Interests, as described in
Article II.
25. "CONFIRMATION" means the entry of the Confirmation Order on the docket
of the Bankruptcy Court.
26. "CONFIRMATION DATE" means the date upon which the Confirmation Order is
entered by the Bankruptcy Court on its docket, within the meaning of Bankruptcy
Rules 5003 and 9021.
27. "CONFIRMATION HEARING" means the hearing held by the Bankruptcy Court
on Confirmation of the Plan, as such hearing may be continued from time to time.
28. "CONFIRMATION ORDER" means the order of the Bankruptcy Court confirming
the Plan pursuant to section 1129 of the Bankruptcy Code.
29. "CONSUMMATION" means the occurrence of the Effective Date.
30. "CORE GROUP" means the parties set forth in the First Amended Notice,
Case Management and Administrative Procedures filed on June 9, 2005 [Docket No.
294].
31. "CREDITORS COMMITTEE" means the official committee of unsecured
creditors of the Debtors appointed by the United States trustee in the Chapter
11 Cases pursuant to section 1102 of the Bankruptcy Code.
32. "CURE AMOUNT CLAIM" means a Claim based upon a Debtor's defaults
pursuant to an Executory Contract or Unexpired Lease at the time such contract
or lease is assumed by that Debtor under section 365 of the Bankruptcy Code.
33. "DEBTOR" means, as the context requires, any of the Debtors.
34. "DEBTOR RELEASEES" means (a) all officers, directors and employees of
the Debtors and their subsidiaries immediately proceeding and as of the
Effective Date, (b) all attorneys, financial advisors, accountants, investment
bankers, investment advisors, actuaries, professionals, agents, affiliates and
representatives of the Debtors and their subsidiaries and (c) the Releasing
Parties, their respective predecessors and successors in interest, and all of
their respective current and former members, officers, directors, employees,
partners, attorneys, financial advisors, accountants, investment bankers,
investment advisors, actuaries, professionals, agents, affiliates and
representatives; provided that no Non-Released Parties will be Debtor Releasees.
35. "DEBTORS" means, collectively, the above-captioned debtors identified
on the cover page to this Plan.
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36. "DEEMED" means, for any particular Claim, (a) the scheduled amount of
such Claim, unless a proof of claim was Filed with respect to such Claim, in
which case the proof of claim amount supersedes the scheduled amount, (b) the
amount asserted in Filed proofs of claim for which there are not corresponding
scheduled amounts and (c) if a Filed proof of claim does not assert a sum
certain, the Deemed amount will be determined by court order. In all events, if
the amount of a Claim is determined or estimated for any purposes by Final Order
or stipulation, then that amount will be the Deemed amount for that Claim.
37. "DERIVATIVE CLAIM" means a claim that is property of any of the
Debtors' Estates pursuant to section 541 of the Bankruptcy Code.
38. "DIP AGENT" means JPMorgan Chase Bank, N.A., as administrative agent
under the DIP Credit Agreement.
39. "DIP CREDIT AGREEMENT" means (a) that certain Amended and Restated
Revolving Credit, Term Loan and Guaranty Agreement, dated as of July 28, 2005,
as it may be subsequently amended and modified, by and among Collins & Aikman
Products Co., as borrower, substantially all of the domestic direct and indirect
subsidiaries of Collins & Aikman Corporation, as guarantors, the DIP Agent, and
certain other lenders named therein; (b) all amendments and restatements thereto
and extensions thereof; and (c) all security agreements, other agreements and
instruments related to the documents identified in (a) and (b) of this
definition.
40. "DIP FACILITY" means that certain debtor-in-possession senior, secured
credit facility entered into pursuant to the DIP Credit Agreement.
41. "DIP FACILITY CLAIMS" means all Obligations (as defined in the DIP
Credit Agreement) outstanding under the DIP Facility as of the Effective Date.
42. "DIP LENDERS" means the lenders under the DIP Credit Agreement.
43. "DISBURSING AGENT" means Reorganized C&A Corporation, in its capacity
as a disbursing agent pursuant to Article VI.B, or any Third Party Disbursing
Agent.
44. "DISCLOSURE STATEMENT" means the disclosure statement (including all
exhibits and schedules thereto or referenced therein) that relates to the Plan,
as approved by the Bankruptcy Court pursuant to section 1125 of the Bankruptcy
Code, as the same may be amended, modified or supplemented.
45. "DISPUTED ... CLAIM" means:
(a) if no proof of Claim has been Filed by the applicable Bar Date or
has otherwise been deemed timely Filed under applicable law: (i) a Claim that is
listed on a Debtor's Schedules as other than disputed, contingent or
unliquidated, but as to which the applicable Debtor, Reorganized Debtor or,
prior to the Confirmation Date, any other party in interest, has Filed an
objection by the Claims Objection Bar Date and such objection has not been
withdrawn or denied by a Final Order; or (ii) a Claim that is listed on a
Debtor's Schedules as disputed, contingent or unliquidated; or
(b) if a proof of Claim or request for payment of an Administrative
Claim has been Filed by the Bar Date or has otherwise been deemed timely Filed
under applicable law: (i) a Claim for which no corresponding Claim is listed on
a Debtor's Schedules; (ii) a Claim for which a corresponding Claim is listed on
a Debtor's Schedules as other than disputed, contingent or unliquidated, but the
nature or amount of the Claim as asserted in the proof of Claim varies from the
nature and amount of such Claim as it is listed on the Schedules; (iii) a Claim
for which a corresponding Claim is listed on a Debtor's Schedules as disputed,
contingent or unliquidated; (iv) a Claim for which an objection has been Filed
by the applicable Debtor, Reorganized Debtor or, prior to the Confirmation Date,
any other party in interest, by the Claims Objection Bar Date, and such
objection has not been withdrawn or denied by a Final Order; or (v) a Tort
Claim.
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46. "DISTRIBUTION RECORD DATE" means the date set by the Bankruptcy Court
for determining the Holders of Claims entitled to vote on the Plan.
47. "DOCUMENT REVIEWING CENTERS" means, collectively: (a) the offices of
Kirkland & Ellis LLP at 200 East Randolph Drive, Chicago, Illinois 60601; and
(b) any other locations designated by the Debtors at which any party in interest
may review all of the exhibits and schedules to the Plan and the Disclosure
Statement.
48. "EFFECTIVE DATE" means a day, as determined by the Debtors and the
Agent that is the Business Day as soon as reasonably practicable after all
conditions to the Effective Date in Article VIII.B have been met or waived
pursuant to Article VIII.C.
49. "ENGLISH INSOLVENCY LAW" means the English Insolvency Act of 1986.
50. "ENTITY" means an entity as defined in section 101(15) of the
Bankruptcy Code.
51. "EQUITY INCENTIVE PLAN" means the equity incentive plan that will be
implemented as set forth in Article IV.C.4, which may provide for the issuance
to officers, directors and employees of the Reorganized Debtors options to
purchase up to 5% of the New Common Stock in Reorganized C&A Corporation.
52. "EQUITY INTEREST" means all equity interests in any of the Debtors,
including all issued, unissued, authorized or outstanding shares of stock,
together with any warrants, options or contract rights to purchase or acquire
such interests at any time.
53. "ESTATE" means, as to each Debtor, the estate created for that Debtor
in its Chapter 11 Case pursuant to section 541 of the Bankruptcy Code.
54. "ESTATES" means, collectively, the estates created for the Debtors in
the Chapter 11 Cases pursuant to section 541 of the Bankruptcy Code.
55. "EUROPEAN DEBTORS" means the Debtors' European subsidiaries that, on
July 15, 2005, petitioned for administration orders pursuant to Schedule B1 of
the English Insolvency Law in the Companies Court of the High Court of Justice,
Chancery Division in London, England. For purposes of clarification, the
European Debtors are not Debtors in the Chapter 11 Cases.
56. "EXCULPATED PARTIES" means: (a) the Debtors; (b) the Reorganized
Debtors; (c) the Releasing Parties and their respective predecessors and
successors in interest; and (d) all of the current (and former as it relates to
the Entities described in foregoing clause (c)) officers, directors, employees,
members, partners, investment advisors, attorneys, actuaries, financial
advisors, accountants, investment bankers, agents, professionals, affiliates and
representatives of each of the foregoing Persons and Entities (in each case in
his, her or its capacity as such); provided that no Non-Released Parties will be
Exculpated Parties.
57. "EXECUTORY CONTRACT" means a contract to which one or more of the
Debtors is a party that is subject to assumption or rejection under section 365
of the Bankruptcy Code.
58. "FACE AMOUNT" means:
(a) when used with reference to a Disputed Insured Claim, either (i) the
full stated amount claimed by the Holder of such Claim in any proof of Claim
Filed by the Bar Date, or otherwise deemed timely Filed under applicable law, if
the proof of Claim specifies only a liquidated amount; (ii) if no proof of Claim
is Filed by the Bar Date or otherwise deemed timely filed under applicable law,
the full amount of the Claim listed on the Debtors' Schedules provided that such
amount is not listed as disputed, contingent or unliquidated; or (iii) the
applicable deductible under the relevant insurance policy, minus any
reimbursement obligations of the applicable Debtor to the insurance carrier for
sums expended by the insurance carrier on account of such Claim (including
defense costs), if such amount is less than the amount specified in (i) or (ii)
above or the proof of Claim specifies an unliquidated amount; and
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(b) when used with reference to a Disputed Uninsured Claim, either (i) the
full stated amount claimed by the Holder of such Claim in any proof of Claim
Filed by the Bar Date or otherwise deemed timely Filed under applicable law, if
the proof of Claim specifies only a liquidated amount; or (ii) the amount of the
Claim acknowledged by the applicable Debtor or Reorganized Debtor in any
objection Filed to such Claim or in the Schedules as an undisputed,
noncontingent and liquidated Claim, estimated by the Bankruptcy Court pursuant
to section 502(c) of the Bankruptcy Code or proposed by the Debtors or the
Reorganized Debtors and approved by the United States trustee, if no proof of
Claim has been Filed by the Bar Date or has otherwise been deemed timely Filed
under applicable law or if the proof of Claim specifies an unliquidated amount.
59. "FEE CLAIM" means a Claim under sections 330(a), 331, 503 or 1103 of
the Bankruptcy Code for compensation of a Professional or other Entity for
services rendered or expenses incurred in the Chapter 11 Cases.
60. "FEE ORDER" means that certain Administrative Order Establishing
Procedures for Monthly Compensation and Reimbursement of Expenses for
Professionals and Official Committee Members entered by the Bankruptcy Court on
June 9, 2005 [Docket No. 290].
61. "FILE" OR "FILED" means file, filed or filing with the Bankruptcy Court
or its authorized designee in the Chapter 11 Cases.
62. "FINAL DECREE" means the decree contemplated under Bankruptcy Rule
3022.
63. "FINAL DIP ORDER" means the Final Order (I) Authorizing Debtors (A) to
Obtain Post-Petition Financing Pursuant to 11 U.S.C. Sections 105, 361, 362,
364(c)(1), 364(c)(2), 364(c)(3), 364(d)(1) and 364(e) and (B) to Utilize Cash
Collateral Pursuant to 11 U.S.C. Section 363 and (II) Granting Adequate
Protection to Pre-Petition Secured Parties Pursuant to 11 U.S.C. Sections 361,
362, 363 and 364 entered by the Bankruptcy Court on July 28, 2005 [Docket No.
809].
64. "FINAL ORDER" means an order or judgment of the Bankruptcy Court, or
other court of competent jurisdiction, as entered on the docket in any Chapter
11 Case or the docket of any other court of competent jurisdiction, that has not
been reversed, stayed, modified or amended, and as to which the time to appeal
or seek certiorari or move for a new trial, reargument or rehearing has expired,
and no appeal or petition for certiorari or other proceedings for a new trial,
reargument or rehearing has been timely taken, or as to which any appeal that
has been taken or any petition for certiorari that has been timely filed has
been withdrawn or resolved by the highest court to which the order or judgment
was appealed or from which certiorari was sought or the new trial, reargument or
rehearing will have been denied or resulted in no modification of such order.
65. "GENERAL UNSECURED CLAIMS" means any Claim against the Debtors that is
not a/an: (a) Administrative Claim; (b) DIP Facility Claim; (c) OEM
Administrative DIP Claim; (d) Priority Tax Claim; (e) Other Secured Claim; (f)
Other Priority Claim; (g) Prepetition Facility Claim; (h) OEM Junior Secured DIP
Claim; (i) PBGC Claim; (j) Senior Note Claim; (k) Senior Subordinated Note
Claim; (l) Equity Interest; (m) Subordinated Securities Claim; or (n)
Intercompany Claim.
66. "HOLDER" means a Person or Entity holding an Equity Interest or Claim.
67. "IMPAIRED" means with respect to any Class of Claims or Equity
Interests, a Claim or Equity Interest that is impaired within the meaning of
section 1124 of the Bankruptcy Code.
68. "IMPAIRED CLAIM" means a Claim classified in an Impaired Class.
69. "IMPAIRED CLAIM NOTE" means a freely prepayable promissory note issued
by Reorganized C&A Corporation on terms equal to the relevant OEM Earn-Out.
70. "INDENTURE TRUSTEES" means, collectively, the Senior Note Indenture
Trustee and the Senior Subordinated Note Indenture Trustee.
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71. "INSURED CLAIM" means any Claim arising from an incident or occurrence
alleged to have occurred prior to the Effective Date that is covered under an
insurance policy, other than a workers' compensation insurance policy,
applicable to the Debtors or their businesses.
72. "INTERCOMPANY CLAIMS" means any and all Claims and Equity Interests of
a Debtor against and in another Debtor.
73. "KERP" means that certain key employee retention program described in
the Debtors' Motion for an Order Authorizing the Debtors to Implement a Key
Employee Retention Program filed November 7, 2005 [Docket No. 1635] and approved
by the Bankruptcy Court on December 16, 2005 [Docket No. 1901].
74. "LITIGATION RECOVERY INTERESTS" means the recovery, if any, of the
Litigation Trust.
75. "LITIGATION TRUST" means that certain litigation trust to be formed on
the Effective Date, pursuant to the Litigation Trust Agreement.
76. "LITIGATION TRUST AGREEMENT" means that certain trust agreement,
substantially on the terms set forth on Exhibit B, that will govern the
Litigation Trust.
77. "LITIGATION TRUST ASSETS" means those assets, including the Litigation
Trust Claims, to be transferred to and owned by the Litigation Trust, pursuant
to the Litigation Trust Agreement.
78. "LITIGATION TRUST CLAIMS" means any and all Causes of Action identified
in the Litigation Trust Agreement.
79. "LITIGATION TRUST FUNDING AMOUNT" means the amount of $3 million to be
used to initially fund the Litigation Trust, which shall be repaid to the
Reorganized Debtors from the first proceeds received by the Litigation Trust.
80. "MASTER BALLOTS" mean the master ballots accompanying the Disclosure
Statement upon which Holders of Impaired Claims will indicate their acceptance
or rejection of the Plan in accordance with the Voting Instructions.
81. "NEW BANK FACILITY" means the exit financing to be obtained by the
Reorganized Debtors, as described in Article IV.D, with terms substantially as
set forth on Exhibit C.
82. "NEW COMMON STOCK" means the shares of common stock in the Reorganized
C&A Corporation with terms substantially as set forth on Exhibit D.
83. "NOMINEE" means any broker, dealer, commercial bank, trust company,
savings and loan, financial institution or other nominee in whose name
securities were registered or held of record on behalf of a Beneficial Holder.
84. "NON-RELEASED PARTIES" means any Person or Entity listed as a potential
defendant in any of the Causes of Action set forth on Exhibit A and Holders of
Claims in Class 3 not voting or voting to reject the Plan.
85. "OEMS" means DaimlerChrysler Corporation, Ford Motor Company, General
Motors Corporation, Honda of America Manufacturing, Inc., Nissan North America
Inc. and Toyota Motor Manufacturing North America, Inc. and their respective
affiliates and representatives.
86. "OEM ADMINISTRATIVE DIP CLAIMS" means any and all Claims arising from
the OEM Administrative DIP Loan.
87. "OEM ADMINISTRATIVE DIP LOAN" means that certain postpetition unsecured
financing in the aggregate principal amount of $30 million provided by the OEMs
pursuant to the Final Order Authorizing the
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Debtors to Obtain Postpetition Unsecured Financing entered by the Bankruptcy
Court on August 11, 2005 [Docket No. 922].
88. "OEM BANKRUPTCY RULE 9019 SETTLEMENTS" means those certain settlements
among the Debtors and each of the OEMs, which settlements shall provide for a
global resolution of material open commercial and restructuring issues between
the Debtors (including releases for the OEMs), their affiliates and the
particular OEM on terms satisfactory to the Debtors and the Agent (in
consultation with the Prepetition Lenders).
89. "OEM EARN-OUT" means that certain one-time earn-out payment for Holders
of OEM Junior Secured DIP Claims, subject to the terms set forth on Exhibit E.
90. "OEM JUNIOR SECURED DIP CLAIMS" means any and all Claims arising from
the OEM Subordinated DIP Loan.
91. "OEM SUBORDINATED DIP LOAN" means that certain debtor-in-possession
junior secured financing, as approved on a final basis by the Bankruptcy Court
on August 11, 2005 [Docket No. 0916], provided under the Price Adjustment,
Non-Resourcing and DIP Financing Arrangement for Collins & Aikman and Its
Affiliated Debtors, by and among Collins & Aikman Corporation, the OEMs and
JPMorgan Chase Bank, N.A., the term of which commenced on July 1, 2005.
92. "OPEB LIABILITY" means any and all Claims that are subject to section
1114 of the Bankruptcy Code.
93. "ORDINARY COURSE PROFESSIONALS ORDER" means that certain Order
Authorizing the Debtors to Employ and Compensate Certain Professionals Utilized
in the Ordinary Course of the Debtors' Businesses entered by the Bankruptcy
Court on June 9, 2005 [Docket No. 293].
94. "OTHER PRIORITY CLAIMS" means any and all Claims accorded priority in
right of payment under section 507(a) of the Bankruptcy Code, other than a
Priority Tax Claim or an Administrative Claim.
95. "OTHER SECURED CLAIMS" means any and all Secured Claims against the
Debtors not specifically described herein; provided that Other Secured Claims
will not include Prepetition Facility Claims, OEM Junior Secured DIP Claims,
Intercompany Claims or Claims of the Indenture Trustees.
96. "PBGC CLAIMS" means any and all Claims of the Pension Benefit Guaranty
Corporation relating to the Collins & Aikman Pension Plan, including any and all
Claims arising from the termination of such pension plan.
97. "PERSON" means an individual, corporation, partnership, joint venture,
association, joint stock company, limited liability company, limited liability
partnership, trust, trustee, United States trustee, estate, unincorporated
organization, government, governmental unit (as defined in the Bankruptcy Code),
agency, or political subdivision thereof, or other Entity.
98. "PETITION DATE" means May 17, 2005.
99. "PLAN" means this Joint Plan of Reorganization of Collins & Aikman
Corporation and Its Debtor Subsidiaries, and all exhibits attached hereto or
referenced herein, as the same may be amended, modified or supplemented.
100. "PLAN OBJECTION DEADLINE" means the deadline established by the
Bankruptcy Court for filing and serving objections to the Confirmation of the
Plan.
101. "PREPETITION CREDIT AGREEMENT" means that certain credit agreement,
dated as of December 20, 2001, by and among Collins & Aikman Products Co., as
borrower, substantially all of the domestic direct and indirect subsidiaries of
Collins & Aikman Corporation, as guarantors, the Agent and certain other lenders
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named therein, as amended and restated as of September 1, 2004, as the same may
have been subsequently modified, amended or supplemented, together with all
instruments and agreements related thereto.
102. "PREPETITION FACILITY" means that certain senior secured credit
facility entered into pursuant to the Prepetition Credit Agreement.
103. "PREPETITION FACILITY CLAIMS" means the total amount outstanding under
the Prepetition Facility as of the Effective Date.
104. "PREPETITION LENDERS" means the lenders from time to time under the
Prepetition Credit Agreement.
105. "PRIORITY CLAIMS" means, collectively, Priority Tax Claims and Other
Priority Claims.
106. "PRIORITY TAX CLAIMS" means any and all Claims of a governmental unit
of the kind specified in section 507(a)(8) of the Bankruptcy Code.
107. "PRO RATA" means the proportion that the amount of an Allowed Claim or
an Allowed Equity Interest in a particular Class bears to the aggregate amount
of Allowed Claims or the aggregate number of Allowed Equity Interests in such
Class.
108. "PROFESSIONAL" means any professional employed in the Chapter 11 Cases
pursuant to sections 327 or 1103 of the Bankruptcy Code or any professional or
other Entity seeking compensation or reimbursement of expenses in connection
with the Chapter 11 Cases pursuant to section 503(b)(4) of the Bankruptcy Code.
109. "PROFESSIONAL ESCROW ACCOUNT" means an interest-bearing savings
account to be funded and maintained in trust for the Reorganized Debtors on and
after the Effective Date solely for the purpose of paying all fees and expenses
of Professionals in these Chapter 11 Cases. The Professional Escrow Account will
not constitute property of any of the Reorganized Debtors.
110. "QUARTERLY DISTRIBUTION DATE" means the last Business Day of the month
following the end of each calendar quarter after the Effective Date; provided
that if the Effective Date is within 45 days of the end of a calendar quarter,
the first Quarterly Distribution Date will be the last Business Day of the month
following the end of the first calendar quarter after the calendar quarter in
which the Effective Date falls.
111. "REAL PROPERTY EXECUTORY CONTRACT AND UNEXPIRED LEASE" means,
collectively, an Executory Contract or Unexpired Lease relating to a Debtor's
interest in real property and any Executory Contract or Unexpired Lease granting
rights or interests related to or appurtenant to the applicable real property,
including all easements; licenses; permits; rights; privileges; immunities;
options; rights of first refusal; powers; uses; usufructs; reciprocal easement
or operating agreements; vault, tunnel or bridge agreements or franchises;
development rights; and any other interests in real estate or rights in rem
related to the applicable real property.
112. "REINSTATED" OR "REINSTATEMENT" means rendering a Claim or Equity
Interest unimpaired within the meaning of section 1124 of the Bankruptcy Code.
Unless the Plan specifies a particular method of Reinstatement, when the Plan
provides that an Allowed Claim or Allowed Equity Interest will be Reinstated,
such Claim or Equity Interest will be Reinstated, at the applicable Reorganized
Debtor's sole discretion, in accordance with one of the following:
(a) the legal, equitable and contractual rights to which such Claim or
Equity Interest entitles the Holder will be unaltered; or
(b) notwithstanding any contractual provision or applicable law that
entitles the Holder of such Claim or Equity Interest to demand or receive
accelerated payment of such Claim or Equity Interest after the occurrence of a
default: (i) any such default that occurred before or after the commencement of
the applicable Chapter 11 Case,
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other than a default of a kind specified in section 365(b)(2) of the Bankruptcy
Code, will be cured; (ii) the maturity of such Claim or Equity Interest as such
maturity existed before such default will be reinstated; (iii) the Holder of
such Claim or Equity Interest will be compensated for any damages incurred as a
result of any reasonable reliance by such Holder on such contractual provision
or such applicable law; and (iv) the legal, equitable or contractual rights to
which such Claim or Equity Interest entitles the Holder of such Claim or Equity
Interest will not otherwise be altered.
113. "RELEASING PARTIES" means the Creditors Committee, each member of the
Creditors Committee, the DIP Lenders, the DIP Agent, the Prepetition Lenders,
the Agent, the Steering Committee, each member of the Steering Committee and all
Holders of Claims in Class 3 voting to accept the Plan.
114. "REORGANIZED C&A CORPORATION" means Collins & Aikman Corporation on
and after the Effective Date.
115. "REORGANIZED DEBTORS" means the Debtors on and after the Effective
Date.
116. "REQUIRED PREPETITION LENDERS" means Prepetition Lenders holding, in
the aggregate, two-thirds in amount and a majority in number of the Prepetition
Facility Claims.
117. "RESTRUCTURING TRANSACTIONS" means, collectively, those mergers,
consolidations, restructurings, dispositions, liquidations or dissolutions that
the Debtors or Reorganized Debtors determine to be necessary or appropriate to
effect a corporate restructuring of their respective businesses or otherwise to
simplify the overall corporate structure of the Reorganized Debtors.
118. "SCHEDULES" means the schedules of assets and liabilities and the
statements of financial affairs Filed by the Debtors, as required by section 521
of the Bankruptcy Code and the Official Bankruptcy Forms, as the same may have
been or may be amended, modified or supplemented.
119. "SECONDARY LIABILITY CLAIM" means a Claim that arises from a Debtor
being liable as a guarantor of, or otherwise being jointly, severally or
secondarily liable for, any contractual, tort or other obligation of another
Debtor, including any Claim based on: (a) guaranties of collection, payment or
performance; (b) indemnity bonds, obligations to indemnify or obligations to
hold harmless; (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 or other similar
obligations made or given by a Debtor relating to the obligations or performance
of another Debtor; (e) vicarious liability; (f) liabilities arising out of
piercing the corporate veil, alter ego liability or similar legal theories; or
(g) any other joint or several liability that any Debtor may have in respect of
any obligation that is the basis of a Claim.
120. "SECURED CLAIM" means a Claim that is secured by a lien on property in
which an Estate has an interest or that is subject to setoff under section 553
of the Bankruptcy Code, to the extent of the value of the Claim Holder's
interest in the applicable Estate's interest in such property or to the extent
of the amount subject to setoff, as applicable, as determined pursuant to
sections 506(a) and, if applicable, 1129(b) of the Bankruptcy Code.
121. "SECURITIES ACT" means the Securities Act of 1933, 15 U.S.C. Sections
77a-77aa, as now in effect or hereafter amended.
122. "SENIOR NOTE CLAIMS" means any and all Claims arising from the Senior
Notes.
123. "SENIOR NOTE INDENTURE" means that certain indenture, dated as of
December 20, 2001, by and among Collins & Aikman Products Co., as issuer,
substantially all of the domestic direct and indirect subsidiaries of Collins &
Aikman Corporation, as guarantors, and BNY Midwest Trust Company, as indenture
trustee, as the same may have been subsequently modified, amended or
supplemented, together with all instruments and agreements related thereto.
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124. "SENIOR NOTE INDENTURE TRUSTEE" means BNY Midwest Trust Company, as
trustee under the Senior Note Indenture.
125. "SENIOR NOTES" means those certain 10-3/4% unsecured senior notes due
2011 issued pursuant to the Senior Note Indenture.
126. "SENIOR SUBORDINATED NOTE CLAIMS" means any and all Claims arising
from the Senior Subordinated Notes.
127. "SENIOR SUBORDINATED NOTE INDENTURE" means that certain indenture,
dated as of August 26, 2004, by and among Collins & Aikman Products Co., as
issuer, substantially all of the domestic direct and indirect subsidiaries of
Collins & Aikman Corporation, as guarantors, and BNY Midwest Trust Company, as
indenture trustee, as the same may have been subsequently modified, amended or
supplemented, together with all instruments and agreements related thereto.
128. "SENIOR SUBORDINATED NOTE INDENTURE TRUSTEE" means The Law Debenture
Company, as trustee under the Senior Subordinated Note Indenture.
129. "SENIOR SUBORDINATED NOTES" means those certain 12-7/8% senior
subordinated notes due August 15, 2012, issued pursuant to the Senior
Subordinated Note Indenture.
130. "SHAREHOLDERS AGREEMENT" means that certain agreement, substantially
on the terms and conditions set forth on Exhibit F, governing the rights, duties
and obligations of shareholders of Reorganized C&A Corporation, to be dated as
of the Effective Date, executed and delivered by Reorganized C&A Corporation and
to which all Holders of New Common Stock and the Warrants (to the extent such
Warrants are exercised) shall be deemed to be parties.
131. "STEERING COMMITTEE" means the unofficial Steering Committee of
Prepetition Lenders.
132. "STIPULATION OF AMOUNT AND NATURE OF CLAIM" means a stipulation or
other agreement between the applicable Debtor or Reorganized Debtor and a Holder
of a Claim or Equity Interest, or an agreed order of the Bankruptcy Court,
establishing the amount and nature of a Claim or Equity Interest.
133. "SUBORDINATED SECURITIES CLAIMS" means Claims of the type described
in, and subject to subordination under, section 510(b) of the Bankruptcy Code,
including any and all Claims whatsoever, whether known or unknown, foreseen or
unforeseen, suspected or unsuspected, currently existing or hereafter arising,
arising from rescission of a purchase or sale of a security of the Debtors or an
affiliate of the Debtors, for damages arising from the purchase, sale or holding
of such securities, or for reimbursement, indemnification or contribution
allowed under section 502 of the Bankruptcy Code on account of such a Claim.
134. "SUBSCRIPTION RECORD DATE" means the date that is fourteen business
days after entry of an order by the Bankruptcy Court approving the adequacy of
the Disclosure Statement.
135. "SUCCESS SHARING PLAN" means that certain success sharing plan
approved by the (a) Order Approving Employment Agreements of Frank Macher, As
President and Chief Executive Officer, and Other Members of Debtors' New
Management Team [Docket No. 1144] and (b) Order Authorizing the Implementation
of a Key Employee Retention Program [Docket No. 1901].
136. "TAX NOTE" means a promissory note, with terms substantially set forth
on Exhibit P, issued by Reorganized C&A Corporation delivered to a Holder of an
Allowed Priority Tax Claim providing for equal cash payments, made
semi-annually, commencing six months after the Effective Date and concluding six
years after the date of assessment of the tax that is the subject of the
relevant Allowed Priority Tax Claim.
137. "THIRD PARTY DISBURSING AGENT" means an Entity designated by
Reorganized C&A Corporation to act as a Disbursing Agent pursuant to Article
VI.B.
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138. "TORT CLAIM" means any Claim that has not been settled, compromised or
otherwise resolved that: (a) arises out of allegations of personal injury,
wrongful death, property damage, products liability or similar legal theories of
recovery; or (b) arises under any federal, state or local statute, rule,
regulation or ordinance governing, regulating or relating to health, safety,
hazardous substances or the environment.
139. "UNEXPIRED LEASE" means a lease of non-residential real property to
which one or more of the Debtors is a party that is subject to assumption or
rejection under section 365 of the Bankruptcy Code.
140. "UNIMPAIRED" means, with respect to a Class of Claims or Equity
Interests, a Claim or Equity Interest that is unimpaired within the meaning of
section 1124 of the Bankruptcy Code.
141. "UNINSURED CLAIM" means any Claim that is not an Insured Claim.
142. "UNSECURED CLAIMS" means, collectively, General Unsecured Claims,
Senior Note Claims and Senior Subordinated Note Claims.
143. "VOTING DEADLINE" means the deadline for submitting Ballots and Master
Ballots to accept or reject the Plan in accordance with section 1126 of the
Bankruptcy Code that is specified in the Disclosure Statement, the Ballots or
related solicitation documents approved by the Bankruptcy Court.
144. "VOTING INSTRUCTIONS" means the instructions for voting on the Plan
contained in the section of the Disclosure Statement entitled "VOTING
INSTRUCTIONS" and in the Ballots and the Master Ballots.
145. "WARRANTS" means warrants having the terms set forth on Exhibit G.
146. "WORKERS' COMPENSATION ORDER" means that certain First Day Order: (A)
Authorizing the Debtors to Continue to Pay and Honor Certain Prepetition Claims
for (i) Wages, Salaries and Other Compensation, (ii) Withholdings and Deductions
and (iii) Reimbursable Employee Expenses; (B) Authorizing the Debtors to
Continue to Provide Employee Benefits in the Ordinary Course of Business; (C)
Authorizing the Debtors to Pay All Related Costs and Expenses; and (D) Directing
Banks to Receive, Honor and Pay All Checks and Electronic Payment Requests
Related to the Foregoing, entered by the Bankruptcy Court on May 17, 2005
[Docket No. 48].
B. RULES OF INTERPRETATION AND COMPUTATION OF TIME
1. Rules of Interpretation
For purposes of the Plan, unless otherwise provided herein: (a) whenever
from the context it is appropriate, each term, whether stated in the singular or
the plural, will include both the singular and the plural; (b) unless otherwise
provided in the Plan, any reference in the Plan to a contract, instrument,
release or other agreement or document being in a particular form or on
particular terms and conditions means that such document will be substantially
in such form or substantially on such terms and conditions; (c) 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 pursuant to the Plan or Confirmation Order; (d) any reference to an
Entity as a Holder of a Claim or Equity Interest includes that Entity's
successors, assigns and affiliates; (e) all references in the Plan to Sections,
Articles and Exhibits are references to Sections, Articles and Exhibits of or to
the Plan; (f) the words "herein," "hereunder" and "hereto" refer to the Plan in
its entirety rather than to a particular portion of the Plan; (g) captions and
headings to Articles and Sections are inserted for convenience of reference only
and are not intended to be a part of or to affect the interpretation of the
Plan; (h) subject to the provisions of any contract, certificates of
incorporation, by-laws, similar constituent documents, instrument, release or
other agreement or document entered into or delivered in connection with the
Plan, the rights and obligations arising under the Plan will be governed by, and
construed and enforced in accordance with, federal law, including the Bankruptcy
Code and the Bankruptcy Rules; and (i) the rules of construction set forth in
section 102 of the Bankruptcy Code will apply.
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2. Computation of Time
In computing any period of time prescribed or allowed hereby, the
provisions of Bankruptcy Rule 9006(a) will apply.
ARTICLE II.
CLASSES OF CLAIMS AND EQUITY INTERESTS
All Claims and Equity Interests, except Administrative Claims and Priority
Tax Claims, are placed in the following Classes. In accordance with section
1123(a)(1) of the Bankruptcy Code, Administrative Claims and Priority Tax
Claims, as described in Article III.A, have not been classified and thus are
excluded from the following Classes. A Claim or Equity Interest is classified in
a particular Class only to the extent that the Claim or Equity Interest
qualifies within the description of that Class and is classified in other
Classes to the extent that any remainder of the Claim or Equity Interest
qualifies within the description of such other Classes.
A. UNIMPAIRED CLASSES OF CLAIMS
1. Class 1 (Other Secured Claims): Other Secured Claims against any Debtor.
2. Class 2 (Other Priority Claims): Priority Claims against any Debtor that
are entitled to priority under section 507(a)(3), (4), (5) or (6) of the
Bankruptcy Code.
B. IMPAIRED CLASSES OF CLAIMS AND EQUITY INTERESTS
1. Class 3 (Prepetition Facility Claims): Prepetition Facility Claims
against any Debtor.
2. Class 4 (OEM Junior Secured DIP Claims): OEM Junior Secured DIP Claims
against any Debtor.
3. Class 5 (General Unsecured Claims): General Unsecured Claims against any
Debtor.
4. Class 6 (Senior Note Claims): Senior Note Claims against any Debtor.
5. Class 7 (PBGC Claims): PBGC Claims against any Debtor.
6. Class 8 (Senior Subordinated Note Claims): Senior Subordinated Note
Claims against any Debtor.
7. Class 9 (Equity Interests): Equity Interests in any Debtor.
8. Class 10 (Subordinated Securities Claims): Subordinated Securities
Claims against any Debtor.
9. Class 11 (Intercompany Claims): Intercompany Claims that are not
Administrative Claims.
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ARTICLE III.
TREATMENT OF CLAIMS AND EQUITY INTERESTS
A. UNCLASSIFIED CLAIMS
1. Payment of Administrative Claims
(a) Administrative Claims in General
Except as specified in this Article III.A.1, and subject to the bar date
provisions herein, unless otherwise agreed by the Holder of an Administrative
Claim and the applicable Debtor or Reorganized Debtor, each Holder of an Allowed
Administrative Claim will receive, in full satisfaction of its Administrative
Claim, Cash equal to the Allowed amount of such Administrative Claim either (i)
on the Effective Date or (ii) if the Administrative Claim is not allowed as of
the Effective Date, 30 days after the date on which an order allowing such
Administrative Claim becomes a Final Order or a Stipulation of Amount and Nature
of Claim is executed by the applicable Reorganized Debtor and the Holder of the
Administrative Claim.
(b) Statutory Fees
On or before the Effective Date, Administrative Claims for fees payable
pursuant to 28 U.S.C. Section 1930 will be paid by the Debtors in Cash equal to
the amount of such Administrative Claims. After the Effective Date, all fees
payable pursuant to 28 U.S.C. Section 1930 will be paid by the Reorganized
Debtors in accordance therewith until the closing of the Chapter 11 Cases
pursuant to section 350(a) of the Bankruptcy Code.
(c) Ordinary Course Liabilities
Administrative Claims based on liabilities incurred by a Debtor in the
ordinary course of its business will be paid by the applicable Reorganized
Debtor pursuant to the terms and conditions of the particular transaction giving
rise to such Administrative Claims, without any further action by the Holders of
such Administrative Claims.
(d) DIP Facility Claims
On the Effective Date, the DIP Agent, on its own behalf and on behalf of
the DIP Lenders, shall receive the following, in full and final satisfaction of
all DIP Facility Claims:
(i) replacement or backstop of all undrawn letters of credit
under the DIP Facility by new letters of credit under the
New Bank Facility (or such other treatment resulting in
termination of liability in respect of such letters of
credit or adequate provision therefor as shall be acceptable
to the issuer of such letters of credit); and
(ii) after taking into account the treatment of letters of credit
as described above, payment in full in Cash of the remaining
amount of the DIP Facility Claims.
(e) OEM Administrative DIP Claims
On the Effective Date, each Holder of an Allowed OEM Administrative DIP
Claim will receive, in full and final satisfaction of such Claim, Cash equal to
the amount of such Allowed OEM Administrative DIP Claim.
(f) Administrative Claims of Indenture Trustees
Any Administrative Claims of the Indenture Trustees will be treated
pursuant to the terms of Article III.E.
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(g) Bar Dates for Administrative Claims
(i) General Bar Date Provisions
Except as otherwise provided in Article III.A.1(g)(ii), unless previously
Filed, requests for payment of Administrative Claims must be Filed and served on
the Reorganized Debtors, pursuant to the procedures specified in the
Confirmation Order and the notice of entry of the Confirmation Order, no later
than 30 days after the Effective Date. Holders of Administrative Claims that are
required to File and serve a request for payment of such Administrative Claims
and that do not File and serve such a request by the applicable bar date will be
forever barred from asserting such Administrative Claims against the Debtors,
the Reorganized Debtors or their respective property, and such Administrative
Claims will be deemed discharged as of the Effective Date. Objections to such
requests must be Filed and served on the Reorganized Debtors and the requesting
party by the later of (a) 180 days after the Effective Date and (b) 90 days
after the Filing of the applicable request for payment of Administrative Claims.
(ii) Bar Dates for Certain Administrative Claims
(A) Professional Compensation
Professionals or other Entities asserting a Fee Claim for services rendered
before the Effective Date must File and serve on the Reorganized Debtors and
such other Entities who are designated by the Bankruptcy Rules, the Confirmation
Order, the Fee Order or other order of the Bankruptcy Court an application for
final allowance of such Fee Claim no later than 30 days after the Effective
Date; provided that any professional who may receive compensation or
reimbursement of expenses pursuant to the Ordinary Course Professionals 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 Order.
Objections to any Fee Claim must be Filed and served on the Reorganized Debtors
and the requesting party by the later of (i) 60 days after the Effective Date
and (ii) 30 days after the Filing of the applicable request for payment of the
Fee Claim. To the extent necessary, the Confirmation Order will amend and
supersede any previously entered order of the Bankruptcy Court, including the
Fee Order, regarding the payment of Fee Claims.
(B) Ordinary Course Liabilities
Holders of Administrative Claims based on liabilities incurred by a Debtor
in the ordinary course of its business will not be required to File or serve any
request for payment of such Administrative Claims. Such Administrative Claims
will be satisfied pursuant to Article III.A.1(c).
(C) DIP Facility Claims
Holders of DIP Facility Claims will not be required to File or serve any
request for payment of such Claims. Such Claims will be satisfied pursuant to
Article III.A.1(d).
(D) OEM Administrative DIP Claims
Holders of OEM Administrative DIP Claims will not be required to File or
serve any request for payment of such Claims. Such Claims will be satisfied
pursuant to Article III.A.1(e).
2. Payment of Priority Tax Claims
Each Holder of an Allowed Priority Tax Claim will receive 100% of the
unpaid Allowed amount of such Claim in Cash or, at the sole option of the
Reorganized Debtors, a Tax Note or a combination thereof, on or as soon as
practicable after the Effective Date. Any claim or demand for penalty relating
to any Priority Tax Claim shall be disallowed, and the Holder of an Allowed
Priority Tax Claim shall not assess or attempt to collect such penalty from the
Reorganized Debtors or the Debtors. Notwithstanding the foregoing, the Holder of
an Allowed Priority Tax
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Claim may receive such other, less favorable treatment as may be agreed upon by
the claimant and the Debtors or the Reorganized Debtors.
B. UNIMPAIRED CLASSES OF CLAIMS
1. CLASS 1 CLAIMS (OTHER SECURED CLAIMS) are Unimpaired. Subject to the
provisions of sections 502(b)(3) and 506(d) of the Bankruptcy Code, on or as
soon as practicable after the Effective Date, each Holder of an Allowed Class 1
Claim will receive, in full and final satisfaction of such Allowed Class 1
Claim, one of the following treatments, in the sole discretion of the Debtors:
(a) the Debtors will reinstate each Allowed Other Secured Claim by curing
all outstanding defaults with all legal, equitable and contractual rights
remaining unaltered;
(b) the Debtors will pay in full (in Cash) any such Allowed Other Secured
Claim;
(c) the Debtors will satisfy any such Allowed Other Secured Claim by
delivering the collateral securing any such Claim and paying any interest
required to be paid under section 506(b) of the Bankruptcy Code; or
(d) the Debtors will otherwise treat any such Allowed Other Secured Claim
in any manner such that the Claim will be rendered Unimpaired.
2. CLASS 2 CLAIMS (OTHER PRIORITY CLAIMS) are Unimpaired. The legal,
equitable and contractual rights of the Holders of Allowed Class 2 Claims are
unaltered by the Plan. Unless otherwise agreed to by the Holders of the Allowed
Other Priority Claims and the Debtors, each Holder of an Allowed Class 2 Claim
will receive, in full and final satisfaction of such Allowed Class 2 Claim, one
of the following treatments, in the sole discretion of the Debtors:
(a) the Debtors will pay the Allowed Class 2 Claim in full in Cash on the
Effective Date or as soon thereafter as is practicable; provided that Class 2
Claims representing obligations incurred in the ordinary course of business will
be paid in full in Cash when such Class 2 Claims become due and owing in the
ordinary course of business; or
(b) each such Allowed Class 2 Claim will be treated in any other manner so
that such Claim will otherwise be rendered Unimpaired.
C. IMPAIRED CLASSES OF CLAIMS AND EQUITY INTERESTS
1. CLASS 3 CLAIMS (PREPETITION FACILITY CLAIMS) are Impaired. On or as soon
as practicable after the Effective Date, each Holder of a Class 3 Claim will
receive, in full and final satisfaction of such Claim, the following treatment:
(a) its Pro Rata share of 100% of the New Common Stock, subject to dilution
by the Warrants and the Equity Incentive Plan;
(b) replacement and cancellation of all undrawn letters of credit under the
Prepetition Facility by new letters of credit under the New Bank Facility (or
such other treatment resulting in termination of liability in respect of such
letters of credit or adequate provision therefor as shall be acceptable to the
issuer of such letters of credit);
(c) retention of all adequate protection payments in connection with the
Prepetition Facility and payment of any deferred or other unpaid adequate
protection payments (including interest, fees and professional fees) payable
under the Final DIP Order accrued through the Effective Date;
(d) payment of the reasonable fees and expenses of the Agent's attorneys
and financial advisor incurred in connection with the consummation,
administration and enforcement of the Plan; and
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(e) the applicable releases and exculpation contained in Article X.
The unsecured portions of Prepetition Facility Claims, if any, will not be
separately classified under the Plan, and the Holders of Prepetition Facility
Claims will not be entitled to vote on the Plan or receive any distributions on
account of such unsecured Claims.
2. CLASS 4 CLAIMS (OEM JUNIOR SECURED DIP CLAIMS) are Impaired. Each Holder
of an Allowed Class 4 Claim, in full and final satisfaction of such Allowed
Class 4 Claim, will be paid in full in Cash, subject to and in accordance with
the terms of the OEM Earn-Out, or, at the sole option of the Reorganized
Debtors, will receive an Impaired Claim Note or combination thereof.
3. CLASS 5 CLAIMS (GENERAL UNSECURED CLAIMS) are Impaired. Although under
the absolute priority rule the Holders of Class 5 Claims are not entitled to any
distributions, to facilitate a consensual Plan, if a Holder of an Allowed Class
5 Claim votes to accept the Plan, such Holder will receive, on or as soon as
practicable after the Effective Date, in full and final satisfaction of such
Allowed Class 5 Claim:
(a) its Pro Rata share of the percentage of the Warrants set forth on
Exhibit G; and
(b) its Pro Rata share of the percentage of the Litigation Recovery
Interests set forth on Exhibit B.
4. CLASS 6 CLAIMS (SENIOR NOTE CLAIMS) are Impaired. Although under the
absolute priority rule the Holders of Class 6 Claims are not entitled to any
distributions, to facilitate a consensual Plan, if a Holder of an Allowed Class
6 Claim votes to accept the Plan, such Holder will receive, on or as soon as
practicable after the Effective Date, in full and final satisfaction of such
Allowed Class 6 Claim:
(a) its Pro Rata share of the percentage of the Warrants set forth on
Exhibit G; and
(b) its Pro Rata share of the percentage of the Litigation Recovery
Interests set forth on Exhibit B.
5. CLASS 7 CLAIMS (PBGC CLAIMS) are Impaired. Although under the absolute
priority rule the Holders of Class 7 Claims are not entitled to any
distributions, to facilitate a consensual Plan, if a Holder of an Allowed Class
7 Claim votes to accept the Plan, such Holder will receive, on or as soon as
practicable after the Effective Date, in full and final satisfaction of such
Allowed Class 7 Claim:
(a) the percentage of the Warrants set forth on Exhibit G; and
(b) the percentage of the Litigation Recovery Interests set forth on
Exhibit B.
6. CLASS 8 CLAIMS (SENIOR SUBORDINATED NOTE CLAIMS) are Impaired. Although
under the absolute priority rule the Holders of Class 8 Claims are not entitled
to any distributions, to facilitate a consensual Plan, if a Holder of an Allowed
Class 8 Claim votes to accept the Plan, such Holder will receive, on or as soon
as practicable after the Effective Date, in full and final satisfaction of such
Allowed Class 8 Claim:
(a) its Pro Rata share of the percentage of the Warrants set forth on
Exhibit G; and
(b) its Pro Rata share of the percentage of the Litigation Recovery
Interests set forth on Exhibit B (collectively, the "Subordinated Note Share");
provided that the Subordinated Note Share will first be distributed to the
Holders of Allowed Senior Note Claims on a Pro Rata basis until such Allowed
Senior Note Claims have been paid in full in accordance with the subordination
provisions of the Senior Subordinated Note Indenture. If and only to the extent
that the Senior Note Claims are paid in full pursuant to the Plan, the remaining
portion of the Subordinated Note Share, if any, will be distributed to the
Holders of Allowed Senior Subordinated Note Claims.
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7. CLASS 9 EQUITY INTERESTS (EQUITY INTERESTS) are Impaired. On the
Effective Date, all Equity Interests will be deemed canceled and will be of no
further force and effect, whether surrendered for cancellation or otherwise, and
there will be no distribution to the Holders of Equity Interests.
8. CLASS 10 CLAIMS (SUBORDINATED SECURITIES CLAIMS) are Impaired. On the
Effective Date, Subordinated Securities Claims will be canceled, and Holders
thereof will not receive a distribution under the Plan in respect of such
Claims.
9. CLASS 11 CLAIMS (INTERCOMPANY CLAIMS) are Impaired. On the Effective
Date, Intercompany Claims will be canceled, and Holders thereof will not receive
a distribution under the Plan in respect of such Claims; provided that Claims of
an European Debtor against a Debtor arising from intercompany transactions with
the Debtor will be deemed Allowed General Unsecured Claims only to the extent
that such Debtor's intercompany claims against such European Debtor are deemed
allowed in such European Debtor's respective administration proceedings pending
under English Insolvency Law.
D. SPECIAL PROVISIONS REGARDING SALE OF ENTIRE BUSINESS
All (but not less than all) of the New Common Stock distributable to the
Holders of Class 3 Claims pursuant to Article III.C.1(a) may be purchased on the
Effective Date by one or more purchasers at such price and currency as may be
agreed to by the Debtors and the Required Prepetition Lenders. The Prepetition
Lenders would receive and retain the other consideration and benefits set forth
in Article III.C.1. In the event that there is more than one prospective
purchaser willing to pay a price acceptable to the Required Prepetition Lenders,
the purchaser(s) offering the highest and best consideration will prevail, with
any consideration in excess of such price being made available to other
constituencies as their interests may appear. The Debtors shall (a) make
information available to prospective purchasers and otherwise actively
participate in a process to attract purchasers in accordance with bid procedures
agreed between the Debtors and the Agent and (b) make reasonable modifications
to the Plan to facilitate a purchase of the entire business by one or more
purchasers and the distribution of the consideration paid therefor.
E. SPECIAL PROVISIONS REGARDING INDENTURE TRUSTEES' ADMINISTRATIVE CLAIMS AND
ALLOWED CLAIMS
In full satisfaction of the Indenture Trustees' Administrative Claims, if
any, any charging lien held by the Indenture Trustees will be preserved.
Distributions received by Holders of Allowed Claims in respect of Senior Notes
and Senior Subordinated Notes pursuant to the Plan will be reduced on account of
payment of the Indenture Trustees' Administrative Claims.
F. SPECIAL PROVISIONS REGARDING THE TREATMENT OF ALLOWED SECONDARY LIABILITY
CLAIMS
The classification and treatment of Allowed Claims under the Plan take into
consideration all Allowed Secondary Liability Claims. On the Effective Date,
Allowed Secondary Liability Claims will be treated as follows:
1. The Allowed Secondary Liability Claims arising from or related to any
Debtor's joint or several liability for the obligations under any (a) Allowed
Claim that is being Reinstated under the Plan or (b) Executory Contract or
Unexpired Lease that is being assumed or deemed assumed by another Debtor or
under any Executory Contract or Unexpired Lease that is being assumed by and
assigned to another Debtor or any other entity will be Reinstated.
2. Except as provided in Article III.F.1, Holders of Allowed Secondary
Liability Claims will be entitled to only one distribution in respect of such
underlying Allowed Claim. No multiple recovery on account of any Allowed
Secondary Liability Claim will be provided or permitted.
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ARTICLE IV.
MEANS FOR IMPLEMENTATION OF THE PLAN
A. CONTINUED CORPORATE EXISTENCE AND VESTING OF ASSETS IN THE REORGANIZED
DEBTORS
1. Except as otherwise provided herein (and subject to the Restructuring
Transactions provisions of Article IV.B), each Debtor will, as a Reorganized
Debtor, continue to exist after the Effective Date as a separate corporate
Entity, with all the powers of a corporation under applicable law and without
prejudice to any right to alter or terminate such existence (whether by merger,
dissolution or otherwise) under applicable state law. Except as otherwise
provided herein, as of the Effective Date, all property of the respective
Estates of the Debtors, and any property acquired by a Debtor or Reorganized
Debtor under the Plan, will vest in the applicable Reorganized Debtor, free and
clear of all Claims, liens, charges, other encumbrances and interests. On and
after the Effective Date, each Reorganized Debtor may operate its businesses and
may use, acquire and dispose of property and compromise or settle any Claims or
Equity Interests 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 or the Confirmation Order.
Without limiting the foregoing, each Reorganized Debtor may pay the charges that
it incurs on or after the Effective Date for professionals' fees, disbursements,
expenses or related support services (including fees relating to the preparation
of Professional fee applications) without application to the Bankruptcy Court.
2. There are certain Affiliates of the Debtors that are not Debtors in the
Chapter 11 Cases. The continued existence, operation and ownership of such
non-Debtor Affiliates is a material component of the Debtors' businesses, and,
as set forth in Article IV.A, all of the Debtors' Equity Interests and other
property interests in such non-Debtor Affiliates shall vest in the applicable
Reorganized Debtor or its successor on the Effective Date.
B. RESTRUCTURING TRANSACTIONS
1. Restructuring Transactions Generally
On or after the Confirmation Date, the applicable Debtors or Reorganized
Debtors may enter into such Restructuring Transactions and may take such actions
as may be necessary or appropriate to effect a corporate restructuring of their
respective businesses or simplify the overall corporate structure of the
Reorganized Debtors. Any Restructuring Transactions effected on or before the
Effective Date shall be subject to the prior consent of the Agent, which consent
shall not be unreasonably withheld. Such restructuring may include one or more
mergers, consolidations, restructurings, dispositions, liquidations or
dissolutions, as may be determined by the Debtors or the Reorganized Debtors to
be necessary or appropriate. The actions to effect these transactions may
include: (a) the execution and delivery of appropriate agreements or other
documents of merger, consolidation, restructuring, disposition, liquidation or
dissolution containing terms that are consistent with the terms of the Plan and
that satisfy the applicable requirements of applicable state law and such other
terms to which the applicable Entities may agree; (b) the execution and delivery
of appropriate instruments of transfer, assignment, assumption or delegation of
any asset, property, right, liability, duty or obligation on terms consistent
with the terms of the Plan and having such other terms to which the applicable
Entities may agree; (c) the filing of appropriate certificates or articles of
merger, consolidation or dissolution pursuant to applicable state law; and (d)
all other actions that the applicable Entities determine to be necessary or
appropriate, including making filings or recordings that may be required by
applicable state law in connection with such transactions.
2. Obligations of Any Surviving Corporation in a Restructuring Transaction
The Restructuring Transactions may include one or more mergers,
consolidations, restructurings, dispositions, liquidations or dissolutions, as
may be determined by the Debtors or Reorganized Debtors to be necessary or
appropriate to result in substantially all of the respective assets, properties,
rights, liabilities, duties and obligations of certain of the Reorganized
Debtors vesting in one or more surviving, resulting or acquiring corporations.
In each case, the surviving, resulting or acquiring corporation will perform the
obligations of the applicable Reorganized Debtor pursuant to the Plan to pay or
otherwise satisfy the Allowed Claims against such
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Reorganized Debtor, except as provided in any contract, instrument or other
agreement or document effecting a disposition to such surviving, resulting or
acquiring corporation, which may provide that another Reorganized Debtor will
perform such obligations. Notwithstanding the foregoing, such surviving,
resulting or acquiring corporation will not be required to perform any
obligations or to pay or otherwise satisfy any Claims discharged pursuant to the
Plan.
C. CORPORATE GOVERNANCE, DIRECTORS AND OFFICERS, EMPLOYMENT-RELATED AGREEMENTS
AND COMPENSATION PROGRAMS
1. Certificate of Incorporation and By-Laws of Reorganized C&A Corporation
As of the Effective Date, the certificate of incorporation and the by-laws
of Reorganized C&A Corporation will be substantially in the forms of Exhibit H
and Exhibit I, respectively. The certificate of incorporation and by-laws of
Reorganized C&A Corporation, among other things, will: (a) prohibit the issuance
of nonvoting equity securities to the extent required by section 1123(a) of the
Bankruptcy Code; and (b) effective immediately after the cancellation of the
Equity Interests as set forth in Article III.C.7 and Article IV.J, authorize the
issuance of New Common Stock in amounts not less than the amounts necessary to
permit the distributions thereof required or contemplated by the Plan. After the
Effective Date, Reorganized C&A Corporation may amend and restate its
certificates of incorporation or by-laws as permitted by the Delaware General
Corporation Law, subject to the terms and conditions of such constituent
documents.
2. Board of Directors of Reorganized C&A Corporation
The initial board of directors of Reorganized C&A Corporation will be
comprised of (a) the chief executive officer of Reorganized C&A Corporation and
(b) six other members selected by the Steering Committee. At least three of the
Steering Committee's nominees will qualify as an "independent" director under
the New York Stock Exchange Guidelines (whether or not the New Common Stock is
listed). The Steering Committee will consult in good faith with the
representatives of the Debtors regarding the selection of such members.
3. New Employment, Retirement, Indemnification and Other Related Agreements
and Incentive Compensation Programs
As of the Effective Date, subject to Article V.F, the Reorganized Debtors
will have authority to: (a) maintain, amend or revise existing employment,
retirement, welfare, incentive, severance, indemnification and other agreements
with their active directors, officers and employees, subject to the terms and
conditions of any such agreement; (b) enter into new employment, retirement,
welfare, incentive, severance, indemnification and other agreements for active
and retired employees; and (c) make the initial grants under the Equity
Incentive Plan as described on Exhibit J. Exhibit K and Exhibit L provide (a) a
description of the Equity Incentive Plan that will take effect as of the
Effective Date and (b) a list of the employment agreements and plans that are in
effect on the Effective Date, respectively. In addition, Exhibit L provides a
summary and description of the Debtors' employment, retirement, severance,
indemnification and other related agreements and incentive compensation programs
that are to take or remain in effect on or as of the Effective Date.
4. Equity Incentive Plan
On the Effective Date or as soon as practicable thereafter, the board of
directors for the Reorganized C&A Corporation will implement the Equity
Incentive Plan to provide stock options to officers, directors and employees of
the Reorganized Debtors for up to 5% of the New Common Stock. The Equity
Incentive Plan will have terms substantially as set forth on Exhibit K and the
initial grants of options thereunder will conform with Exhibit J, each of which
shall be satisfactory to the Agent (in consultation with the Prepetition
Lenders) and the Debtors.
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5. Corporate Action
The Restructuring Transactions; the adoption of new or amended and restated
certificates of incorporation and by-laws or similar constituent documents for
the Reorganized Debtors; the initial selection of directors and officers for the
Reorganized Debtors; the entry into the New Bank Facility; the distribution of
Cash pursuant to the Plan; the issuance and distribution of New Common Stock
pursuant to the Plan; the adoption, execution, delivery and implementation of
all contracts, leases, instruments, releases and other agreements or documents
related to any of the foregoing; the adoption, execution and implementation of
employment, retirement and indemnification agreements, incentive compensation
programs, retirement income plans, welfare benefit plans and other employee
plans and related agreements, including the Equity Incentive Plan and the plans
and agreements described on Exhibit L; and the other 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 will occur and be effective as of the date specified in the documents
effectuating the applicable Restructuring Transactions or the Effective Date, if
no such other date is specified in such other documents, and will be authorized
and approved in all respects and for all purposes without any requirement of
further action by stockholders or directors of any of the Debtors.
D. NEW BANK FACILITY, OBTAINING CASH FOR PLAN DISTRIBUTIONS AND TRANSFERS OF
FUNDS AMONG THE DEBTORS
On the Effective Date, the Reorganized Debtors are authorized to execute
and deliver those documents necessary or appropriate to obtain the New Bank
Facility. All Cash necessary to make payments pursuant to the Plan will be
obtained from the Reorganized Debtors' cash balances and operation, the New Bank
Facility and the Litigation Trust. Cash payments to be made pursuant to the Plan
will be made by the Reorganized Debtors; provided that the Debtors and the
Reorganized Debtors will be entitled to transfer funds between and among
themselves as they determine to be necessary or appropriate to enable the
Reorganized Debtors to satisfy the obligations under the Plan. Any Intercompany
Claims resulting from such transfers will be accounted for and settled in
accordance with the Debtors' historical intercompany account settlement
practices.
E. AUTHORIZATION AND ISSUANCE OF NEW COMMON STOCK
Reorganized C&A Corporation will issue a single class of New Common Stock,
with a par value of 0.01 cents per share, to be distributed under the Plan in
accordance with Article III. In addition, as of the Effective Date, Reorganized
C&A Corporation shall authorize: (1) such shares of New Common Stock as may be
required for the Equity Incentive Plan, in accordance with Article IV.C.4; (2)
such additional shares of New Common Stock as may be required to satisfy the
Warrants issued pursuant to this Plan; and (3) such other shares as may be
deemed necessary from time to time for general corporate purposes. All New
Common Stock to be issued on the Effective Date, all options granted under the
Equity Incentive Plan, all New Common Stock purchased pursuant to such options
and all Warrants shall be subject to the terms of the Shareholders Agreement.
F. THE LITIGATION TRUST
On the Effective Date, the Litigation Trust will be implemented pursuant to
the terms of the Litigation Trust Agreement. On the Effective Date, pursuant to
the terms of the Litigation Trust Agreement, the Debtors will transfer the
Litigation Trust Assets for and on behalf of the beneficiaries of the Litigation
Trust. Upon the transfer of the Litigation Trust Assets, the Debtors will have
no reversionary or further interest in or with respect to the Litigation Trust
Assets or the Litigation Trust. For all federal income tax purposes, the
beneficiaries of the Litigation Trust shall be treated as grantors and owners
thereof and it is intended that the Litigation Trust be classified as a
liquidating trust under Section 301.7701-4 of the Treasury Regulations and that
such trust is owned by its beneficiaries. Accordingly, for federal income tax
purposes, it is intended that the beneficiaries be treated as if they had
received a distribution of an undivided interest in the Litigation Trust Assets
and then contributed such interests to the Litigation Trust. The Litigation
Trust will initially be funded by the Litigation Trust Funding Amount, which
will be transferred to the Litigation Trust on the Effective Date and which will
be repaid to the Reorganized Debtors from the first proceeds received by the
Litigation Trust.
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G. PRESERVATION OF RIGHTS OF ACTION
1. Maintenance of Causes of Action
Except as otherwise provided in the Plan (including Article X.B), the
Reorganized Debtors and the Litigation Trust, as applicable, shall retain all
rights to commence and pursue, as appropriate, any and all Causes of Action,
whether arising before or after the Petition Date, in any court or other
tribunal in an adversary proceeding or contested matter Filed in one or more of
the Chapter 11 Cases, including the following actions and any Causes of Actions
specified on Exhibit A: (a) objections to Claims under the Plan; and (b) any
other litigation or Causes of Action, whether legal, equitable or statutory in
nature, arising out of, or in connection with the Debtors' businesses, assets or
operations or otherwise affecting the Debtors, including possible claims against
the following types of parties, both domestic and foreign, for the following
types of claims: (i) Causes of Action against vendors, suppliers of goods or
services, or other parties for overpayments, back charges, duplicate payments,
improper holdbacks, deposits, warranties, guarantees, indemnities or setoff;
(ii) Causes of Action against utilities, vendors, suppliers of services or
goods, or other parties for wrongful or improper termination, suspension of
services or supply of goods, or failure to meet other contractual or regulatory
obligations; (iii) Causes of Action against vendors, suppliers of goods or
services, or other parties for failure to fully perform or to condition
performance on additional requirements under contracts with any one or more of
the Debtors before the assumption or rejection of the subject contracts; (iv)
Causes of Action for any liens, including mechanic's, artisan's, materialmen's,
possessory or statutory liens held by any one or more of the Debtors; (v) Causes
of Action for payments, deposits, holdbacks, reserves or other amounts owed by
any creditor, lessor, utility, supplier, vendor, insurer, surety, factor,
lender, bondholder, lessor or other party; (vi) Causes of Action against any
current or former director, officer, employee or agent of the Debtors arising
out of employment related matters, including Causes of Action regarding
intellectual property, confidentiality obligations, employment contracts, wage
and benefit overpayments, travel, contractual covenants, or employee fraud or
wrongdoing; (vii) Causes of Action against any professional services provider or
any other party arising out of financial reporting; (viii) Causes of Action
arising out of environmental or contaminant exposure matters against landlords,
lessors, environmental consultants, environmental agencies or suppliers of
environmental services or goods; (ix) Causes of Action against insurance
carriers, reinsurance carriers, underwriters or surety bond issuers relating to
coverage, indemnity, contribution, reimbursement or other matters; (x)
counterclaims and defenses relating to notes, bonds or other contract
obligations; (xi) Causes of Action against local, state, federal and foreign
taxing authorities for refunds of overpayments or other payments; (xii) Causes
of Action against attorneys, accountants, consultants or other professional
service providers relating to services rendered; (xiii) contract, tort or
equitable Causes of Action that may exist or subsequently arise; (xiv) any
intracompany or intercompany Causes of Action; (xv) Causes of Action of the
Debtors arising under section 362 of the Bankruptcy Code; (xvi) equitable
subordination Causes of Action arising under section 510 of the Bankruptcy Code
or other applicable law; (xvii) turnover Causes of Action arising under sections
542 or 543 of the Bankruptcy Code; (xviii) Causes of Action arising under
chapter 5 of the Bankruptcy Code, including preferences under section 547 of the
Bankruptcy Code; (xix) Causes of Action against any union arising from, among
other things, state or federal law or under a collective bargaining agreement,
including any wrongful or illegal acts, any wrongful termination, suspension of
performance, defamation or failure to meet other contract or regulatory
obligations; and (xx) Causes of Action for unfair competition, interference with
contract or potential business advantage, conversion, infringement of
intellectual property or other business tort claims. Notwithstanding the
foregoing, the Litigation Trust shall not commence or pursue any Causes of
Action after the Effective Date against any current vendor of the Reorganized
Debtors.
The Reorganized Debtors and the Litigation Trust reserve and shall retain
the foregoing Causes of Action notwithstanding the rejection of any executory
contract or unexpired lease during the Debtors' Chapter 11 Cases. In accordance
with section 1123(b)(3) of the Bankruptcy Code, any claims, rights and Causes of
Action that the respective Debtors may hold against any Entity shall vest in the
Reorganized Debtors and the Litigation Trust, as the case may be. The applicable
Reorganized Debtor or the Litigation Trust, through its authorized agents or
representatives, shall retain and may exclusively enforce any and all such
claims, rights or Causes of Action, and all other similar claims arising
pursuant to applicable state laws, including fraudulent transfer claims, if any,
and all other Causes of Action of a trustee and debtor-in-possession pursuant to
the Bankruptcy Code. The Reorganized Debtors and the Litigation Trust shall have
the exclusive right, authority and discretion to determine
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and to initiate, file, prosecute, enforce, abandon, settle, compromise, release,
withdraw or litigate to judgment any and all such claims, rights and Causes of
Action, and to decline to do any of the foregoing without the consent or
approval of any third party and without any further notice to or action, order
or approval of the Bankruptcy Court.
2. Preservation of All Causes of Action Not Expressly Settled or Released
Unless a claim or Cause of Action against a creditor or other Person is
expressly waived, relinquished, released, compromised or settled in the Plan or
any Final Order, the Debtors expressly reserve such claim or Cause of Action for
later adjudication by the Debtors and, therefore, no preclusion doctrine,
including the doctrines of res judicata, collateral estoppel, issue preclusion,
claim preclusion, waiver, estoppel (judicial, equitable or otherwise) or laches
shall apply to such claims or Causes of Action upon or after the Confirmation or
Consummation of the Plan based on the Disclosure Statement, the Plan or the
Confirmation Order, except where such claims or Causes of Action have been
expressly waived, relinquished, released, compromised, or settled in the Plan or
a Final Order. In addition, the Debtors and the successor entities pursuant to
the Plan expressly reserve the right to pursue or adopt any claims not so
waived, relinquished, released, compromised or settled that are alleged in any
lawsuit in which the Debtors are a defendant or an interested party, against any
person or entity, including the plaintiffs or co-defendants in such lawsuits.
Any Person to whom the Debtors have incurred an obligation (whether on account
of services, purchase, sale of goods or otherwise), or who has received services
from the Debtors or a transfer of money or property of the Debtors, or who has
transacted business with the Debtors, or leased equipment or property from the
Debtors should assume that such obligation, transfer or transaction may be
reviewed by the Reorganized Debtors subsequent to the Effective Date and may, to
the extent not theretofore expressly waived, relinquished, released, compromised
or settled, be the subject of an action after the Effective Date, whether or
not: (a) such Person has Filed a proof of claim against the Debtors in the
Chapter 11 Cases; (b) such Person's proof of claim has been objected to; (c)
such Person's Claim was included in the Debtors' Schedules; or (d) such Person's
scheduled Claim has been objected to by the Debtors or has been identified by
the Debtors as disputed, contingent or unliquidated.
H. CERTAIN EMPLOYEE, RETIREE AND WORKERS' COMPENSATION BENEFITS
1. Employee Benefits
From and after the Effective Date and except as otherwise set forth herein,
the Reorganized Debtors intend to continue (or continue as modified or replaced)
their existing employee benefit policies, plans and agreements identified on
Exhibit L.
2. Retiree Medical Benefits
From and after the Effective Date, the Reorganized Debtors will not be
obligated to pay retiree benefits (as defined in section 1114(a) of the
Bankruptcy Code) or any similar health and medical benefits in accordance with
the terms of the retiree benefit plans or other agreements governing the payment
of such benefits.
3. Pension Plan
From and after the Effective Date, the Reorganized Debtors will not be
obligated to pay any benefits in accordance with the terms of any pension plans
or other agreements governing the payment of such benefits.
4. Workers' Compensation Benefits
From and after the Effective Date, the Reorganized Debtors may continue to
pay workers' compensation benefits in accordance with the Workers' Compensation
Order.
5. Implementation of the KERP and Success Sharing Plan
To the extent the Debtors have not already implemented all or part of the
KERP or the Success Sharing Plan prior to the Effective Date, on the Effective
Date the Debtors are directed to implement the KERP and the
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Success Sharing Plan, and the Debtors or Reorganized Debtors will perform any
and all obligations thereunder, including the payment of performance bonuses,
emergence bonuses and severance amounts contemplated thereby.
I. LIMITATIONS ON AMOUNTS TO BE DISTRIBUTED TO HOLDERS OF ALLOWED INSURED
CLAIMS
Distributions under the Plan to each Holder of an Allowed Insured Claim
will be in accordance with the treatment provided under the Plan for the Class
in which such Allowed Insured Claim is classified, but solely to the extent that
such Allowed Insured Claim is not satisfied from proceeds payable to the Holder
thereof under any pertinent insurance policies and applicable law. Nothing in
this Article IV.I will constitute a waiver of any claims, obligations, suits,
judgments, damages, demands, debts, rights, causes of action or liabilities that
any Entity may hold against any other Entity, including the Debtors' insurance
carriers.
J. CANCELLATION AND SURRENDER OF INSTRUMENTS, SECURITIES AND OTHER
DOCUMENTATION
Except as provided in any contract, instrument or other agreement or
document entered into or delivered in connection with the Plan, on the Effective
Date and concurrently with the applicable distributions made pursuant to Article
III, the DIP Facility, the Prepetition Credit Facility, the Senior Note
Indenture, the Senior Subordinated Note Indenture, the Senior Notes, the Senior
Subordinated Notes and the Equity Interests will be canceled and of no further
force and effect, without any further action on the part of any Debtor or
Reorganized Debtor. The Holders of or parties to such canceled instruments,
securities and other documentation will have no rights arising from or relating
to such instruments, securities and other documentation or the cancellation
thereof, except the rights provided pursuant to the Plan; provided that no
distribution under the Plan will be made to or on behalf of any Holder of an
Allowed Claim evidenced by Senior Notes or Senior Subordinated Notes unless and
until such instruments or securities are received by the Reorganized Debtors to
the extent required in Article VI.I.
K. CREATION OF PROFESSIONAL ESCROW ACCOUNT
On the Effective Date, the Debtors will establish the Professional Escrow
Account and transfer the amounts necessary (based on estimates of Accrued
Professional Fees as of the Effective Date provided by each Professional to the
Debtors immediately before the Effective Date) to ensure the payment of all
Accrued Professional Compensation through the Effective Date. Additionally, on
the Effective Date, all amounts in the Carve Out Account will be transferred to
and deposited in the Professional Escrow Account.
L. RELEASE OF LIENS
Except as otherwise provided in the Plan or in any contract, instrument,
release or other agreement or document entered into or delivered in connection
with the Plan, on the Effective Date and concurrently with the applicable
distributions made pursuant to Article III, all mortgages, deeds of trust, liens
or other security interests against the property of any Estate will be fully
released and discharged, and all of the right, title and interest of any holder
of such mortgages, deeds of trust, liens or other security interests, including
any rights to any collateral thereunder, will revert to the applicable
Reorganized Debtor and its successors and assigns.
M. EFFECTUATING DOCUMENTS; FURTHER TRANSACTIONS; EXEMPTION FROM CERTAIN
TRANSFER TAXES
The Chairman of the Board, Chief Executive Officer, Executive Vice
President, Chief Financial Officer, Senior Vice President and any Vice President
of each Debtor and Reorganized Debtor will be authorized to execute, deliver,
file or record such contracts, instruments, releases and other agreements or
documents and take such actions as may be necessary or appropriate to effectuate
and implement the provisions of the Plan. The Secretary and any Assistant
Secretary of each Debtor and Reorganized Debtor will be authorized to certify or
attest to any of the foregoing actions. Pursuant to section 1146(c) of the
Bankruptcy Code, the following will not be subject to any stamp tax, real estate
transfer tax or similar tax: (1) the issuance, transfer or exchange of New
Common Stock or Warrants; (2) the creation of any mortgage, deed of trust, lien
or other security interest; (3) the making or assignment of any lease or
sublease; (4) the execution and delivery of the New Bank Facility; (5) any
Restructuring Transaction; or (6) the making or delivery of any deed or other
instrument of transfer under, in furtherance of or in
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connection with the Plan, including (a) any merger agreements; (b) agreements of
consolidation, restructuring, disposition, liquidation or dissolution; (c)
deeds; (d) bills of sale; or (e) assignments executed in connection with any
Restructuring Transaction pursuant to the Plan.
ARTICLE V.
TREATMENT OF EXECUTORY CONTRACTS
AND UNEXPIRED LEASES
A. EXECUTORY CONTRACTS AND UNEXPIRED LEASES TO BE ASSUMED OR ASSUMED AND
ASSIGNED
1. Assumption and Assignment Generally
Except as otherwise provided in the Plan or in any contract, instrument,
release or other agreement or document entered into in connection with the Plan,
on the Effective Date, pursuant to section 365 of the Bankruptcy Code, the
applicable Debtor or Debtors will assume or assume and assign to the applicable
Reorganized Debtor, as indicated, each of the other Executory Contracts and
Unexpired Leases listed on Exhibit M; provided that the Debtors reserve the
right, at any time prior to the Effective Date, in consultation with the Agent,
to amend Exhibit M to: (a) delete any Executory Contracts and Unexpired Leases
listed therein, thus providing for its rejection pursuant to Article V.C or (b)
add any Executory Contracts and Unexpired Leases thereto, thus providing for its
assumption or assumption and assignment pursuant to this Article V.A.1. The
Debtors will provide notice of any amendments to Exhibit M to the parties to the
Executory Contracts and Unexpired Leases affected thereby and the Core Group.
Each contract and lease listed on Exhibit M will be assumed only to the extent
that any such contract or lease constitutes an Executory Contract or Unexpired
Lease. Listing a contract or lease on Exhibit M does not constitute an admission
by a Debtor or Reorganized Debtor that such contract or lease (including any
related agreements as described in Article I.A.111 or Article V.A.2) is an
Executory Contract or Unexpired Lease or that a Debtor or Reorganized Debtor has
any liability thereunder.
2. Assumptions and Assignments of Real Property Executory Contracts and
Unexpired Leases
Each Real Property Executory Contract and Unexpired Lease listed on Exhibit
M includes any modifications, amendments, supplements, restatements or other
agreements made directly or indirectly by any agreement, instrument or other
document that in any manner affects such contract or lease, irrespective of
whether such agreement, instrument or other document is listed on Exhibit M,
unless any such modification, amendment, supplement, restatement or other
agreement is rejected pursuant to Article V.C.
3. Assignments Related to the Restructuring Transactions
As of the effective time of an applicable Restructuring Transaction, any
Executory Contract or Unexpired Lease (including any related agreements as
described in Article I.A.111 and Article V.A.2) to be held by any Debtor or
another surviving, resulting or acquiring corporation in an applicable
Restructuring Transaction, will be deemed assigned to the applicable Entity,
pursuant to section 365 of the Bankruptcy Code.
4. Approval of Assumptions and Assignments
The Confirmation Order will constitute an order of the Bankruptcy Court
approving the assumptions and assignments described in this Article V.A,
pursuant to section 365 of the Bankruptcy Code, as of the Effective Date. An
order of the Bankruptcy Court entered on or prior to the Confirmation Date will
specify the procedures for providing notice to each party whose Executory
Contract or Unexpired Lease is being assumed or assumed and assigned pursuant to
the Plan of: (a) the contract or lease being assumed or assumed and assigned;
(b) the Cure Amount Claim, if any, that the applicable Debtor believes it would
be obligated to pay in connection with such assumption; and (c) the procedures
for such party to object to the assumption or assumption and assignment of the
applicable contract or lease or the amount of the proposed Cure Amount Claim.
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B. PAYMENTS RELATED TO THE ASSUMPTION OF EXECUTORY CONTRACTS AND UNEXPIRED
LEASES
To the extent that such Claims constitute monetary defaults, the Cure
Amount Claims associated with each Executory Contract and Unexpired Lease to be
assumed pursuant to the Plan will be satisfied, pursuant to section 365(b)(1) of
the Bankruptcy Code, at the option of the Debtor assuming such contract or lease
or the assignee of such Debtor, if any: (a) by payment of the Cure Amount Claim
in Cash on the Effective Date; or (b) on such other terms as are agreed to by
the parties to such Executory Contract or Unexpired Lease. If there is a dispute
regarding: (a) the amount of any Cure Amount Claim; (b) the ability of the
applicable Reorganized Debtor or any assignee to provide "adequate assurance of
future performance" (within the meaning of section 365 of the Bankruptcy Code)
under the contract or lease to be assumed; or (c) any other matter pertaining to
assumption or assumption and assignment of such contract or lease, the payment
of any Cure Amount Claim required by section 365(b)(1) of the Bankruptcy Code
will be made following the entry of a Final Order resolving the dispute and
approving the assumption. For assumptions of Executory Contracts or Unexpired
Leases between Debtors, the Debtor assuming such contract may cure any monetary
default (a) by treating such amount as either a direct or indirect contribution
to capital or distribution (as appropriate) or (b) through an intercompany
account balance in lieu of payment in Cash.
C. EXECUTORY CONTRACTS AND UNEXPIRED LEASES TO BE REJECTED
On the Effective Date, except for an Executory Contract or Unexpired Lease
that was previously assumed, assumed and assigned or rejected by an order of the
Bankruptcy Court or that is assumed pursuant to Article V.A (including any
related agreements as described in Article I.A.111 or Article V.A.2), each
Executory Contract and Unexpired Lease entered into by a Debtor prior to the
Petition Date that has not previously expired or terminated pursuant to its own
terms will be rejected pursuant to section 365 of the Bankruptcy Code. The
Executory Contracts and Unexpired Leases to be rejected will include the
Executory Contracts and Unexpired Leases listed on Exhibit N. Each contract and
lease listed on Exhibit N will be rejected only to the extent that any such
contract or lease constitutes an Executory Contract or Unexpired Lease. Listing
a contract or lease on Exhibit N does not constitute an admission by a Debtor or
Reorganized Debtor that such contract or lease (including related agreements as
described in Article I.A.111 and Article V.A.2) is an Executory Contract or
Unexpired Lease or that a Debtor or Reorganized Debtor has any liability
thereunder. Any Executory Contract and Unexpired Lease not listed on Exhibit N
and not previously assumed, assumed and assigned or rejected by an order of the
Bankruptcy Court will be rejected irrespective of whether such contract is
listed on Exhibit N. The Confirmation Order will constitute an order of the
Bankruptcy Court approving such rejections pursuant to section 365 of the
Bankruptcy Code as of the Effective Date.
D. BAR DATE FOR REJECTION DAMAGES
Notwithstanding anything in the Bar Date Order to the contrary, if the
rejection of an Executory Contract or Unexpired Lease pursuant to Article V.C
gives rise to a Claim (including any Claims arising from those indemnification
obligations described in Article V.E) by the other party or parties to such
contract or lease, such Claim will be forever barred and will not be enforceable
against the Debtors, the Reorganized Debtors, their respective successors or
their respective properties unless a proof of Claim is Filed and served on the
Reorganized Debtors, pursuant to the procedures specified in the notice of the
entry of the Confirmation Order or an order of the Bankruptcy Court, no later
than 30 days after the Effective Date.
E. SPECIAL EXECUTORY CONTRACT AND UNEXPIRED LEASE ISSUES
1. Obligations to Indemnify Directors, Officers and Employees
(a) The obligations of each Debtor to indemnify any person serving as one
of its directors, officers or employees as of or following the Effective Date by
reason of such person's prior or future service in such a capacity or as a
director, officer or employee of another corporation, partnership or other legal
Entity, to the extent provided in the applicable certificates of incorporation,
by-laws or similar constituent documents, by statutory law or by written
agreement, policies or procedures of or with such Debtor, will be deemed and
treated as executory contracts
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that are assumed by the applicable Debtor and assigned to the applicable
Reorganized Debtor pursuant to the Plan and section 365 of the Bankruptcy Code
as of the Effective Date. Accordingly, such indemnification obligations will
survive and be unaffected by entry of the Confirmation Order, irrespective of
whether such indemnification is owed for an act or event occurring before or
after the Petition Date.
(b) The obligations of each Debtor to indemnify any person who, as of the
Effective Date, was no longer serving as a director, officer or employee of such
Debtor, which indemnity obligation arose by reason of such person's prior
service in any such capacity or as a director, officer or employee of another
corporation, partnership or other legal Entity, whether provided in the
applicable certificates of incorporation, by-laws or similar constituent
documents, by statutory law or by written agreement, policies or procedures of
or with such Debtor, will terminate and be discharged pursuant to section 502(e)
of the Bankruptcy Code or otherwise, as of the Effective Date; provided that to
the extent that such indemnification obligations no longer give rise to
contingent Claims that can be disallowed pursuant to section 502(e) of the
Bankruptcy Code, such indemnification obligations will be deemed and treated as
Executory Contracts that are rejected by the applicable Debtor pursuant to the
Plan and section 365 of the Bankruptcy Code, as of the Effective Date, and any
Claims arising from such indemnification obligations (including any rejection
damage claims) will be subject to the bar date provisions of Article V.D.
2. Reinstatement of Allowed Secondary Liability Claims Arising From or
Related to Executory Contracts or Unexpired Leases Assumed by the Debtors
On the Effective Date, in accordance with Article III.F, any Allowed
Secondary Liability Claim arising from or related to any Debtor's joint or
several liability for the obligations under or with respect to: (a) any
Executory Contract or Unexpired Lease that is being assumed or deemed assumed
pursuant to section 365 of the Bankruptcy Code by another Debtor; (b) any
Executory Contract or Unexpired Lease that is being assumed by and assigned to
another Debtor; or (c) a Reinstated Claim will be Reinstated. Accordingly, such
Allowed Secondary Liability Claims will survive and be unaffected by entry of
the Confirmation Order.
F. CONTRACTS AND LEASES ENTERED INTO AFTER THE PETITION DATE
Contracts and leases entered into after the Petition Date by any Debtor,
including any Executory Contracts and Unexpired Leases assumed by such Debtor,
will be performed by the Debtor or Reorganized Debtor liable thereunder in the
ordinary course of its business. Accordingly, such contracts and leases
(including any assumed Executory Contracts and Unexpired Leases) will survive
and remain unaffected by entry of the Confirmation Order.
G. ASSUMPTION AND ASSIGNMENT OF D&O INSURANCE
As of the Effective Date, the Debtors will be deemed to have assumed and
assigned to the applicable Reorganized Debtors all of the Debtors' directors'
and officers' liability insurance policies pursuant to section 365(a) of the
Bankruptcy Code. Entry of the Confirmation Order will constitute the Bankruptcy
Court's approval of the Reorganized Debtors' foregoing assumption of each of the
directors' and officers' liability insurance policies. Notwithstanding anything
to the contrary contained in the Plan, Confirmation of the Plan will not
discharge, impair or otherwise modify any indemnity obligations assumed by the
foregoing assumption of the directors' and officers' liability insurance
policies, and each such indemnity obligation will be deemed and treated as an
Executory Contract that has been assumed by the Debtors under the Plan for which
no proof of claim need be Filed. The Reorganized Debtors shall maintain
customary directors' and officers' liability insurance coverage for the
protection of persons serving as directors and officers of the Reorganized
Debtors on and after the Effective Date.
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ARTICLE VI.
PROVISIONS GOVERNING DISTRIBUTIONS
A. DISTRIBUTIONS FOR CLAIMS ALLOWED AS OF THE EFFECTIVE DATE
Except as otherwise provided in this Article VI and as to DIP Facility
Claims and Prepetition Facility Claims, distributions of Cash to be made on the
Effective Date to Holders of Claims that are allowed as of the Effective Date
will be deemed made on the Effective Date if made on the Effective Date or as
promptly thereafter as practicable, but in any event no later than: (i) 90 days
after the Effective Date and (ii) 90 days after such later date when the
applicable conditions of Article V.B (regarding cure payments for Executory
Contracts and Unexpired Leases being assumed), Article VI.D.2 (regarding
undeliverable distributions) or Article VI.I (regarding surrender of canceled
instruments and securities) are satisfied. Distributions on account of Claims
that become Allowed Claims after the Effective Date will be made pursuant to
Article VI.G and Article VII.C.
B. METHOD OF DISTRIBUTIONS TO HOLDERS OF CLAIMS
Reorganized C&A Corporation, or such Third Party Disbursing Agents as
Reorganized C&A Corporation may employ in its sole discretion, will make all
distributions of Cash, New Common Stock and other instruments or documents
required under the Plan. Each Disbursing Agent will serve without bond, and any
Disbursing Agent may employ or contract with other Entities to assist in or make
the distributions required by the Plan.
C. COMPENSATION AND REIMBURSEMENT FOR SERVICES RELATED TO DISTRIBUTIONS
Each Third Party Disbursing Agent providing services related to
distributions pursuant to the Plan will receive from Reorganized C&A Corporation
reasonable compensation for such services and reimbursement of reasonable
out-of-pocket expenses incurred in connection with such services without
Bankruptcy Court approval. These payments will be made on terms agreed to with
Reorganized C&A Corporation and will not be deducted from distributions to be
made pursuant to the Plan to Holders of Allowed Claims (including any
distributions of Cash Investment Yield) receiving distributions from a Third
Party Disbursing Agent.
D. DELIVERY OF DISTRIBUTIONS AND UNDELIVERABLE OR UNCLAIMED DISTRIBUTIONS
1. Delivery of Distributions
(a) Generally
Except as provided in Article VI.D.1(b), distributions to Holders of
Allowed Claims will be made by a Disbursing Agent: (i) at the addresses set
forth on the respective proofs of Claim Filed by Holders of such Claims; (ii) at
the addresses set forth in any written certification of address change delivered
to the relevant Disbursing Agent (including pursuant to a letter of transmittal
delivered to the relevant Disbursing Agent) after the date of Filing of any
related proof of Claim; or (iii) at the addresses reflected in the applicable
Debtor's Schedules if no proof of Claim has been Filed and the relevant
Disbursing Agent has not received a written notice of a change of address.
(b) Special Provision for Distribution to Holders of Prepetition
Facility Claims
Distributions of Cash to Holders of Prepetition Facility Claims will be
made on the Effective Date by the Debtors or a Disbursing Agent to the Agent for
the Pro Rata benefit of the Holders of Prepetition Facility Claims.
Distributions of Cash to the Agent shall be effected by wire transfer of
immediately available funds. Distribution of New Common Stock to Holders of
Prepetition Facility Claims will be made on the Effective Date by the Debtors or
a Disbursing Agent to the respective Holder of Prepetition Facility Claims.
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(c) Special Provisions for Distributions to Holders of Senior Note
Claims
Subject to the requirements of Article VI.I, distributions to Holders of
Allowed Senior Note Claims will be made by a Disbursing Agent to the record
holders of the Senior Notes as of the Distribution Record Date as identified on
a record holder register to be provided to the Disbursing Agent by the Senior
Note Indenture Trustee within five Business Days after the Distribution Record
Date. This record holder register will provide the name, address and holdings of
each respective registered Holder of Senior Notes as of the Distribution Record
Date.
2. Undeliverable Distributions Held by Disbursing Agents
(a) Holding and Investment of Undeliverable Distributions
If any distribution to a Holder of an Allowed Claim is returned to a
Disbursing Agent as undeliverable, no further distributions will be made to such
Holder unless and until the applicable Disbursing Agent is notified by written
certification of such Holder's then-current address. Undeliverable distributions
will remain in the possession of the applicable Disbursing Agent pursuant to
this Article VI.D.2(a) until such time as a distribution becomes deliverable.
Undeliverable Cash (including dividends or other distributions on account of
undeliverable New Common Stock) will be held in segregated bank accounts in the
name of the applicable Disbursing Agent for the benefit of the potential
claimants of such funds. Any Disbursing Agent holding undeliverable cash will
invest such Cash in a manner consistent with the Reorganized Debtors' investment
and deposit guidelines. Undeliverable New Common Stock will be held by the
applicable Disbursing Agent for the benefit of the potential claimants of such
securities.
(b) After Distributions Become Deliverable
On each Quarterly Distribution Date, the applicable Disbursing Agents will
make all distributions that become deliverable to Holders of Allowed Claims
during the preceding calendar quarter. Each such distribution will include, to
the extent applicable, a Pro Rata share of the Cash Investment Yield from the
investment of any undeliverable cash from the date that such distribution would
have first been due had it then been deliverable to the date that such
distribution becomes deliverable.
(c) Failure to Claim Undeliverable Distributions
Any Holder of an Allowed Claim that does not assert a claim pursuant to the
Plan for an undeliverable distribution to be made by a Disbursing Agent within
two years after the later of (i) the Effective Date and (ii) the last date on
which a distribution was deliverable will have its claim for such undeliverable
distribution discharged and will be forever barred from asserting any such claim
against the Reorganized Debtors or their respective property. Unclaimed Cash
will become property of Reorganized C&A Corporation, free of any restrictions
thereon, and any such Cash held by a Third Party Disbursing Agent will be
returned to Reorganized C&A Corporation. Unclaimed Warrants will be canceled.
Nothing contained in the Plan or the law will require any Debtor, Reorganized
Debtor or Disbursing Agent to attempt to locate any Holder of an Allowed Claim.
E. DISTRIBUTION RECORD DATE
1. As of the close of business on the Distribution Record Date, the
respective transfer registers for the Senior Notes, as maintained by the Debtors
or the Indenture Trustees, will be closed. The applicable Disbursing Agent will
have no obligation to recognize the transfer or sale of any Senior Note Claim
that occurs after the close of business on the Distribution Record Date, and any
Disbursing Agent will be entitled for all purposes herein to recognize and make
distributions only to those Holders of Senior Note Claims who are Holders of
such Claims as of the close of business on the Distribution Record Date.
2. Except as otherwise provided in a Final Order of the Bankruptcy Court,
the transferees of Claims in Classes 5 and 6 that are transferred pursuant to
Bankruptcy Rule 3001 on or prior to the Distribution Record Date
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will be treated as the Holders of such Claims for all purposes, notwithstanding
that any period provided by Bankruptcy Rule 3001 for objecting to such transfer
has not expired by the Distribution Record Date.
F. MEANS OF CASH PAYMENTS
Except as otherwise specified herein, Cash payments made pursuant to the
Plan will be in U.S. currency by checks drawn on a domestic bank selected by the
applicable Debtor or Reorganized Debtor or, at the option of the applicable
Debtor or Reorganized Debtor, by wire transfer from a domestic bank; provided
that Cash payments to foreign Holders of Allowed Claims may be made, at the
option of the applicable Debtor or Reorganized Debtor, in such funds and by such
means as are necessary or customary in a particular foreign jurisdiction. Cash
payments made pursuant to the Plan on behalf of DIP Facility Claims and
Prepetition Facility Claims will be made to the respective administrative agent
on the Effective Date by wire transfer of immediately available funds.
G. TIMING AND CALCULATION OF AMOUNTS TO BE DISTRIBUTED
1. Allowed Claims
Subject to Article VI.A, on the Effective Date, each Holder of an Allowed
Claim will receive the full amount of the distributions that the Plan provides
for Allowed Claims in the applicable Class. On each Quarterly Distribution Date,
distributions also will be made, pursuant to Article VII.C, to Holders of
Disputed Claims in any such Class that were Allowed during the preceding
calendar quarter. Such quarterly distributions also will be in the full amount
that the Plan provides for Allowed Claims in the applicable Class.
2. De Minimis Distributions
No Disbursing Agent will distribute cash to the Holder of an Allowed Claim
in an Impaired Class 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 will have its claim for such
distribution discharged and will be forever barred from asserting any such claim
against the Reorganized Debtors or their respective property. Any Cash not
distributed pursuant to this Article VI.G.2 will be the property of Reorganized
C&A Corporation, free of any restrictions thereon, and any such Cash held by a
Third Party Disbursing Agent will be returned to Reorganized C&A Corporation.
3. Compliance with Tax Requirements
(a) In connection with the Plan, to the extent applicable, each Disbursing
Agent will comply with all tax withholding and reporting requirements imposed on
it by any governmental unit, and all distributions pursuant to the Plan will be
subject to such withholding and reporting requirements. Each Disbursing Agent
will be authorized to take any actions that may be necessary or appropriate to
comply with such withholding and reporting requirements.
(b) Notwithstanding any other provision of the Plan, each Entity receiving
a distribution of Cash, New Common Stock or Warrants pursuant to the Plan will
have sole and exclusive responsibility for the satisfaction and payment of any
tax obligations imposed on it by any governmental unit on account of such
distribution, including income, withholding and other tax obligations.
H. SETOFFS
Except with respect to claims of a Debtor or Reorganized Debtor released
pursuant to the Plan or any contract, instrument, release or other agreement or
document entered into or delivered in connection with the Plan, the Reorganized
Debtors or, as instructed by the applicable Reorganized Debtor, a Third Party
Disbursing Agent may, pursuant to section 553 of the Bankruptcy Code or
applicable nonbankruptcy law, set off against any Allowed Claim and the
distributions to be made pursuant to the Plan on account of such Claim (before
any distribution is made on account of such Claim) the claims, rights and causes
of action of any nature that the applicable Debtor or
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Reorganized Debtor may hold against the Holder of such Allowed Claim; provided
that neither the failure to effect a setoff nor the allowance of any Claim
hereunder will constitute a waiver or release by the applicable Debtor or
Reorganized Debtor of any claims, rights and Causes of Action that the Debtor or
Reorganized Debtor may possess against such a Claim Holder.
I. SURRENDER OF CANCELED INSTRUMENTS OR SECURITIES
As a condition precedent to receiving any distribution pursuant to the Plan
on account of an Allowed Claim evidenced by Senior Notes or Senior Subordinated
Notes, the Holder of such Claim must tender, as specified in this Article VI.I,
the applicable Senior Notes or Senior Subordinated Notes to the applicable
Reorganized Debtor or Disbursing Agent, together with any letter of transmittal
required by such Reorganized Debtor or Disbursing Agent. Pending such surrender,
any distributions pursuant to the Plan on account of any such Claim will be
treated as an undeliverable distribution pursuant to Article VI.D.2.
1. Tender of Senior Notes
Except as provided in Article VI.I.2 for lost, stolen, mutilated or
destroyed Senior Notes, each Holder of an Allowed Senior Note Claim must tender
the applicable Senior Notes to the Reorganized Debtors in accordance with a
letter of transmittal to be provided to such Holders by the Reorganized Debtors
or Disbursing Agent as promptly as practicable following the Effective Date. The
letter of transmittal will include, among other provisions, customary provisions
with respect to the authority of the Holder of the applicable Senior Notes to
act and the authenticity of any signatures required thereon. All surrendered
Senior Notes will be marked as canceled and delivered to the appropriate
Reorganized Debtor or Disbursing Agent.
2. Lost, Stolen, Mutilated or Destroyed Senior Notes
Any Holder of an Allowed Senior Note Claim with respect to which the
underlying Senior Note has been lost, stolen, mutilated or destroyed must, in
lieu of surrendering such Senior Note, deliver to the applicable Reorganized
Debtor or Disbursing Agent: (a) evidence satisfactory to the Reorganized Debtor
or Disbursing Agent of the loss, theft, mutilation or destruction; and (b) such
security or indemnity as may be required by the Reorganized Debtor to hold the
Reorganized Debtors harmless from any damages, liabilities or costs incurred in
treating such individual as a Holder of a Senior Note. Upon compliance with this
Article VI.I.2 by a Holder of an Allowed Senior Note Claim, such Holder will,
for all purposes under the Plan, be deemed to have surrendered the applicable
Senior Note.
3. Failure to Surrender Senior Notes
Any Holder of an Allowed Senior Note Claim that fails to surrender or is
not deemed to have surrendered the applicable Senior Notes within two years
after the Effective Date will have its right to distribution pursuant to the
Plan on account of such Senior Note Claim discharged and will be forever barred
from asserting any such Claim against the Reorganized Debtors or their
respective property.
ARTICLE VII.
PROCEDURES FOR RESOLVING DISPUTED CLAIMS
A. PROSECUTION OF OBJECTIONS TO CLAIMS
1. Objections to Claims
All objections to Claims must be Filed and served on the Holders of such
Claims by the Claims Objection Bar Date, and (a) if Filed prior to the Effective
Date, such objections will be served on the parties on the then-applicable
service list in the Chapter 11 Cases; and (b) if Filed after the Effective Date,
such objections will be served on the United States trustee. If an objection has
not been Filed to a proof of Claim or a scheduled Claim by
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the Claims Objection Bar Date, the Claim to which the proof of Claim or
scheduled Claim relates will be treated as an Allowed Claim if such Claim has
not been allowed earlier. An objection is deemed to have been timely Filed as to
all Tort Claims, thus making each such Claim a Disputed Claim as of the Claims
Objection Bar Date. Each such Tort Claim will remain a Disputed Claim until it
becomes an Allowed Claim in accordance with Article I.A.5.
2. Authority to Prosecute Objections
After the Effective Date, except as provided in the following paragraph,
only the Debtors or the Reorganized Debtors will have the authority to File,
settle, compromise, withdraw or litigate to judgment objections to Claims. After
the Effective Date, the Reorganized Debtors may settle or compromise any
Disputed Claim without approval of the Bankruptcy Court; provided that (a) the
Reorganized Debtors will promptly File with the Bankruptcy Court a written
notice of any settlement or compromise of a Claim with a Face Amount in excess
of $1,000,000 and (b) the Agent and the United States trustee will be authorized
to contest the proposed settlement or compromise by Filing a written objection
with the Bankruptcy Court and serving such objection on the Reorganized Debtors
within 20 days of the service of the settlement notice. If no such objection is
Filed, the applicable settlement or compromise will be deemed final without
further action of the Bankruptcy Court.
Notwithstanding the foregoing, after the Effective Date, only the
Litigation Trust will have the authority to File, settle, compromise, withdraw
or litigate to judgment objections to Claims in Classes 5, 6 and 8. After the
Effective Date, the Litigation Trust may settle or compromise any Disputed Claim
without approval of the Bankruptcy Court; provided that (a) the Litigation Trust
will promptly File with the Bankruptcy Court a written notice of any settlement
or compromise of a Claim with a Face Amount in excess of $1,000,000 and (b) the
Agent and the United States trustee will be authorized to contest the proposed
settlement or compromise by Filing a written objection with the Bankruptcy Court
and serving such objection on the Reorganized Debtors no later than 20 days
after the service of the settlement notice. If no such objection is Filed, the
applicable settlement or compromise will be deemed final without further action
of the Bankruptcy Court.
B. TREATMENT OF DISPUTED CLAIMS
Notwithstanding any other provisions of the Plan, no payments or
distributions will be made on account of a Disputed Claim until such Claim
becomes an Allowed Claim.
C. DISTRIBUTIONS ON ACCOUNT OF DISPUTED CLAIMS ONCE ALLOWED
On each Quarterly Distribution Date, the applicable Disbursing Agent will
make all distributions on account of any Disputed Claim that has become an
Allowed Claim during the preceding calendar quarter. Such distributions will be
made pursuant to the provisions of the Plan governing the applicable Class.
ARTICLE VIII.
CONDITIONS PRECEDENT TO CONFIRMATION
AND CONSUMMATION OF THE PLAN
A. CONDITIONS TO CONFIRMATION
The following are conditions precedent to Confirmation of this Plan that
must be (i) satisfied or (ii) waived in accordance with Article VIII.C below:
1. The Bankruptcy Court shall have entered the Confirmation Order in form
and substance reasonably acceptable to the Debtors and the Agent on or before
December 15, 2006.
2. The Plan and the Exhibits hereto (as confirmed or approved by the
Confirmation Order) shall be in form and substance satisfactory to the Debtors
and the Agent, in consultation with the Prepetition Lenders.
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3. The Debtors shall have obtained a written commitment for the New Bank
Facility in form and substance satisfactory to the Debtors and the Agent, in
consultation with the Prepetition Lenders.
4. The Debtors and OEMs shall have entered into agreements and/or the
Bankruptcy Court shall have entered orders (which shall not have been vacated or
stayed) approving OEM Bankruptcy Rule 9019 Settlements, providing individually
or in combination for the following matters with respect to each OEM in form and
substance satisfactory to the Debtors and the Agent, in consultation with the
Prepetition Lenders: (a) long term business arrangements that are demonstrably
consistent with the Debtors' projections attached to the Disclosure Statement;
(b) the availability of expedited payment terms on an agreed schedule; (c)
deferral of resourcing; (d) addition of the relevant Reorganized Debtors to bid
lists for new business; (e) if applicable, awards of new business; (f)
resolution of material commercial issues; and (g) where appropriate, mutual
releases.
5. The Debtors shall have obtained certain cost savings at manufacturing
facilities listed on Exhibit O, or the Debtors shall have developed a plant
rationalization strategy for certain of such manufacturing facilities, in each
case acceptable to the Debtors and the Agent, in consultation with the
Prepetition Lenders.
6. The Bankruptcy Court shall have entered an order (which shall not have
been vacated or stayed), which shall provide that the Debtors' pension plan for
United States employees is terminated.
7. The Bankruptcy Court shall have entered an order (which shall not have
been vacated or stayed), which shall provide that the Reorganized Debtors have
no OPEB Liability.
8. The investigations of the Securities and Exchange Commission and the
Department of Justice shall have been resolved in form and substance
satisfactory to the Debtors and the Agent, in consultation with the Prepetition
Lenders.
B. CONDITIONS PRECEDENT TO CONSUMMATION
The following are conditions precedent to Consummation of this Plan that
must be (i) satisfied or (ii) waived in accordance with Article VIII.C below:
1. All conditions to Confirmation of this Plan set forth in Article VIII.A
shall remain satisfied.
2. Each order of the Bankruptcy Court referred to in Article VIII.A shall
have become a Final Order.
3. The (a) drawn amounts under the New Bank Facility (excluding
outstanding, undrawn letters of credit) plus (b) capital leases and less (c)
cash on hand or expected proceeds from non-core asset sales shall be no more
than an amount acceptable to the Debtors and the Agent, in consultation with the
Prepetition Lenders.
4. The Debtors' available liquidity, including cash and unused commitments
under the New Bank Facility (after giving effect to the distributions to be made
on or about the Effective Date pursuant to the Plan), shall be an amount
acceptable to the Debtors and the Agent, in consultation with the Prepetition
Lenders.
5. Since August 31, 2006, there shall have been no material adverse change
with respect to the Debtors' results of operations, the Debtors' projections
attached to the Disclosure Statement or the reasonable likelihood of the Debtors
achieving such projections.
6. None of the OEMs shall then be a debtor in a case pending under the
Bankruptcy Code.
7. The closing and initial funding shall have occurred under the New Bank
Facility and all conditions precedent to the consummation thereof (other than
the occurrence of the Effective Date of the Plan) shall have been waived or
satisfied in accordance with the terms thereof.
8. The New Common Stock shall have been issued in accordance with the Plan.
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9. The employment agreements for parties listed on Exhibit L shall have
been approved by the Reorganized Debtors.
10. The Litigation Trust shall have been funded with the Litigation Trust
Funding Amount, which shall be repaid to the Reorganized Debtors from the first
proceeds received by the Litigation Trust.
11. The Shareholders Agreement shall have been executed in a form
satisfactory to the Debtors and the Agent, in consultation with the Prepetition
Lenders.
12. All other actions, documents and agreements necessary to implement the
Plan as of the Effective Date shall have been delivered and all conditions
precedent thereto shall have been satisfied or waived.
13. The Effective Date shall have occurred no later than February 28, 2007.
C. WAIVER OF CONDITIONS
The Debtors, in the Debtors' discretion and with the consent of the Agent,
in consultation with the Prepetition Lenders, may waive any of the conditions to
Confirmation of the Plan set forth in Article VIII.A or Consummation of the Plan
set forth in Article VIII.B at any time, without notice, without leave or order
of the Bankruptcy Court, and without any formal action other than proceeding to
confirm or consummate the Plan.
D. EFFECT OF NON-OCCURRENCE OF CONDITIONS TO CONSUMMATION
If the Consummation of the Plan does not occur, the Plan will be null and
void in all respects and nothing contained in the Plan or the Disclosure
Statement will: (1) constitute a waiver or release of any Claims by or against,
or any Equity Interests, in any Debtor; (2) prejudice in any manner the rights
of any Debtor or any other party; or (3) constitute an admission,
acknowledgment, offer or undertaking by any Debtor in any respect.
ARTICLE IX.
CRAMDOWN
The Debtors request Confirmation under section 1129(b) of the Bankruptcy
Code with respect to any impaired Class that does not accept the Plan pursuant
to section 1126 of the Bankruptcy Code. 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 X.
SETTLEMENT, RELEASE, INJUNCTION AND RELATED PROVISIONS
A. COMPROMISE AND SETTLEMENT
Notwithstanding anything contained in the Plan to the contrary, the
allowance, classification and treatment of all Allowed Claims and Allowed Equity
Interests and their respective distributions and treatments hereunder take into
account for and conform to the relative priority and rights of the Claims and
Equity Interests in each Class in connection with any contractual, legal and
equitable subordination rights relating thereto whether arising under general
principles of equitable subordination, section 510(b) and (c) of the Bankruptcy
Code, substantive consolidation or otherwise. As of the Effective Date, any and
all such rights described in the preceding sentence are settled, compromised and
released pursuant hereto, including for substantive consolidation purposes. The
Confirmation Order shall constitute the Bankruptcy Court's finding and
determination that the settlements reflected in the Plan, including all issues
pertaining to claims for substantive consolidation (which are settled by the
distributions in the Plan), are (1) in the best interests of the Debtors and
their Estates, (2) fair, equitable and reasonable, (3) made in good faith and
(4) approved by the Bankruptcy Court pursuant to section 363 of the
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Bankruptcy Code and Bankruptcy Rule 9019. In addition, the allowance,
classification and treatment of Allowed Claims take into account any causes of
action, claims or counterclaims, whether under the Bankruptcy Code or otherwise
under applicable law, that may exist: (1) between the Debtors and the Releasing
Parties; and (2) as between the Releasing Parties (to the extent set forth in
the Third Party Release). As of the Effective Date, any and all such causes of
action, claims and counterclaims are settled, compromised and released pursuant
hereto. The Confirmation Order will approve all such releases of contractual,
legal and equitable subordination rights, causes of action, claims and
counterclaims against each such Releasing Party that are satisfied, compromised
and settled pursuant hereto. Nothing in this Article X.A will compromise or
settle in any way whatsoever, any Claims or Causes of Action that the Debtors or
the Reorganized Debtors may have against the Non-Released Parties.
B. RELEASES BY THE DEBTORS
NOTWITHSTANDING ANYTHING CONTAINED IN THE PLAN TO THE CONTRARY, ON THE
EFFECTIVE DATE AND EFFECTIVE AS OF THE EFFECTIVE DATE, FOR THE GOOD AND VALUABLE
CONSIDERATION PROVIDED BY EACH OF THE DEBTOR RELEASEES, INCLUDING: (1) THE
DISCHARGE OF DEBT AND ALL OTHER GOOD AND VALUABLE CONSIDERATION PAID PURSUANT TO
THE PLAN; AND (2) THE SERVICES OF THE DEBTORS' PRESENT OFFICERS AND DIRECTORS IN
FACILITATING THE EXPEDITIOUS IMPLEMENTATION OF THE RESTRUCTURING CONTEMPLATED BY
THE PLAN, EACH OF THE DEBTORS WILL PROVIDE A FULL DISCHARGE AND RELEASE TO THE
DEBTOR RELEASEES (AND EACH SUCH DEBTOR RELEASEE SO RELEASED WILL BE DEEMED
RELEASED AND DISCHARGED BY THE DEBTORS) AND EACH SUCH DEBTOR RELEASEE'S
RESPECTIVE PROPERTIES FROM ANY AND ALL CLAIMS, CAUSES OF ACTION AND ANY OTHER
DEBTS, OBLIGATIONS, RIGHTS, SUITS, DAMAGES, ACTIONS, CAUSES OF ACTION, REMEDIES,
AND LIABILITIES WHATSOEVER, WHETHER KNOWN OR UNKNOWN, FORESEEN OR UNFORESEEN,
SUSPECTED OR UNSUSPECTED, LIQUIDATED OR UNLIQUIDATED, CONTINGENT OR FIXED,
CURRENTLY EXISTING OR HEREAFTER ARISING, IN LAW, EQUITY OR OTHERWISE, WHETHER
FOR TORT, FRAUD, CONTRACT, VIOLATIONS OF FEDERAL OR STATE SECURITIES LAWS, OR
OTHERWISE, BASED IN WHOLE OR IN PART UPON ANY ACT OR OMISSION, TRANSACTION, OR
OTHER OCCURRENCE OR CIRCUMSTANCES EXISTING OR TAKING PLACE PRIOR TO OR ON THE
EFFECTIVE DATE ARISING FROM OR RELATED IN ANY WAY TO THE DEBTORS, INCLUDING
THOSE THAT ANY OF THE DEBTORS OR THE REORGANIZED DEBTORS WOULD HAVE BEEN LEGALLY
ENTITLED TO ASSERT (WHETHER INDIVIDUALLY OR COLLECTIVELY) OR THAT ANY HOLDER OF
A CLAIM OR EQUITY INTEREST OR OTHER PERSON OR ENTITY WOULD HAVE BEEN LEGALLY
ENTITLED TO ASSERT FOR OR ON BEHALF OF ANY OF THE DEBTORS OR ANY OF THEIR
ESTATES AND FURTHER INCLUDING THOSE IN ANY WAY RELATED TO THE CHAPTER 11 CASES
OR THE PLAN; PROVIDED THAT THE FOREGOING DEBTOR RELEASE WILL NOT OPERATE TO
WAIVE OR RELEASE ANY DEBTOR RELEASEE FROM ANY CAUSES OF ACTION SET FORTH ON
EXHIBIT A.
NOTWITHSTANDING ANYTHING CONTAINED IN THE PLAN TO THE CONTRARY, THE DEBTORS
WILL NOT HAVE RELEASED NOR BE DEEMED TO HAVE RELEASED BY OPERATION OF THIS
ARTICLE X.B OR OTHERWISE ANY OF THE CAUSES OF ACTION SET FORTH ON EXHIBIT A OR
ANY CLAIMS OR CAUSES OF ACTION THAT THEY OR THE REORGANIZED DEBTORS MAY HAVE NOW
OR IN THE FUTURE AGAINST THE NON-RELEASED PARTIES.
ENTRY OF THE CONFIRMATION ORDER WILL CONSTITUTE THE BANKRUPTCY COURT'S
APPROVAL, PURSUANT TO SECTION 363 OF THE BANKRUPTCY CODE AND BANKRUPTCY RULE
9019, OF THE DEBTOR RELEASE, WHICH INCLUDES BY REFERENCE EACH OF THE RELATED
PROVISIONS AND DEFINITIONS CONTAINED IN THE PLAN, AND FURTHER, WILL CONSTITUTE
THE BANKRUPTCY COURT'S FINDING THAT THE DEBTOR RELEASE IS: (1) IN EXCHANGE FOR
GOOD AND VALUABLE CONSIDERATION PROVIDED BY THE DEBTOR RELEASEES, REPRESENTING
GOOD FAITH SETTLEMENT AND COMPROMISE OF THE CLAIMS RELEASED BY THE DEBTOR
RELEASE; (2) IN THE BEST INTERESTS OF THE DEBTORS AND ALL HOLDERS OF CLAIMS; (3)
FAIR, EQUITABLE AND REASONABLE; (4) APPROVED AFTER DUE NOTICE AND OPPORTUNITY
FOR HEARING; AND (5) A BAR TO THE DEBTORS OR REORGANIZED DEBTORS ASSERTING ANY
CLAIM RELEASED BY THE DEBTOR RELEASE AGAINST ANY OF THE DEBTOR RELEASEES OR
THEIR PROPERTY.
C. THIRD PARTY RELEASE
AS OF THE EFFECTIVE DATE, IN CONSIDERATION FOR THE OBLIGATIONS OF THE
DEBTORS AND THE REORGANIZED DEBTORS UNDER THE PLAN AND THE CASH, NEW COMMON
STOCK, WARRANTS AND OTHER CONTRACTS, INSTRUMENTS, RELEASES, AGREEMENTS OR
DOCUMENTS TO BE ENTERED INTO OR DELIVERED IN CONNECTION WITH THE PLAN (1) EACH
HOLDER OF A CLAIM THAT VOTES IN FAVOR OF THE PLAN AND (2) TO THE FULLEST EXTENT
PERMISSIBLE UNDER APPLICABLE LAW, AS SUCH LAW MAY BE EXTENDED OR INTERPRETED
SUBSEQUENT TO THE EFFECTIVE DATE, EACH ENTITY THAT HAS HELD, HOLDS OR
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MAY HOLD A CLAIM OR EQUITY INTEREST OR AT ANY TIME WAS A CREDITOR OR STOCKHOLDER
OF ANY OF THE DEBTORS AND THAT DOES NOT VOTE ON THE PLAN OR VOTES AGAINST THE
PLAN WILL BE DEEMED TO FOREVER RELEASE, WAIVE AND DISCHARGE ALL CLAIMS
(INCLUDING DERIVATIVE CLAIMS), OBLIGATIONS, SUITS, JUDGMENTS, DAMAGES, DEMANDS,
DEBTS, RIGHTS, CAUSES OF ACTION AND LIABILITIES (OTHER THAN THE RIGHT TO ENFORCE
THE DEBTORS' OR THE REORGANIZED DEBTORS' OBLIGATIONS UNDER THE PLAN AND THE
CONTRACTS, INSTRUMENTS, RELEASES, AGREEMENTS AND DOCUMENTS DELIVERED
THEREUNDER), WHETHER KNOWN OR UNKNOWN, FORESEEN OR UNFORESEEN, SUSPECTED OR
UNSUSPECTED, LIQUIDATED OR UNLIQUIDATED, CONTINGENT OR FIXED, CURRENTLY EXISTING
OR HEREAFTER ARISING, IN LAW, EQUITY OR OTHERWISE, THAT ARE BASED IN WHOLE OR IN
PART ON ANY ACT, OMISSION, TRANSACTION OR OTHER OCCURRENCE TAKING PLACE ON OR
PRIOR TO THE EFFECTIVE DATE IN ANY WAY RELATING TO A DEBTOR, THE CHAPTER 11
CASES OR THE PLAN THAT SUCH ENTITY HAS, HAD OR MAY HAVE AGAINST ANY DEBTOR
RELEASEE OR RELEASING PARTY (WHICH RELEASE WILL BE IN ADDITION TO THE DISCHARGE
OF CLAIMS AND TERMINATION OF EQUITY INTERESTS PROVIDED HEREIN AND UNDER THE
CONFIRMATION ORDER AND THE BANKRUPTCY CODE).
NOTWITHSTANDING ANYTHING CONTAINED IN THE PLAN TO THE CONTRARY, THE
RELEASING PARTIES WILL NOT HAVE RELEASED NOR DEEMED TO HAVE RELEASED BY
OPERATION OF THIS ARTICLE X.C OR OTHERWISE ANY CLAIMS OR CAUSES OF ACTION THAT
THEY, THE DEBTORS OR THE REORGANIZED DEBTORS MAY HAVE NOW OR IN THE FUTURE
AGAINST THE NON-RELEASED PARTIES.
ENTRY OF THE CONFIRMATION ORDER WILL CONSTITUTE THE BANKRUPTCY COURT'S
APPROVAL PURSUANT TO SECTION 363 OF THE BANKRUPTCY CODE AND BANKRUPTCY RULE 9019
OF THE THIRD PARTY RELEASE, WHICH INCLUDES BY REFERENCE EACH OF THE RELATED
PROVISIONS AND DEFINITIONS CONTAINED IN THE PLAN, AND FURTHER, WILL CONSTITUTE
THE BANKRUPTCY COURT'S FINDING THAT THE THIRD PARTY RELEASE IS: (1) IN EXCHANGE
FOR GOOD AND VALUABLE CONSIDERATION PROVIDED BY THE DEBTOR RELEASEES AND THE
RELEASING PARTIES, REPRESENTING GOOD FAITH SETTLEMENT AND COMPROMISE OF THE
CLAIMS RELEASED BY THE THIRD PARTY RELEASE; (2) IN THE BEST INTERESTS OF THE
DEBTORS AND ALL HOLDERS OF CLAIMS; (3) FAIR, EQUITABLE, AND REASONABLE; (4)
APPROVED AFTER DUE NOTICE AND OPPORTUNITY FOR HEARING; AND (5) A BAR TO ANY OF
THE RELEASING PARTIES ASSERTING ANY CLAIM RELEASED BY THE THIRD PARTY RELEASE
AGAINST ANY OF THE DEBTOR RELEASEES OR THE RELEASING PARTIES OR THEIR RESPECTIVE
PROPERTY.
D. EXCULPATION
NOTWITHSTANDING ANYTHING CONTAINED IN THE PLAN TO THE CONTRARY, THE
EXCULPATED PARTIES WILL NEITHER HAVE NOR INCUR ANY LIABILITY TO ANY PERSON OR
ENTITY FOR ANY PREPETITION OR POSTPETITION ACT TAKEN OR OMITTED TO BE TAKEN IN
CONNECTION WITH OR RELATED TO FORMULATING, NEGOTIATING, PREPARING,
DISSEMINATING, IMPLEMENTING OR ADMINISTERING THE PLAN, THE DISCLOSURE STATEMENT
OR ANY CONTRACT, INSTRUMENT, RELEASE OR OTHER AGREEMENT OR DOCUMENT CREATED OR
ENTERED INTO IN CONNECTION WITH THE PLAN, OR ANY OTHER PREPETITION OR
POSTPETITION ACT TAKEN OR OMITTED TO BE TAKEN IN CONNECTION WITH OR IN
CONTEMPLATION OF THE RESTRUCTURING OF THE DEBTORS OR CONFIRMING OR CONSUMMATING
THE PLAN; PROVIDED THAT THE FOREGOING PROVISIONS OF THIS ARTICLE X.D WILL HAVE
NO EFFECT ON THE LIABILITY OF ANY PERSON OR ENTITY THAT RESULTS FROM ANY SUCH
ACT OR OMISSION THAT IS DETERMINED IN A FINAL ORDER TO HAVE CONSTITUTED GROSS
NEGLIGENCE OR WILLFUL MISCONDUCT; PROVIDED FURTHER THAT EACH EXCULPATED PARTY
WILL BE ENTITLED TO RELY UPON THE ADVICE OF COUNSEL CONCERNING HIS, HER OR ITS
DUTIES PURSUANT TO, OR IN CONNECTION WITH, THE PLAN; PROVIDED STILL FURTHER THAT
THE FOREGOING EXCULPATION WILL NOT APPLY TO ANY ACTS OR OMISSIONS EXPRESSLY SET
FORTH IN AND PRESERVED BY THE PLAN.
NOTWITHSTANDING ANYTHING CONTAINED IN THE PLAN TO THE CONTRARY, THE
EXCULPATED PARTIES WILL NOT INCLUDE THE NON-RELEASED PARTIES, AND THE PLAN WILL
NOT EXCULPATE NOR BE DEEMED TO HAVE EXCULPATED ANY OF THE NON-RELEASED PARTIES
FOR ANY ACTS THEY HAVE TAKEN, WHETHER IN CONTEMPLATION OF THE RESTRUCTURING OF
THE DEBTORS, IN CONFIRMING OR CONSUMMATING THE PLAN, OR OTHERWISE.
E. INDEMNIFICATION
On and from the Effective Date, and effective as of the Effective Date, the
Reorganized Debtors will jointly and severally indemnify and hold harmless, each
of the Releasing Parties, their respective predecessors and successors in
interest and the respective current and former officers, directors, employees,
members, partners, attorneys, financial advisors, accountants, investment
bankers, investment advisors, actuaries, professionals,
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affiliates, agents and representatives of each of them for all costs, expenses,
loss, damage or liability incurred by any such parties arising from or related
in any way to any and all Claims, Causes of Action and any other debts,
obligations, rights, suits, damages, actions, causes of action, remedies, and
liabilities whatsoever, whether known or unknown, foreseen or unforeseen,
existing as of the Effective Date or thereafter arising, in law, at equity,
whether for tort, fraud, contract, violations of federal or state securities
laws, or otherwise, based in whole or in part upon any act or omission,
transaction, or other occurrence or circumstances existing or taking place prior
to or on the Effective Date arising from or related in any way to the Debtors,
including those arising from or related in any way to: (1) any acquisition by
any such party of any indebtedness of the Debtors; (2) any action or omission of
any such party with respect to any such indebtedness of the Debtors (including
any action or omission of any such party with respect to the acquisition,
holding, voting or disposition of any such investment); (3) any action or
omission of any such party in such party's capacity as an officer, director,
employee or agent of, or advisor to any Debtor; (4) any disclosure made or not
made by any person to any current or former Holder of any such indebtedness of
the Debtors; (5) any consideration paid to any such party by any of the Debtors
in respect of any investment by any such party in any indebtedness of the
Debtors or in respect of any services provided by any such party to any Debtor;
and (6) any action taken or not taken in connection with the Chapter 11 Cases or
the Plan. In the event that any such party becomes involved in any action,
proceeding or investigation brought by or against any person, as a result of
matters to which the foregoing indemnity may relate, the Reorganized Debtors
will promptly reimburse any such party for its reasonable legal and other
expenses (including the cost of any investigation and preparation) incurred in
connection therewith as such expenses are incurred and after a request for
indemnification is made in writing, with reasonable documentation in support
thereof; provided that notwithstanding anything herein to the contrary, the Plan
will not indemnify nor be deemed to have indemnified any of the Non-Released
Parties, whether for any matter to which this Article X.E pertains or otherwise.
F. DISCHARGE OF CLAIMS AND TERMINATION OF EQUITY INTERESTS
1. EXCEPT AS PROVIDED IN THE PLAN OR IN THE CONFIRMATION ORDER, THE RIGHTS
AFFORDED UNDER THE PLAN AND THE TREATMENT OF CLAIMS AND EQUITY INTERESTS UNDER
THE PLAN WILL BE IN EXCHANGE FOR AND IN COMPLETE SATISFACTION, DISCHARGE AND
RELEASE OF ALL CLAIMS AND TERMINATION OF ALL EQUITY INTERESTS ARISING ON OR
BEFORE THE EFFECTIVE DATE, INCLUDING ANY INTEREST ACCRUED ON CLAIMS FROM THE
PETITION DATE. EXCEPT AS PROVIDED IN THE PLAN OR IN THE CONFIRMATION ORDER,
CONFIRMATION WILL, AS OF THE EFFECTIVE DATE: (A) DISCHARGE THE DEBTORS FROM ALL
CLAIMS OR OTHER DEBTS THAT AROSE ON OR BEFORE THE EFFECTIVE DATE AND ALL DEBTS
OF THE KIND SPECIFIED IN SECTION 502(G), (H) OR (I) OF THE BANKRUPTCY CODE,
WHETHER OR NOT (I) A PROOF OF CLAIM BASED ON SUCH DEBT IS FILED OR DEEMED FILED
PURSUANT TO SECTION 501 OF THE BANKRUPTCY CODE, (II) A CLAIM BASED ON SUCH DEBT
IS ALLOWED PURSUANT TO SECTION 502 OF THE BANKRUPTCY CODE OR (III) THE HOLDER OF
A CLAIM BASED ON SUCH DEBT HAS ACCEPTED THE PLAN; AND (B) TERMINATE ALL EQUITY
INTERESTS AND OTHER RIGHTS OF EQUITY SECURITY HOLDERS IN THE DEBTORS.
2. IN ACCORDANCE WITH THE FOREGOING, EXCEPT AS PROVIDED IN THE PLAN OR THE
CONFIRMATION ORDER, THE CONFIRMATION ORDER WILL BE A JUDICIAL DETERMINATION, AS
OF THE EFFECTIVE DATE, OF A DISCHARGE OF ALL CLAIMS AND OTHER DEBTS AND
LIABILITIES AGAINST THE DEBTORS AND A TERMINATION OF ALL EQUITY INTERESTS AND
OTHER RIGHTS OF EQUITY SECURITY HOLDERS IN THE DEBTORS, PURSUANT TO SECTIONS 524
AND 1141 OF THE BANKRUPTCY CODE, AND SUCH DISCHARGE WILL VOID ANY JUDGMENT
OBTAINED AGAINST A DEBTOR AT ANY TIME, TO THE EXTENT THAT SUCH JUDGMENT RELATES
TO A DISCHARGED CLAIM OR TERMINATED EQUITY INTEREST.
G. INJUNCTION
1. EXCEPT AS PROVIDED IN THE PLAN OR THE 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 EQUITY 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 EQUITY
INTERESTS OR RIGHTS: (A) COMMENCING OR CONTINUING IN ANY MANNER ANY ACTION OR
OTHER PROCEEDING AGAINST THE DEBTORS, THE REORGANIZED DEBTORS OR THEIR
RESPECTIVE PROPERTY, OTHER THAN TO ENFORCE ANY RIGHT PURSUANT TO THE PLAN TO A
DISTRIBUTION; (B) ENFORCING, ATTACHING, COLLECTING OR RECOVERING IN ANY MANNER
ANY JUDGMENT, AWARD, DECREE OR ORDER AGAINST THE DEBTORS, THE REORGANIZED
DEBTORS OR THEIR RESPECTIVE PROPERTY, OTHER THAN AS PERMITTED PURSUANT TO (A)
ABOVE; (C) CREATING, PERFECTING
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OR ENFORCING ANY LIEN OR ENCUMBRANCE AGAINST THE DEBTORS, THE REORGANIZED
DEBTORS OR THEIR RESPECTIVE PROPERTY; (D) ASSERTING A SETOFF, RIGHT OF
SUBROGATION OR RECOUPMENT OF ANY KIND AGAINST ANY DEBT, LIABILITY OR OBLIGATION
DUE TO THE DEBTORS OR THE REORGANIZED DEBTORS; AND (E) 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.
2. AS OF THE EFFECTIVE DATE, ALL ENTITIES THAT HAVE HELD, CURRENTLY HOLD OR
MAY HOLD ANY CLAIMS, OBLIGATIONS, SUITS, JUDGMENTS, DAMAGES, DEMANDS, DEBTS,
RIGHTS, CAUSES OF ACTION OR LIABILITIES THAT ARE RELEASED PURSUANT TO THE PLAN
ARE PERMANENTLY ENJOINED FROM TAKING ANY OF THE FOLLOWING ACTIONS AGAINST ANY
RELEASED ENTITY OR ITS PROPERTY ON ACCOUNT OF SUCH RELEASED CLAIMS, OBLIGATIONS,
SUITS, JUDGMENTS, DAMAGES, DEMANDS, DEBTS, RIGHTS, CAUSES OF ACTION OR
LIABILITIES: (A) COMMENCING OR CONTINUING IN ANY MANNER ANY ACTION OR OTHER
PROCEEDING; (B) ENFORCING, ATTACHING, COLLECTING OR RECOVERING IN ANY MANNER ANY
JUDGMENT, AWARD, DECREE OR ORDER; (C) CREATING, PERFECTING OR ENFORCING ANY LIEN
OR ENCUMBRANCE; (D) ASSERTING A SETOFF, RIGHT OF SUBROGATION OR RECOUPMENT OF
ANY KIND AGAINST ANY DEBT, LIABILITY OR OBLIGATION DUE TO ANY RELEASED ENTITY;
AND (E) 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.
3. BY ACCEPTING DISTRIBUTIONS PURSUANT TO THE PLAN, EACH HOLDER OF AN
ALLOWED CLAIM RECEIVING DISTRIBUTIONS PURSUANT TO THE PLAN WILL BE DEEMED TO
HAVE SPECIFICALLY CONSENTED TO THE INJUNCTIONS SET FORTH IN THIS ARTICLE X.G.
ARTICLE XI.
RETENTION OF JURISDICTION
Notwithstanding the entry of the Confirmation Order and the occurrence of
the Effective Date, the Bankruptcy Court will retain such jurisdiction over the
Chapter 11 Cases after the Effective Date as is legally permissible, including
jurisdiction to:
1. Allow, disallow, determine, liquidate, classify, estimate or establish
the priority or secured or unsecured status of any Claim or Equity Interest,
including the resolution of any request for payment of any Administrative Claim
and the resolution of any objections to the allowance, priority or
classification of Claims or Equity Interests;
2. Grant or deny any applications for allowance of compensation or
reimbursement of expenses authorized pursuant to the Bankruptcy Code or the Plan
for periods ending on or before the Effective Date;
3. Resolve any matters related to the assumption, assumption and assignment
or rejection of any Executory Contract or Unexpired Lease to which any Debtor is
a party or with respect to which any Debtor or Reorganized Debtor may be liable
and to hear, determine and, if necessary, liquidate any Claims arising
therefrom, including any Cure Amount Claims;
4. Ensure that distributions to Holders of Allowed Claims are accomplished
pursuant to the provisions of the Plan;
5. Decide or resolve any motions, adversary proceedings, contested or
litigated matters and any other matters, and grant or deny any applications
involving the Debtors that may be pending on the Effective Date or brought
thereafter;
6. Enter such orders as may be necessary or appropriate to implement or
consummate the provisions of the Plan and all contracts, instruments, releases
and other agreements or documents entered into or delivered in connection with
the Plan, the Disclosure Statement or the Confirmation Order;
7. Resolve any cases, controversies, suits or disputes that may arise in
connection with the Consummation, interpretation or enforcement of the Plan or
any contract, instrument, release or other agreement or
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document that is entered into or delivered pursuant to the Plan or any Entity's
rights arising from or obligations incurred in connection with the Plan or such
documents;
8. Modify the Plan before or after the Effective Date pursuant to section
1127 of the Bankruptcy Code; modify the Disclosure Statement, the Confirmation
Order or any contract, instrument, release or other agreement or document
entered into or delivered in connection with the Plan, the Disclosure Statement
or the Confirmation Order; or remedy any defect or omission or reconcile any
inconsistency in any Bankruptcy Court order, the Plan, the Disclosure Statement,
the Confirmation Order or any contract, instrument, release or other agreement
or document entered into, delivered or created in connection with the Plan, the
Disclosure Statement or the Confirmation Order, in such manner as may be
necessary or appropriate to consummate the Plan;
9. Issue injunctions, enforce the injunctions contained in the Plan and the
Confirmation Order, enter and implement other orders or take such other actions
as may be necessary or appropriate to restrain interference by any Entity with
Consummation, implementation or enforcement of the Plan or the Confirmation
Order;
10. Enter and implement such orders as are necessary or appropriate if the
Confirmation Order is for any reason or in any respect modified, stayed,
reversed, revoked or vacated or distributions pursuant to the Plan are enjoined
or stayed;
11. Determine any other matters that may arise in connection with or relate
to the Plan, the Disclosure Statement, the Confirmation Order or any contract,
instrument, release or other agreement or document entered into or delivered in
connection with the Plan, the Disclosure Statement or the Confirmation Order;
12. Determine matters concerning state, local and federal taxes in
accordance with sections 346, 505 and 1146 of the Bankruptcy Code, including any
Disputed Claims for taxes; and
13. Enter a Final Decree closing the Chapter 11 Cases.
ARTICLE XII.
MISCELLANEOUS PROVISIONS
A. DISSOLUTION OF THE CREDITORS' COMMITTEE
On the Effective Date, the Creditors Committee will dissolve and the
members of the Creditors Committee will be released and discharged from all
duties and obligations arising from or related to the Chapter 11 Cases. The
Professionals retained by the Creditors Committee and the members thereof will
not be entitled to assert any Fee Claim for any services rendered or expenses
incurred 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 and served
after the Effective Date pursuant to Article III.A.1(g)(ii)(A) and in connection
with any appeal of the Confirmation Order.
B. MODIFICATION OF THE PLAN
Subject to the restrictions on modifications set forth in section 1127 of
the Bankruptcy Code, the Debtors or the Reorganized Debtors, as applicable,
reserve the right to alter, amend or modify the Plan before its substantial
consummation.
C. REVOCATION OF THE PLAN
The Debtors reserve the right to revoke or withdraw the Plan as to any or
all of the Debtors prior to the Confirmation Date. If the Debtors revoke or
withdraw the Plan as to any or all of the Debtors, or if Confirmation as to any
or all of the Debtors does not occur, then, with respect to such Debtors, the
Plan will be null and void in all respects, and nothing contained in the Plan
will: (1) constitute a waiver or release of any Claims by or against, or
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any Equity Interests in any Debtor; (2) prejudice in any manner the rights of
any Debtor or any other party; or (3) constitute an admission, acknowledgment,
offer or undertaking by any Debtor in any respect.
D. SEVERABILITY OF PLAN PROVISIONS
If, prior to Confirmation, any term or provision of the Plan is held by the
Bankruptcy Court to be invalid, void or unenforceable, the Bankruptcy Court will
have the power to alter and interpret such term or provision to make it valid or
enforceable to the maximum extent practicable, consistent with the original
purpose of the term or provision held to be invalid, void or unenforceable, and
such term or provision then will be applicable as altered or interpreted.
Notwithstanding any such holding, alteration or interpretation, the remainder of
the terms and provisions of the Plan will remain in full force and effect and
will in no way be affected, impaired or invalidated by such holding, alteration
or interpretation. The Confirmation Order will constitute a judicial
determination and will provide that each term and provision of the Plan, as it
may have been altered or interpreted in accordance with the foregoing, is valid
and enforceable pursuant to its terms.
E. CONSULTATION
Reference in the Plan to "in consultation with the Prepetition Lenders" or
words of similar import shall mean in consultation with the Steering Committee
and/or other Prepetition Lenders in such manner and to such extent as the Agent,
in its sole discretion, shall determine is appropriate under the circumstances.
In no event shall a reference to such consultation require a vote by any
Prepetition Lenders.
F. SUCCESSORS AND ASSIGNS
The rights, benefits and obligations of any Entity named or referred to in
the Plan will be binding on, and will inure to the benefit of, any heir,
executor, administrator, successor or assign of such Entity.
G. SERVICE OF CERTAIN PLAN EXHIBITS AND DISCLOSURE STATEMENT EXHIBITS
Because the Exhibits to the Plan are voluminous, the Exhibits are not being
served with copies of the Plan and the Disclosure Statement. Any party in
interest may review the Plan Exhibits during normal business hours (9:30 a.m. to
4:30 p.m., local time) in the Document Reviewing Centers.
H. SERVICE OF DOCUMENTS
Any pleading, notice or other document required by the Plan or Confirmation
Order to be served on or delivered to the Debtors, the Reorganized Debtors, the
Creditors Committee or the DIP Lenders must be sent by overnight delivery
service, facsimile transmission, courier service or messenger to:
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THE DEBTORS AND THE REORGANIZED DEBTORS THE CREDITORS COMMITTEE
Richard M. Cieri Michael S. Stamer
Kirkland & Ellis LLP Akin, Gump, Strauss, Hauer & Feld L.L.P.
Citigroup Center 590 Madison Avenue
153 East 53rd Street New York, New York 10022
New York, New York 10022 Telephone: (212) 872-1000
Telephone: (212) 446-4800 Facsimile: (212) 872-1002
Facsimile: (212) 446-4900
-and-
-and-
Thomas B. Radom
David L. Eaton Butzel Long, P.C.
Ray C. Schrock 100 Bloomfield Hills Parkway
Kirkland & Ellis LLP Bloomfield Hills, Michigan 48304
200 East Randolph Drive Telephone: (248) 258-1616
Chicago, Illinois 60601 Facsimile: (248) 258-1439
Telephone: (312) 861-2000
Facsimile: (312) 861-2200
-and-
Joseph M. Fischer
Lawrence A. Lichtman
Carson Fischer, P.L.C.
4111 West Andover Road -- Second Floor
Bloomfield Hills, Michigan 48302
Telephone: (248) 644-4840
Facsimile: (248) 644-1832
THE DIP LENDERS THE PREPETITION LENDERS
Peter V. Pantaleo Harold S. Novikoff
Alice B. Eaton Chetan Gulati
Simpson Thacher & Bartlett LLP Wachtell, Lipton, Rosen & Katz
425 Lexington Avenue 51 West 52nd Street
New York, New York 10017 New York, New York 10019
Telephone: (212) 455-2000 Telephone: (212) 403-1000
Facsimile: (212) 455-2502 Facsimile: (212) 403-2000
THE UNITED STATES TRUSTEE
Stephen E. Spence
U.S. Department of Justice
Office of the United States Trustee
211 West Fort Street, Suite 700
Detroit, Michigan 48226
Telephone: (313) 226-7911
Facsimile: (313) 226-7952
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Respectfully Submitted,
COLLINS & AIKMAN CORPORATION
(for itself and on behalf of its
Debtor subsidiaries)
/s/ John R. Boken
----------------------------------------
Name: John R. Boken
Title: Chief Restructuring Officer
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