Attached files
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8-K - AMERICAN BILTRITE INC. - AMERICAN BILTRITE INC | eps3592.htm |
EX-99.2 - AMERICAN BILTRITE INC | ex99-2.htm |
Exhibit
99.1
UNITED
STATES DISTRICT COURT
DISTRICT
OF NEW JERSEY
IN
RE:
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)
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Case
No. 09-04371 (JAP)
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CONGOLEUM
CORPORATION,
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)
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Chapter
11
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CONGOLEUM
SALES, INC., and
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)
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Case
No. 03-51524
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CONGOLEUM
FISCAL, INC.,
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)
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Debtors.
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)
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Jointly
Administered
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)
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SECOND
AMENDED JOINT PLAN OF REORGANIZATION UNDER CHAPTER 11 OF THE BANKRUPTCY CODE OF
THE DEBTORS, THE OFFICIAL ASBESTOS CLAIMANTS’ COMMITTEE AND THE OFFICIAL
COMMITTEE OF BONDHOLDERS FOR CONGOLEUM CORPORATION, ET AL., DATED AS OF OCTOBER
22, 2009
THIS
PLAN PROVIDES, AMONG OTHER THINGS, FOR THE ISSUANCE OF INJUNCTIONS UNDER SECTION
524(g) OF THE BANKRUPTCY CODE THAT RESULT IN THE CHANNELING OF ALL
ASBESTOS-RELATED LIABILITIES OF CONGOLEUM CORPORATION AND THE PROTECTED PARTIES
SET FORTH HEREIN INTO A TRUST AS MORE FULLY DESCRIBED HEREIN.
PILLSBURY
WINTHROP SHAW PITTMAN LLP
1540
Broadway
New
York, NY 10033-4039
Richard
L. Epling
Robin
L. Spear
Kerry
A. Brennan
Attorneys
for the Debtors
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OKIN,
HOLLANDER & DELUCA, LLP
PARKER
PLAZA
400
Kelby Street
Fort
Lee, NJ 07024
Paul
S. Hollander
James
J. DeLuca
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AKIN
GUMP STRAUSS HAUER & FELD LLP
One
Bryant Park
New
York, NY 10036
Michael
S. Stamer
AKIN
GUMP STRAUSS HAUER & FELD LLP
1333
New Hampshire Avenue, N.W.
Washington
D.C. 20036
James
R. Savin
David
M. Dunn
Joanna
F. Newdeck
Attorneys
for the Official Committee of Bondholders
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TEICH
GROH
691
State Highway 33
Trenton,
NJ 08619
Michael
A. Zindler
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CAPLIN
& DRYSDALE, CHTD.
One
Thomas Circle, N.W.
Washington,
D.C. 20005
Peter
Van N. Lockwood
Ronald
Reinsel
Attorneys
for the Asbestos Claimants’ Committee
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GOLDSTEIN
ISAACSON, PC
100
Morris Avenue, 3rd Floor
Springfield,
NJ 07081
Nancy
Isaacson
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TABLE
OF CONTENTS
Page
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ARTICLE
I DEFINITIONS, RULES OF INTERPRETATION, AND COMPUTATION OF
TIME
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1
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1.1
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Scope
of Definitions
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1
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1.2
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Definitions
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1
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1.3
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Rules
of Interpretation: Application of Definitions, Rules of Construction, and
Computation of Time
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17
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1.4
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Exhibits
and Schedules
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17
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ARTICLE
II CLASSIFICATION OF CLAIMS AND INTERESTS
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17
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2.1
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Generally
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17
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2.2
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Unclassified
Claims
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17
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2.3
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Classes
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17
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ARTICLE
III TREATMENT OF ADMINISTRATIVE CLAIMS AND PRIORITY TAX
CLAIMS
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18
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3.1
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Summary
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18
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3.2
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Administrative
Claims
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18
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3.3
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Priority
Tax Claims
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18
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3.4
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Substantial
Contribution Claims
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18
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ARTICLE
IV TREATMENT OF CLASSIFIED CLAIMS AND INTERESTS
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19
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4.1
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Claims
and Interests
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19
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4.2
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Reservation
of Rights Regarding Claims.
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21
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ARTICLE
V IMPLEMENTATION OF THE PLAN
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21
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5.1
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The
Plan Trust
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21
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5.2
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Certain
Mergers
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23
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5.3
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The
Amended and Restated Certificate and the Amended and Restated
Bylaws
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23
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5.4
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Directors
and Officers of Reorganized Congoleum
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23
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5.5
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Cancellation
of Existing Securities and Agreements of the Debtors/Discharge of the
Indenture Trustee
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24
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5.6
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Exit
Facility
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24
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5.7
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Issuance
of New Securities and Debt Instruments
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24
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5.8
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Registration
Rights Agreement
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24
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5.9
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Stockholders
Agreement
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24
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5.10
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Effectuating
Documents/Further Transactions
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25
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5.11
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Exemption
from Certain Transfer Taxes and Recording Fees
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25
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5.12
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Section
346 Injunction
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25
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5.13
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Corporate
Action
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25
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5.14
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Litigation
Settlement Agreement.
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25
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5.15
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Review
of Claimants’ Counsel Expenses
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27
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i
5.16
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Intercompany
Settlement
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27
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5.17
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Deemed
Consolidation of Debtors For Plan Purposes Only
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28
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ARTICLE
VI PROVISIONS GOVERNING DISTRIBUTIONS WITH RESPECT TO CLAIMS OTHER THAN
PLAN TRUST ASBESTOS CLAIMS
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29
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6.1
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Plan
Distributions
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29
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6.2
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Distributions
of Cash
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29
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6.3
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No
Interest on Claims
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29
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6.4
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Delivery
of Distributions
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29
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6.5
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Distributions
to Holders as of the Record Date
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29
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6.6
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Fractional
Securities; Fractional Dollars
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29
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6.7
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Withholding
of Taxes
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29
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6.8
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Unclaimed
Property.
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30
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ARTICLE
VII RESOLUTION OF DISPUTED CLAIMS
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30
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7.1
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Disallowance
of Improperly Filed Claims
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30
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7.2
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Prosecution
of Objections to Claims
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30
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7.3
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No
Distributions Pending Allowance
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30
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7.4
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Distributions
After Allowance
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31
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ARTICLE
VIII TREATMENT OF EXECUTORY CONTRACTS, UNEXPIRED LEASES AND
SETTLEMENTS
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31
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8.1
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Assumption
of Unexpired Leases and Executory Contracts
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31
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8.2
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Damages
Upon Rejection
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31
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8.3
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Insurance
Agreements
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32
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8.4
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Compensation
and Benefits Programs
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32
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8.5
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Retiree
Benefits
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32
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8.6
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Indemnification
of Directors, Officers and Employees
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32
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ARTICLE
IX ACCEPTANCE OR REJECTION OF THE PLAN
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33
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9.1
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Classes
Entitled to Vote
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33
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9.2
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Acceptance
by Impaired Classes of Claims
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33
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9.3
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Acceptance
by Impaired Class of Interests
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33
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9.4
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Acceptance
Pursuant to Section 524(g) of the Bankruptcy Code
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33
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9.5
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Presumed
Acceptance of Plan
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33
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9.6
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Reservation
of Rights
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33
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ARTICLE
X CONDITIONS TO CONFIRMATION AND EFFECTIVENESS
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33
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10.1
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Conditions
to Confirmation
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33
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10.2
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Conditions
to Effectiveness
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35
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10.3
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Waiver
of Conditions
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36
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ii
ARTICLE
XI INJUNCTIONS, RELEASES AND DISCHARGE
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36
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11.1
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Discharge
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37
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11.2
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Exculpation
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37
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11.3
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Releases
by Holders of Plan Trust Asbestos Claims
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37
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11.4
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Discharge
Injunction
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38
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11.5
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Third
Party Releases
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38
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11.6
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Asbestos
Channeling Injunction
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38
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11.7
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Reservation
of Rights
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39
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11.8
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Rights
Against Non-Debtors under Securities Laws
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39
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11.9
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Rights
Against Debtors Under Environmental Laws
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39
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11.10
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Disallowed
Claims and Disallowed Interests
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39
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11.11
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Anti-Suit
Injunction
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39
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11.12
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Insurance
Neutrality
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40
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11.13
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No
Liability for Solicitation or Participation
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40
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ARTICLE
XII MATTERS INCIDENT TO PLAN CONFIRMATION
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40
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12.1
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Term
of Certain Injunctions and Automatic Stay
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40
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12.2
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No
Successor Liability
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41
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12.3
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Revesting
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41
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12.4
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Vesting
and Enforcement of Causes of Action
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41
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12.5
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GHR/Kenesis
Actions
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41
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ARTICLE
XIII MISCELLANEOUS
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42
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13.1
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Jurisdiction
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42
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13.2
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General
Retention
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42
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13.3
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Specific
Purposes
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42
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13.4
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Payment
of Statutory Fees
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43
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13.5
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Securities
Law Matters
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44
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13.6
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Plan
Supplement
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44
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13.7
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Allocation
of Plan Distributions Between Principal and Interest
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44
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13.8
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The
Asbestos Claimants’ Committee, the Futures Representative and the
Bondholders’ Committee
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44
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13.9
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Revocation
of Plan
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44
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13.10
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Modification
of Plan
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45
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13.11
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Modification
of Payment Terms
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45
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13.12
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Entire
Agreement
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45
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13.13
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Headings
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45
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13.14
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Professional
Fee Claims
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45
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13.15
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Recordable
Order
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46
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iii
13.16
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Preparation
of Estates’ Returns and Resolution of Tax Claims
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46
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13.17
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No
Admission
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46
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13.18
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Consent
to Jurisdiction
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46
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13.19
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Setoffs
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46
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13.20
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Successors
and Assigns
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46
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13.21
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Non-Debtor
Waiver of Rights
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46
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13.22
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Further
Authorizations
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46
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13.23
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No
Bar to Suits
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46
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13.24
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Conflicts
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46
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13.25
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Notices
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47
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13.26
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Duty
to Cooperate
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48
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13.27
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Governing
Law
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48
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iv
INTRODUCTION
The
Plan Proponents hereby propose this plan of reorganization pursuant to the
provisions of Chapter 11 of the United States Bankruptcy
Code. Capitalized terms used herein are defined in Article I
below.
Reference
is made to the Disclosure Statement distributed contemporaneously herewith for a
discussion of the history, businesses, properties and results of operations of
the Debtors and the risks associated with the Plan. All holders of
Claims and Interests entitled to vote on the Plan are encouraged to read the
Plan and Disclosure Statement in their entirety before voting to accept or
reject the Plan. Subject to certain restrictions and requirements set
forth in section 1127 of the Bankruptcy Code, Bankruptcy Rule 3019, and Sections
13.6 and 13.7 of the Plan, the Plan Proponents reserve the right to alter,
amend, modify, revoke or withdraw the Plan prior to its substantial
consummation.
ARTICLE
I
DEFINITIONS,
RULES OF INTERPRETATION, AND COMPUTATION OF TIME
1.1 Scope of
Definitions
All
capitalized terms not otherwise defined herein shall have the meanings ascribed
to them in Section 1.2 of the Plan. Any term used in the Plan that is
not defined herein, but is defined in the Bankruptcy Code or the Bankruptcy
Rules, shall have the meaning ascribed to that term in the Bankruptcy Code or
the Bankruptcy Rules.
1.2 Definitions
“ABI” means American Biltrite
Inc., a Delaware corporation.
“ABI Asbestos Claim” means any
Asbestos Claim that may be asserted by ABI now or in the future other than an
ABI Asbestos Indemnity Claim.
“ABI Asbestos Indemnity Claim”
means any ABI Asbestos Personal Injury Indemnity Claim or ABI Asbestos Property
Damage Indemnity Claim.
“ABI Asbestos Personal Injury
Indemnity Claim” means any asbestos personal injury indemnification Claim
or Demand that may be asserted by ABI against Congoleum at any time under the
Joint Venture Agreement.
“ABI Asbestos Property Damage
Indemnity Claim” means any asbestos related property damage
indemnification Claim or Demand that may be asserted by ABI against Congoleum at
any time under the Joint Venture Agreement.
“ABI Canada License Agreement”
means the License Agreement, effective January 1, 2006, between Congoleum and
American Biltrite (Canada) Ltd., as amended on the Effective Date pursuant to
the Intercompany Settlement.
“ABI Claim” means any Claim or
Demand at any time that may be asserted by ABI at any time against any Debtor,
including without limitation ABI Asbestos Claims, ABI Rejection Damages Claims,
and ABI Asbestos Indemnity Claims.
“ABI Parties” means any
current or former officers, directors and employees of ABI, in their capacity as
such.
“ABI Rejection Damages Claims”
means any and all rejection damages claims that might arise upon the deemed
rejection of the Intercompany Agreements provided for in Section 5.15 of the
Plan.
“Administrative Claim” means
any Claim for the payment of an Administrative Expense. The term
“Administrative Claim” shall not include Asbestos Claims.
“Administrative Expense” means
(a) any cost or expense of administration of the Reorganization Cases under
section 503(b) of the Bankruptcy Code including, but not limited to, (1) any
actual and necessary post-petition cost or expense of preserving the Estates or
operating the Debtors’ assets and businesses, (2) any payment to be made under
the Plan to cure a default on an assumed executory contract or unexpired lease,
(3) any post-petition cost, indebtedness or contractual obligation duly and
validly incurred or assumed by the Debtors in the ordinary course of business,
(4) the outstanding fees and expenses of the Indenture Trustee incurred in
accordance with Section 6.6 of the Indenture relating to the Senior Notes,
including the reasonable fees and expenses of counsel to the Indenture Trustee,
and (5) compensation or reimbursement of expenses of professionals to the extent
allowed by the Bankruptcy Court or the District Court under section 327, 328,
330(a), 331, 503(b) or 1103 of the Bankruptcy Code, including, without
limitation, the Debtors and their professionals, the Futures Representative and
its professionals, the Bondholders’ Committee and its professionals, and the
Asbestos Claimants’ Committee and its professionals and (b) any fee or
charge assessed against the Estates under 28 U.S.C. § 1930.
“Affiliate” shall have the
meaning ascribed to such term in section 101(2) of the Bankruptcy
Code.
“Allowed” means:
(a) With
respect to an Administrative Claim:
(i) such
amount that represents a Claim of a professional person employed under sections
327, 328, 524(g)(4)(B)(i) or 1103 of the Bankruptcy Code who is required to
apply to the Bankruptcy Court or the District Court for the allowance of
compensation and reimbursement of expenses pursuant to section 330 of the
Bankruptcy Code, to the extent such Claim is allowed by a Final Order of the
Bankruptcy Court or the District Court under sections 330 or 331 of the
Bankruptcy Code;
(ii) such
amount that represents the reasonable fees and expenses of the Indenture Trustee
and its counsel that were otherwise incurred in accordance with the terms of the
Indenture and are outstanding on the Effective Date; and
(iii) other
than with respect to a Claim described in clauses (a)(i) and (a)(ii) of this
definition, such amount that represents an actual or necessary expense of
preserving the Estates or operating the business of any of the Debtors, any such
Claim to the extent that it constitutes an Allowed Administrative Claim, or if
such Claim is a Disputed Claim, any such Claim to the extent it is allowed in
whole or in part by a Final Order of the Bankruptcy Court or the District Court
and only to the extent that such allowed portion is deemed, pursuant to a Final
Order of the Bankruptcy Court or the District Court, to constitute a cost or
expense of administration under section 503 or 1114 of the Bankruptcy
Code;
(b) With
respect to an Asbestos Property Damage Claim that was filed prior to the
expiration of the Asbestos Property Damage Claim Bar Date, such amount as is
liquidated and allowed by the Bankruptcy Cour or the District Courtt; and
(c) With
respect to any Claim other than a Plan Trust Asbestos Claim, an Asbestos
Property Damage Claim or an Administrative Claim, such Claim or any portion
thereof (i) that has been allowed in whole or in part by a Final Order of the
Bankruptcy Court or the District Court; (ii) that has been expressly allowed in
the Plan; (iii) as to which, on or before the Effective Date, (A) no Proof of
Claim has been filed with the Bankruptcy Court or the District Court and (B) the
Claim is listed in the Schedules (as they may be amended) and not listed as
disputed, contingent, or unliquidated; or (iv) for which a Proof of Claim in a
liquidated amount has been timely filed with the Bankruptcy Court or District
Court pursuant to the Bankruptcy Code, any Final Order of the Bankruptcy Court
or the District Court, or other applicable bankruptcy law, and as to which
either (A) no objection to its allowance has been filed within the periods of
limitation fixed by the Plan, the Bankruptcy Code, or any order of the
Bankruptcy Court or District Court, or (B) any objection to its allowance has
been settled or withdrawn, or has been denied by a Final Order.
2
“Allowed Amount” means the sum
at which a Claim is Allowed.
“Amended and Restated Bylaws”
means the Amended and Restated Bylaws of Reorganized Congoleum to become
effective on the Effective Date, which shall be substantially in the form
attached hereto as Exhibit “J”. The Amended and Restated Bylaws will
be filed as part of the Plan Supplement.
“Amended and Restated
Certificate” means the Amended and Restated Certificate of Incorporation
of Reorganized Congoleum to become effective on the Effective Date, which shall
be substantially in the form attached hereto as Exhibit “K”. The
Amended and Restated Certificate will be filed as part of the Plan
Supplement.
“Anti-Suit Injunction” means
the injunction described in Section 11.11 of the Plan.
“Asbestos Channeling
Injunction” means the injunction described in Section 11.6 of the
Plan.
“Asbestos Claimant” means the
holder of an Asbestos Personal Injury Claim.
“Asbestos Claimants’
Committee” means the official committee of the representatives of holders
of present unsecured Asbestos Personal Injury Claims, solely in its capacity as
such, which committee as of the date hereof consists of the following
representatives of the holders of present unsecured Asbestos Personal Injury
Claims: Perry Weitz, Esquire, Joseph Rice, Esquire, Steven Kazan,
Esquire, Russell Budd, Esquire and Robert Taylor, II, Esquire.
“Asbestos Claims” means,
collectively, Plan Trust Asbestos Claims and ABI Asbestos Claims.
“Asbestos In-Place Insurance
Coverage” means any insurance coverage, not reduced to Cash settlement
proceeds, available for the payment or reimbursement of liability, indemnity or
defense costs arising from or related to Asbestos Claims or Demands or Plan
Trust Expenses under any Asbestos Insurance Policy or any Asbestos Insurance
Settlement Agreement.
“Asbestos Insurance Action”
means any claim, cause of action, or right of any Debtor against any Asbestos
Insurance Company, including without limitation, the Coverage Litigation,
arising from or related to: (a) any such Asbestos Insurance Company’s failure to
provide or pay under Asbestos In-Place Insurance Coverage, (b) the refusal of
any Asbestos Insurance Company to compromise and settle any Asbestos Claim under
or pursuant to any Asbestos Insurance Policy, or (c) the interpretation or
enforcement of the terms of any Asbestos Insurance Policy with respect to any
Asbestos Claim.
“Asbestos Insurance Action
Recoveries” means (a) Cash derived from and paid pursuant to Asbestos
Insurance Settlement Agreements, (b) the right to receive proceeds of Asbestos
In-Place Insurance Coverage, and (c) the right to receive the proceeds or
benefits of any Asbestos Insurance Action.
“Asbestos Insurance
Assignment” means the transfer, grant and assignment of the Asbestos
Insurance Rights to the Plan Trust described in Article V of the Plan, which
will be effectuated pursuant to the Insurance Assignment Agreement.
“Asbestos Insurance Company”
means any insurance company, insurance broker, guaranty association, liquidator,
rehabilitator or any other Entity with demonstrated or potential liability to
any of the Debtors, the Reorganized Debtors, or the Plan Trust under or related
to an Asbestos Insurance Policy.
“Asbestos Insurance Policy”
means any insurance policy issued to or for the benefit of any of the Debtors in
effect at any time on or before the Effective Date that may afford any of the
Debtors indemnity or insurance coverage, upon which any claim has been or may be
made with respect to any Asbestos Claim.
“Asbestos Insurance Rights”
means any and all rights, titles, privileges, interests, claims, demands or
entitlements to any proceeds, payments, initial or supplemental dividends,
scheme payments, supplemental scheme payments, causes of action and choses in
action related to Asbestos In-Place Insurance Coverage, whether now existing or
hereafter arising, accrued or unaccrued, liquidated or unliquidated, matured or
unmatured, disputed or undisputed, fixed or contingent, including but not
limited to:
3
(i) any
and all rights to pursue or receive payments with respect to Asbestos Claims
under any Asbestos In-Place Insurance Coverage, whether for liability, defense
or otherwise;
(ii) any
and all rights to pursue or receive payments related to any Asbestos In-Place
Insurance Coverage that was entered into by any domestic or foreign insolvent
insurance company, whether in receivership, liquidation, rehabilitation,
run-off, scheme of arrangement or any other form of proceeding;
(iii) any
and all rights to pursue or receive payments related to any Asbestos In-Place
Insurance Coverage from any state insurance guaranty association in connection
with any state insurance guaranty association statute; provided, however, that
Asbestos Insurance Rights shall not include any rights or obligations under any
insurance policy or settlement agreement to which the Debtors are a party
insofar as such insurance policy or settlement agreement relates to Workers’
Compensation Claims; and
(iv) any
and all rights to pursue any Causes of Action against, or to receive payments
related to any Asbestos In-Place Insurance Coverage from, any Asbestos Insurance
Company.
“Asbestos Insurance Settlement
Agreement” means any settlement agreement between or among any of the
Debtors and a Settling Asbestos Insurance Company relating to any Asbestos Claim
or Asbestos Insurance Action.
“Asbestos Insurer Coverage
Defenses” means all defenses at law or in equity that an Asbestos
Insurance Company may have under any Asbestos Insurance Policy or applicable law
to provide Asbestos In-Place Insurance Coverage to or for Asbestos Personal
Injury Claims or Plan Trust Expenses that have been channeled to or assumed by
or incurred by the Plan Trust pursuant to the Plan; provided, however, that in
the event there is a Final Order determining that the Bankruptcy Code authorizes
the Asbestos Insurance Assignment by preempting any terms of any Asbestos
Insurance Policy or provisions of applicable non-bankruptcy law that otherwise
might prohibit the Asbestos Insurance Assignment, “Asbestos Insurer Coverage
Defenses” shall not include any defense that the Asbestos Insurance Assignment
is prohibited by any Asbestos Insurance Policy or applicable non-bankruptcy
law.
“Asbestos Personal Injury
Claim” means (a) any claim, demand or lawsuit (including, but not limited
to, any Claim or Demand), whenever and wherever arising or asserted against any
of the Debtors or their respective present or former officers, directors or
employees in their capacities as such and (b) any debt, obligation or liability
(whether or not reduced to judgment, liquidated, unliquidated, fixed,
contingent, matured, unmatured, disputed, undisputed, legal, equitable, bonded,
secured or unsecured), whenever and wherever arising or asserted, of the Debtors
or their respective present or former officers, directors or employees in their
capacities as such (including, but not limited to, all thereof in the nature of
or sounding in tort, contract, warranty, or any other theory of law, equity or
admiralty); in either case (a) or (b) for, based on or arising by reason of,
directly or indirectly, physical, emotional, bodily or other personal injury,
sickness, disease, death or damages based on the foregoing (including, but not
limited to, any claim or demand for compensatory damages, loss of consortium,
proximate, consequential, general, special or punitive damages, reimbursement,
indemnity, warranty, contribution or subrogation) whether or not diagnosable or
manifested before the Confirmation of the Plan or the close of the
Reorganization Cases, (x) caused or allegedly caused, in whole or part, directly
or indirectly: (i) by exposure to asbestos or asbestos-containing products
manufactured, supplied, distributed, handled, fabricated, stored, sold,
installed, or removed by any Debtor and/or its predecessors; or (ii) by
services, actions, or operations provided, completed or taken by any Debtor
and/or its predecessors in connection with asbestos or asbestos-containing
products or (y) caused or allegedly caused by asbestos for which any Debtor or
its predecessors, are alleged to be liable under any applicable law including,
but not limited to, Indirect Asbestos Claims, provided that Asbestos
Personal Injury Claim shall not include Workers’ Compensation Claims, ABI
Asbestos Claims or Asbestos Property Damage Claims.
“Asbestos Personal Injury Claim
Sub-Account” means that portion of the Plan Trust Assets to be made
available for payment of Plan Trust Asbestos Claims (and related Plan Trust
Expenses) other than Allowed Asbestos Property Damage Claims.
4
“Asbestos Property Damage
Claim” means any Claim or remedy or liability for damage to property
(whether or not such Claim, remedy or liability is reduced to judgment,
liquidated, unliquidated, fixed, contingent, matured, unmatured, disputed,
undisputed, legal, equitable, secured or unsecured, and whether or not the facts
of or legal bases therefor are known or unknown, under any theory of law,
equity, admiralty or otherwise), for which the Debtors are alleged to be or may
be responsible by judgment, order or settlement and that (1) arises from or
relates to any building or other real property in which asbestos was or is, or
asbestos-containing products were or are, alleged to have been installed prior
to the Petition Date; and (2) seeks monetary or other relief for injury to,
destruction, loss of use, diminution in value, and/or asbestos-related repair or
maintenance of such property or for the cost of inspection, encapsulation,
decontamination, containment, removal, or other abatement of the asbestos or
asbestos-containing products installed or allegedly installed in such
property. Asbestos Property Damage Claim also includes any such
Claims, remedies or liabilities as described immediately above that seek (a)
compensatory damages (such as proximate, consequential, general and special
damages) and punitive damages; and/or (b) reimbursement, indemnification,
subrogation and/or contribution, including, without limitation, any Asbestos
Property Damage Contribution Claim. Notwithstanding the foregoing,
Asbestos Property Damage Claim does not include any ABI Asbestos Claim or
Asbestos Personal Injury Claim.
“Asbestos Property Damage Claim Bar
Date” means May 3, 2004, the date designated by the Bankruptcy Court as
the last date for filing Proofs of Claim on account of an Asbestos Property
Damage Claim against the Debtors.
“Asbestos Property Damage Claim
Sub-Account” means that portion of the Plan Trust Assets, consisting
solely of the Asbestos Property Damage Insurance Rights, to be made available
for payment of Allowed Asbestos Property Damage Claims.
“Asbestos Property Damage Contribution
Claim” means any Claim or remedy or liability for damage to property
asserted against the Debtors (whether or not such Claim, remedy or liability is
reduced to judgment, liquidated, unliquidated, fixed, contingent, matured,
unmatured, disputed, undisputed, legal, equitable, secured or unsecured, and
whether or not the facts of or legal bases therefor are known or unknown, under
any theory of law, equity, admiralty or otherwise) that is: (1) held by any
Entity or assignee or transferee thereof which has been, is, or may be a
defendant in an action alleging damage to property that (i) arises from or
relates to any building or other real property in which asbestos was or is, or
asbestos-containing products were or are, alleged to have been installed prior
to the Petition Date, and (ii) seeks monetary or other relief for injury to,
destruction, loss of use, diminution in value, and/or asbestos-related repair or
maintenance of such property or for the cost of inspection, encapsulation,
decontamination, containment, removal, or other abatement of the asbestos or
asbestos-containing products installed or allegedly installed in such property;
and (2) on account of alleged liability by the Debtors for reimbursement,
indemnification, subrogation, or contribution of any portion of any damages such
Entity (or assignee or transferee thereof) has paid or may pay to the plaintiff
in such action. Notwithstanding anything herein to the contrary,
Asbestos Property Damage Contribution Claim does not include any ABI Asbestos
Claims or Asbestos Personal Injury Claims.
“Asbestos Property Damage Insurance
Rights” means all rights arising under all insurance policies, issued to
or for the benefit of any of the Debtors that may afford any of the Debtors
indemnity or insurance coverage solely for Asbestos Property Damage Claims,
which policies are set forth on Exhibit “A” attached hereto. The
foregoing includes, but is not limited to, rights under insurance policies,
rights under settlement agreements made with respect to such insurance policies,
rights against the estates of insolvent insurers that issued such policies or
entered into such settlements, and rights against state insurance guaranty
associations arising out of any such insurance policies issued by insolvent
insurers.
“Avoidance Actions” means,
collectively, the Omnibus Avoidance Action and the Sealed Avoidance
Action.
“Bankruptcy Code” means title
11 of the United States Code, 11 U.S.C. §§ 101, et seq., as in effect on the
Petition Date, together with all amendments and modifications thereto that were
subsequently made applicable to the Reorganization Cases.
“Bankruptcy Court” means the
United States Bankruptcy Court for the District of New Jersey.
5
“Bankruptcy Professional”
means any Person (a) employed pursuant to an order of the Bankruptcy Court or
District Court, as applicable, in accordance with section 327 or 1103 of the
Bankruptcy Code and to be compensated for services pursuant to sections 327,
328, 329, 330 and/or 331 of the Bankruptcy Code, or (b) who applies to the
District Court for compensation and reimbursement of expenses pursuant to
section 503(b) of the Bankruptcy Code.
“Bankruptcy Rules” means the
Federal Rules of Bankruptcy Procedure and the local rules of the Bankruptcy
Court, as in effect on the Petition Date, together with all amendments and
modifications thereto that were subsequently made applicable to the
Reorganization Cases.
“Bar Dates” means the date(s),
if any, designated by the Bankruptcy Court or the District Court as the last
date(s) for filing Proofs of Claim against the Debtors.
“Bondholders’ Committee” means
the official committee bondholders appointed in these Reorganization Cases on
January 27, 2006, as reconstituted from time to time, solely in its capacity as
such.
“Business Day” means any day
other than a Saturday, Sunday or a legal holiday (as such term is defined in
Bankruptcy Rule 9006(a)) on which commercial banks are open for business in New
York, New York.
“Cash” means lawful currency
of the United States of America and its equivalents.
“Causes of Action” means,
without limitation, any and all rights, remedies, claims, causes of action,
liabilities, obligations, suits, debts, sums of money, damages, judgments, and
demands whatsoever, whether known or unknown, in law, equity, or otherwise which
may be brought by or on behalf of the Debtors and/or the Estates, arising under
any provision of the Bankruptcy Code or other applicable law, including the
GHR/Kenesis Actions.
“Century Entities” shall have
the meaning ascribed to such term in the Settlement and Buyback
Agreement.
“Claim” means a claim against
the Debtors (or any of them), whether or not asserted, as defined in section
101(5) of the Bankruptcy Code, and further shall include, but is not limited to,
Asbestos Claims.
“Claimant Agreement” means
that certain Settlement Agreement Between Congoleum and Various Asbestos
Claimants, as amended by the first amendment thereto, entered into by Congoleum
and certain Asbestos Claimants, through their counsel, prior to the Petition
Date, as amended from time to time in accordance with its terms.
“Claimants’ Counsel” means
Joseph F. Rice, Esquire and Perry Weitz, Esquire, collectively, in their
capacity under the Claimant Agreement as the representatives of certain holders
of Asbestos Personal Injury Claims.
“Class” means a category of
Claims or Interests, as classified in Article II of the Plan pursuant to section
1122(a)(1) of the Bankruptcy Code.
“Collateral Trust” means the
Collateral Trust established pursuant to the Collateral Trust Agreement, the
Security Agreement and the Claimant Agreement.
“Collateral Trust Agreement”
means that certain irrevocable trust agreement entered into by Congoleum
and Arthur J. Pergament and Wilmington Trust Company, as amended by the first
amendment thereto, and any further modifications or amendments
thereto.
“Collateral Trustee” means the
Trustee as defined and named in the Collateral Trust Agreement.
“Confirmation” means the
approval of the Plan by the District Court pursuant to section 1129 and other
applicable sections of the Bankruptcy Code.
6
“Confirmation Date” means the
date on which the Confirmation Order is entered on the docket of the District
Court.
“Confirmation Hearing” means
the hearing(s) which will be held before the District Court, as appropriate, at
which the Plan Proponents will seek Confirmation of the Plan.
“Confirmation Order” means the
order of the District Court confirming the Plan pursuant to section 1129 and
other applicable sections of the Bankruptcy Code.
“Congoleum” means Congoleum
Corporation, a Delaware corporation.
“Congoleum Interests” means,
collectively, all equity interests in Congoleum outstanding immediately prior to
the Effective Date including, without limitation, (a) shares of Class A common
stock, par value $0.01 per share, and Class B Common Stock, par value $0.01 per
share, of Congoleum and (b) any options, warrants, conversion rights, rights of
first refusal, or other rights, contractual or otherwise, to acquire or receive
any stock or other equity ownership interests in Congoleum.
“Coverage Action” means that certain
civil action pending in the Superior Court of New Jersey, docket number
MID-L-8908-01, as such action exists after giving effect to the Order entered
therein on October 30, 2003 that dismissed, without prejudice, certain claims
including Environmental Claims, as referenced in such Order.
“Coverage Litigation” means
(i) the Coverage Action; and (ii) any other action which seeks to determine the
extent of insurance coverage for defense of and liability for Asbestos Claims
and related issues.
“Debtor” means each of
Congoleum, Congoleum Sales, Inc. and Congoleum Fiscal, Inc., as
debtors-in-possession in the Reorganization Cases, and “Debtors” means all of them
collectively, and when the context so requires, as post-Confirmation entities
reorganized hereunder.
“Demand” means a demand for
payment against any of the Debtors within the meaning of section 524(g)(5) of
the Bankruptcy Code, but excludes any demand in respect of an Asbestos Property
Damage Claim or an ABI Asbestos Claim.
“Direct Action” means any
cause of action or right to bring a cause of action possessed by an Asbestos
Claimant against an Asbestos Insurance Company on account of such Asbestos
Claimant’s Plan Trust Asbestos Claim, whether arising by contract or under the
laws of any jurisdiction.
“Disallowed” means a Claim or
Interest, as the case may be, that is disallowed by the Plan, a Final Order of
the District Court, or that is disallowed pursuant to the TDP.
“Disbursing Agent” means
Reorganized Congoleum or any Person selected by Reorganized Congoleum to hold
and distribute the consideration to be distributed to the holders of Allowed
Claims (other than Plan Trust Asbestos Claims and Senior Note Claims) under the
Plan.
“Discharge Injunction” means
the injunction described in Section 11.4 of the Plan.
“Disclosure Statement” means
the Disclosure Statement with respect to the Plan, including all exhibits,
appendices, schedules and annexes attached thereto, as submitted by the Plan
Proponents pursuant to section 1125 of the Bankruptcy Code, as such Disclosure
Statement may be further amended, supplemented or modified from time to
time.
“Disclosure Statement Approval
Order” means that certain order of the District Court entered on
__________, 2009, approving the adequacy of the Disclosure Statement pursuant to
section 1125 of the Bankruptcy Code, as such order may be amended, modified or
supplemented thereafter.
7
“Disputed Claim” means any
Claim that has not been allowed by a Final Order as to which (a) a Proof of
Claim has been filed with the Bankruptcy Court or the District Court, as
applicable, and (b) an objection has been or may be timely filed or deemed filed
under applicable law and any such objection has not been (i) withdrawn, (ii)
overruled or denied by a Final Order or (iii) granted by a Final
Order. For purposes of the Plan, a Claim that has not been Allowed by
a Final Order shall be considered a Disputed Claim, whether or not an objection
has been or may be timely filed, if (A) the amount of the Claim specified in the
Proof of Claim exceeds the amount of any corresponding Claim listed
in the Schedules, (B) the classification of the Claim specified in the Proof of
Claim differs from the classification of any corresponding Claim listed in the
Schedules, (C) any corresponding Claim has been listed in the Schedules as
disputed, contingent or unliquidated, (D) no corresponding Claim has been listed
in the Schedules or (E) such Claim is reflected as unliquidated or contingent in
the Proof of Claim filed in respect thereof.
“Distributions” means any
distribution by the Debtors or Reorganized Congoleum to a Record Holder of an
Allowed Claim or Interest.
“Distribution Date” means,
when used with respect to an Allowed Claim (other than a Plan Trust Asbestos
Claim), the date which is as soon as reasonably practicable after the latest
of: (a) the Effective Date; (b) the first Business Day of the next
calendar month following the date on which the Claim becomes an Allowed Claim;
or (c) the first Business Day of the next calendar month upon which the Claim
matures and becomes due and payable according to its own terms, unless the Claim
becomes Allowed within fifteen (15) Business Days before the first Business Day
of the next calendar quarter, in which case the Distribution Date shall be the
first Business Day of the next succeeding calendar quarter.
“District Court” means the
United States District Court for the District of New Jersey, which withdrew the
reference from the Bankruptcy Court pursuant to 28 U.S.C. § 157(d) as of August
17, 2009 and assumed authority over the Reorganization Cases.
“Effective Date” means the
first Business Day after the Confirmation Date immediately following the first
day upon which all of the conditions to the occurrence of the Effective Date
specified in Section 10.2 of the Plan have been satisfied or waived pursuant to
Section 10.3 of the Plan.
“Entity” means any Person,
estate, trust, Governmental Unit or the United States Trustee.
“Environmental Laws” means (a)
the Comprehensive Environmental Response, Compensation and Liability Act of
1980, as amended by the Superfund Amendments and Reauthorization Act of 1986, 42
U.S.C. §§ 9601, et
seq., (b) the Resource Conservation and Recovery Act, as amended by the
Hazardous and Solid Waste Amendment of 1984, 42 U.S.C. §§ 6901, et seq., (c) the Clean Air
Act, 42 U.S.C. §§ 7401, et
seq., (d) the Clean Water Act of 1977, 33 U.S.C. §§ 1251, et seq., (e) the Toxic
Substances Control Act, 15 U.S.C. §§ 2601, et seq., (f) all statutes or
laws issued or promulgated by any Governmental Unit, as they may be amended from
time to time, relating to environmental contamination or pollution, air
pollution, water pollution, noise control and/or the handling, discharge,
existence, release, disposal or recovery of on-site or off-site hazardous, toxic
or dangerous wastes, substances, chemicals or materials, and (g) the ordinances,
rules, regulations, orders, notices of violation, requests, demands and
requirements issued or promulgated by any Governmental Unit in connection with
such statutes or laws.
“ERISA” means the Employee Retirement Income Security Act of 1974,
as amended.
“Estate(s)” means,
individually, the estate of each Debtor in the Reorganization Cases and,
collectively, the estates of all Debtors in the Reorganization Cases, created
pursuant to section 541 of the Bankruptcy Code.
“Existing Credit Agreement”
means the Loan and Security Agreement between Congoleum, as borrower, and
Wachovia, as lender, dated as of December 10, 2001, as amended by Amendment
No. 1 to Loan and Security Agreement, dated September 19, 2002, by and between
Wachovia and Congoleum, and Amendment No. 2 to Loan and Security Agreement,
dated as of February 27, 2003, by and between Wachovia and Congoleum, and as
otherwise amended, restated, modified and/or supplemented as of the Petition
Date and any related documents.
8
“Existing Securities” means,
collectively, the Senior Notes and Interests.
“Existing Subsidiary Guaranty”
means the Limited Guaranty, dated as of February 27, 2003, executed by Congoleum
Fiscal, Inc. and Congoleum Sales, Inc., as amended, restated, modified or
supplemented as of the Petition Date.
“Exit Facility” means the
revolving credit and term loan facility in the aggregate principal amount of
$30,000,000 to be provided by lenders acceptable to the Bondholders’ Committee,
the Debtors and the Asbestos Claimants’ Committee in the form of a revolving
loan and a term loan to Reorganized Congoleum secured by substantially all of
the assets of Reorganized Congoleum and otherwise on terms and conditions, and
pursuant to loan documentation, satisfactory and acceptable to the Bondholders’
Committee, the Debtors and the Asbestos Claimants’ Committee which financing
shall be consistent with the Exit Facility Commitment Letter or Term Sheet
contained in the Plan Supplement.
“Exit Facility Commitment Letter or
Term Sheet” means that certain agreement by and between the Debtors and
Exit Facility Lenders, detailing the commitment of the Exit Facility Lenders to
provide the Exit Facility, a copy of which will be provided in the Plan
Supplement.
“Exit Facility Lenders” means
the lenders who will provide the Exit Facility, with such lenders to be
identified in the Exit Facility Commitment Letter or Term Sheet.
“Final Distribution” means the
Distribution by the Debtors or Reorganized Congoleum that satisfies all Allowed
Claims and Interests to the extent provided in accordance with this
Plan.
“Final Order” means an order
or judgment of the Bankruptcy Court or the District Court, as applicable, or
other court of competent jurisdiction, the implementation, operation or effect
of which has not been stayed and as to which order (or any revision,
modification or amendment thereon) the time to appeal or seek review, rehearing
or writ of certiorari has expired and as to which no appeal or petition for
review, reconsideration, rehearing or certiorari has been taken and is
pending.
“Financing Order” shall have
the meaning ascribed to such term in Section 4.1(b).
“Futures Representative” means
the Person appointed by the Bankruptcy Court to represent the rights and
interests of the future Demands, who shall be R. Scott Williams, Esquire, or
such other individual appointed by the District Court, pursuant to section
524(g) of the Bankruptcy Code.
“General Unsecured Claim”
means any Claim against any Debtor arising prior to the Petition Date
(regardless of whether such Claim is covered by insurance) to the extent that
such Claim is neither secured nor entitled to priority under the Bankruptcy Code
or by a Final Order of the Bankruptcy Court or District Court, as applicable
(other than any Workers’ Compensation Claim, ABI Claim, Senior Note Claim or
Asbestos Claim), including, but not limited to: (a) any Claim arising from the
rejection of an executory contract or unexpired lease under section 365 of the
Bankruptcy Code, and (b) any portion of a Claim to the extent the value of the
holder’s interest in the applicable Estate’s interest in the property securing
such Claim is less than the amount of the Claim, or to the extent that the
amount of the Claim subject to setoff is less than the amount of the Claim, as
determined pursuant to section 506(a) of the Bankruptcy Code; provided, however,
General Unsecured Claims do not include claims against the Debtors under the
Environmental Laws as set forth in Section 11.9 hereof, which survive the
Reorganization Cases.
“GHR/Kenesis Actions” means
any Causes of Action, including for malpractice, against Gilbert LLP (formerly
known as Gilbert Oshinsky LLP, Gilbert Randolph LLP, Gilbert, Heintz &
Randolph LLP) or The Kenesis Group LLC.
“Governmental Unit” means any
domestic, foreign, provincial, federal, state, local or municipal (a)
government, or (b) governmental agency, commission, department, bureau, ministry
or other governmental entity.
9
“Impaired” means, when used
with reference to a Claim or Interest, a Claim or Interest that is impaired
within the meaning of section 1124 of the Bankruptcy Code.
“Indenture” means the
Indenture by and between Congoleum Corporation, as Issuer, and First Union
National Bank, as Trustee, dated as of August 3, 1998, as supplemented and
amended from time to time, relating to the Senior Notes.
“Indenture Trustee” means HSBC
Bank USA, N.A., as successor to First Union National Bank, not individually but
as indenture trustee under the Indenture, and its successors and
assigns.
“Indirect Asbestos Claim”
means (i) any Claim based on a right of contribution, reimbursement,
subrogation, or indemnity (as those terms are defined by the non-bankruptcy law
of any relevant jurisdiction) arising out of or based on an Asbestos Personal
Injury Claim or another Indirect Asbestos Claim, (ii) any other derivative or
indirect Claim of any kind whatsoever, whether in the nature of or sounding in
contract, tort, warranty or any other theory of law, equity or admiralty, by
reason of an Asbestos Personal Injury Claim or another Indirect Asbestos Claim
(including, without limitation, any Claim (A) for attorneys’ fees arising or
incurred in connection with any Asbestos Personal Injury Claim, another Indirect
Direct Asbestos Claim or an Asbestos Insurance Action or (B) arising out of or
based on the rejection of any executory contract related to or involving
asbestos), and (iii) any Claim arising out of Asbestos Insurance Policies or
settlement agreements related thereto, in each case other than ABI Asbestos
Claims or Asbestos Property Damage Claims.
“Injunctions” means the
Discharge Injunction, the Asbestos Channeling Injunction, the Anti-Suit
Injunction and any other injunctions entered by order of the Bankruptcy Court or
the District Court in the Reorganization Cases (including but not limited to any
injunction contained in any Final Order approving any Asbestos Insurance
Settlement Agreement).
“Insurance Assignment
Agreement” means the insurance assignment agreement referenced in Section
5.1(c) of the Plan and substantially in the form attached as Exhibit “B” to the
Plan.
“Intercompany Agreements”
means any and all agreements existing between any of the Debtors and ABI,
including without limitation the (i) Joint Venture Agreement, (ii) Personal
Services Agreement, (iii) stockholders agreement, made as of March 11, 1993, as
amended, (iv) Business Relations Agreement, dated as of March 11, 1993, as
amended, (v) Tax Sharing Agreement, (vi) Closing Agreement, dated as of March
11, 1993, (vii) Plan of Repurchase, dated as of February 1, 1995, and (viii)
annual intercompany personal computing, desktop and voice and data system
support and other information technology services agreements.
“Intercompany Settlement”
shall have the meaning ascribed to such term in Section 5.15.
“Interest” means any equity
interest in the Debtors existing immediately prior to the Effective Date,
including without limitation, the Congoleum Interests and the Subsidiary
Interests.
“IRC” means the Internal
Revenue Code of 1986, as amended.
“Joint Venture Agreement”
means that certain Joint Venture Agreement, dated as of December 16, 1992, by
and among American Biltrite Inc., Resilient Holdings Incorporated, Congoleum,
Hillside Industries Incorporated and Hillside Capital Incorporated, as amended
by the Closing Agreement, dated as of March 11, 1993, by and among the same
parties.
“Lender Secured Claim” means
any Claim of Wachovia arising under or relating to the Existing Credit
Agreement, the Existing Subsidiary Guaranty and any related
documents.
“Lien” means, with respect to
any asset or property, any properly perfected and unavoidable mortgage, lien,
pledge, charge, security interest, encumbrance or other security device of any
kind pertaining to or affecting such asset or property.
10
“Litigation Settlement
Agreement” means the compromise and settlement agreement referenced in
Section 5.14 of the Plan, approved by the Bankruptcy Court by order dated
October 31, 2008.
“Litigation Settlement
Claimant” means a person whose Asbestos Personal Injury Claim was
liquidated pursuant to or was subject to liquidation pursuant to the Claimant
Agreement or a Pre-Petition Settlement Agreement who executed the Litigation
Settlement Agreement.
“New ABI Agreement” means the
agreement to be entered into between Reorganized Congoleum and ABI, which shall
be in form and substance mutually agreeable to the Bondholders’ Committee, the
Asbestos Claimants’ Committee and ABI, and which shall govern the relationship
between ABI and Reorganized Congoleum upon the Effective Date, thereby
superseding any and all Intercompany Agreements and which agreement shall be
substantially in the form attached as Exhibit “I” to the Plan. The
New ABI Agreement will be filed with the Plan Supplement.
“New Common Stock” means the
newly issued shares of Congoleum common stock, par value $.01 per share, to be
issued by Reorganized Congoleum as of the Effective Date pursuant to the terms
of the Plan.
“New Indenture” means the
Indenture by and between Congoleum Corporation, as Issuer, and HSBC Bank USA,
N.A., as trustee, dated as of the Effective Date relating to the New Senior
Notes and which shall be substantially in the form attached as Exhibit “D” to
the Plan. The New Indenture will be filed as part of the Plan
Supplement.
“New Senior Notes” means the
Senior Secured Notes to be issued to holders of Allowed Senior Note Claims by
Reorganized Congoleum in the initial aggregate principal amount of $33 million
on the Effective Date and which shall be due and payable December 31, 2017 .
There shall be no interest accruing or due and payable on the principal amount
of the New Senior Notes for the first six months after the Effective Date.
Thereafter, interest shall accrue on the principal amount of the New Senior
Notes at the rate of 9% per annum and be payable semi-annually in cash. At the
sole option of Reorganized Congoleum, however, beginning with the
interest payment due 12 months after the Effective Date to and including the
interest payment due 30 months after the Effective Date (the “PIK Period”),
interest may be paid in kind by the issuance of additional New Senior Notes in
the aggregate amount of the interest then due and payable on each such payment
date within the PIK Period. The option shall be separately exercisable with
respect to each of the four semi-annual periods within the PIK Period. If
Reorganized Congoleum elects to pay interest in kind during any semi-annual
period within the PIK Period, interest shall accrue on all the New Senior Notes
outstanding at the beginning of such semi-annual period, including any New
Senior Notes issued previously in connection with an interest payment in kind,
at the rate of 11% per annum; if the Company does not elect the PIK payment
option on any interest payment date within the PIK period, interest for such
semi-annual period shall be calculated at the rate of 9% per annum on all the
New Senior Notes outstanding at the beginning of such semi-annual period,
including any New Senior Notes issued previously in connection with an interest
payment in kind. After the expiration of the PIK Period, the option to pay
interest in kind shall expire, and be of no further force and effect, and all
interest shall accrue at 9% per annum, payable semi-annually in
cash.
The New Indenture also shall contain a
provision for the annual issuance of additional New Senior Notes ("Additional
Notes"), with the amount of Additional Notes to be issued being determined as of
the end of Reorganized Congoleum’s fiscal year ending December 31, 2011 , and on
an annual basis at the end of each of the succeeding five years (each such date,
a "Determination Date"), according to the following procedure. As soon as
practicable after each Determination Date, the average EBITDA for the two-year
period ending on the Determination Date shall be calculated. An assumed net debt
capacity ("Net Debt Capacity") shall then be determined as of each such
Determination Date by multiplying this two-year average annual EBITDA by four.
Additional Notes shall be issuable to holders of New Senior Notes with respect
to a Determination Date to the extent that the Net Debt Capacity as of such
Determination Date, plus any cash amount on Congoleum's balance sheet as of such
Determination Date, exceeds the sum of (i) the amount of the balance of
Reorganized Congoleum's working capital loan (determined as the daily average of
such loan for the year ending on such Determination Date ); (ii) the $33 million
of New Senior Notes to be issued on the Effective Date; (iii) the amount of
Additional Notes issued with respect to all prior Determination Dates; and (iv)
the amount of other interest-bearing debt outstanding as of such Determination
Date. The calculation of the amount of Additional Notes to be issued shall take
place within three months after each Determination Date, and the issuance of
such Additional Notes shall be deemed to have occurred as of the first day of
the fiscal year following the Determination Date. In no event shall the
cumulative amount of Additional Notes issued under the procedures set forth in
this paragraph exceed $37 million.
11
The
New Senior Notes will be secured by liens or security interests in all the
assets of Reorganized Congoleum, which liens or security interests shall be
subordinate in priority only to the liens or security interests granted by
Reorganized Congoleum under the Exit Facility but shall not otherwise be
subordinated to the Exit Facility, and which New Senior Notes liens or security
interests shall be pari passu
with no other security interests or liens. The New Senior
Notes shall be in the form set forth in the New Indenture.
“Non-Asbestos Stock
Distribution” means 49.9% of the New Common Stock.
“Non-Compensatory Damages”
means any and all damages awarded by a court of competent jurisdiction that are
penal in nature, including, without limitation, punitive, punitory, exemplary,
vindictive, imaginary or presumptive damages.
“Omnibus Avoidance Action”
means that certain Adversary Proceeding No. 05-06245 (KCF), which was
filed in the Bankruptcy Court on behalf of the Debtors on December 3, 2005, as
amended.
“Other Secured Claim” means a
Secured Claim arising prior to the Petition Date against any of the Debtors
other than a Lender Secured Claim.
“PBGC” shall have the meaning
ascribed to such term in Section 8.4(b).
“Pension Plans” means,
collectively, that certain Congoleum Corporation Hourly Retirement Plan, that
certain Congoleum Corporation Retirement Plan for Salaried Employees and that
certain Congoleum Corporation Plant 2 Retirement Plan, in each case as the same
may be amended from time to time.
“Person” means any person,
individual, partnership, corporation, limited liability company, joint venture
company, association or other entity or being of whatever kind, whether or not
operating or existing for profit, including, but not limited to, any “person” as
such term is defined in section 101(41) of the Bankruptcy Code, but excluding
any Governmental Unit.
“Personal Services Agreement”
means that certain Personal Services Agreement dated as of March 11, 1993,
by and between ABI and Congoleum and all amendments thereto.
“Petition Date” means December
31, 2003, the date on which the Debtors filed their petitions for relief
commencing the Reorganization Cases.
“Plan” means this Amended
Joint Plan of Reorganization under Chapter 11 of the Bankruptcy Code and all
exhibits and schedules annexed hereto or referenced herein, and any amendments
or modifications thereto made in accordance with the Bankruptcy
Code.
“Plan Documents” means the
Plan, the Plan Trust Agreement, the TDP, the Exit Facility, the New Senior
Notes, the New Indenture, the Registration Rights Agreement, the Amended and
Restated Certificate, the Amended and Restated Bylaws, the Stockholders
Agreement, the New ABI Agreement, and the Insurance Assignment Agreement, and
all exhibits and schedules to any of the foregoing, including any included in a
Plan Supplement.
“Plan Proponents” means,
collectively, the Debtors, the Asbestos Claimants’ Committee and the
Bondholders’ Committee.
“Plan Supplement” means the
compilation of substantially final forms of documents, including, without
limitation, a schedule identifying rejected contracts, the Exit Facility
Commitment Letter or Term Sheet, the New ABI Agreement, Registration Rights
Agreement, the New Indenture, the Stockholders Agreement, the Amended and
Restated Bylaws and the Amended and Restated Certificate and schedules
identifying the initial officers and the initial board of directors of
Reorganized Congoleum, which the Plan Proponents shall file with the District
Court no later than ten (10) Business Days
prior to the last date for filing objections to Confirmation of the
Plan. Notwithstanding the foregoing, the Plan Proponents may amend
the Plan Supplement and any attachments thereto through and including the
Confirmation Date.
12
“Plan Trust” means the trust
to be established pursuant to the Plan Trust Agreement and Section 5.1(a) of the
Plan as of any date between (and inclusive of) the Confirmation Date and the
Effective Date.
“Plan Trust Agreement” means
that certain Congoleum Plan Trust Agreement, effective as of any date between
(and inclusive of) the Confirmation Date and the Effective Date, substantially
in the form attached hereto as Exhibit “E,” as it may be modified from time to
time in accordance with the terms thereof.
“Plan Trust Asbestos Claims”
means, collectively, Asbestos Personal Injury Claims, future Demands and
Allowed Asbestos
Property Damage Claims.
“Plan Trust Assets” means the
assets to be delivered to the Plan Trust pursuant to the Plan Documents and
shall include, without limitation, the following assets and any income and
profits thereon, and proceeds derived therefrom: (a) the Plan Trust
Common Stock; (b) the Asbestos Insurance Rights; (c) all rights of the Debtors
under, and all proceeds of, the Asbestos Insurance Settlement Agreements (except for those
certain proceeds of the Asbestos Insurance Settlement Agreement with Liberty
Mutual Insurance Company, which are payable to the Debtors as provided in
Section 5.1(q) of the Plan); (d) the proceeds of the
Asbestos In-Place Insurance Coverage; (e) the proceeds of the
Asbestos Insurance Actions; (f) the proceeds of the
Asbestos Insurance Action Recoveries; (g) the rights granted
to the Plan Trust pursuant to the Insurance Assignment Agreement; and (h) the Asbestos
Property Damage Insurance Rights.
“Plan Trust Bylaws” means the
bylaws as approved by the Plan Trustee, the Trust Advisory Committee and the
Futures Representative, effective as of the effective date of the Plan Trust, as
may be modified from time to time with the consent and approval of the Plan
Trustee, the Trust Advisory Committee and the Futures
Representative.
“Plan Trust Common Stock”
means a number of shares of common stock of Reorganized Congoleum
constituting 50.1% of the New Common Stock.
“Plan Trust Documents” means
the Plan Trust Agreement, the Plan Trust Bylaws, the TDP and the other
agreements, instruments and documents governing the establishment,
administration and operation of the Plan Trust, as amended or modified from time
to time in accordance with the Plan and such documents.
“Plan Trust Expenses” means
any liabilities, costs, taxes or expenses of, or imposed upon or in respect of,
the Plan Trust or, on and after the Effective Date, the Plan Trust Assets
(except for payments to holders of Asbestos Claims on account of such Asbestos
Claims).
“Plan Trustee” means the
Person appointed pursuant to Article V of the Plan and the Plan Trust Agreement
for the purpose of acting as Trustee of the Plan Trust in accordance with the
terms and conditions contained in the Plan, the Plan Trust Agreement and the
Confirmation Order.
“Post-Petition Interest” means
interest accruing on and after the Petition Date on a Claim.
“Pre-Petition Settled
Claimant” means a person whose Asbestos Personal Injury Claim was
liquidated pursuant to or was subject to liquidation pursuant to the Claimant
Agreement or a Pre-Petition Settlement Agreement, as the case may be (other than
such persons whose claims have been previously expunged by order of the
Bankruptcy Court, it being understood that defendants in the Omnibus Avoidance
Action against whom a default has been granted shall not be considered to have
had their claims expunged).
“Pre-Petition Settlement
Agreement” means a settlement agreement, other than the Claimant
Agreement, executed prior to the Petition Date to resolve an Asbestos Personal
Injury Claim under which some or all of the consideration due has yet to be
paid.
“Priority Claim” means any
Claim (other than an Administrative Claim or a Priority Tax Claim) to the extent
such Claim is entitled to a priority in payment under section 507(a) of the
Bankruptcy Code.
13
“Priority Tax Claim” means any
Claim to the extent that such Claim is entitled to a priority in payment under
section 507(a)(8) of the Bankruptcy Code.
“Professional Fee Claim” means
a Claim of a professional retained in the Reorganization Cases pursuant to
sections 327, 328, and 1103 of the Bankruptcy Code, or otherwise, including such
Claims of the Futures Representative and its professionals, for compensation or
reimbursement of costs and expenses relating to services rendered on and after
the Petition Date and prior to and including the Effective Date.
“Proof of Claim” means any
proof of claim filed with the Bankruptcy Court or District Court or their duly
appointed claims agent with respect to the Debtors pursuant to Bankruptcy Rule
3001 or 3002.
“Pro Rata” means with
reference to any distribution on account of any Claim in any Class, the
proportion that the amount of such Claim bears to the aggregate amount of all
Claims (including Disputed Claims but excluding Disallowed Claims) in such
Class.
“Protected Party” means any of
the following parties:
(a) the
Debtors and the Reorganized Debtors;
(b) any
Entity that, pursuant to the Plan or after the Confirmation Date, becomes a
direct or indirect transferee of, or successor to, the Plan Trust or the
Debtors;
(c) the
Persons designated on Exhibit “F” (as such Exhibit may be amended on or before
the Confirmation Date) as current distributors of the product lines currently
manufactured, sold or otherwise produced by Congoleum; or
(d) each
Settling Asbestos Insurance Company.
“Record Date” means the date
established in the Disclosure Statement Approval Order or any other Final Order
of the District Court for determining the identity of holders of Claims entitled
to vote to accept or reject this Plan and/or receive Distributions under this
Plan. If no Record Date is established in the Disclosure Statement
Approval Order or any other Final Order of the District Court, then the Record
Date shall be the date of the entry of the Disclosure Statement Approval
Order.
“Record Holder” means the
holder of a Claim as of the Record Date.
“Registration Rights
Agreement” means the agreement described in Section 5.8 of the
Plan.
“Reinstated” means (a) leaving
unaltered the legal, equitable, and contractual rights to which a Claim or
Interest entitles the holder of such Claim or Interest so as to leave such Claim
or Interest Unimpaired or (b) notwithstanding any contractual provision or
applicable law that entitles the holder of such Claim or Interest to demand or
receive accelerated payment of such Claim or Interest after the occurrence of a
default, (i) curing any such default that occurred before or after the Petition
Date, other than a default of a kind specified in section 365(b)(2) of the
Bankruptcy Code; (ii) reinstating the maturity of such Claim or Interest as such
maturity existed before such default; and (iii) compensating the holder of such
Claim or Interest for any damages incurred as a result of any legal, equitable
or contractual rights to which such Claim or Interest entitles the holder of
such Claim or Interest.
“Reorganization Cases” means
the cases filed by the Debtors under Chapter 11 of the Bankruptcy
Code.
“Reorganized Congoleum” means
reorganized Congoleum (or any successor thereto) on and after the Effective
Date.
14
“Reorganized Debtors” means
the reorganized Debtors (or any successor thereto) on and after the Effective
Date.
“Representatives” means, with
respect to any Entity, the present and former directors, officers, members,
employees, trustees, accountants (including independent certified public
accountants), advisors, attorneys, consultants, experts or other agents of that
Entity, or any other professionals of that Entity, in each case in their
capacity as such; provided,
however, that in no event shall “Representatives” mean Gilbert LLP
(formerly known as Gilbert Oshinsky, LLP, Gilbert Randolph LLP and Gilbert
Heintz & Randolph LLP) or Kenesis Group, LLC.
“Schedules” means the
schedules, statements and lists filed by the Debtors with the Bankruptcy Court
or District Court pursuant to Bankruptcy Rule 1007, if such documents are filed,
as they have been and may be amended or supplemented from time to
time.
“Sealed Avoidance Action” means
that certain Adversary Proceeding No. 05-06461 (KCF), as it may be amended,
which was filed under seal in the Bankruptcy Court on behalf of the Debtors on
December 29, 2005, against (a) Arthur J. Pergament, in his capacity as
Collateral Trustee; (b) Joseph F. Rice and the law firm of Motley Rice LLC; (c)
Perry Weitz and the law firm of Weitz & Luxenberg, P.C.; and (d) certain
holders of pre-petition Asbestos Personal Injury Claims.
“Secured Claim” means any
Claim (other than an Asbestos Claim) that is (a) secured in whole or part, as of
the Petition Date, by a Lien which is valid, perfected and enforceable under
applicable law and is not subject to avoidance under the Bankruptcy Code or
applicable non-bankruptcy law, or (b) subject to setoff under section 553 of the
Bankruptcy Code, but, with respect to both (a) and (b) above, only to the extent
of the value, net of any senior lien, of the Estates’ interest in the assets or
property securing any such Claim or the amount subject to setoff, as the case
may be.
“Security Agreement” means
that certain Superseding Security Agreement entered into by Congoleum and the
Collateral Trustee, dated June 11, 2003, as the same may be amended from time to
time.
“Senior Note Claim” means any
Claim of a holder of Senior Notes based upon the Senior Notes.
“Senior Note Distribution”
means the Non-Asbestos Stock Distribution and $33 million initial principal
amount of the New Senior Notes.
“Senior Notes” means the
8.625% Senior Notes Due 2008 in the original principal amount of $100 million
issued by Congoleum and outstanding as of the Petition Date.
“Settlement and Buyback
Agreement” means that certain Settlement and Buyback Agreement dated as
of August 17, 2006 among the Debtors, Century Indemnity Company and the other
parties thereto.
“Settling Asbestos Insurance
Company” means any Asbestos Insurance Company that has, before the
conclusion of the Confirmation Hearing before the District Court, entered into
an Asbestos Insurance Settlement Agreement that is sufficiently comprehensive
and otherwise on terms appropriate in the determination of each of the
Bondholders’ Committee, the Debtors and the Asbestos Claimants’ Committee to
warrant treatment under section 524(g) of the Bankruptcy Code (including, with
respect to any Asbestos Insurance Settlement Agreement that is conditioned in
whole or in part on a plan of reorganization proposed by the Debtors, an
agreement from such Settling Asbestos Insurance Company in writing, in a form
reasonably acceptable to the Bondholders’ Committee, the Debtors and the
Asbestos Claimants’ Committee that all conditions to its performance under
its Asbestos Insurance Settlement Agreement based on or related to a plan
proposed by the Debtors is satisfied in full by this Plan), which determination
by the Bondholders’ Committee, the Debtors and the Asbestos Claimants’ Committee
will be indicated by the inclusion of such Asbestos Insurance Company on a
schedule of Settling Asbestos Insurance Companies filed by the Plan Proponents
as Exhibit “H” to the Plan with the District Court before the conclusion of the
Confirmation Hearing and approved by such District Court.
15
“Stockholders Agreement” means
that certain stockholders agreement described in Section 5.9 of this Plan, which
shall be substantially in the form attached hereto as Exhibit
“L.” The Stockholders Agreement will be filed as part of the Plan
Supplement.
“Subsidiary Debtors” means,
collectively, Congoleum Sales, Inc. and Congoleum Fiscal, Inc.
“Subsidiary Interests” means,
collectively, the issued and outstanding shares of stock of the Subsidiary
Debtors as of the Petition Date and any options, warrants or other contractual
rights to acquire any shares of stock of the Subsidiary Debtors as of the
Petition Date.
“Substantial Contribution
Claim” shall have the meaning ascribed to such term in Section
3.4.
“Tax Sharing Agreement” means
that certain Tax Sharing Agreement, dated as of November 1, 1996, by and between
ABI and Congoleum.
“TDP” means the trust
distribution procedures for the Plan Trust, substantially in the form attached
as Exhibit “G” to the Plan, as it may be modified from time to time in
accordance with the terms of the TDP and the Plan Trust Agreement.
“Trust Advisory Committee” or
“TAC” means a Trust
Advisory Committee to be formed to represent all holders of Asbestos Personal
Injury Claims to advise the Plan Trustee and to approve and consent to certain
actions as specified herein and in the Plan Trust Agreement, solely in its
capacity as such.
“United States Trustee” means
the Office of the United States Trustee for Region 3.
“Unimpaired” means, with
reference to a Claim or Interest, unimpaired within the meaning of section 1124
of the Bankruptcy Code.
“Unpaid Intercompany Amounts”
means the following intercompany payables, to the extent such
payables arise following the Petition Date, are evidenced by invoices or other
appropriate supporting documentation and remain unpaid as of the Effective
Date: (i) payments due under the Personal Services Agreement, (ii)
payments due for purchases of urethane or other products sold intercompany under
the Business Relations Agreement, dated as of March 11, 1993, as amended,
(iii) payments due under the Canadian Tile exclusivity agreement under the
Business Relations Agreement, dated as of March 11, 1993, as amended,
(iv) royalty payments due under the non-pvc license agreement dated January
1, 2006, (v) payments due under intercompany personal computing, desktop
and voice and data system support and other information technology services
agreements between ABI and the Debtors, (vi) payments due for items purchased by
ABI and/or an ABI subsidiary for a Debtor and/or Debtor subsidiary, or
purchased by a Debtor and/or a Debtor subsidiary for ABI and/or an ABI
subsidiary, or purchased jointly by any of them and (vii) intercompany payments
due as reimbursement of reasonable and necessary travel expenses incurred
(whether by ABI or an ABI subsidary, or a Debtor or a Debtor subsidiary) in
connection with ABI personnel providing management services to any of the
Debtors.
“Voting Agent” means Logan
& Company, Inc.
“Voting Procedures Order”
means the order entered by the District Court setting the voting procedures for
this Plan.
“Wachovia” shall mean Wachovia
Bank, National Association, successor by merger to Congress Financial
Corporation.
“Workers’ Compensation Claim”
means any Claim (a) for benefits under a state-mandated workers’ compensation
system, that a past, present, or future employee of the Debtors and their
predecessors is receiving, or may in the future have a right to receive, and/or
(b) for reimbursement brought by any insurance company as a result of payments
made to or for the benefit of such employees and fees and expenses incurred
under any insurance policies covering such employee claims.
16
1.3 Rules of
Interpretation: Application of Definitions, Rules of Construction, and
Computation of Time. Wherever from the context it appears appropriate,
each term stated in either the singular or the plural shall include both the
singular and the plural, and pronouns stated in the masculine, feminine, or
neuter gender shall include the masculine, feminine and neuter. For
purposes of the Plan: (a) any reference in the Plan to a contract, instrument,
release, indenture, or other agreement or document being in a particular form or
on particular terms and conditions means that the document shall be
substantially in that form or substantially on those terms and conditions; (b)
any reference in the Plan to an existing document or exhibit filed or to be
filed means the document or exhibit as it may have been or may be amended,
modified, or supplemented; (c) unless otherwise specified, all references in the
Plan to Sections, Schedules, and Exhibits are references to sections, schedules,
and exhibits of or to the Plan. Unless otherwise specified, the words
“herein,” “hereof,” “hereto,” “hereunder,” and other words of similar meaning
refer to the Plan as a whole and not to any particular section, subsection, or
clause contained in the Plan. The rules of construction contained in section 102
of the Bankruptcy Code shall apply to the construction of the
Plan. The headings in the Plan are for convenience of reference only
and shall not expand, limit, or otherwise affect the provisions of the
Plan. Unless otherwise indicated herein, all references to dollars
are to United States dollars. Unless otherwise expressly provided
herein, in computing any period of time prescribed or allowed by the Plan, the
provisions of Bankruptcy Rule 9006(a) shall apply.
1.4 Exhibits
and Schedules.
All exhibits and schedules
are incorporated into and are a part of the Plan as if set forth in full
herein.
ARTICLE
II
CLASSIFICATION
OF CLAIMS AND INTERESTS
2.1 Generally. Pursuant to section 1122 of the
Bankruptcy Code, set forth below is a designation of Classes of Claims and
Interests. A Claim or Interest is classified in a particular Class
only to the extent that the Claim or Interest qualifies within the description
of the Class and is classified in a different Class to the extent the Claim or
Interest qualifies within the description of that different
Class. Solely for voting purposes, Claims against each Estate are
classified as Claims against the Estates as a whole.
2.2 Unclassified
Claims. In accordance with section 1123(a)(1) of the Bankruptcy Code,
Administrative Claims and Priority Tax Claims are not classified and are
excluded from the Classes set forth in Section 2.3 of the Plan. The
treatment accorded Administrative Claims and Priority Tax Claims is set forth in
Article III of the Plan.
2.3 Classes. In accordance with section 1122 of the
Bankruptcy Code, the following constitute the Classes of Claims against and
Interests in the Debtors:
(a) Class 1 – Priority
Claims. Class 1 consists of all Priority
Claims. Class 1 is Unimpaired.
(b) Class 2 – Lender Secured
Claims. Class 2 consists of the Lender Secured
Claims. Class 2 is Unimpaired.
(c) Class 3 – Other Secured
Claims. Class 3 consists of all Other Secured Claims, each of
which will be within a separate subclass, with each such subclass to be deemed a
separate Class for all purposes. Class 3 is (or these subclasses are)
Unimpaired.
(d) Class 4 – Senior Note
Claims. Class 4 consists of all Senior Note
Claims. Class 4 is Impaired.
(e) Class 5 – Workers’
Compensation Claims. Class 5 consists of all Workers’
Compensation Claims. Class 5 is Unimpaired.
(f) Class 6 – ABI
Claims. Class 6 consists of all ABI Claims. Class 6
is Impaired.
17
(g) Class 7 – Asbestos Personal
Injury Claims. Class 7 consists of all Asbestos Personal
Injury Claims, including the unliquidated Asbestos Personal Injury Claims of
Pre-Petition Settled Claimants. Class 7 is Impaired.
(h) Class 8 - Asbestos Property
Damage Claims. Class 8 consists of all Asbestos Property
Damage Claims. Class 8 is Impaired.
(i) Class 9 – General Unsecured
Claims. Class 9 consists of all General Unsecured
Claims. Class 9 is Impaired.
(j) Class 10 – Congoleum
Interests. Class 10 consists of all Congoleum
Interests. Class 10 is Impaired.
(k) Class 11 – Subsidiary
Interests. Class 11 consists of all Subsidiary
Interests. Class 11 is Unimpaired.
ARTICLE
III
TREATMENT
OF ADMINISTRATIVE CLAIMS
AND PRIORITY TAX CLAIMS
3.1 Summary. Pursuant
to section 1123(a)(1) of the Bankruptcy Code, Administrative Expense Claims and
Priority Tax Claims against the Debtors are not classified for purposes of
voting on, or receiving Distributions under, this Plan. Similarly,
Substantial Contribution Claims are not classified for purposes of voting on, or
receiving Distributions under, this Plan. Holders of such Claims are
not entitled to vote on this Plan. All such Claims are instead
treated separately in accordance with this Article III and in accordance with
the requirements set forth in section 1129(a)(9)(A) of the Bankruptcy Code.
3.2 Administrative
Claims. On
the Distribution Date, each holder of an Allowed Administrative Claim, except as
otherwise provided for herein, and subject to the requirements of Section 13.14
of the Plan, shall receive, in full satisfaction, settlement, release,
extinguishment, and discharge of such Allowed Administrative Claim, (a) Cash
equal to the unpaid portion of such Allowed Administrative Claim or (b) such
different treatment as to which the applicable Debtor and such holder shall have
agreed upon in writing; provided, however, that
Allowed Administrative Claims representing (i) post-petition liabilities
incurred in the ordinary course of business by the Debtors and (ii)
post-petition contractual liabilities arising under loans or advances to the
Debtors, whether or not incurred in the ordinary course of business, shall be
paid by Reorganized Congoleum in accordance with the terms and conditions of the
particular transactions relating to such liabilities and any agreements relating
thereto.
3.3 Priority Tax
Claims. On
the Distribution Date, each holder of an Allowed Priority Tax Claim shall
receive, in full satisfaction, settlement, release, and discharge of and in
exchange for such Allowed Priority Tax Claim, (a) Cash equal to the unpaid
portion of such Allowed Priority Tax Claim, (b) such different treatment as to
which the applicable Debtor and such holder shall have agreed upon in writing,
or (c) at Reorganized Congoleum’s sole discretion, deferred Cash payments having
a value, as of the Effective Date, equal to such Allowed Priority Tax Claim,
over a period not exceeding six (6) years after the date of assessment of such
Allowed Priority Tax Claim.
3.4 Substantial Contribution
Claims. Any
Entity who requests compensation or expense reimbursement for making a
substantial contribution in the Reorganization Cases pursuant to sections
503(b)(3), (4) and (5) of the Bankruptcy Code (“Substantial Contribution
Claim”) must file an application with the clerk of the District Court on
or before a date that is sixty (60) days subsequent to the Effective Date and
serve such application on counsel for the Debtors, counsel for the Futures
Representative, counsel for the Asbestos Claimants’ Committee, counsel for the
Bondholders’ Committee and on all other parties as otherwise required by the
District Court and the Bankruptcy Code, or be forever barred from seeking such
compensation or expense reimbursement. All Allowed Substantial
Contribution Claims shall be paid by Reorganized Congoleum within sixty (60)
days of allowance by the District Court.
18
ARTICLE
IV
TREATMENT
OF CLASSIFIED CLAIMS AND INTERESTS
4.1 Claims and
Interests
(a) Class 1 – Priority
Claims. On the Distribution Date, each holder of an Allowed
Priority Claim shall receive, in full satisfaction, settlement, release, and
discharge of and in exchange for such Allowed Priority Claim, either (i) the
Allowed Amount of its Priority Claim, in Cash, or (ii) such different treatment
as may be agreed to by such holder and Reorganized Congoleum. Class 1
is Unimpaired and the holders of Class 1 Claims are deemed to have accepted the
Plan and, accordingly, are not entitled to vote on the Plan.
(b) Class 2 – Lender Secured
Claims. The Lender Secured Claim shall be paid in full
indefeasibly on the Effective Date or as soon thereafter as practicable and
Wachovia shall be released from any and all liabilities and causes of action in
accordance with the Final Order (1) Authorizing Debtors’ Use of Cash Collateral,
(2) Authorizing Debtors to Obtain Post-Petition Financing, (3) Granting Senior
Liens and Priority Administrative Expense Status Pursuant to 11 U.S.C. §§105 and
364(c), (4) Modifying the Automatic Stay Pursuant to 11 U.S.C. §362, and (5)
Authorizing Debtors to Enter into Agreements with Congress Financial Corporation
(the “Financing
Order”). Nothing herein requires that Wachovia permit the use
of collateral, including cash collateral, or finance the Debtors after the
Effective Date other than with Wachovia’s prior written
consent. Class 2 is Unimpaired and the holder of the Class 2 Claim is
deemed to have accepted the Plan and, accordingly, is not entitled to vote on
the Plan. Notwithstanding anything to the contrary contained in the
Plan, the Confirmation Order, or otherwise, the Obligations under and as defined
in the Existing Credit Agreement (as the same has heretofore been or may
hereafter be amended, modified, ratified, restated, extended, renewed or
replaced) and all the rights, claims, liens and priorities and other protections
provided to Wachovia shall survive the Confirmation Date and continue in full
force and effect in accordance with the terms and conditions of the Financing
Order and the Existing Credit Agreement.
(c) Class 3 – Other Secured
Claims. Each holder of an Allowed Other Secured Claim shall
receive one of the following three treatments at Reorganized Congoleum’s sole
option: (i) retain unaltered the legal, equitable and contractual
rights (including, but not limited to, any Liens that secure such Claim) to
which such Claim entitles such holder and such Allowed Other Secured Claim shall
be Reinstated on the Effective Date, (ii) the Debtors shall surrender all
collateral securing such Claim to the holder thereof, in full satisfaction of
such holder’s Allowed Class 3 Claim, without representation or warranty by, or
recourse against, the Debtors or Reorganized Congoleum or (iii) such holder
shall be otherwise treated in a manner so that such Claim shall be rendered
Unimpaired. Class 3 is Unimpaired and the holders of Class 3 Claims are deemed
to have accepted the Plan and, accordingly, are not entitled to vote on the
Plan.
(d) Class 4 – Senior Note
Claims. Senior Note Claims shall be Allowed in an aggregate
amount equal to at least $103,593,750.00, which shall not be subject to any
avoidance, reductions, set off, offset, recharacterization, subordination,
counterclaims, defenses, disallowance, impairment or any other challenges under
applicable law or regulation by any person or entity. On the
Effective Date, each holder of an Allowed Senior Note Claim shall receive, in
full satisfaction of its Senior Note Claim, its Pro Rata share of each of the
securities included in the Senior Note Distribution. Class 4 is
Impaired and holders of Class 4 Claims are entitled to vote to accept or reject
the Plan.
(e) Class 5 – Workers’
Compensation Claims. Each holder of an Allowed Workers’
Compensation Claim shall be paid in the ordinary course pursuant to such rights
that exist under any state workers’ compensation system or laws applicable to
such Claims. Class 5 is Unimpaired and the holders of Class 5 Claims
are deemed to have accepted the Plan and, accordingly, are not entitled to vote
on the Plan.
(f) Class 6 – ABI Claims.
Pursuant to and in consideration of the Intercompany Settlement and Section 5.15
and other terms of the Plan, on the Effective Date all Intercompany Agreements
shall be rejected and all ABI Claims, including without limitation any ABI
Rejection Damages Claims (other than claims for payment of Unpaid Intercompany
Amounts that may be asserted to the extent consistent with Section
5.15(b)(4)(B) of the Plan), shall be deemed Disallowed and
expunged. Class 6 is Impaired and the holder of the Class 6 Claims is
entitled to vote to accept or reject the Plan.
19
(g) Class 7 – Asbestos Personal
Injury Claims.
(i) As
of the Effective Date, all liability for all Asbestos Personal Injury Claims
(which includes all Claims in Class 7) as well as liability for all future
Demands shall be assumed, automatically and without further act or deed, by the
Plan Trust and the Reorganized Debtors shall have no liability
therefor. Each Asbestos Personal Injury Claim and future Demands
shall be resolved pursuant to the Plan Trust Agreement and the
TDP. The TDP shall apply to all holders of Asbestos Personal Injury
Claims and future Demands, including any such holder who elects to resort to the
legal system and obtains a judgment for money damages.
(ii) As
of the Effective Date, pursuant to the Plan, all Pre-Petition Settled Claimants,
including the Litigation Settlement Claimants, in full satisfaction of his, her
or its Asbestos Personal Injury Claim and any and all rights pursuant to any
Pre-Petition Settlement Agreement, Claimant Agreement, Security Agreement,
Collateral Trust Agreement or any and all other agreements and amendments
thereto with respect to the pre-packaged plan of reorganization filed by the
Debtors on December 31, 2003, shall be restored to status quo ante, including
with respect to any statutes of limitation related to such Asbestos Personal
Injury Claim, as of the time each such Claimant initially filed or submitted its
Asbestos Claim against the Debtors that resulted in the Claimant’s Pre-Petition
Settlement Agreement or the Claimant Agreement, respectively, and shall be
treated by the Plan Trust as holding unliquidated Asbestos Personal Injury
Claims under applicable federal or state law, which claims shall be resolved
pursuant to the Plan Trust Agreement and the TDP in the same manner as all other
Asbestos Personal Injury Claims in Class 7. Pre-Petition
Settled Claimants in Class 7 shall receive pari passu treatment under
the Plan without regard to any lien, security interest or other claim to
priority treatment whatsoever (i.e. it is understood that
any such Pre-Petition Settled Claimant will need to reapply to the Plan Trust to
satisfy the TDP including medical, exposure, statutes of limitation and other
requirements).
(iii) Class
7 is Impaired. Holders of Class 7 Claims are entitled to vote with
respect to the Plan.
(h) Class 8 - Asbestos Property
Damage Claims. As of the Effective Date, all liability for all
Allowed Asbestos Property Damage Claims shall be assumed, automatically and
without further act or deed, by the Plan Trust and the Reorganized Debtors shall
have no liability therefor. Each Allowed Asbestos Property Damage
Claim shall be paid solely from the Asbestos Property Damage Claim Sub-Account
on account of the unpaid Allowed Amount of such Claim pursuant to the Plan Trust
Agreement. After the assets in the Asbestos Property Damage Claim
Sub-Account have been exhausted or transferred therefrom in accordance with the
Plan Trust Agreement, the Plan Trust shall have no further liability or
obligation for or in respect of any Asbestos Property Damage
Claims. All Asbestos Property Damage Claims as to which a Proof of
Claim was not filed prior to the expiration of the Asbestos Property Damage
Claim Bar Date shall be deemed Disallowed. Class 8 is Impaired and
the holders of Class 8 Claims are entitled to vote to accept or reject the
Plan.
(i) Class 9 – General Unsecured
Claims. Except to the extent that a holder of an Allowed
General Unsecured Claim in Class 9 has been paid by the Debtors prior to the
Effective Date or agrees to alternate, less favorable, treatment, each holder of
an Allowed Class 9 Claim shall receive, on the Distribution Date, in full and
final satisfaction of such Allowed Class 9 Claim, Cash in the amount of $.35 for
each $1.00 of such holder’s Allowed Class 9 Claim. Class 9 is
Impaired and the holders of Class 9 Claims are entitled to vote to accept or
reject the Plan. General Unsecured Claims do not include Claims
against the Debtors under the Environmental Laws as set forth in Section 11.9
hereof, which Claims (other than Claims held by ABI) survive the Reorganization
Cases.
(j) Class 10 – Congoleum
Interests. On the Effective Date,
the Congoleum Interests shall be cancelled, the holders of the Congoleum
Interests shall retain and receive nothing on account of such
Interests. Class 10 is Impaired and the holders of Class 10 Congoleum
Interests are deemed to have rejected the Plan in accordance with the provisions
of section 1126(g) of the Bankruptcy Code, and accordingly, their votes are not
being solicited.
(k) Class 11 – Subsidiary
Interests. On the Effective Date, the holder of the Subsidiary
Interests shall retain such Subsidiary Interests. Class 11 is
Unimpaired and the holder of Class 11 Subsidiary Interests is deemed to have
accepted the Plan, and accordingly, is not entitled to vote on the
Plan.
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4.2 Reservation of Rights
Regarding Claims. Except
as otherwise explicitly provided in the Plan, nothing shall affect the Debtors’
or Reorganized Congoleum’s rights and defenses, both legal and equitable, with
respect to any Claims, including, but not limited to, all rights with respect to
legal and equitable defenses to alleged rights of setoff or
recoupment. Except as otherwise explicitly provided in the Plan,
nothing shall affect any of the Plan Trust’s rights and defenses, both legal and
equitable, with respect to any Asbestos Claims, including, but not limited to,
all rights with respect to legal and equitable defenses to alleged rights of
setoff or recoupment.
ARTICLE
V
IMPLEMENTATION
OF THE PLAN
5.1 The Plan
Trust
(a) Establishment
and Purpose of the Plan Trust. On or prior to the Effective
Date, the Plan Trust shall be established in accordance with the Plan Trust
Agreement. The Plan Trust is intended to be a “qualified settlement
fund” within the meaning of section 468B of the IRC and the Treasury Regulations
promulgated thereunder. The purpose of the Plan Trust shall be to,
among other things: (i) pay all Plan Trust Asbestos Claims in accordance with
the Plan, the Plan Trust Agreement, the TDP and the Confirmation Order; (ii)
preserve, hold, manage, and maximize the Plan Trust Assets for use in paying and
satisfying Plan Trust Asbestos Claims in accordance with the Plan Trust
Agreement and the TDP; (iii) prosecute, settle and manage the disposition of the
Asbestos In-Place Insurance Coverage; and (iv) prosecute, settle, and manage
Asbestos Insurance Actions and Direct Actions.
(b) Funding
and Receipt of Plan Trust Assets. On the Effective Date,
Reorganized Congoleum shall issue the Plan Trust Common Stock to the Plan Trust
in accordance with the Plan and all Plan Trust Assets shall be transferred to,
vested in, and assumed by, the Plan Trust free and clear of all Claims, Liens
and encumbrances; provided, however, that to the extent
that certain Plan Trust Assets, because of their nature or because they will
accrue subsequent to the Effective Date, cannot be transferred to, vested in,
and assumed by the Plan Trust on the Effective Date, such Plan Trust Assets
shall be transferred to, vested in, and assumed by the Plan Trust free and clear
of Claims, Liens and encumbrances, as soon as practicable after the Effective
Date.
(c) Insurance
Assignment Agreement. On the Effective Date, the Debtors shall
deliver the Insurance Assignment Agreement attached hereto as Exhibit
“B.” Such agreement shall be valid, binding and
enforceable. The Insurance Assignment Agreement shall transfer claims
and rights set forth therein as Debtors may have, subject to any and all
Asbestos Insurer Coverage Defenses.
(d) Creation
of Asbestos Property Damage Claim Sub-Account. On the
Effective Date, the Plan Trust shall cause the Asbestos Property Damage
Insurance Rights and any proceeds thereof, including $1.2 million from the
proceeds of that certain settlement agreement between the Debtors and Liberty
Mutual Insurance Company approved by the Bankruptcy Court by order dated July
30, 2004, to be held in the Asbestos Property Damage Claim
Sub-Account. In accordance with the terms of the Plan Trust
Agreement, the Plan Trustee shall be permitted to transfer monies from the
Asbestos Property Damage Claim Sub-Account to the Asbestos Personal Injury Claim
Sub-Account, from time to time, to the extent that the funds in the Asbestos
Property Damage Claim Sub-Account exceed the aggregate amount of all unpaid
Asbestos Property Damage Claims that have been filed prior to the Asbestos
Property Damage Claim Bar Date, and a reasonable reserve for Plan Trust Expenses
and indemnification costs or expenses, in either case, related to Asbestos
Property Damage Claims.
(e) Assumption
of Liabilities by the Plan Trust. On the Effective Date, all
liabilities, obligations and responsibilities relating to all Plan Trust
Asbestos Claims shall be transferred to the Plan Trust as set forth herein and
the Plan Trustee, on behalf of the Plan Trust, shall expressly assume all
liability for all Plan Trust Asbestos Claims and Demands as set forth herein,
subject to the provisions of the Plan Trust Agreement. With the
exception of the liabilities identified hereinabove in this Section 5.1(e), in
no event shall the Plan Trust assume any of the liabilities, obligations or
responsibilities of the Debtors or Reorganized Congoleum.
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(f) Discharge
of Liabilities to Holders of Asbestos Claims. Except as
provided in the Plan and the Confirmation Order, the transfer to, vesting in,
and assumption by the Plan Trust of the Plan Trust Assets as contemplated by the
Plan shall, among other things, discharge the Debtors and the Reorganized
Debtors from and in respect of all Plan Trust Asbestos Claims.
(g) TDP. From
and after the Effective Date, the Plan Trust shall pay the Plan Trust Asbestos
Claims in accordance with the Plan Trust Agreement and the TDP. The
Plan Trustee shall have the power to administer, amend, supplement or modify the
TDP in accordance with the terms thereof.
(h) Payment
of Allowed Asbestos Property Damage Claims. From and after the
Effective Date, the Plan Trust shall cause the payment of Allowed Asbestos
Property Damage Claims from the Asbestos Property Damage Claim Sub-Account in
accordance with the Plan Trust Agreement; provided, however that once
the assets in the Asbestos Property Damage Claim Sub-Account have been
exhausted, the Plan Trust shall have no further liability or obligation for or
in respect of any Asbestos Property Damage Claims.
(i) Excess
Plan Trust Assets. To the extent there are any Plan Trust
Assets remaining after the payment in full of all Plan Trust Asbestos Claims and
all Plan Trust Expenses (or provision has been made therefor) in accordance with
the Plan Trust Agreement and the TDP, such excess Plan Trust Assets shall be
transferred to a tax-exempt organization qualified under section 501(c)(3) of
the IRC, which tax-exempt organization is to be determined by the Plan Trustee;
provided, however, that
the purpose thereof, if practicable, shall be related to the treatment of,
research on or the relief of suffering of individuals suffering from
asbestos-related lung disorders.
(j) Plan
Trust Expenses. The Plan Trust shall pay all Plan Trust
Expenses from the Plan Trust Assets in accordance with the Plan Trust
Agreement. Neither the Debtors, the Reorganized Debtors, nor their
Affiliates shall have any obligation to pay any Plan Trust
Expenses. The Plan Trustee, each member of the TAC, the Futures
Representative and the Representatives of each of the foregoing will have a lien
upon the Plan Trust Assets which will be prior to any lien thereon, and the Plan
Trust will grant a security interest in the Plan Trust Assets, all proceeds
thereof and all accounts into which such proceeds or the Plan Trust Assets are
deposited or maintained to secure payment of amounts payable to them as
compensation or indemnification.
(k) Appointment
of the Initial Plan Trustee. Effective as of the
Effective Date, the District Court shall appoint the initial Plan Trustee to
serve as Plan Trustee in accordance with the Plan Trust
Agreement. The Plan Trustee shall be designated no later than thirty
(30) days prior to the Confirmation Hearing and shall be mutually acceptable to
the Asbestos Claimants’ Committee and the Futures Representative. For
purposes of performing his or her duties and fulfilling his or her obligations
under the Plan Trust Agreement, the TDP and the Plan, the Plan Trustee shall be
deemed to be a party in interest within the meaning of section 1109(b) of the
Bankruptcy Code. The Plan Trustee shall be the “administrator” of the
Plan Trust as that term is used in Treas. Reg.
Section 1.468B-2(k)(3).
(l) The
Futures Representative. Effective as of the Effective Date,
the District Court shall appoint a Person to serve as the Futures Representative
from and after the Effective Date pursuant to the terms of the Plan Trust
Agreement and who shall have the functions and rights provided in the Plan Trust
Documents.
(m) Appointment
of Trust Advisory Committee Members. Effective as of the
Effective Date, the District Court shall appoint five initial members of the TAC
(and thereupon the TAC shall be formed) to serve as members of the TAC in
accordance with the Plan Trust Agreement.
(n) Institution
and Maintenance of Legal and Other Proceedings. As of the
Effective Date, the Plan Trust shall be empowered to initiate, prosecute,
defend, and resolve all legal actions and other proceedings related to any
asset, liability, or responsibility of the Plan Trust, including, without
limitation, the Coverage Action, in each case to the extent not adjudicated,
compromised or settled prior to the Effective Date. The Plan Trust shall be
empowered to initiate, prosecute, defend, and resolve all such actions in the
name of the Debtors and/or Reorganized Congoleum if deemed necessary or
appropriate by the Plan Trustee. Except as otherwise provided by law
or agreement, the Plan Trust shall be responsible for the payment of all
damages, awards, judgments, settlements, expenses, costs, fees, and other
charges incurred subsequent to the Effective Date arising
22
from
or associated with any legal action or other proceeding brought pursuant to this
Section 5.1(n) and shall pay or reimburse all deductibles, retrospective premium
adjustments, or other charges which may arise from the receipt of insurance
proceeds by the Plan Trust. Without in any way limiting the foregoing
and subject to any Asbestos Insurer Coverage Defenses, the Plan Trust shall be
empowered to elect to (or not to), initiate, prosecute, defend, settle, and
resolve all Asbestos Insurance Actions and Direct Actions, and to maintain,
administer, preserve, or pursue the Asbestos-In-Place Insurance Coverage, the
Asbestos Insurance Action Recoveries, Asbestos Insurance Rights, the Asbestos
Insurance Policies and rights under the Asbestos Insurance Settlement
Agreements. All Causes of Action other than Asbestos Insurance
Actions and Direct Actions shall remain the property of the Reorganized
Debtors.
(o) Preservation
of Insurance Claims. The discharge and releases provided
herein, and the injunctive protection provided to the Debtors, the Reorganized
Debtors and any Protected Party with respect to Demands as provided herein,
shall neither diminish nor impair the enforceability of any of the Asbestos
Insurance Policies by any Entity except (i) to the extent that any such Asbestos
Insurance Company is also a Settling Asbestos Insurance Company or (ii) that all
Asbestos Insurer Coverage Defenses are preserved.
(p) Indemnification
by the Plan Trust. As and to the extent provided in the Plan
Trust Agreement in Sections 1.4 and 4.6, the Plan Trust shall indemnify and hold
harmless each of the Debtors, the Reorganized Debtors, the Plan Trustee, any
officer and employee of the Plan Trust, the Futures Representative, each member
of the TAC and, with respect to each of the foregoing, their respective past,
present and future Representatives.
(q) Reimbursement
of Defense and Indemnity Costs Relating to Asbestos
Claims. All defense and indemnity costs incurred by Congoleum
with respect to Asbestos Claims prior to the Effective Date shall be reimbursed
from the proceeds of the Liberty Mutual Settlement.
5.2 Certain
Mergers. On
the Effective Date, the Subsidiary Debtors shall merge with and into Congoleum, with Reorganized Congoleum as the sole surviving corporation.
5.3 The Amended and Restated
Certificate and the Amended and Restated Bylaws. The
Amended and Restated Certificate and the Amended and Restated Bylaws of
Reorganized Congoleum shall be in form and substance acceptable to the
Bondholders’ Committee, the Debtors and the Asbestos Claimants’ Committee and
shall be consistent with the provisions of the Plan and the Bankruptcy
Code. The Amended and Restated Certificate shall, among other things
(a) authorize the issuance of New Common Stock pursuant to Section 5.7 of the
Plan, and (b) provide, pursuant to section 1123(a)(6) of the Bankruptcy Code,
for a provision prohibiting the issuance of non-voting common equity
securities. The Amended and Restated Bylaws and the
Amended and Restated Certificate of Reorganized Congoleum shall be substantially
in the form attached hereto as Exhibits “J” and “K”,
respectively. The Amended and Restated Bylaws and the Amended and
Restated Certificate will filed as part of the Plan Supplement.
5.4 Directors and Officers of
Reorganized Congoleum. The
initial board of directors of Reorganized Congoleum shall consist of five (5)
directors. One of such directors shall be selected by the
Bondholders’ Committee, three of such directors shall be selected jointly by the
Futures Representative and the Asbestos Claimants’ Committee, and one of such
directors shall be Reorganized Congoleum’s chief executive
officer. The identity of such directors shall be disclosed by the
Plan Proponents in the Plan Supplement. To the extent any such Person
is an Insider (as defined in section 101(31) of the Bankruptcy Code), the nature
of any compensation for such Person will also be disclosed prior to the
Confirmation Hearing. Each of the Persons on the initial board of
directors of Reorganized Congoleum shall serve in accordance with the Amended
and Restated Certificate and the Amended and Restated Bylaws of Reorganized
Congoleum, as the same may be amended from time to
time. Subsequently, Reorganized Congoleum’s board of directors shall
be elected in accordance with Reorganized Congoleum’s governing documents which
governing documents shall be acceptable to the Bondholders’ Committee and the
Asbestos Claimants’ Committee.
23
The
initial officers of Reorganized Congoleum shall be set forth in the Plan
Supplement. To the extent any such Person is an Insider (as defined
in section 101(31) of the Bankruptcy Code), the nature of any compensation for
such Person will also be disclosed at such time. The initial officers
shall serve in accordance with the Amended and Restated Certificate and the
Amended and Restated Bylaws of Reorganized Congoleum, as the same may be amended
from time to time.
5.5 Cancellation of Existing
Securities and Agreements of the Debtors/Discharge of the Indenture
Trustee. Except
as set forth in the Plan, upon the Effective Date, the Existing Securities shall
be cancelled and the holders thereof shall have no further rights or
entitlements in respect thereof against the Debtors except the right to receive
any Distributions to be made to such holders under the Plan. To the
extent possible, Distributions to be made under the Plan to the beneficial
owners of the Senior Notes shall be made through the Depository Trust Company
and its participants. The Confirmation Order shall authorize and
direct the Indenture Trustee to take whatever action may be necessary or
appropriate, in its reasonable discretion, to deliver the Distributions,
including, without limitation, obtaining an order of the District
Court. On the Effective Date, the Indenture Trustee and its agents
shall be discharged of all their obligations associated with (i) the Senior
Notes, (ii) the Indenture, and (iii) any related documents, and released from
all Claims arising in the Reorganization Cases. As of the Effective
Date, the Indenture shall be deemed fully satisfied and cancelled; provided, however, that the Indenture
shall continue in effect solely for the purposes of: (1) allowing holders of the
Senior Note Claims to receive distributions under the Plan, (2) allowing and
preserving the rights of the Indenture Trustee to (a) make distributions in
satisfaction of Allowed Senior Note Claims, (b) exercise its charging liens
against any such distributions, and (c) seek compensation and reimbursement for
any fees and expenses incurred in making such distributions. Upon
completion of all such distributions, the Senior Notes and the Indenture shall
terminate completely. From and after the Effective Date, the
Indenture Trustee shall have no duties or obligations under the Indenture other
than to make distributions pursuant to the Plan.
5.6 Exit
Facility. On
the Effective Date, Reorganized Congoleum shall obtain exit financing consistent
with the terms and conditions set forth in the Exit Facility Commitment Letter
or Term Sheet, which shall be filed as part of the Plan Supplement, from the
Exit Facility Lenders.
5.7 Issuance of New Securities
and Debt Instruments
(a) New Common
Stock. On the Effective Date, Reorganized Congoleum shall
issue the New Common Stock pursuant to the Plan. The Amended and
Restated Certificate sets forth the rights and preferences of the New Common
Stock. The New Common Stock shall be issued subject to the
Stockholders Agreement described below.
(b) New Senior
Notes. On the Effective Date, Reorganized Congoleum shall
issue $33 million in initial principal amount of 9% New Senior Notes, which
shall mature on December 31, 2017. The New Senior Notes shall be
governed by the terms and conditions set forth in the New
Indenture.
5.8 Registration Rights
Agreement. In
the event the board of directors of Reorganized Congoleum determines in its
discretion to register any of the New Common Stock with the Securities and
Exchange Commission, or if Reorganized Congoleum is required under the
Stockholders Agreement or applicable securities laws to register any of the New
Common Stock with the Securities and Exchange Commission, any Person receiving
Distributions of the New Common Stock issued on the Effective Date that is not
entitled to an exemption from registration under applicable securities laws
pursuant to section 1145(a) of the Bankruptcy Code, or whose resale of the New
Common Stock is otherwise restricted under the securities laws, shall be
entitled to become a party to the Registration Rights Agreement. The
Registration Rights Agreement shall be satisfactory in form and substance to the
Bondholders’ Committee, the Debtors and the Asbestos Claimants’ Committee, a
substantially similar form of which will be contained in the Plan
Supplement.
5.9 Stockholders
Agreement. On
the Effective Date, the Stockholders Agreement will be adopted by Reorganized
Congoleum and be binding upon all holders of New Common Stock. All
holders of New Common Stock will be subject to the Stockholders Agreement which
will, among other things, govern the access each holder of New Common Stock
shall have to information with respect to Reorganized Congoleum and the ability
to transfer such holder’s New Common Stock. Each certificate
representing share(s) of New Common Stock shall bear a legend indicating that
the New Common Stock is subject to the Stockholders Agreement. The
Stockholders Agreement will be effective as of the Effective
Date. The Stockholders Agreement contains customary terms and
conditions, including minority stockholder protections, and includes the
minority stockholders having both a right of first refusal and right of first
offer on the Plan Trust Common Stock. The Stockholders Agreement
shall be satisfactory in form and substance to the Bondholders’ Committee and
the Asbestos Claimants’ Committee, a substantially similar form of which is
attached hereto as Exhibit “L.” The Stockholders Agreement will be
filed as part of the Plan Supplement.
24
5.10 Effectuating
Documents/Further Transactions. Each
of the Debtors (subject to the consent of the Bondholders’ Committee and the
Asbestos Claimants’ Committee) and Reorganized Congoleum, and their respective
officers and designees, is authorized and directed to execute, deliver, file, or
record such contracts, instruments, releases, indentures, and other agreements
or documents, and take such actions as may be requested by the Plan Proponents,
or as may be necessary or appropriate, to effectuate and further evidence the
terms and conditions of the Plan, the Exit Facility, or any other Plan Document,
or to otherwise comply with applicable law.
5.11 Exemption from Certain
Transfer Taxes and Recording Fees. Pursuant
to section 1146(a) of the Bankruptcy Code, any transfers from a Debtor to
Reorganized Congoleum or to any other Person or Entity pursuant to the Plan, or
any agreement regarding the transfer of title to or ownership of any of the
Debtors’ real or personal property will not be subject to any document recording
tax, stamp tax, conveyance fee, sales tax, intangibles or similar tax, mortgage
tax, stamp act, real estate transfer tax, mortgage recording tax, Uniform
Commercial Code filing or recording fee, or other similar tax or governmental
assessment, and the Confirmation Order will direct the appropriate state or
local governmental officials or agents to forego the collection of any such tax
or governmental assessment and to accept for filing and recordation any of the
foregoing instruments or other documents without the payment of any such tax or
governmental assessment.
5.12 Section 346
Injunction. In
accordance with section 346 of the Bankruptcy Code for the purposes of any state
or local law imposing a tax, income will not be realized by the Estates, the
Debtors or the Reorganized Debtors by reason of the forgiveness or discharge of
indebtedness resulting from the consummation of the Plan. As a
result, each state or local taxing authority is permanently enjoined and
restrained, after the Confirmation Date, from commencing, continuing or taking
any act to impose, collect or recover in any manner any tax against the Debtors
or the Reorganized Debtors arising by reason of the forgiveness or discharge of
indebtedness under the Plan.
5.13 Corporate
Action. All
matters provided for under the Plan involving the corporate structure of the
Debtors or Reorganized Congoleum, or any corporate action to be taken by, or
required of the Debtors or Reorganized Congoleum shall be deemed to have
occurred and be effective as provided herein, and shall be authorized and
approved in all respects without any requirement for further action by the
stockholders or directors of any of such entities.
5.14 Litigation
Settlement Agreement. (a) The
Plan implements a compromise and settlement with respect to each such Litigation
Settlement Claimant whose Asbestos Personal Injury Claim was liquidated pursuant
to the Claimant Agreement or a Pre-Petition Settlement Agreement, as the case
may be, and the Litigation Settlement Agreement, which was approved by the Court
by an order signed on October 31, 2008, shall be binding on the parties
thereto.
(b) As
of the Effective Date of the Plan:
(i) The
Litigation Settlement Claimants shall waive any and all rights with respect to
any pre-petition settlement of their Asbestos Personal Injury Claims against the
Debtors, whether pursuant to any Pre-Petition Settlement Agreement or the
Claimant Agreement, including the liquidated amounts thereof; provided, however,
that:
· any
Asbestos Personal Injury Claim against the Debtors held by any such Litigation
Settlement Claimant, including with respect to any statutes of limitation
related thereto, shall be restored to the status quo ante as it existed
as of the time the Litigation Settlement Claimant initially filed or submitted
its Asbestos Personal Injury Claim against the Debtors that resulted in the
Claimant’s Pre-Petition Settlement Agreement or the Claimant Agreement (the
“Submission Date”);
25
· any
statute of limitation with respect to such Asbestos Personal Injury Claim shall
be tolled until the later of ninety (90) days after the expiration of any stay
imposed due to the filing of the Debtors’ chapter 11 cases of such additional
time as may be provided pursuant to the TDP incorporated in the Plan (the
“Asbestos Tolling Period”);
· neither
the Asbestos Tolling Period nor any other term or provision of the Litigation
Settlement Agreement shall revive any statute of limitations that expired as of
the Submission Date; and
· all
parties retain the right to assert any statute of limitations defense or other
defenses that they could have asserted as of the Submission Date.
(ii) With
respect to the Litigation Settlement Claimants, the Debtors shall be released
from any and all obligations and duties imposed pursuant to any Pre-Petition
Settlement Agreement, Claimant Agreement, the Collateral Trust Agreement,
Security Agreement and any and all other agreements and amendments thereto with
respect to the pre-packaged plan of reorganization filed by the Debtors on
December 31, 2003.
(iii) The
Debtors shall be deemed to have forever withdrawn, released, discharged, waived
and forgiven the Litigation Settlement Claimants and Claimants’ Counsel, and
each of their respective assigns, administrators and successors in interest, for
and from any and all claims, actions, causes of action, counterclaims, proofs of
claim, and any other obligation of any kind or nature arising from or related to
the Bankruptcy Code, the Avoidance Actions, and any and all claims related to
any Pre-Petition Settlement Agreement, Claimant Agreement, the Collateral Trust
Agreement, Security Agreement, pre-petition payments to Claimants Counsel, and
any and all other agreements and amendments thereto with respect to the
pre-packaged plan of reorganization filed by the Debtors on December 31,
2003, including all pending and potential causes of action, whether accrued or
to accrue, whether asserted by way of claim, counterclaim, cross-claim,
third-party action, action for indemnity or contribution or otherwise; provided,
however, that the
foregoing shall not constitute a release of any rights to enforce the terms of
the Litigation Settlement Agreement or any defenses to Asbestos Personal Injury
Claims that may be asserted by the Debtors as contemplated in the Litigation
Settlement Agreement.
(iv) Except
as otherwise provided for in the Litigation Settlement Agreement, all Litigation
Settlement Claimants and Claimants’ Counsel shall be deemed to have forever
withdrawn, released, discharged, waived and forgiven the Debtors and their
respective assigns, administrators and successors in interest, for and from any
and all claims, actions, causes of action, counterclaims, proofs of claim, and
any other obligation of any kind or nature arising from or related to the
Bankruptcy Code, the Avoidance Actions, and any and all claims related to any
Pre-Petition Settlement Agreement, Claimant Agreement, the Collateral Trust
Agreement, Security Agreement and any and all other agreements and amendments
thereto with respect to the pre-packaged plan of reorganization filed by the
Debtors on December 31, 2003, including all pending and potential causes of
action, whether accrued or to accrue, whether asserted by way of a claim,
counterclaim, cross-claim, third-party action, action for indemnity or
contribution or otherwise; provided, however, that the foregoing shall not
constitute a release of any rights to enforce the terms of the Litigation
Settlement Agreement and shall not constitute a release by Litigation Settlement
Claimants of their Asbestos Personal Injury Claims against the Debtors, the Plan
Trust, or any other party or entity.
(c) Pursuant
to the Litigation Settlement Agreement and contingent upon confirmation of the
Plan, the estates of Comstock, Cook and Arsenault have elected to forgo any
further distribution from the Debtors and/or Plan Trust.
(d) Within
30 days after the Effective Date of the Plan, the District Court shall enter an
order of dismissal of all claims and counterclaims in the Avoidance Actions,
with prejudice, and with all parties to bear their own costs and attorneys
fees.
26
(e) Subject
to the terms of this Plan, the mutual releases set forth in the Litigation
Settlement Agreement shall not abridge the right of Litigation Settlement
Claimants to submit and recover upon their Asbestos Personal Injury Claims
against the Debtors including as against the Plan Trust.
(f) Any
claim by Claimants’ Counsel for the payment of fees and expenses shall be
subject to application to, and approval by, the District Court.
(g) Each
Litigation Settlement Claimant shall be entitled to submit its Asbestos Personal
Injury Claim to the Debtors’ bankruptcy estates, including the Plan Trust, as an
unliquidated claim for resolution and treatment pursuant to TDP, provided that,
any Litigation Settlement Claimant who received a partial payment from the
Debtors with respect thereto prior to the Petition Date, including specifically
claimants Cook, Arsenault, and Comstock, in addition to the other provisions
hereof, hereby agrees to either: (a) not seek any further recovery with respect
thereto against the Debtors, including from any Plan Trust, or (b) return and
relinquish any such pre-petition partial payment for the benefit of the Plan
Trust as a condition precedent to asserting any such further Asbestos Personal
Injury Claim against the Debtors or the Plan Trust.
(h) Pursuant
to the Plan, any Pre-Petition Settled Claimant that is not a Litigation
Settlement Claimant shall nevertheless receive the same treatment as the
Litigation Settlement Claimants.
5.15 Review
of Claimants’ Counsel Expenses.
The expenses paid pre-petition by the Debtors to the Claimants’ Counsel
pursuant to the Claimant Agreement shall be subject to approval by the District
Court under § 1129(a)(4) of the Bankruptcy Code.
5.16 Intercompany
Settlement. (a) The Plan implements a compromise
and settlement with respect to ABI, the ABI Claims and the Intercompany
Agreements (as set forth in this Section 5.16, the
“Intercompany Settlement”). Pursuant to Bankruptcy Rule
9019 and section 1123(b)(3) of the Bankruptcy Code and consistent with section
1129 of the Bankruptcy Code, the Plan shall constitute a motion for approval of,
and the Confirmation Order shall authorize and constitute District Court
approval of, the Intercompany Settlement.
(b) On
the Effective Date, pursuant to Bankruptcy Rule 9019 and section 1123(b)(3) of
the Bankruptcy Code, in full and final satisfaction of the ABI Claims, and for
good and valuable consideration including ABI's agreement to the treatment
specified in the Plan for the ABI Claims and the Claims and Interests asserted
by other parties in interest, the ABI Settlement shall be effectuated in
accordance with the following terms:
1. All
ABI Claims, including without limitation ABI Rejection Damages Claims (other
than claims for payment of Unpaid Intercompany Amounts that may be asserted to
the extent consistent with Section 5.15(b)(4)(B) of the Plan), shall be
deemed Disallowed and expunged.
2. All
Intercompany Agreements shall be deemed rejected, and any and all ABI Rejection
Damages Claims (other than claims for payment of Unpaid Intercompany Amounts
that may be asserted to the extent consistent with Section 5.16(b)(4)(B) of
the Plan) arising therefrom shall be deemed Disallowed and
expunged.
3. ABI
and Reorganized Congoleum shall enter into and effectuate the New ABI
Agreement, and which shall govern the relationship between ABI and
Reorganized Congoleum upon the Effective Date.
4. The
ABI Parties and ABI and their respective Representatives (in their capacities as
such) shall be deemed to have received and exchanged mutual general releases
with and from the Debtors, their Estates and Reorganized Congoluem, such
that:
27
A. As of the Effective Date, the
Debtors, their Estates and Reorganized Congoleum shall be deemed to forever
release, waive and discharge all claims, obligations,
suits, judgments, demands, debts, rights, causes of action and
liabilities (other than their rights to enforce the terms of the Intercompany
Settlement, the New ABI Agreement and the ABI Canada License Agreement, as
amended by Section 5.16(b)(5) of the Plan, and their rights to payment of not
more than $2 million on account of net Unpaid Intercompany Amounts remaining
after intercompany offsets of Unpaid Intercompany Amounts), whether
liquidated or unliquidated, fixed or contingent, matured or unmatured, known or
unknown, foreseen or unforeseen, then existing or thereafter arising, in law,
equity or otherwise, that are based in whole or in part on any act, omission,
transaction, event or other occurrence taking place on or prior to the Effective
Date in any way relating to the Debtors, Reorganized Congoleum, the
Reorganization Cases, the Plan or the Disclosure Statement, and that could have
been asserted by or on behalf of the Debtors, their Estates or Reorganized
Congoleum, as of the Petition Date or thereafter, against the ABI Parties, ABI
and/or their respective Representatives (in their capacities as such);
and
B. As of the Effective Date, the ABI
Parties, ABI and their respective Representatives (in their capacities as such)
shall be deemed to forever release, waive and discharge all claims, obligations,
suits, judgments, demands, debts, rights, causes of action and liabilities
(other than their rights to enforce the terms of the Intercompany Settlement,
the New ABI Agreement and the ABI Canada License Agreement, as amended by
Section 5.16(b)(5) of the Plan, and their rights to payment of not more than $2
million on account of net Unpaid Intercompany Amounts remaining
after intercompany offsets of Unpaid Intercompany Amounts), whether
liquidated or unliquidated, fixed or contingent, matured or unmatured, known or
unknown, foreseen or unforeseen, then existing or thereafter arising, in law,
equity or otherwise, that are based in whole or in part on any act, omission,
transaction, event or other occurrence taking place on or prior to the Effective
Date in any way relating to the Debtors, Reorganized Congoleum, the
Reorganization Cases, the Plan or the Disclosure Statement, and that could have
been asserted by or on behalf of the ABI Parties, ABI and their respective
Representatives (in their capacities as such), as of the Petition Date or
thereafter, against the Debtors, their Estates or Reorganized
Congoleum.
5. The
ABI Canada License Agreement shall be deemed to have been assumed by Congoleum
and become an obligation of Reorganized Congoleum, provided, however, that
Article 7.02 of the ABI Canada License Agreement shall be modified so that the
“Term” thereof shall expire two years from the Effective Date and the ABI Canada
License Agreement shall be deemed amended accordingly as of the Effective Date
without any further action of any Person or Entity.
5.17 Deemed Consolidation of
Debtors For Plan Purposes Only. Subject
to the occurrence of the Effective Date, the Debtors shall be deemed
consolidated under the Plan for Plan purposes only. Each and every
Claim filed or to be filed against any of the Debtors shall be deemed filed
against the deemed consolidated Debtors and shall be deemed one Claim against
and obligation of the deemed consolidated Debtors. Such deemed consolidation,
however, shall not (other than for purposes related to funding distributions
under the Plan and as set forth above in this Section 5.17) affect: (i) the
legal and organizational structure of the Debtors; or (ii) any Liens that are
required to be maintained under the Plan (A) in connection with executory
contracts or unexpired leases that were entered into during the Reorganization
Cases or that have been or will be assumed, (B) pursuant to the Plan, or (C) in
connection with any Exit Facility. Notwithstanding anything contained in the
Plan to the contrary, the deemed consolidation of the Debtors shall not have any
effect on any of the Claims being reinstated and left unimpaired under the Plan,
and the legal, equitable, and contractual rights to which the holders of any
such Claims are entitled shall be left unaltered by the Plan.
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ARTICLE
VI
PROVISIONS
GOVERNING DISTRIBUTIONS WITH RESPECT TO CLAIMS
OTHER
THAN PLAN TRUST ASBESTOS CLAIMS
6.1 Plan
Distributions. The
Disbursing Agent shall make all distributions required under the Plan (other
than distributions to holders of Plan Trust Asbestos Claims and Senior Note
Claims). Distributions shall be made on the Distribution Date (unless
otherwise provided herein or ordered by the District Court) with respect to all
Claims except for Plan Trust Asbestos Claims. Distributions to be
made on the Distribution Date shall be deemed actually made on the Distribution
Date if made either (a) on the Distribution Date or (b) as soon as practicable
thereafter. With respect to Plan Trust Asbestos Claims, distributions
to holders of Plan Trust Asbestos Claims shall be made in accordance with the
Plan Trust Agreement and/or the TDP, as applicable. With respect to Senior Note Claims, Distributions will
be made by the Indenture Trustee, whose reasonable fees and expenses in
connection with such Distributions shall be paid by Reorganized
Congoleum.
6.2 Distributions of
Cash. Any
Distribution of Cash made by Reorganized Congoleum pursuant to the Plan shall,
at Reorganized Congoleum’s option, be made by check drawn on a domestic bank or
by wire transfer from a domestic bank.
6.3 No Interest on
Claims. Unless
otherwise specifically provided for in the Plan, the Confirmation Order, or a
post-petition agreement in writing between the Debtors and a holder,
Post-Petition Interest shall not accrue or be paid on Claims, and no holder
shall be entitled to interest accruing on or after the Petition
Date. Additionally, and without limiting the foregoing, interest
shall not accrue or be paid on any Disputed Claim in respect of the period from
the Effective Date to the date a Final Distribution is made when and if such
Disputed Claim becomes an Allowed Claim. Notwithstanding the foregoing, this Section
6.3 shall not apply to Plan Trust Asbestos Claims which shall be governed in all
cases by the Plan Trust Agreement and the TDP.
6.4 Delivery of
Distributions. Distributions
to holders of Allowed Claims other than Asbestos Claims shall be made by the
Disbursing Agent or the Indenture Trustee, as applicable, (a) at the holder’s
last known address, or (b) at the address in any written notice of address
change delivered to the Disbursing Agent or the Indenture Trustee, as
applicable. If any holder’s distribution made by the Disbursing Agent
is returned as undeliverable, no further distributions to such holder shall be
made, unless and until the Disbursing Agent is notified of such holder’s then
current address, at which time all missed distributions shall be made to such
holder without interest. Amounts in respect of undeliverable
distributions made through the Disbursing Agent shall be returned to Reorganized
Congoleum until such distributions are claimed or become unclaimed property
pursuant to Section 6.8 of the Plan. With respect to Plan Trust Asbestos Claims,
distributions to the holders of Plan Trust Asbestos Claims shall be made in
accordance with the Plan Trust Agreement and/or the TDP, as
applicable. With respect to Senior Note
Claims, distributions to holders of Senior Note Claims shall be made in
accordance with the Indenture.
6.5 Distributions to Holders as
of the Record Date. All
Distributions on Allowed Claims shall be made to the Record Holders of such
Claims. As of the close of business on the Record Date, the Claims
register maintained by the Voting Agent shall be closed, and there shall be no
further changes in the Record Holder of any Claim. Reorganized
Congoleum shall have no obligation to recognize any transfer of any Claim
occurring after the Record Date. Reorganized Congoleum shall instead
be entitled to recognize and deal for all purposes under the Plan with the
Record Holders as of the Record Date.
6.6 Fractional Securities;
Fractional Dollars. Distributions
of fractions of shares of New Common Stock will not be made and shall be rounded
(up or down) to the nearest whole number, with half shares or less being rounded
down. Reorganized Congoleum shall not be required to make
Distributions or payments of fractions of dollars. Whenever any payment of a
fraction of a dollar under the Plan would otherwise be called for, the actual
payment shall reflect a rounding of such fraction to the nearest whole dollar
(up or down), with half dollars or less being rounded down.
6.7 Withholding of
Taxes. The
Disbursing Agent shall withhold from any assets or property distributed under
the Plan any assets or property that must be withheld pursuant to applicable
law.
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6.8 Unclaimed
Property.
Any Cash, assets and other property to be distributed on account of any Claim
(other than a Plan Trust Asbestos Claim) under the Plan that remain unclaimed
(including by an Entity’s failure to negotiate a check issued to such Entity) or
otherwise not deliverable to the Entity entitled thereto before the later of
(a) one year after the date of distribution or (b) 120 calendar days after
an order allowing such Entity’s Claim becomes a Final Order, shall become vested
in, and shall be transferred and delivered to, Reorganized
Congoleum. In such event, such Entity’s Claim shall no longer be
deemed to be Allowed and such Entity shall be deemed to have waived its rights
to such payments or distributions under the Plan pursuant to section 1143 of the
Bankruptcy Code and shall have no further Claim in respect of such distribution
and shall not participate in any further distributions under the Plan with
respect to such Claim.
ARTICLE
VII
RESOLUTION
OF DISPUTED CLAIMS
7.1 Disallowance of Improperly
Filed Claims. Subject
to section 502(j) of the Bankruptcy Code and Bankruptcy Rules 3008 and 9006, any
Administrative Claim, Asbestos Property Damage Claim or Claim (other than
Asbestos Personal Injury Claims) for which the filing of a Proof of Claim,
application or motion with the District Court is required under the terms of the
Bankruptcy Code, the Bankruptcy Rules, any order of the Bankruptcy Court or
District Court, as applicable (including one providing a Bar Date), or the Plan
shall be Disallowed if and to the extent that such Proof of Claim (or other
filing) is not timely and properly made.
7.2 Prosecution of Objections to
Claims. Unless
otherwise ordered by the District Court after notice and a hearing, after the
Effective Date Reorganized Congoleum, the Bondholders’ Committee and the
Asbestos Claimants’ Committee each shall have the right to make and file
objections to Proofs of Claims, other than Proofs of Claims in respect of
Asbestos Personal Injury Claims and Professional Fee Claims, at any time on or
before ninety (90) days after the later of (i) the Effective Date or (ii) the
date on which such Claim was filed with the Bankruptcy Court or District Court,
as applicable, unless no Proof of Claim is required to be filed pursuant to
Bankruptcy Rule 3002, the Plan or any order of the Bankruptcy Court or District
Court, as applicable; provided, however, that (x)
this deadline may be extended by the District Court on motion by the Debtors,
Reorganized Congoleum, the Bondholders’ Committee, or the Asbestos Claimants’
Committee as applicable, and (y) neither the Debtors, Reorganized Congoleum, the
Futures Representative, the Bondholders’ Committee, the Asbestos Claimants’
Committee nor any other Person may file an objection to any (1) Claim that was
Allowed by a Final Order entered during the Reorganization Cases, or (2) Claim
Allowed by the Plan. In addition, unless otherwise ordered by the
District Court after notice and a hearing, after the Effective Date Reorganized
Congoleum, the Bondholders’ Committee and the Asbestos Claimants’ Committee,
subject to Sections 13.8 and 13.14 of the Plan, each shall have the exclusive
right to make and file objections to Administrative Claims and to amend the
Schedules or to object to any Claim specified on the Schedules, at any time on
or before sixty (60) days after the later of (i) the Effective Date or (ii) the
date on which such Claim was filed with the District Court unless no Proof of
Claim is required to be filed pursuant to Bankruptcy Rule 3002, the Plan or any
order of the District Court; provided, however, that (x)
this deadline may be extended by the District Court on motion by the Debtors,
Reorganized Congoleum, the Bondholders’ Committee or the Asbestos Claimants’
Committee, as applicable, (y) neither the Debtors, Reorganized Congoleum, the
Futures Representative, the Bondholders’ Committee, the Asbestos Claimants’
Committee nor any other Person may file an objection to any (1) Claim that was
Allowed by a Final Order entered during the Reorganization Cases, or (2) Claim
Allowed by the Plan, and (z) with respect to any Administrative Claim referred
to in sub-clause (a)(4) of the definition of Administrative Expense, no
objection may be filed with respect to any such Administrative Expense other
than with respect to the reasonableness of such Administrative Expense or
whether such Administrative Expense was incurred in accordance with Section 6.6
of the Indenture. Without prejudice to the right of any Asbestos
Insurance Company to assert any Asbestos Insurer Coverage Defenses, after the
Effective Date, only the Plan Trustee shall have the authority to contest
Asbestos Personal Injury Claims and Asbestos Property Damage Claims and litigate
to judgment, settle or withdraw such objections and each Asbestos Personal
Injury Claim and Asbestos Property Damage Claim, whether or not a Proof of Claim
was filed with the Bankruptcy Court or District Court, as applicable, shall be
satisfied exclusively in accordance with the Plan Trust Documents.
7.3 No Distributions Pending
Allowance. Notwithstanding
any other provision hereof, if a Claim or any portion of a Claim (other than an
Asbestos Personal Injury Claim) is a Disputed Claim, no payment or distribution
shall be made on account of such Disputed Claim, unless and until such Disputed
Claim becomes an Allowed Claim.
30
7.4 Distributions After
Allowance. Payments
and distributions to each holder of a Claim that is Disputed, or that is not
Allowed, to the extent that such Claim ultimately becomes Allowed, shall be made
in accordance with the provisions hereof governing the Class of Claims in which
such Claim is classified. As soon as practicable after the date that
the order or judgment of the District Court allowing any Disputed Claim (other
than a disputed Asbestos Claim) becomes a Final Order, Reorganized Congoleum
shall distribute to the holder of such Claim any payment or property that would
have been distributed to such holder if the Claim had been Allowed as of the
Effective Date (or such other date on which such distribution would have been
made).
ARTICLE
VIII
TREATMENT
OF EXECUTORY CONTRACTS, UNEXPIRED
LEASES AND SETTLEMENTS
8.1 Assumption of Unexpired
Leases and Executory Contracts
(a) Assumption. Except
for any unexpired lease or executory contract that the Plan Proponents reject or
designate as being subject to rejection on or before the Effective Date, as of
the Effective Date, all executory contracts and unexpired leases not previously
assumed or rejected by the Debtors pursuant to section 365 of the Bankruptcy
Code shall be deemed to have been assumed by the Debtors, and the Plan shall
constitute a motion to assume such executory contracts and unexpired
leases. Subject to the occurrence of the Effective Date, entry of the
Confirmation Order by the District Court shall constitute approval of such
assumptions pursuant to section 365(a) of the Bankruptcy Code and a finding by
the District Court that each such assumption is in the best interests of the
Debtors, the Estates and all parties in interest in the Reorganization Cases.
With respect to each such executory contract or unexpired lease assumed by the
Debtors, unless otherwise determined by the District Court pursuant to a Final
Order or agreed to by the parties thereto on or before the Effective Date, any
defaults of the Debtors with respect to such assumed executory contracts or
leases existing as of the Effective Date shall be cured in the ordinary course
of the Reorganized Debtors’ business promptly after any such default becomes
known to the Debtors and, if disputed, established pursuant to applicable law by
the District Court, and the assumed executory contracts or leases shall be
binding upon and enforceable upon the parties thereto, subject to any rights and
defenses existing thereunder. Subject to the occurrence of the
Effective Date, upon payment of such cure amounts, all defaults of the Debtors
existing as of the Confirmation Date with respect to such executory contract or
unexpired lease shall be deemed cured.
(b) Rejection. Notwithstanding
subpart (a) of this Section 8.1, the Plan Proponents may reject those executory
contracts and unexpired leases listed on an exhibit to be filed with the
District Court as part of the Plan Supplement (as such list may be amended or
supplemented up to and including the Confirmation Date).
(c) ABI Canada License
Agreement; Intercompany Agreements. Pursuant to and in
consideration of the Intercompany Settlement and Section 5.15 and other terms of
the Plan, on the Effective Date (A) the ABI Canada License Agreement shall be
amended as provided in the Intercompany Settlement and deemed to have been
assumed by Congoleum and become a contractual obligation of Reorganized
Congoleum, and the Plan shall constitute a motion to assume such license
agreement and (B) all Intercompany Agreements shall be rejected and all ABI
Claims, including without limitation any ABI Rejection Damages Claims (other
than claims for payment of Unpaid Intercompany Amounts that may be asserted to
the extent consistent with Section 5.15(b)(4)(B) of the Plan), shall be deemed
Disallowed and expunged.
8.2 Damages Upon
Rejection. Except
to the extent arising out of or based on the rejection of any executory contract
related to or involving asbestos which shall be dealt with under the TDP, the District Court shall
determine the dollar amount, if any, of the Claim of any Entity seeking damages
by reason of the rejection of any executory contract or unexpired lease; provided, however, that such
Entity must file a Proof of Claim with the District Court on or before thirty
(30) calendar days following the later of the Confirmation Date or the date of
rejection of the executory contract or unexpired lease. To the extent
that any such Claim is Allowed by the District Court by Final Order, such Claim
shall become, and shall be treated for all purposes under the Plan as, a Class 9
General Unsecured Claim, and the holder thereof shall receive distributions as a
holder of an Allowed Claim in such Class pursuant to the Plan unless such Claim
is held by ABI, in which case such Claim shall be Disallowed and
expunged.
31
8.3 Insurance
Agreements. Except
to the extent expressly set forth in any Asbestos Insurance Settlement
Agreement, nothing contained in the Plan or any negotiations leading up to the
Plan, including this Section 8.3, shall constitute a waiver
of: (i) any claim, right, or cause of action that any of
the Debtors or the Plan Trust, as applicable, may have against any insurer,
including under any insurance agreement; or (ii) any Asbestos Insurer Coverage
Defenses that any Asbestos Insurance Company may have against the Debtors or the
Plan Trust. The discharge and release provisions contained in the
Plan shall neither diminish nor impair the duties or obligations of any Debtor
or any other Entity under any Asbestos Insurance Policy or agreement relating
thereto (including any Asbestos Insurance Settlement Agreement), nor shall the
discharge and release provisions contained in the Plan diminish nor impair the
duties, obligations or the Asbestos Insurer Coverage Defenses of any Asbestos
Insurance Company under any Asbestos Insurance Policy or agreement relating
thereto. The Reorganized Debtors shall not voluntarily assist any
Person in the establishment of any rights, action, cause of action or claim
against the Century Entities in anyway relating to any Asbestos Claim or other
claim released under the Settlement and Buyback Agreement.
8.4 Compensation and Benefits
Programs
iii) Except for the
Congoleum Interests which are treated elsewhere in the Plan, unless otherwise
agreed to by the affected parties or modified by order of the Bankruptcy Court
or District Court, as applicable, all of the Debtors’ obligations under
employment and severance policies, and all compensation and benefit plan,
policies, and programs shall be treated as though they are executory contracts
that are deemed assumed under the Plan.
(b) As
of the Effective Date, the Pension Plans, as well as the collective bargaining
agreement by and between the Debtors and Teamsters Local 312, shall be deemed to
have been assumed by Reorganized Congoleum. Reorganized Congoleum
shall continue the Pension Plans, satisfy the minimum funding standards pursuant
to 26 U.S.C. § 412 and 29 U.S.C. § 1082, and administer the Pension Plans in
accordance with their terms and the provisions of ERISA. Furthermore,
nothing in the Plan shall be construed as discharging, releasing or relieving
the Debtors or Reorganized Congoleum, or any party, in any capacity, from any
liability imposed under any law or regulatory provision with respect to the
Pension Plans, the Pension Benefit Guaranty Corporation (“PBGC”) or the Teamsters
Pension Trust Fund of Philadelphia Vicinity (the “Teamsters Pension
Fund”). The PBGC, the Pension Plans and the Teamsters Pension Fund
shall not be enjoined or precluded from enforcing such liability as a result of
any provision of the Plan or the Confirmation Order. Notwithstanding
anything in this Section 8.4, the Plan Trust shall not assume any of the
liabilities, obligations, or responsibilities of the Debtors or Reorganized
Congoleum with respect to the Pension Plans, the PBGC or the Teamster Pension
Fund.
8.5 Retiree
Benefits. Notwithstanding
any other provisions of the Plan (other than the last sentence of this Section
8.5), any payments that are due to any individual for the purpose of providing
or reimbursing payments for retired employees and their spouses and dependents
for medical, surgical, or hospital care benefits, or benefits in the event of
sickness, accident, disability, or death under any plan, fund, or program
(through the purchase of insurance or otherwise) maintained or established in
whole or in part by the Debtors prior to the Petition Date shall be continued
for the duration of the period, if any, that the Debtors have obligated
themselves to provide such benefits. Notwithstanding the foregoing,
no employee or retired employee (nor their spouses or dependents and
beneficiaries) of the Debtors or the Reorganized Debtors shall be entitled to
assert any Asbestos Claim against the Debtors or the Reorganized
Debtors.
8.6 Indemnification of
Directors, Officers and Employees The
obligations of the Debtors to indemnify their current and former directors,
officers or employees to the extent provided in the Debtors’ constituent
documents or required pursuant to applicable general corporation law shall be
deemed and treated as obligations that are assumed by Reorganized Congoleum
pursuant to the Plan as of the Effective Date; provided, however, that (i)
with respect to acts or omissions occurring prior to, on or after the Petition
Date, the indemnification obligation of Reorganized Congoleum is limited
exclusively to the extent of proceeds available under any applicable directors
and officers insurance policy for the act(s) and/or omission(s) at issue and
(ii) no current or former director, officer or employee shall be indemnified
with respect to the gross negligence, fraud or willful misconduct of such
party.
32
ARTICLE
IX
ACCEPTANCE
OR REJECTION OF THE PLAN
9.1 Classes Entitled to
Vote. The
holders of Claims or Interests in each Impaired Class of Claims or Interests,
i.e., Classes 4, 6, 7, 8, 9 and 10 whose Claims or Interests are Allowed or
temporarily allowed for voting purposes, are entitled to vote to accept or
reject the Plan pursuant to the Voting Procedures Order; provided however that the
holders of Congoleum Interests in Class 10 are deemed to have rejected the Plan
in accordance with the provisions of Section 1126(g) of the Bankruptcy Code and,
accordingly, their separate vote will not be solicited.
9.2 Acceptance by Impaired
Classes of Claims
. Pursuant
to section 1126(c) of the Bankruptcy Code, an Impaired Class of Claims shall
have accepted the Plan if (a) the holders of at least two-thirds in dollar
amount of the claims actually voting in such Class (other than Claims held by
any holder designated pursuant to section 1126(e) of the Bankruptcy Code) have
voted to accept the Plan and (b) more than one-half in number of such claims
actually voting in such Class (other than Claims held by any holder designated
pursuant to section 1126(e) of the Bankruptcy Code) have voted to accept the
Plan.
9.3 Acceptance by Impaired Class
of Interests. Pursuant
to section 1126(d) of the Bankruptcy Code, an Impaired Class of Interests shall
have accepted the Plan if the holders of at least two-thirds in amount of the
Allowed Interests actually voting in such Class (other than Interests held by
any holder designated pursuant to section 1126(e) of the Bankruptcy Code) have
voted to accept the Plan. The holders of Congoleum Interests in Class
10 are deemed to have rejected the Plan in accordance with the provisions of
Section 1126(g) of the Bankruptcy Code.
9.4 Acceptance Pursuant to
Section 524(g) of the Bankruptcy Code. The
Plan shall have been voted upon favorably as required by section
524(g)(2)(B)(ii)(IV)(bb) of the Bankruptcy Code.
9.5 Presumed Acceptance of
Plan. Classes
1, 2, 3, 5, and 11 are Unimpaired. Under section 1126(f) of the
Bankruptcy Code, the holders of Claims and Interests in such Classes are
conclusively presumed to have voted to accept the Plan.
9.6 Reservation of
Rights. In
the event that any Impaired Class fails to accept the Plan by the requisite
numbers and amounts required by the Bankruptcy Code, the Plan Proponents reserve
the right to seek Confirmation of the Plan under section 1129(b) of the
Bankruptcy Code.
ARTICLE
X
CONDITIONS
TO CONFIRMATION AND EFFECTIVENESS
10.1 Conditions to
Confirmation. Confirmation
of the Plan shall not occur unless each of the following conditions has been
satisfied or waived in accordance with Section 10.3 below. These
conditions to Confirmation, which are designed, among other things, to ensure
that the Injunctions, releases, and discharges set forth in Article XI
shall be effective, binding and enforceable, are as follows:
(a) The
District Court shall have made specific findings and determinations, among
others, in substantially the following form:
(i) The
Discharge Injunction and the Asbestos Channeling Injunction are to be
implemented in connection with the Plan and the Plan Trust;
33
(ii) As
of the Petition Date, Congoleum has been named as a defendant in personal
injury, wrongful death or property damage actions seeking recovery for damages
allegedly caused by the presence of, or exposure to, asbestos or
asbestos-containing products;
(iii) The
Plan Trust, upon the Effective Date, shall assume the liabilities of the Debtors
with respect to Plan Trust Asbestos Claims and Demands;
(iv) The
Plan Trust is to be funded in part by securities of Reorganized Congoleum in the
form of the Plan Trust Common Stock, which constitutes an
obligation of Reorganized Congoleum to make future payments to the Plan
Trust;
(v) On
the Effective Date, the Plan Trust will own a majority of the voting shares of
Reorganized Congoleum;
(vi) The
Plan Trust is to use its assets and income to pay Plan Trust Asbestos Claims and
Plan Trust Expenses;
(vii) Congoleum
is likely to be subject to substantial future Demands for payment arising out of
the same or similar conduct or events that gave rise to the Plan Trust Asbestos
Claims, which are addressed by the Asbestos Channeling Injunction;
(viii) The
actual amounts, numbers and timing of future Demands cannot be
determined;
(ix) Pursuit
of Demands outside the procedures prescribed by the Plan and the TDP is likely
to threaten the Plan’s purpose to deal equitably with Plan Trust Asbestos Claims
and future Demands;
(x) The
Plan establishes a separate Class 7 for Asbestos Personal Injury Claims that are
to be addressed by the Plan Trust and at least seventy-five percent (75%) of the
Asbestos Claimants voting in Class 7 have accepted the Plan;
(xi) The
Plan establishes a separate class of Asbestos Property Damage Claims that are to
be addressed by the Plan Trust and at least seventy-five percent (75%) of the
claimants voting in such class have accepted the Plan;
(xii) Pursuant
to court orders or otherwise, the Plan Trust shall operate through mechanisms
such as structured, periodic or supplemental payments, pro rata distributions,
matrices or periodic review of estimates of the numbers and values of Asbestos
Personal Injury Claims or other comparable mechanisms, that provide reasonable
assurance that the Plan Trust shall value, and be in a financial position to
pay, Asbestos Personal Injury Claims and Demands therefor in substantially the
same manner;
(xiii) The
Futures Representative was appointed by the Bankruptcy Court as part of the
proceedings leading to the issuance of the Discharge Injunction and the Asbestos
Channeling Injunction for the purpose of, among other things, protecting the
rights of persons that might subsequently assert Demands of the kind that are
addressed in the Discharge Injunction and the Asbestos Channeling Injunction and
transferred to the Plan Trust;
(xiv) In
light of the benefits provided, or to be provided, to the Plan Trust on behalf
of each Protected Party, the Asbestos Channeling Injunction is fair and
equitable with respect to the persons that might subsequently assert Demands
against any Protected Party;
(xv) The
Plan otherwise complies with section 524(g) of the Bankruptcy Code;
34
(xvi) Congoleum’s
contributions to the Plan Trust provided for herein, together with the Asbestos
Insurance Assignment, the Plan Trust Common Stock, constitute substantial assets
of the Plan Trust and the reorganization;
(xvii) The
duties and obligations of the insurers that issued policies and their successors
and assigns, or, with respect to any insolvent insurers, their liquidators
and/or the state insurance guaranty funds that bear responsibility with respect
to such rights under such policies which constitute the Asbestos Insurance
Rights and Asbestos Property Damage Insurance Rights are not eliminated or
diminished by the transfer pursuant to the Plan of the Debtors’ rights in the
Asbestos Insurance Rights and Asbestos Property Damage Insurance Rights pursuant
to the Insurance Assignment Agreement;
(xviii) The
Settling Asbestos Insurance Companies are entitled to the benefits of the
Asbestos Channeling Injunction with respect to Plan Trust Asbestos
Claims;
(xix) After
Confirmation, each Asbestos Insurance Settlement Agreement of a Settling
Asbestos Insurance Company and each Final Order of the Bankruptcy Court or
District Court, as applicable, approving such Settlement Agreements shall be
binding upon and inure to the benefit of the Plan Trust and the Plan Trustee,
and the Plan Trust shall become fully bound by, and entitled to all of the
rights afforded to the Plan Trust and/or the Debtors under, all of the terms and
conditions of each such Asbestos Insurance Settlement Agreement without need for
further act or documentation of any kind;
(xx) After
Confirmation, none of the Debtors, Reorganized Congoleum, the Futures
Representative, the Plan Trustee, and the Asbestos Claimants’ Committee shall
seek to terminate, reduce or limit the scope of the Asbestos Channeling
Injunction or any other injunction contained in the Plan that inures to the
benefit of any Settling Asbestos Insurance Company;
(xxi) As
of the Effective Date, the Insurance Assignment Agreement shall be a valid and
binding obligation of each of the parties thereto, shall be in full force and
effect and shall be enforceable in accordance with its terms, in each case
notwithstanding any anti-assignment provision in or incorporated into any
Asbestos Insurance Policy and applicable state law; and
(xxii) The
Plan Trust is a “qualified settlement fund” pursuant to Section 468(B) of the
IRC and the regulations issued pursuant thereto.
(b) Confirmation
Order. The District Court shall have made such findings and
determinations regarding the Plan as shall enable the entry of the Confirmation
Order and any other order entered in conjunction therewith, each of which shall
be in form and substance acceptable to the Bondholders’ Committee, the Debtors
and the Asbestos Claimants’ Committee and, insofar as such
findings and determinations affect the Financing Order or the rights of Wachovia
thereunder, Wachovia.
10.2 Conditions to
Effectiveness. Notwithstanding
any other provision of the Plan or the Confirmation Order, the Effective Date of
the Plan shall not occur unless and until each of the following conditions has
been satisfied or waived in accordance with Section 10.3 below:
(a) Confirmation
Order. The Confirmation Order shall have been entered by the
District Court and the Confirmation Order and any order of the District Court
shall be in form and substance acceptable to the Bondholders’ Committee, the
Debtors and the Asbestos Claimants’ Committee and the Confirmation Order (and
affirming order of the District Court) shall have become a Final Order; provided, however, that the
Effective Date may occur at a point in time when the Confirmation Order is not a
Final Order at the option of the Plan Proponents unless the effectiveness of the
Confirmation Order has been stayed, reversed or vacated. The
Effective Date may occur, again at the option of the Plan Proponents, on the
first Business Day immediately following the expiration or other termination of
any stay of effectiveness of the Confirmation Order.
(b) Injunctions. The
Discharge Injunction, the Asbestos Channeling Injunction and the Anti-Suit
Injunction shall be
in full force and effect.
35
(c) Exit
Facility. The Exit Facility to be entered into by Reorganized
Congoleum, and all documents to be
executed in connection with the Exit Facility, shall be in form and substance
reasonably satisfactory to the Bondholders’ Committee, the Debtors and the
Asbestos Claimants’ Committee and shall have been executed and delivered and all
conditions precedent to effectiveness thereof shall have been satisfied or
waived by the parties thereto.
(d) New Senior Notes and New
Indenture. The New Indenture shall have been executed and
authorized and the New Senior Notes shall have been delivered in accordance with
the New Indenture and shall constitute valid senior secured indebtedness of
Reorganized Congoleum.
(e) New Common
Stock. The New Common Stock shall have been issued in
accordance with the Plan.
(f) Plan
Documents. The Plan Documents necessary or appropriate to
implement the Plan (which shall include without limitation, the Plan, the Plan
Trust Agreement, the TDP, the Exit Facility, the New Senior Notes, the New
Indenture, the Registration Rights Agreement, the Amended and Restated
Certificate, the Amended and Restated Bylaws, the New ABI Agreement, the
Stockholders Agreement, and the Insurance Assignment Agreement) shall have been
executed, delivered and, where applicable, filed with the appropriate
governmental authorities; all conditions precedent to the effectiveness of each
of such Plan Documents shall have been satisfied or waived by the respective
parties thereto; and the Plan Documents shall be in full force and
effect. The Plan Documents shall be acceptable to the Bondholders’
Committee, the Debtors and the Asbestos Claimants’ Committee.
(g) Other
Assurances. The Debtors or the Plan Proponents shall have
obtained either (i) a private letter ruling from the Internal Revenue
Service establishing that the Plan Trust is a “qualified settlement fund”
pursuant to Section 468(B) of the IRC and the regulations issued pursuant
thereto, or (ii) other decisions, opinions or assurances regarding certain
tax consequences of the Plan, satisfactory to the Debtors and the Asbestos
Claimants’ Committee.
(h) [reserved]
(i) Merger. The
District Court will have made a specific finding and determination that the
merger of the Subsidiary Debtors with and into Congoleum, with Reorganized
Congoleum as the sole surviving corporation, is authorized.
(j) Judicial
Fees. All fees payable pursuant to 28 U.S.C. § 1930 if
and to the extent assessed against the Bankruptcy Estates of the Debtors will
have been paid in full.
(k) [reserved]
(l) [reserved]
(m) Other Approvals, Documents
and Actions. All authorizations, consents and regulatory
approvals required, if any, in connection with the consummation of the Plan
shall have been obtained, and all actions, documents, and agreements necessary
to implement the Plan shall have been effected or executed.
10.3 Waiver of
Conditions. Each
of the conditions set forth in Sections 10.1 and 10.2 above may be waived in
whole or in part by the Plan Proponents without any notice to other parties in
interest or the District Court and without a hearing. The failure of
the Plan Proponents to exercise any of the foregoing rights shall not be deemed
a waiver of any other rights, and each such right shall be deemed an ongoing
right that may be asserted at any time.
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ARTICLE
XI
INJUNCTIONS,
RELEASES AND DISCHARGE
11.1 Discharge. a) Except
as specifically provided in the Plan, the Plan Documents or in the Confirmation
Order, as of the Effective Date, Confirmation shall discharge the Debtors and
the Reorganized Debtors pursuant to section 1141(d)(1)(A) of the Bankruptcy Code
from any and all Claims of any nature whatsoever and Demands including, without
limitation, any Claims, demands and liabilities that arose before Confirmation,
and all debts of the kind specified in section 502(g), 502(h) or 502(i) of the
Bankruptcy Code, whether or not (a) a Proof of Claim based on such Claim was
filed or deemed filed under section 501 of the Bankruptcy Code, or such Claim
was listed on the Schedules of the Debtors, (b) such Claim is or was Allowed
under section 502 of the Bankruptcy Code, or (c) the holder of such Claim has
voted on or accepted the Plan. Except as specifically provided in the
Plan or Plan Documents, the rights that are provided in the Plan as of the
Effective Date shall be in exchange for and in complete satisfaction, settlement
and discharge of all Claims (including without limitation Asbestos Claims) or
Demands against, Liens on, and interests in the Debtors or the Reorganized
Debtors or any of their assets or properties. Notwithstanding
anything herein to the contrary, nothing in this Section 11.1 shall affect the
right of any Asbestos Insurance Company to assert any Asbestos Insurer Coverage
Defenses.
(b) Notwithstanding
any other provision of the Plan to the contrary, Confirmation shall not
discharge any pre-Petition Date or post-Petition Date, pre-Confirmation Date
liability that may be due from any of the Debtors to the Internal Revenue
Service as currently set forth in certain Proofs of Claim and Administrative
Expense Claim, as amended, filed by the Internal Revenue
Service. Should any pre-Petition Date or post-Petition Date,
pre-Confirmation Date tax liabilities be determined by the Internal Revenue
Service to be due from any of the Debtors for any of the tax periods reflected
by such Proofs of Claim or Administrative Expense Claim, such liabilities shall
be determined administratively or in a judicial forum in the manner in which
such liabilities would have been resolved had these Reorganization Cases not
been commenced. Any resulting liabilities determined pursuant to a
Final Order or other final determination shall be paid as if these
Reorganization Cases had not been commenced.
11.2 Exculpation As
of the Effective Date, (i) the Debtors, the Futures Representative, the Asbestos
Claimants’ Committee, the Bondholders’ Committee and each of their
Representatives shall not have or incur any liability to any Entity for any act
or omission taken on or after the Petition Date in connection with or arising
out of the negotiation of the Plan, any Plan Document or any prior plan of
reorganization relating to the Debtors or other related documents, the pursuit
of Confirmation of the Plan or any prior plan of reorganization relating to the
Debtors, the consummation of the Plan, or the administration of the Plan, or the
property to be distributed under the Plan; and (ii) in all respects the Debtors,
Futures Representative, the Asbestos Claimants’ Committee and the Bondholders’
Committee shall be entitled to rely upon the advice of counsel with respect to
their duties and responsibilities under the Plan and the other Plan
Documents. For avoidance of doubt, in no event shall any such party
be exculpated from liability under this Section 11.2 in the case of the gross
negligence, fraud or willful misconduct of such party. None of the
foregoing parties shall be exculpated under this provision with respect to any
acts occurring prior to the Petition Date. With respect to officers
and directors of the Debtors, this section shall apply only to such officers and
directors who were serving in such capacity on and after the Petition
Date.
11.3 Releases by Holders of Plan
Trust Asbestos Claims. Pursuant
to this Section 11.3 and the Confirmation Order, which may include release(s)
for the benefit of any Settling Asbestos Insurance Company consistent with the
terms of this Section 11.3 and the terms of the relevant Asbestos Insurance
Settlement Agreement, any holder of a Plan Trust
Asbestos Claim that receives a payment from the Plan Trust shall be deemed to
have unconditionally released the Plan Trust and each Settling Asbestos
Insurance Company from any and all Claims, obligations, rights, suits,
damages, causes of action, remedies, and liabilities whatsoever, whether known
or unknown, foreseen or unforeseen, existing or hereafter arising, in law,
equity, or otherwise, arising from,
relating to, or involving the manufacture, sale, distribution, installation,
formulation, marketing, transport, handling or any other activity involving any
asbestos containing products of Congoleum and any of Congoleum entities
identified in the Confirmation Order, which may incorporate the terms of one or
more Asbestos Insurance Settlement Agreement, or their premises to the extent
such Claim arises from, relates to or involves exposure to asbestos, including
without limitation, any operation claims, contribution claims, direct action
claims, and insurance coverage claims. For the avoidance of doubt, in
no event shall any such party be released under this Section 11.3 in the case of
the gross negligence, fraud or willful misconduct of such party.
37
11.4 Discharge
Injunction. Except
as specifically provided in the Plan Documents to the contrary, the
satisfaction, release, and discharge set forth in Section 11.1 shall also
operate as an injunction, pursuant to sections 105, 524(g) and 1141 of the
Bankruptcy Code, prohibiting and enjoining the commencement or continuation of
any action, the employment of process or any act to collect, recover from, or
offset (a) any Claim or Demand against or Interest in the Debtors, the
Reorganized Debtors, or the Plan Trust by any Entity and (b) any cause of
action, whether known or unknown, against the Debtors and the Reorganized
Debtors based on such Claim or Interest described in subpart (a) of this Section
11.4.
11.5 Third Party
Releases. Notwithstanding
anything set forth in the Plan, no third party releases are being granted
pursuant to the Plan nor are the Plan Proponents seeking approval of any such
third party releases.
11.6 Asbestos Channeling
Injunction. The sole recourse of the
holder of a Plan Trust Asbestos Claim or Demand on account of such Claim or
Demand or of a Person that had or could have asserted an Asbestos Claim or
Demand shall be to the Plan Trust pursuant to the provisions of the Asbestos
Channeling Injunction, the Plan, the Plan Trust Agreement and the TDP, and such
holder shall have no right whatsoever at any time to assert its Plan Trust
Asbestos Claim or Demand against the Debtors, the Reorganized Debtors, any other
Protected Party, or any property or interest in property of the Debtors, the
Reorganized Debtors, or any other Protected Party. Without limiting
the foregoing, from and after the Effective Date, the Asbestos Channeling
Injunction shall apply to all present and future holders of Plan Trust Asbestos
Claims and Demands, and all such holders shall be permanently and forever
stayed, restrained, and enjoined from taking any of the following actions for
the purpose of, directly or indirectly, collecting, recovering, or receiving
payment of, on, or with respect to any Plan Trust Asbestos Claims and Demands,
other than from the Plan Trust in accordance with the Asbestos Channeling
Injunction and pursuant to the Plan, the Plan Trust Agreement and the
TDP:
(a) commencing, conducting, or
continuing in any manner, directly or indirectly, any suit, action, or other
proceeding (including a judicial, arbitration, administrative, or other
proceeding) in any forum against or affecting any Protected Party or any
property or interests in property of any Protected Party;
(b) enforcing, levying,
attaching (including any prejudgment attachment), collecting, or otherwise
recovering by any means or in any manner, whether directly or indirectly, any
judgment, award, decree, or other order against any Protected Party or any
property or interests in property of any Protected Party;
(c) creating, perfecting, or
otherwise enforcing in any manner, directly or indirectly, any encumbrance
against any Protected Party, or any property or interests in property of any
Protected Party;
(d) setting off, seeking
reimbursement of, contribution from, or subrogation against, or otherwise
recouping in any manner, directly or indirectly, any amount against any
liability owed to any Protected Party or any property or interests in property
of any Protected Party; and
(e) proceeding in any manner in
any place with regard to any matter that is subject to resolution pursuant to
the Plan Trust, except in conformity and compliance with the Plan, the Plan
Trust Agreement and the TDP.
Any right, claim or cause of
action that an Asbestos Insurance Company may have been entitled to assert
against a Settling Asbestos Insurance Company based on or relating to Asbestos
Claims shall be channeled to and become a right, claim or cause of action as an
offset claim against the Plan Trust and not against the Settling Asbestos
Insurance Company in question and all persons, including any Asbestos Insurance
Company, shall be enjoined from asserting any such right, claim or cause of
action against a Settling Asbestos Insurance Company.
Except as otherwise
expressly provided in the Plan, nothing contained in the Plan shall constitute
or be deemed a waiver of any claim, right or cause of action that the Debtors,
the Reorganized Debtors, or the Plan Trust may have against any Entity in
connection with or arising out of or related to an Asbestos
Claim. Notwithstanding any other provision in the Plan to the
contrary, nothing in the Plan shall be understood to channel, prevent, impair or
limit in any way enforcement against the Debtors, Reorganized Congoleum, or any
other Protected Party of any rights provided in connection with any Workers’
Compensation Claim.
38
11.7 Reservation of
Rights. Notwithstanding
any other provision of the Plan to the contrary, the satisfaction, release and
discharge, and the Injunctions set forth in Article XI, shall not serve to
satisfy, discharge, release, or enjoin (a) claims by any Entity (other than the
Reorganized Debtors and their Affiliates) against the Plan Trust for payment of
Plan Trust Asbestos Claims in accordance with the Plan, the Plan Trust Agreement
and the TDP, as applicable, (b) claims by any Entity against the Plan Trust for
the payment of Plan Trust Expenses, (c) claims by the Reorganized Debtors, the
Plan Trust, or any other Entity to enforce the provisions of any Asbestos
Insurance Settlement Agreement or any provision of the Plan or another Plan
Document, or (d) the rights of any Asbestos Insurance Company to assert any
claim, debt, obligation, cause of action or liability for payment against any
other Asbestos Insurance Company that is not a Settling Asbestos Insurance
Company.
11.8 Rights Against Non-Debtors
under Securities Laws. Notwithstanding
any language to the contrary contained in the Disclosure Statement, Plan, and/or
Confirmation Order, no provision shall release any non-Debtor, including any
current and/or former officer and/or director of the Debtors from liability to
the United States Securities and Exchange Commission, in connection with any
legal action or claim brought by such governmental unit against such
Person(s).
11.9 Rights Against Debtors Under
Environmental Laws. Environmental
rights and Claims of Governmental Units and rights of contribution,
reimbursement and indemnity by other Entities (other than ABI) under applicable
Environmental Laws shall survive the Reorganization Cases, shall not be
discharged, impaired or adversely affected by the Plan and the Reorganization
Cases and shall be determined in the manner and by the administrative or
judicial tribunals in which such rights or Claims would have been resolved or
adjudicated if the Reorganization Cases had not been
commenced. Governmental Units and other Entities, other than ABI
whose claims, if any, shall be discharged, need not file any Proofs of Claim
under Environmental Laws in the Reorganization Cases in order to preserve Claims
under Environmental Laws. Nothing in the Confirmation Order or Plan
shall be construed as releasing or relieving any Entity of any liability under
any Environmental Law.
11.10 Disallowed Claims and
Disallowed Interests. On
and after the Effective Date, the Debtors shall be fully and finally discharged
from any liability or obligation on a Disallowed Claim or a Disallowed Interest
and any order creating a Disallowed Claim or a Disallowed Interest that is not a
Final Order as of the Effective Date solely because of an Entity’s right to move
for reconsideration of such order pursuant to section 502 of the Bankruptcy Code
or Bankruptcy Rule 3008 will nevertheless become and be deemed to be a Final
Order on the Effective Date. The Confirmation Order, except as
otherwise provided herein, or unless the District Court orders otherwise, shall
constitute an order: (a) disallowing all Claims (other than Plan Trust Asbestos
Claims that have not been previously expunged by Final Order of the Bankruptcy
Court or District Court, as applicable, or withdrawn) and Interests to the
extent such Claims and Interests are not allowable under any provision of
section 502 of the Bankruptcy Code, including, but not limited to, time-barred
Claims, and Claims for unmatured interest, and (b) disallowing or subordinating,
as the case may be, any Claims, or portions of Claims, for penalties or
Non-Compensatory Damages.
11.11 Anti-Suit
Injunction. With
respect to any Settling Asbestos Insurance Company, this Section 11.11 and the
Confirmation Order, which may include anti-suit injunction(s) for the benefit of
any Settling Asbestos Insurance Company consistent with the terms of this
Section 11.10 and the terms of the relevant Asbestos Insurance Settlement
Agreement, shall operate as an injunction, pursuant to section 105(a) of the
Bankruptcy Code, permanently and forever prohibiting and enjoining the
commencement, conduct or continuation of any action or cause of action, whether
known or unknown, the employment of process or any act to collect, recover from
or offset any non-asbestos claim, Claim or demand against any Settling Asbestos
Insurance Company arising out of, relating to, or in connection with an Asbestos
Insurance Policy or any other insurance policy or rights under such other
insurance policy issued to or insuring the relationship of the relevant Settling
Asbestos Insurance Companies with, the relevant Congoleum entities that are
insureds under such policies, but such injunction pursuant to section 105(a) of
the Bankruptcy Code shall not affect or modify the rights of Persons insured
under policies of insurance except to the extent released in an Asbestos
Insurance Settlement Agreement.
39
11.12 Insurance
Neutrality
(a) Except
as otherwise provided in Section 11.12(b):
(i) Nothing
in the Plan, the Plan Documents or the Confirmation Order shall preclude any
Entity from asserting in any proceeding any and all claims, defenses, rights or
causes of action that it has or may have under or in connection with any
Asbestos Insurance Policy or any Asbestos Insurance Settlement Agreement with
respect thereto;
(ii) Nothing
in the Plan, the Plan Documents or the Confirmation Order shall be deemed to
waive any claims, defenses, rights or causes of action that any Entity has or
may have under the provisions, terms, conditions, defenses and/or exclusions
contained in any Asbestos Insurance Policy or any Asbestos Insurance Settlement
Agreement with respect thereto, including but not limited to any and all such
claims, defenses, rights or causes of action based upon or arising out of
Asbestos Personal Injury Claims that are liquidated, resolved, discharged,
channeled, or paid in connection with the Plan; and
(iii) Notwithstanding
anything to the contrary in the Confirmation Order, the Plan, or any of the Plan
Documents, nothing in the Confirmation Order, the Plan, or any of the Plan
Documents (including any other provision that purports to be preemptory or
supervening other than Section 11.12(b)), shall in any way operate to impair, or
have the effect of impairing, the insurers’ legal, equitable, or contractual
rights, if any, in any respect; nor shall the Plan, any of the Plan Documents,
the Confirmation Order, or the estimation, liquidation or payment of any Claim
for purposes of distribution by the Trust in accordance with the Plan and the
Plan Documents have any binding effect on any Asbestos Insurance Company or have
any res judicata or collateral estoppel effect upon any Asbestos Insurance
Company for any other purpose, including without limitation with respect to the
amount or the reasonableness of any such Claim, or constitute a binding
determination on any issue or the creation of any liquidated claim with respect
to any Asbestos Insurance Company. The rights of insurers shall be
determined under the applicable Asbestos Insurance Policy or any Asbestos
Insurance Settlement Agreement with respect thereto.
(b) Notwithstanding
the provisions of Section 11.12(a), Asbestos Insurance Companies shall be bound
by the District Court’s findings and conclusions with respect to whether, under
the Bankruptcy Code, the assignment or transfer of rights under the Asbestos
Insurance Assignment is valid and enforceable against each Asbestos Insurance
Company notwithstanding any anti-assignment provision in or incorporated into
any Asbestos Insurance Policy and applicable state law, and therefore Asbestos
Insurance Companies shall be entitled to litigate that issue in connection with
Confirmation, and shall retain all rights of appeal with respect thereto.
Further, to the extent any Asbestos Insurance Company chooses, notwithstanding
the protections provided by Section 11.11(a), to litigate any other issues in
connection with Confirmation, and the District Court gives such Asbestos
Insurance Company standing to litigate those issues and rules on the merits of
those issues, then such Asbestos Insurance Company shall be bound by the
District Court's findings and conclusions thereon, subject to any rights of
appeal.
11.13 No Liability for
Solicitation or Participation. Pursuant
to section 1125(e) of the Bankruptcy Code, the Confirmation Order will provide
that all of the Persons who have solicited acceptances or rejections of the Plan
(including the Bondholders’ Committee, the Asbestos Claimants’ Committee, the
Debtors and each of their respective members and Representatives, as applicable,
and the Voting Agent) have acted in good faith and in compliance with the
applicable provisions of the Bankruptcy Code, and are not liable on account of
such solicitation or participation, for violation of any applicable law, rule,
or regulation governing the solicitation of acceptances or rejections of the
Plan or the offer, issuance, sale or purchase of securities.
ARTICLE
XII
MATTERS
INCIDENT TO PLAN CONFIRMATION
12.1 Term of Certain Injunctions
and Automatic Stay
(a) All
of the injunctions and/or automatic stays provided for in or in connection with
the Reorganization Cases, whether pursuant to section 105, 362, 524(g), or any
other provision of the Bankruptcy Code or other applicable law, in existence
immediately prior to Confirmation shall remain in full force and effect until
the Injunctions become effective, and thereafter if so provided by the Plan, the
Confirmation Order, or by their own terms. In addition, on and after
Confirmation, the Bondholders’ Committee, the Debtors and the Asbestos
Claimants’ Committee may seek such further orders as they may deem necessary to
preserve the status quo during the time between Confirmation and the Effective
Date.
40
(b) Each
of the Injunctions shall become effective on the Effective Date and shall
continue in effect at all times thereafter. Notwithstanding anything
to the contrary contained in the Plan, all actions in the nature of those to be
enjoined by the Injunctions shall be enjoined during the period between the
Confirmation Date and the Effective Date.
12.2 No Successor
Liability. Except
as otherwise expressly provided in the Plan, the Debtors, the Reorganized
Debtors, their Affiliates, the Asbestos Claimants’ Committee, the Bondholders’
Committee, the Plan Trust and the Futures Representative do not, pursuant to the
Plan or otherwise, assume, agree to perform, pay, or indemnify creditors or
otherwise have any responsibilities for any liabilities or obligations of the
Debtors relating to or arising out of the operations of or assets of the
Debtors, whether arising prior to, on, or after the Confirmation
Date. Neither the Debtors, the Reorganized Debtors, their Affiliates,
nor the Plan Trust is, or shall be, a successor to the Debtors by reason of any
theory of law or equity, and none shall have any successor or transferee
liability of any kind or character, except that the Reorganized Debtors and the
Plan Trust shall assume the obligations specified in the Plan Documents and the
Confirmation Order.
12.3 Revesting. Except
as otherwise expressly provided in the Plan, on the Effective Date, Reorganized
Congoleum shall be vested with all of the assets and property of the Estates,
free and clear of all Claims, Liens, charges and other interests of holders of
Claims or Interests, and may operate its business free of any restrictions
imposed by the Bankruptcy Code or by the District Court.
12.4 Vesting and Enforcement of
Causes of Action. Pursuant
to section 1123(b)(3)(B) of the Bankruptcy Code, except as otherwise provided in
the Plan, Reorganized Congoleum shall be vested with and have the right to
enforce against any Entity any and all of the Debtors’ Causes of
Action other than Causes of Action related to Plan Trust Asbestos Claims and
Plan Trust Assets (including the right to pursue such claims, if any, in the
name of any Debtor if necessary), with the proceeds of the recovery of any such
actions to be property of Reorganized Congoleum; provided, however, that
nothing herein shall alter, amend, or modify the injunctions (including the
Injunctions), releases, or discharges provided herein. Pursuant to
section 1123(b)(3)(B) of the Bankruptcy Code, except as otherwise provided in
the Plan, the Plan Trust shall be vested with and have the right to enforce
against any Entity any and all of the Debtors’ Causes of Action relating to any
Plan Trust Asbestos Claims or any Plan Trust Assets, including the right to
pursue such claims, if any, in the name of any Debtor, if necessary; and for
this purpose the Plan Trust shall be designated as a representative of the
Estates, with the proceeds of the recovery of any such actions to be property of
the Plan Trust; provided,
however, that nothing herein shall alter, amend, or modify the
injunctions (including the Injunctions), releases, or discharges provided
herein.
After
the Effective Date, Reorganized Congoleum, in its sole and absolute discretion,
shall have the right to bring, settle, release, compromise, or enforce such
Causes of Action (or decline to do any of the foregoing), without further
approval of the District Court. Reorganized Congoleum, or any successors, in the
exercise of its sole discretion, may pursue such Causes of Action so long as it
is in the best interests of Reorganized Congoleum or any successors holding such
rights of action. The failure of the Plan Proponents to specifically list any
claim, right of action, suit, proceeding or other Causes of Action in the Plan
or the Plan Supplement does not, and will not be deemed to, constitute a waiver
or release by the Debtors or Reorganized Congoleum of such claim, right of
action, suit, proceeding or other Causes of Action, and Reorganized Congoleum
will retain the right to pursue such claims, rights of action, suits,
proceedings and other Causes of Action in its sole discretion and, therefore, no
preclusion doctrine, collateral estoppel, issue preclusion, claim preclusion,
estoppel (judicial, equitable or otherwise) or laches will apply to such claim,
right of action, suit, proceeding or other Causes of Action upon or after the
Confirmation or consummation of the Plan.
12.5 GHR/Kenesis
Actions. On
the Effective Date, the GHR/Kenesis Actions shall be preserved for enforcement
solely by, and for the sole benefit of, Reorganized Congoleum.
41
ARTICLE
XIII
MISCELLANEOUS
13.1 Jurisdiction. Until
the Reorganization Cases are closed, the District Court shall retain the fullest
and most extensive jurisdiction permissible, including that necessary to ensure
that the purposes and intent of the Plan are carried out. Except as
otherwise provided in the Plan, the District Court shall retain jurisdiction to
hear and determine all Claims against and Interests in the Debtors, and to
adjudicate and enforce all other causes of action which may exist on behalf of
the Debtors. Nothing contained herein shall prevent the Debtors,
Reorganized Congoleum, or the Plan Trust from taking such action as may be
necessary in the enforcement of any cause of action which the Debtors have or
may have and which may not have been enforced or prosecuted by the Debtors,
which cause of action shall survive Confirmation of the Plan and shall not be
affected thereby except as specifically provided herein. Nothing
contained herein concerning the retention of jurisdiction by the District Court
shall be deemed to be a retention of exclusive jurisdiction with respect to any
Asbestos Insurance Action; rather any court other than the District Court which
has jurisdiction over an Asbestos Insurance Action shall have the continuing
right to exercise such jurisdiction.
13.2 General
Retention. Following the Confirmation of the Plan, the
administration of the Reorganization Cases will continue at least until the
completion of the transfers contemplated to be accomplished on the Effective
Date. Moreover, the Plan Trust shall be subject to the continuing
jurisdiction of the District Court to the extent required by the requirements of
section 468B of the IRC and the regulations issued pursuant
thereto. The District Court shall also retain jurisdiction for the
purpose of classification of any Claim and the re-examination of Claims that
have been Allowed for purposes of voting, and the determination of such
objections as may be filed with the District Court with respect to any
Claim. The failure by the Debtors to object to, or examine, any Claim
for the purposes of voting, shall not be deemed a waiver of the right of the
Debtors, Reorganized Congoleum, or the Plan Trust, as the case may be, to object
to or re-examine such Claim in whole or in part.
13.3 Specific
Purposes. In
addition to the foregoing, the District Court shall retain jurisdiction for the
following specific purposes after Confirmation:
(a) to
modify the Plan after Confirmation, pursuant to the provisions of the Bankruptcy
Code and the Bankruptcy Rules;
(b) to
correct any defect, cure any omission, reconcile any inconsistency, or make any
other necessary changes or modifications in or to the Plan, the Plan Documents
or the Confirmation Order as may be necessary to carry out the purposes and
intent of the Plan, including the adjustment of the date(s) of performance under
the Plan Documents in the event that the Effective Date does not occur as
provided herein so that the intended effect of the Plan may be substantially
realized thereby;
(c) to
assure the performance by the Disbursing Agent, the Indenture Trustee and the
Plan Trustee of their respective obligations to make distributions under the
Plan;
(d) to
enforce and interpret the terms and conditions of the Plan
Documents;
(e) to
enter such orders or judgments, including, but not limited to, injunctions as
are necessary to (i) enforce the title, rights, and powers of the Debtors, the
Reorganized Debtors, the Plan Trust, the Futures Representative and the Trust
Advisory Committee or (ii) enable holders of Claims to pursue their rights
against any Entity that may be liable therefor pursuant to applicable law or
otherwise, including, but not limited to, Bankruptcy Court or District Court
orders;
(f) to
hear and determine any motions or contested matters involving taxes, tax
refunds, tax attributes, tax benefits, tax proceedings, and similar or related
matters with respect to the Debtors, the Reorganized Debtors, or the Plan Trust
relating to tax periods or portions thereof ending on or before the Effective
Date, arising on account of transactions contemplated by the Plan Documents, or
relating to the period of administration of the Reorganization
Cases;
42
(g) to
hear and determine all applications for compensation of professionals and
reimbursement of expenses under sections 330, 331, or 503(b) of the Bankruptcy
Code;
(h) to
hear and determine any causes of action arising during the period from the
Petition Date through the Effective Date;
(i) to
hear and determine any claim, causes of action, dispute or other matter in any
way related to the Plan Documents or the transactions contemplated thereby
against the Debtors, the Reorganized Debtors, the Bondholders’ Committee, the
Asbestos Claimants’ Committee, the Trust Advisory Committee, the Plan Trust, the
Plan Trustee, or the Futures Representative and each of their respective
Representatives;
(j) to
hear and determine any and all motions pending as of Confirmation for the
rejection, assumption, or assignment of executory contracts or unexpired leases
and the allowance of any Claim resulting therefrom;
(k) to
determine the allowance and/or disallowance of any Claims against the Debtors or
their Estates, including, without limitation, any objections to any such Claims
and the compromise and settlement of any Claim against the Debtors or their
Estates;
(l) to
hear and determine such other matters and for such other purposes as may be
provided in the Confirmation Order;
(m) to
consider and act on the compromise and settlement of any Claim against or
Interest in the Debtors or their Estates;
(n) to
hear and determine all questions and disputes regarding title to the assets of
the Debtors, their Estates, Reorganized Congoleum or the Plan
Trust;
(o) to
hear and determine any other matters related hereto, including the
implementation and enforcement of all orders entered by the Bankruptcy Court or
District Court, as applicable, in these Reorganization Cases;
(p) to
retain continuing jurisdiction with regard to the Plan Trust sufficient to
satisfy the requirements of the Treasury Regulations promulgated under section
468B of the IRC (including Treas. Reg. Section 1.468B-1(c)(1));
(q) to
hear and determine any and all applications brought by the Plan Trustee to
amend, modify, alter, waive, or repeal any provision of the Plan Trust Agreement
or the TDP;
(r) to
enter such orders as are necessary to implement and enforce the Injunctions and
the other injunctions described herein, including, without limitation, orders
extending the protections afforded by section 524(g)(4) of the Bankruptcy Code
to the Protected Parties, including without limitation, the Settling Asbestos
Insurance Companies; and
(s) to
hear and determine any motions or contested matters involving or related to any
GHR/Kenesis Action.
Notwithstanding
anything to the contrary in this Section 13.3, (i) the allowance of Plan Trust
Asbestos Claims (other than Asbestos Property Damage Claims) and the forum in
which such allowance will be determined, shall be governed by and made in
accordance with the Plan Trust Agreement and the TDP and (ii) the District Court
will have concurrent rather than exclusive jurisdiction with respect to disputes
relating to rights under insurance policies included in the Plan Trust
Assets.
13.4 Payment of Statutory
Fees. All
fees payable pursuant to section 1930 of title 28 of the United States Code, as
determined by the District Court at the Confirmation Hearing, shall be paid by
the Debtors on or before the Effective Date and thereafter by Reorganized
Congoleum as due until the Reorganization Cases are closed, converted or
dismissed. The Reorganized Debtors shall pay any quarterly fees
payable pursuant to 28 U.S.C. § 1930(a)(6) to the United States Trustee after
the Effective Date until such time as the case is converted, dismissed or closed
pursuant to a final decree. The Reorganized Debtor shall file post-Effective
Date reports, the form of which will be supplied by the United States
Trustee. Nothing contained in this Plan shall relieve the Debtors or
Reorganized Debtors from making payments to the United States Trustee when due
as required by 28 U.S.C. § 1930(a)(6).
43
13.5 Securities Law
Matters. It
is an integral and essential element of the Plan that the issuance of the New
Common Stock pursuant to the Plan shall be exempt from registration under the
Securities Act, pursuant to Section 1145 of the Bankruptcy Code and from
registration under state securities laws. Nothing in the Plan is
intended to preclude the Securities and Exchange Commission from exercising its
police and regulatory powers relating to the Debtors or any other
entity.
13.6 Plan
Supplement. The
Plan Supplement will contain, among other things, without limitation,
substantially final forms of a schedule identifying rejected contracts, the Exit
Facility Commitment Letter or Term Sheet, the Registration Rights Agreement, the
New ABI Agreement, the New Indenture, the Stockholders Agreement, the Amended
and Restated Bylaws, the Amended and Restated Certificate and schedules
identifying the initial officers and the initial board of directors of
Reorganized Congoleum, and shall be filed with the District Court no later than ten (10) Business Days prior to the
last date for filing objections to Confirmation of the
Plan. Notwithstanding the foregoing, the Plan Proponents may amend
the Plan Supplement and any attachments thereto, through and including the
Confirmation Date.
13.7 Allocation of Plan
Distributions Between Principal and Interest. To
the extent that any Allowed Claim entitled to a Distribution under this Plan is
composed of indebtedness and accrued but unpaid interest thereon, such
Distribution shall, to the extent permitted by applicable law, be allocated for
United States federal income tax purposes to the principal amount of the Claim
first and then, to the extent the consideration exceeds the principal amount of
the Claim, to the portion of the Claim representing accrued but unpaid
interest. Notwithstanding the foregoing, no Distribution shall be
made on account of Post-Petition Interest.
13.8 The Asbestos Claimants’
Committee, the Futures Representative and the Bondholders’
Committee. As
of the Effective Date, the Futures Representative shall (a) continue in
existence and the rights, duties and responsibilities of the Futures
Representative appointed by the District Court to serve after the Effective Date
shall be as set forth in the Plan Trust Documents and (b) continue in existence
for purposes of the Reorganization Cases with respect to any appeal or request
for reconsideration or stay pending appeal of the Confirmation Order and have
the right to prosecute and/or object to applications for Professional Fee
Claims. The Representatives retained by the Futures Representative
during the Reorganization Cases shall be released and discharged of and from all
further authority, duties, responsibilities and obligations related to, or
arising from, the Reorganization Cases on the same date the Futures
Representative ceases existence for purposes of the Reorganization
Cases. On the Effective Date, the Asbestos Claimants’ Committee and
the Bondholders’ Committee shall be dissolved except for the purposes of: (i)
any appeal or request for reconsideration or stay pending appeal of the
Confirmation Order; (ii) pending adversary proceedings, and (iii)
prosecuting and/or objecting to Professional Fee
claims. Representatives of the Asbestos Claimants’ Committee and the
Bondholders Committee shall be released and discharged of and from all further
authority, duties, responsibilities, and obligations related to, or arising
from, the Reorganization Cases on the same date the Asbestos Claimants’
Committee or the Bondholders’ Committee, as applicable, cease to exist for
purposes of the Reorganization Cases. Until the Effective Date, the
Debtors shall pay the reasonable fees and expenses of the Asbestos Claimants’
Committee, the Bondholders’ Committee and the Futures Representative in
accordance with any applicable fee order in the Reorganization
Cases. On the Effective Date, the Trust Advisory Committee
will assume those powers, duties, and responsibilities as provided in the Plan
Trust Agreement.
13.9 Revocation of
Plan. The
Plan Proponents reserve the right to revoke and withdraw the Plan before the
entry of the Confirmation Order. If the Plan Proponents revoke or
withdraw the Plan, or if Confirmation or the Effective Date does not occur,
then, with respect to all parties in interest, the Plan shall be deemed null and
void and nothing contained herein shall be deemed to constitute a waiver or
release of any Claims by or against the Debtors or any other Entity or to
prejudice in any manner the rights of the Debtors or such other Entity in any
further proceedings involving the Debtors.
44
13.10 Modification of
Plan. The Plan Proponents
may propose amendments to or modifications of any of the Plan Documents under §
1127 of the Bankruptcy Code and as herein provided, to the extent applicable law
permits. Subject to the limitations contained herein, the Plan
Proponents may modify the Plan in accordance with this paragraph, before or
after Confirmation, without notice or hearing, or after such notice and hearing
as the District Court deems appropriate, if the District Court finds that the
modification does not materially and adversely affect the rights of any parties
in interest which have not had notice and an opportunity to be heard with regard
thereto. After Confirmation, the Plan Proponents may remedy any
defects or omissions or reconcile any inconsistencies in the Plan or the
Confirmation Order or any other order entered for the purpose of implementing
the Plan in such manner as may be necessary to carry out the purposes and intent
of the Plan; provided, however, that none of the Debtors, the Reorganized
Debtors, ABI, the Futures Representative, the Plan Trustee, the Asbestos
Claimants’ Committee, and the Bondholders’ Committee shall seek to terminate,
reduce or limit the scope of the Asbestos Channeling Injunction or any other
injunction contained in the Plan that inures to the benefit of any Settling
Asbestos Insurance Company. Anything in the Plan or in any Plan
Document to the contrary notwithstanding, following Confirmation but prior to
the Effective Date, the Plan Documents shall not be modified, supplemented,
changed or amended in any material respect except with the written consent of
the Bondholders’ Committee, the Debtors and the Asbestos Claimants’
Committee. In the event of any modification on or before
Confirmation, any votes to accept or reject the Plan shall be deemed to be votes
to accept or reject the Plan as modified, unless the District Court finds that
the modification materially and adversely affects the rights of parties in
interest which have cast said votes. The Plan Proponents reserve the
right in accordance with § 1127 of the Bankruptcy Code to modify the Plan at any
time before the Confirmation Date. Subject to § 1127 of the
Bankruptcy Code, if the District Court determines at or in connection with the
Confirmation Hearing that any provision of the Plan is invalid or unenforceable,
such provision, to the extent the Plan Proponents agree, shall be severable from
the Plan and null and void, and, in such event, such determination shall in no
way limit or affect the enforceability or operative effect of any or all other
provisions of the Plan.
13.11 Modification of Payment
Terms. Reorganized
Congoleum shall have the right to modify the treatment of any Allowed Claim
(other than a Plan Trust Asbestos Claim), as provided in section 1123(a)(4) of
the Bankruptcy Code, at any time after the Effective Date upon the consent of
the holder of such Allowed Claim.
13.12 Entire
Agreement. The
Plan Documents and the Plan Trust Documents set forth the entire agreement and
undertakings relating to the subject matter thereof and supersede all prior
discussions and documents. No Entity shall be bound by any terms,
conditions, definitions, warranties, understandings, or representations with
respect to the subject matter hereof, other than as expressly provided for
herein or as may hereafter be agreed to by the parties in writing.
13.13 Headings. Headings
are utilized in the Plan are for convenience and reference only and shall not
constitute a part of the Plan for any other purpose.
13.14 Professional Fee
Claims. All
final requests for payment of Professional Fee Claims must be filed and served
on Reorganized Congoleum and their counsel no later than 60 days after the
Effective Date, unless otherwise ordered by the District
Court. Objections to any application of such Bankruptcy Professionals
or other Entities for compensation or reimbursement of expenses must be filed
and served on the respective applicant and its counsel no later than the first
Business Day following 30 days (or such other period as may be allowed by order
of the District Court) after the date on which the applicable application for
compensation or reimbursement was received. Reorganized Congoleum may
pay the reasonable charges that they incur on and after the Effective Date for
Bankruptcy Professionals’ fees, disbursements, expenses or related support
services without application to the District Court. Reorganized
Congoleum shall pay the reasonable fees and expenses of the Bondholders’
Committee, Asbestos Claimants’ Committee and Futures Representative after the
Effective Date in connection with the purposes set forth in Section 13.8 of this
Plan, without application to the District Court.
45
13.15 Recordable
Order. Upon
Confirmation of the Plan, the Confirmation Order shall be deemed to be in
recordable form, and shall be accepted by any recording officer for filing and
recording purposes without further or additional orders, certifications, or
other supporting documents.
13.16 Preparation of Estates’
Returns and Resolution of Tax Claims. The
Debtors or Reorganized Congoleum shall file all tax returns and other filings
with governmental authorities and may file determination requests under section
505(b) of the Bankruptcy Code to resolve any Disputed Claim relating to taxes
with a governmental authority.
13.17 No
Admission. Nothing
contained in the Plan or in the Disclosure Statement shall be deemed as an
admission by the Debtors, the Bondholders’ Committee or the Asbestos Claimants’
Committee with respect to any matter set forth herein or therein, including,
without limitation, liability on any Claim or the propriety of any Claims
classification.
13.18 Consent to
Jurisdiction. Upon
default under the Plan or any Plan Documents, the Debtors, Reorganized
Congoleum, the Affiliates, the Plan Trust, the Trust Advisory Committee, the
Futures Representative, ABI and the Plan Trustee consent to the jurisdiction of
the District Court, or any successor thereto, and agree that it shall be the
preferred forum for all proceedings relating to such default.
13.19 Setoffs. Subject
to the limitations provided in section 553 of the Bankruptcy Code, the Debtors
or the Plan Trust, as applicable, may, but shall not be required to, setoff
against any Claim and the-payments
or other distributions to be made pursuant to the Plan in respect of such Claim,
claims of any nature whatsoever the Debtors may have against the holder of such
Claim, but neither the failure to do so nor the allowance of any Claim hereunder
shall constitute a waiver or release by the Debtors of any such claim that the
Debtors may have against such holder; provided that Reorganized
Congoleum may not offset any obligations under the Plan Trust Common Stock
against any claim that Reorganized Congoleum may have against the Plan
Trust.
13.20 Successors and
Assigns. The
rights, duties, and obligations of any Entity named or referred to in the Plan
shall be binding upon, and shall inure to the benefit of, the successors and
assigns of such Entity.
13.21 Non-Debtor Waiver of
Rights. Non-Debtor
parties shall have the right to voluntarily waive any rights, benefits or
protections that are afforded to them under the provisions of the Plan or any
order issued in furtherance of the Plan, and such waiver shall supersede such
rights, benefits or protections. Any such waiver shall only be
effective if, and then only to the extent that, such party expressly and
specifically waives in writing one or more of such rights, benefits or
protections.
13.22 Further
Authorizations. The
Debtors, Reorganized Congoleum, the Bondholders’ Committee, and the Plan Trust,
if and to the extent necessary, may seek with notice to the others such orders,
judgments, injunctions, and rulings that any of them deem necessary to further
carry out the intentions and purposes of, and give full effect to the provisions
of, the Plan.
13.23 No Bar to
Suits. Except
as otherwise provided in Article XI of this Plan, neither this Plan nor
Confirmation hereof shall operate to bar or estop the Debtors or Reorganized
Congoleum from commencing any Cause of Action, including any Bankruptcy Cause of
Action, or any other legal action against any holder of a Claim or
any individual, corporation, partnership, trust, venture,
governmental unit, or any other form of legal entity, whether such Cause of
Action, or any other legal action arose prior to or after the Confirmation Date
and whether or not the existence of such Cause of Action, or any other legal
action was disclosed in any disclosure statement filed by the Debtors in
connection with this Plan or whether or not any payment was made or is made on
account of any Claim.
13.24 Conflicts. Unless
otherwise provided in the Confirmation Order, in the event of a conflict between
the terms or provisions of the Plan and any other Plan Document, the terms of
the other Plan Document will control.
46
13.25 Notices. All
notices, requests, elections, or demands in connection with the Plan shall be in
writing and shall be mailed by registered or certified mail, return receipt
requested, to:
If
to the Debtors:
Congoleum
Corporation
3500
Quakerbridge Road
Hamilton,
NJ 08619
Attn: Howard
N. Feist
CFO
and
Pillsbury
Winthrop Shaw Pittman LLP
1540
Broadway
New
York, NY 10033-4039
Attn: Richard
L. Epling
Robin L. Spear
Kerry A. Brennan
If
to the Futures Representative:
R.
Scott Williams, Esquire
Haskell
Slaughter Young & Rediker, L.L.C.
2001
Park Place North, Suite 1400
Birmingham,
AL 35203
and
Orrick,
Herrington & Sutcliffe LLP
1152
15th Street, N.W.
Washington,
DC 20005
Attn: Roger
Frankel
Richard Wyron
Jonathan Guy
If
to the Asbestos Claimants’ Committee:
Caplin
& Drysdale, Chtd.
One
Thomas Circle, N.W.
Washington,
D.C. 20005
Attn: Peter
Van N. Lockwood
Ronald E. Reinsel
If
to the Bondholders’ Committee:
Akin
Gump Strauss Hauer & Feld LLP
One
Bryant Park
New
York, NY 10036
Attn: Michael
S. Stamer
Akin
Gump Strauss Hauer & Feld LLP
1333
New Hampshire Avenue, N.W.
Washington
D.C. 20036
Attn: James
R. Savin
47
13.26 Duty to
Cooperate. Notwithstanding
anything herein to the contrary, nothing in the Plan, the Plan Documents or the
Confirmation Order shall relieve (by way of injunction or otherwise) any of the
Debtors or Reorganized Congoleum or any other Entity which is or claims to be an
insured or entitled to indemnity under an Asbestos Insurance Policy from any
duty to cooperate that may be required by any such insurance policy under
applicable law with respect to the defense and/or settlement of any Claim for
which coverage is sought under such Asbestos Insurance Policy. To the
extent that any entity incurs costs in satisfying such duty to cooperate with
respect to Asbestos Personal Injury Claims after the Effective Date, the Plan
Trust shall reimburse such entity for all such reasonable out-of-pocket
expenses.
13.27 Governing
Law. Except
to the extent that federal law (including, but not limited to, the Bankruptcy
Code and the Bankruptcy Rules) is applicable or where the Plan provides
otherwise, the rights and obligations arising under the Plan shall be governed
by, and construed and enforced in accordance with, the laws of the State of
Delaware, without giving effect to the principles of conflicts of law thereof
that would require application of any other law.
Dated: October 22,
2009
CONGOLEUM
CORPORATION
By: ________________________
Name: Howard
N. Feist III
Title: Chief
Financial Officer and Secretary
CONGOLEUM
SALES, INC.
By: ________________________
Name: Howard
N. Feist III
Title: Vice
President
CONGOLEUM
FISCAL, INC.
By: ________________________
Name: Howard
N. Feist III
Title: Vice
President
48
ASBESTOS
CLAIMANTS’ COMMITTEE
By: ________________________
Name: Ronald
E. Reinsel
Title: Counsel
for the Asbestos Claimants’ Committee
49
BONDHOLDERS’ COMMITTEE | ||
By:
|
________________________
|
|
Name:
|
Paul
Kunz
|
|
Title:
|
Authorized
representative of
Deutsche
Asset Management, not in its individual or principal capacity, but solely
in its capacity as Chair of the Official Committee of
Bondholders
|
50