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8-K - FORM 8-K - FINLAY ENTERPRISES INC /DE | mm08-2310_8k.htm |
EXHIBIT
2.1
UNITED
STATES BANKRUPTCY COURT
SOUTHERN
DISTRICT OF NEW YORK
X | ||
In re | : | Chapter 11 Case No. |
: | ||
FINLAY ENTERPRISES, INC., et al., | : | 09-14873 (JMP) |
: | ||
Debtors. | : | (Jointly Administered) |
X |
DEBTORS’
MODIFIED PLAN OF LIQUIDATION UNDER
CHAPTER 11 OF THE BANKRUPTCY
CODE
WEIL,
GOTSHAL & MANGES LLP
Lori R.
Fife
Shai Y.
Waisman
767 Fifth
Avenue
New York,
New York 10153
(212)
310-8000
Attorneys
for the Debtors and
Debtors
in Possession
Dated: May
18, 2010
ARTICLE
I
DEFINITIONS
AND INTERPRETATION
A.
|
Definitions.
|
The
following terms used herein shall have the respective meanings set forth
below:
1.1 Administrative
Expense Claim means any right to payment constituting a cost or expense
of administration of the Chapter 11 Cases under sections 330, 503(b), 507(a)(2)
and 507(b) of the Bankruptcy Code, including, without limitation, (a) any actual
and necessary costs and expenses of preserving the Debtors’ Estates, (b) any
actual and necessary costs and expenses of operating the Debtors’ businesses,
(c) any indebtedness or obligations incurred or assumed by the Debtors in
Possession during the Chapter 11 Cases and (d) any compensation for
professional services rendered and reimbursement of expenses
incurred. Any fee or charge assessed against the Estates of the
Debtors under section 1930 of chapter 123 of title 28 of the United States Code
is excluded from the definition of Administrative Expense Claim and shall be
paid in accordance with Section 2.4 of the Plan.
1.2 Affiliate
has the meaning set forth in section 101(2) of the Bankruptcy Code.
1.3 Agency
Agreement that certain agency agreement dated August 5, 2009 between
Finlay Fine Jewelry and Gordon Brothers approved pursuant to the Sale
Order.
1.4 Allowed
means, with reference to any Claim against the Debtors, (a) any Claim
against any Debtor that has been listed by such Debtor in its Schedules (as such
Schedules may be amended by the Debtors from time to time in accordance with
Bankruptcy Rule 1009) as liquidated in amount and not disputed or contingent and
for which no contrary proof of Claim has been filed or no timely objection to
allowance or request for estimation has been interposed, (b) any timely filed
proof of Claim as to which no objection has been or is interposed in accordance
with Section 7.1 of the Plan or such other applicable period of limitation fixed
by the Bankruptcy Code, the Bankruptcy Rules, the Local Bankruptcy Rules, the
Claims Objection Procedures Order or the Bankruptcy Court or as to which any
objection has been determined by a Final Order to the extent such objection is
determined in favor of the respective holder of such Claim, (c) any Claim
expressly allowed by a Final Order or under the Plan, (d) any Claim that is
compromised, settled or otherwise resolved pursuant to the authority granted to
the Plan Administrator pursuant to a Final Order of the Bankruptcy Court, the
Claims Objection Procedures Order, or under Section 7.3 of the
Plan. Unless otherwise specified in the Plan or by order of the
Bankruptcy Court, “Allowed Administrative Expense Claim” or “Allowed Claim”
shall not, for any purpose under the Plan, include interest on such Claim from
and after the Commencement Date.
1.5 Amended and
Restated Credit Agreement means that certain Fourth Amended and Restated
Credit Agreement dated as of November 9, 2007, as amended by Amendment No. 1 to
the Credit Agreement dated November 18, 2008 and by the Limited Consent and
Amendment No. 2 to Credit Agreement dated February 25, 2009, among the Debtors
and other credit parties signatory thereto, GECC, as Agent, L/C Issuer, and
Lender, GE Capital Markets, Inc., as Sole Bookrunner and Joint Lead Arranger,
JPMorgan Securities Inc., as Joint Lead Arranger, and Wachovia Bank, NA, as
Documentation Agent, and the lenders that are parties thereto from time to
time.
1.6 Avoidance
Actions means any actions commenced, or that may be commenced before or
after the Effective Date, pursuant to section 544, 545, 547, 548, 550 or 551 of
the Bankruptcy Code.
1.7 Bankruptcy
Code means title 11 of the United States Code, as amended from time to
time, as applicable to the Chapter 11 Cases.
1.8 Bankruptcy
Court means the United States Bankruptcy Court for the Southern District
of New York or any other court of the United States having jurisdiction over the
Chapter 11 Cases.
1.9 Bankruptcy
Rules means the Federal Rules of Bankruptcy Procedure as promulgated by
the United States Supreme Court under section 2075 of title 28 of the United
States Code, as amended from time to time.
1.10 Business
Day means any day other than a Saturday, Sunday or any other day on which
banking institutions in New York, New York are required or authorized to close
by law or executive order.
1.11 Cash means
lawful currency of the United States, including, but not limited to, bank
deposits, checks, and other similar items.
1.12 Cash Collateral
Budget means that certain budget annexed as “Exhibit A” to the Final Cash
Collateral Order as it may thereafter be amended or modified from time to time
by stipulation and with the consent of the Majority in Interest.
1.13 Causes of
Action means any and all Claims against a Debtor, Avoidance Actions, and
rights of the Debtors, including claims of a Debtor against another Debtor or
other affiliate.
1.14 Chapter 11
Cases means the jointly administered cases commenced by the Debtors
styled as “In re Finlay Enterprises, Inc., et al.” and being jointly
administered in the Bankruptcy Court under case number 09-14873 (JMP) under
chapter 11 of the Bankruptcy Code.
1.15 Claim has
the meaning set forth in section 101(5) of the Bankruptcy Code.
2
1.16 Claims Objection
Procedures Order means the order pursuant
to section 105(a) of the Bankruptcy Code and Bankruptcy Rules 3007 and 9019(b)
(i) authorizing the Debtors to file omnibus claims objections and (ii) approving
procedures for settling certain claims entered by the Bankruptcy Court on
January 5, 2010.
1.17 Class means any group of
substantially similar Claims or Equity Interests classified by the Plan pursuant
to section 1122 of the Bankruptcy Code.
1.18 Collateral
means any property or interest in property of the Estates of the Debtors subject
to a Lien, charge or other encumbrance to secure the payment or performance of a
Claim, which Lien, charge or other encumbrance is not subject to avoidance or
otherwise invalid under the Bankruptcy Code or applicable state
law.
1.19 Commencement Date
means August 5, 2009, the date on which each of the respective Debtors
filed their voluntary petition under chapter 11 of the Bankruptcy
Code.
1.20 Confirmation
Date means the date on which the clerk of the Bankruptcy Court enters the
Confirmation Order on the docket.
1.21 Confirmation
Hearing means the hearing conducted by the Bankruptcy Court pursuant to
section 1128(a) of the Bankruptcy Code to consider confirmation of the Plan, as
such hearing may be adjourned or continued from time to time.
1.22 Confirmation
Order means the Final Order of the Bankruptcy Court confirming the
Plan.
1.23 Contingent Claim
means any Claim, the liability for which attaches or is dependent upon
the occurrence or happening of, or is triggered by, an event, which event has
not yet occurred, happened or been triggered as of the date on which such Claim
is sought to be estimated or an objection to such Claim is filed, whether or not
such event is within the actual or presumed contemplation of the holder of such
Claim and whether or not a relationship between the holder of such Claim and the
applicable Debtor now or hereafter exists or previously existed.
1.24 Creditors’
Committee means the official committee of unsecured creditors appointed
in the Chapter 11 Cases pursuant to section 1102(a) of the Bankruptcy Code and
represented by Moses & Singer LLP.
1.25 Debtors
means each of Finlay Enterprises, Inc., Finlay Fine Jewelry Corporation, Finlay
Merchandising & Buying LLC, eFinlay, Inc., Finlay Jewelry, Inc., Carlyle
& Co. Jewelers, LLC, L. Congress, Inc., and Park Promenade,
LLC.
1.26 Debtors in
Possession means the Debtors in their capacity as Debtors in Possession
in the Chapter 11 Cases under sections 1107(a) and 1108 of the Bankruptcy
Code.
3
1.27 Disclosure
Statement means that certain disclosure statement for this Plan, dated as
of May 18, 2010, including, without limitation, all exhibits and schedules
thereto, as the same may be amended, supplemented or otherwise modified from
time to time, as approved by the Bankruptcy Court pursuant to section 1125 of
the Bankruptcy Code.
1.28 Disputed
means, with reference to any Administrative Expense Claim or Claim, any such
Administrative Expense Claim or Claim (a) to the extent neither Allowed nor
disallowed under the Plan or a Final Order nor deemed Allowed under section 502,
503 or 1111 of the Bankruptcy Code, (b) which has been or hereafter is listed by
a Debtor on its Schedules as unliquidated, disputed or contingent and which has
not been resolved by written agreement of the parties or a Final Order or (c) as
to which the Debtors or any other party in interest has interposed a timely
objection and/or request for estimation in accordance with the Bankruptcy Code,
the Bankruptcy Rules, the Local Bankruptcy Rules and the Claims Procedures
Order, which objection or request for estimation has not been withdrawn or
determined by a Final Order. Prior to the earlier of the time an
objection has been timely filed and the expiration of the time within which to
object to such Claim set forth herein or otherwise established by order of the
Bankruptcy Court or Allowed hereunder, a Claim shall be considered a Disputed
Claim to the extent that the amount of the Claim specified in a proof of Claim
exceeds the amount of the Claim scheduled by the Debtor as not disputed,
contingent or unliquidated. For the avoidance of doubt, a proof of
Claim for which no amount has been scheduled by the Debtors shall be considered
a Disputed Claim in its entirety.
1.29 Distribution
Date means
a date or dates, including the Initial Distribution Date, as determined by the
Plan Administrator, on which the Plan Administrator makes a distribution to
holders of Allowed General Unsecured Claims and Allowed Third Lien
Claims.
1.30 Distribution
Record Date means, other than with respect to any publicly held
securities, the record date for purposes of making distributions under the Plan on account of
Allowed Claims, which date shall be five (5) Business Days from and after the
Confirmation Date.
1.31 Effective
Date means the first Business Day on which (a) no stay of the
Confirmation Order is in effect and (b) all the conditions precedent to the
effectiveness of the Plan specified in Section 9.1 of the Plan shall have been
satisfied or waived as provided in Section 9.2 of the Plan.
1.32 Equity Interest
means the interest of any holders of equity securities of any of the
Debtors represented by issued and outstanding shares of common or preferred
stock or other instrument evidencing a present ownership interest in any of the
Debtors, whether or not transferable, or any option, warrant, or right,
contractual or otherwise, acquire any such interest.
4
1.33 Estates
means the Estates created pursuant to section 541 of the Bankruptcy Code upon
the filing of the Chapter 11 Cases.
1.34 Excess Committee
Costs means any fees and expenses from and after January 1, 2010 of any
professionals retained by the Creditors’ Committee in excess of the budgeted
amounts set forth in the Cash Collateral Budget and which shall be paid solely
from the Harbinger Cash Contribution.
1.35 Excess Plan
Administrator GUC Costs means any amounts expended in excess of the
amounts set forth in the budget for the Plan Administrator referred to in
Section 5.3(a) for the reconciliation and payment of General Unsecured Claims,
which amounts shall be paid from the Harbinger Cash Contribution.
1.36 FF&E Sale
Order means that certain order of the Bankruptcy Court dated November 15,
2009, authorizing inter
alia (A) the sale of assets, free and clear of liens, claims,
encumbrances and other interests and (B) assumption and assignment of
nonresidential leases of real property.
1.37 Final Cash
Collateral Order means that Final Order (i) Authorizing Use of Cash
Collateral, (ii) Granting Adequate Protection, and (iii) Modifying the Automatic
Stay entered by the Bankruptcy Court on August 20, 2009 (as amended, modified or
supplemented from time to time in accordance therewith).
1.38 Final
Order means an order or judgment of a court of competent jurisdiction
that has been entered on the docket maintained by the clerk of such court and
has not been reversed, vacated or stayed and as to which (a) the time to appeal,
petition for certiorari
or move for a new trial, reargument or rehearing has expired and as to
which no appeal, petition for certiorari or other
proceedings for a new trial, reargument or rehearing shall then be pending or,
(b) if an appeal, writ of certiorari, new trial,
reargument or rehearing thereof has been sought, (i) such order or judgment
shall have been affirmed by the highest court to which such order was appealed,
certiorari shall have
been denied or a new trial, reargument or rehearing shall have been denied or
resulted in no modification of such order and (ii) the time to take any further
appeal, petition for certiorari, or move for a new
trial, reargument or rehearing shall have expired; provided, however, that the
possibility that a motion under Rule 60 of the Federal Rules of Civil Procedure,
or any analogous rule under the Bankruptcy Rules or the Local Bankruptcy Rules,
may be filed relating to such order shall not prevent such order from being a
Final Order.
1.39 Finlay
Enterprises means Finlay Enterprises, Inc., a Delaware
corporation.
1.40 Finlay Fine
Jewelry means Finlay Fine Jewelry Corporation, a Delaware
corporation.
1.41 GECC means
General Electric Capital Corporation, as agent under that certain Fourth Amended
and Restated Credit Agreement dated as of November 9, 2007.
5
1.42 General Unsecured
Claim means any Claim against the Debtors other than an Administrative
Expense Claim, Professional Compensation and Reimbursement Claim, Priority Tax
Claim, Other Priority Claim, Other Secured Claim, Second Lien Note Claim, Third
Lien Claim, or Equity Interest.
1.43 Gordon
Brothers means Gordon Brothers Retail Partners, LLC.
1.44 Harbinger
means Harbinger Capital Partners Master Fund I, Ltd. and Harbinger
Capital Partners Special Situations Fund, L.P.
1.45 Harbinger Cash
Contribution means the $7.0 million in cash funded from the sale of
Harbinger’s Third Lien Notes by Harbinger to Coliseum Capital Management, LLC
(“Coliseum”),
JMB Capital Partners LP (“JMB”), and MFP
Partners LP (“MFP”) and held in
escrow (the “Escrow”) pursuant to
that certain Escrow Agreement, dated as of May 3, 2010, by and among Harbinger,
Coliseum, JMB, MFP, and Pryor Cashman LLP, as escrow agent, that will be
transferred to the Post Effective Date Debtors for distribution by the Plan
Administrator (without any deductions for any Administrative Expense Claims,
Priority Tax Claims, Other Priority Claims or expenses of the Plan
Administrator, unless otherwise expressly provided herein) to holders of allowed
General Unsecured Claims, excluding Harbinger and its assigns on account of any
deficiency claim under the Third Lien Notes, on a pro-rata basis and in accordance
with the terms herein. For the avoidance of doubt, (i) the Harbinger
Cash Contribution represents the first $7.0 million that would otherwise have
been distributed to Harbinger in its capacity as the former holder of a Third
Lien Claim, and (ii) upon the release of the Escrow, the Harbinger Cash
Contribution shall have been fully satisfied under this Plan, and therefore all
distributions on account of the Third Lien Note Claims shall go to the holder(s)
thereof without the need to deduct for the Harbinger Cash
Contribution.
1.46 HSBC means
HSBC Bank USA, National Association, as collateral agent and indenture trustee,
including its successors in such capacity, under the Third Lien
Indenture.
1.47 Initial
Distribution Date means a date as soon as reasonably practicable but in
no event later than 30 days after the Effective Date, as determined by the Plan
Administrator, on which the Plan Administrator makes an initial distribution to
holders of Allowed General Unsecured Claims and Allowed Third Lien
Claims.
1.48 Intercompany
Claim means any Claim against any Debtor held by another
Debtor.
1.49 Lien has
the meaning set forth in section 101(37) of the Bankruptcy Code.
1.50 Local Bankruptcy
Rules means the Local Bankruptcy Rules for the Southern District of New
York, as amended from time to time.
6
1.51 Majority in
Interest means the holders of a majority of the outstanding principal
amount of the Third Lien Notes as of the Record Date (as defined in the
Disclosure Statement).
1.52 Other Priority
Claim means any Claim, other than an Administrative Expense Claim or a
Priority Tax Claim, entitled to priority in payment under section 507(a)(3),
(4), (5), (6), (7), (9) or (10) of the Bankruptcy Code.
1.53 Other Secured
Claims means any Secured Claim against the Debtors not constituting a
Second Lien Note Claim or a Third Lien Claim.
1.54 Person
means an individual, partnership, corporation, limited liability company,
cooperative, trust, unincorporated organization, association, joint venture,
government or agency or political subdivision thereof or any other form of legal
entity.
1.55 Plan means
this Plan of Liquidation Under Chapter 11 of the Bankruptcy Code, dated as of
March 26, 2010, including, without limitation, the schedules hereto, as the same
may be amended or modified from time to time in accordance with the provisions
of the Bankruptcy Code and the terms hereof.
1.56 Plan
Administrator means the person or entity selected by the Debtors and
reasonably acceptable to HSBC, the Majority in Interest and the Creditors’
Committee charged with overseeing, inter alia, (a) the Claims
resolution process, (b) the Claims distribution process, and (c) the wind-down
process of the Debtors and the Post Effective Date Debtors.
1.57 Plan
Supplement means the supplement or supplements to the Plan containing
certain documents relevant to the implementation of the Plan specified in
Section 10.11 of the Plan, to be filed with the Bankruptcy Court no later
than ten (10) calendar days prior to the deadline set to file objections to
confirmation of the Plan.
1.58 Post Effective
Date Debtors means any of the Debtors on and after the Effective
Date.
1.59 Priority Tax
Claim means any Claim of a governmental unit of the kind entitled to
priority in payment as specified in sections 502(i) and 507(a)(8) of the
Bankruptcy Code.
1.60 Released
Parties means each of the (i) Debtors and their estates, (ii) the
Creditors’ Committee and each of the members of the Creditors’ Committee (solely
in that capacity) who acted in such capacity after the Commencement Date, (iii)
GECC, (iv) Wilmington Trust, (v) HSBC, (vi) Harbinger, and (vii) the Senior
Lenders, and in each case, each of their present or former directors, officers,
members, managers, partners, employees, affiliates, agents, financial advisors,
restructuring advisors, attorneys and representatives (and their respective
affiliates).
7
1.61 Sale Order
that certain order dated September 25, 2009, authorizing the Debtors, inter alia, to enter into the Agency
Agreement.
1.62 Schedules
means, collectively, the schedules of assets and liabilities, schedules of
current income and expenditures, schedules of executory contracts and unexpired
leases and statements of financial affairs filed by the Debtors under section
521 of the Bankruptcy Code, Bankruptcy Rule 1007 and the Official Bankruptcy
Forms in the Chapter 11 Cases, as may have been amended or supplemented through
the Confirmation Date pursuant to Bankruptcy Rule 1007.
1.63 Second Lien
Indenture means that certain second lien indenture dated as of November
26, 2008 between Finlay Fine Jewelry and Wilmington Trust, as
trustee.
1.64 Second Lien
Notes means
the 11.375%/12.125 senior secured second lien notes due June 1, 2012 issued by
Finlay Fine Jewelry pursuant to the Second Lien Indenture.
1.65 Second Lien Note
Claims means all Claims arising under or in connection with the Second
Lien Notes and the Second Lien Indenture.
1.66 Secured
Claim means any Claim that is secured by a Lien on Collateral to the
extent of the value of such Collateral, as determined in accordance with section
506(a) of the Bankruptcy Code, or, in the event that such Claim is subject to a
permissible setoff under section 553 of the Bankruptcy Code, to the extent of
such permissible setoff.
1.67 Secured Vendor
Acceptance Agreement means any of the Secured Vendor Acceptance and
Agreements dated as of February 23, 2009 entered into among the Debtors,
Harbinger and any of the additional secured vendors parties set forth on Exhibit
“A” hereto.
1.68 Secured Vendor
Claims means the unpaid portion of all Claims arising under or in
connection with the Secured Vendor Acceptance Agreements, as set forth on
Exhibit “A” hereto.
1.69 Senior Indemnity
Account means that certain account established pursuant to the Final Cash
Collateral Order for the purpose of securing certain reimbursement,
indemnification or similar continuing obligations of the Debtors.
1.70 Senior
Lenders means those parties
party from time to time to that certain Fourth Amended and Restated Credit
Agreement dated as of November 9, 2007.
1.71 Senior Unsecured
Notes means the 8-3/8% senior unsecured notes due June 1, 2012 issued by
Finlay Fine Jewelry pursuant to the Senior Unsecured Note
Indenture.
8
1.72 Senior Unsecured
Note Indenture means that certain indenture dated as of June 3, 2004
between Finlay Fine Jewelry and U.S. Bank, as successor trustee to
HSBC.
1.73 Subsidiary
Debtor means each of the direct and indirect subsidiaries of Finlay
Enterprises.
1.74 Third Lien
Indenture means that certain third lien indenture dated as of November
26, 2008 between Finlay Fine Jewelry and HSBC, as trustee.
1.75 Third Lien
Notes means
the 8.375%/8.945 senior secured third lien notes due June 1, 2012 issued by
Finlay Fine Jewelry pursuant to the Third Lien Indenture.
1.76 Third Lien Note
Claims means all Claims arising under or in connection with the Third
Lien Notes and the Third Lien Indenture.
1.77 Third Lien
Claims means all Third Lien Note Claims and Secured Vendor
Claims.
1.78 Unliquidated
Claim means any Claim, the amount of liability for which has not been
fixed, whether pursuant to agreement, applicable law or otherwise, as of the
date on which such Claim is asserted or sought to be estimated.
1.79 U.S. Bank
means U.S. Bank National Association, as successor trustee, including its
successors in such capacity, under the Senior Unsecured Note
Indenture.
1.80 U.S.
Trustee means the United States Trustee appointed under section 581 of
title 28 of the United States Code to serve in the Southern District of New
York.
1.81 Wilmington Trust
means Wilmington Trust FSB, as successor indenture trustee, including its
successors in such capacity, under the Second Lien Indenture.
B.
|
Interpretation; Application of
Definitions and Rules of
Construction.
|
Unless
otherwise specified, all section, article, schedule or exhibit references in the
Plan are to the respective section in, article of or schedule or exhibit, to the
Plan or the Plan Supplement, as the same may be amended, waived or modified from
time to time. The words “herein,” “hereof,” “hereto,” “hereunder” and
other words of similar import refer to the Plan as a whole and not to any
particular section, subsection or clause contained in the Plan. A
term used herein that is not defined herein shall have the meaning assigned to
that term in the Bankruptcy Code. 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 limit or otherwise affect the provisions hereof. In
computing any period of time
9
prescribed
or allowed by the Plan, unless otherwise expressly provided, the provisions of
Bankruptcy Rule 9006(a) shall apply.
ARTICLE
II
PROVISIONS
FOR PAYMENT OF ADMINISTRATIVE
EXPENSES
AND PRIORITY TAX CLAIMS
2.1 Administrative
Expense Claims.
Except to
the extent that any entity entitled to payment of any Allowed Administrative
Expense Claim agrees to a less favorable treatment, has been paid during the
Chapter 11 Cases or is provided for elsewhere in this Plan, each holder of an
Allowed Administrative Expense Claim shall receive Cash in an amount equal to
such Allowed Administrative Expense Claim on or as soon as reasonably
practicable following the later to occur of (a) Effective Date and (b) the date
such Administrative Expense Claim becomes an Allowed Administrative Expense
Claim; provided, however, that Allowed
Administrative Expense Claims representing liabilities incurred in the ordinary
course of business by the Debtors shall be paid in full and performed by the
Debtors or Post Effective Date Debtors, as the case may be, in the ordinary
course of business in accordance with the terms and subject to the conditions of
any agreements governing, instruments evidencing or other documents relating to
such transactions.
The
reasonable fees and expenses of Wilmington Trust, HSBC, Harbinger, and the
Creditors’ Committee, and their respective professionals, for the period from
the Commencement Date through and including December 31, 2009 shall be paid as
Administrative Expense Claims without reference to amounts set forth in the Cash
Collateral Budget. For the periods on or after January 1, 2010, the
reasonable fees and expenses of the aforementioned professionals shall be paid
in the amounts set forth in the Cash Collateral Budget; provided, however that Excess
Committee Costs (if any), Excess Plan Administrator GUC Costs (if any), and the
reasonable fees and expenses of U.S. Bank and its professionals shall be paid
solely from the Harbinger Cash Contribution. Professional fees of
Wilmington Trust, HSBC and the Debtors in excess of the amounts set forth in the
Cash Collateral Budget shall be paid by the Debtors’ estates as Allowed
Administrative Expense Claims prior to the payment of Third Lien Claims, but
subject to the consent of the Majority in Interest (which consent shall not be
unreasonably withheld).
2.2 Professional
Compensation and Reimbursement Claims.
All
entities seeking awards by the Bankruptcy Court of compensation for services
rendered or reimbursement of expenses incurred through and including the
Confirmation Date under sections 330, 331, 503(b)(2), 503(b)(3), 503(b)(4) or
503(b)(5) of the Bankruptcy Code shall (a) file, on or before the date that is
forty-five (45) days after the Effective Date their respective applications for
final allowances of compensation for services rendered and reimbursement of
expenses incurred and (b) be paid in full, in Cash, in such amounts as are
Allowed by the Bankruptcy Court in accordance with the order relating to or
allowing any such Administrative Expense Claim other than Excess Committee Costs
and Excess Plan
10
Administrator
GUC Costs, which are to be paid from the Harbinger Cash
Contribution. The Post Effective Date Debtors are authorized to pay
compensation for professional services rendered and reimbursement of expenses
incurred after the Confirmation Date in the ordinary course and without the need
for Bankruptcy Court approval, including the reasonable fees and expenses of
counsel to the Post Effective Date Debtors, subject to a budget reasonably
acceptable to the Majority in Interest.
2.3 Priority Tax
Claims.
Except to
the extent that a holder of an Allowed Priority Tax Claim agrees to a different
treatment, each holder of an Allowed Priority Tax Claim shall receive, in full
satisfaction, settlement, and release of and in exchange for such Allowed
Priority Tax Claim, payment in Cash in the full amount of such Allowed Priority
Tax Claim, on or as soon as reasonably practicable following the later to occur
of (x) the Effective Date, and (y) the date on which such claim becomes
Allowed.
2.4 Statutory
Fees.
All fees
payable under section 1930 of chapter 123 of title 28 of the United States Code,
as determined by the Bankruptcy Court at the Confirmation Hearing, shall be paid
on the Effective Date, with interest under title 31 of section 3717, if
any.
2.5 Second Lien Note
Claims.
As of the
Effective Date, holders of Allowed Second Lien Note Claims shall retain, in full
and final satisfaction of the Allowed Second Lien Note Claims, all amounts
previously paid to and received by the holders of such Claims pursuant to the
Final Cash Collateral Order on account of the Second Lien Note Claims and such
payments shall not be subject to avoidance, disallowance, disgorgement,
recharacterization, or subordination (whether equitable or otherwise) pursuant
to the Bankruptcy Code or applicable non-bankruptcy law. In addition,
upon the expiration of the Challenge Period (as defined in the Final Cash
Collateral Order) with respect to the Second Lien Note Claims and Liens and the
Third Lien Claims and Liens as set forth in the Final Cash Collateral Order,
Wilmington Trust shall immediately surrender the proceeds of the Senior
Indemnity Account to the Plan Administrator to be distributed in accordance with
the Plan.
ARTICLE
III
CLASSIFICATION
OF CLAIMS AND
EQUITY
INTERESTS, IMPAIRMENT AND VOTING
The
following table designates the classes of Claims against and Equity Interests in
the Debtors and specifies which of those classes are impaired or unimpaired by
the Plan and entitled to vote to accept or reject the Plan in accordance with
section 1126 of the Bankruptcy Code or deemed to reject the Plan.
11
Class
|
Designation
|
Impairment
|
Entitled
to Vote
|
Class
1
|
Other
Priority Claims
|
Unimpaired
|
No
(deemed to accept)
|
Class
2
|
Other
Secured Claims
|
Unimpaired
|
No
(deemed to accept)
|
Class
3
|
Third
Lien Claims
|
Impaired
|
Yes
|
Class
4
|
General
Unsecured Claims
|
Impaired
|
Yes
|
Class
5
|
Equity
Interests
|
Impaired
|
No
(deemed to reject)
|
ARTICLE
IV
TREATMENT
OF CLAIMS AND EQUITY INTERESTS
4.1 Other Priority
Claims (Class 1).
(a) Impairment and
Voting. Class 1 is unimpaired by the Plan. Each
holder of an Allowed Other Priority Claim is conclusively presumed to have
accepted the Plan and is not entitled to vote to accept or reject the
Plan.
(b) Distributions. Except
to the extent that a holder of an Allowed Other Priority Claim agrees to a
different treatment, each holder of an Allowed Other Priority Claim shall
receive, in full satisfaction of such unpaid Allowed Other Priority Claim, (a)
Cash in the full amount of such claim (excluding post-petition interest) on or
as soon as reasonably practicable following the later to occur of (x) the
Effective Date or as soon thereafter as is reasonably practicable and (y) the
date on which such Claim becomes Allowed or (b) receive such other terms
determined by the Bankruptcy Court to provide the holder deferred cash payments
having a value, as of the Effective Date, equal to such Claim.
4.2 Other Secured
Claims (Class 2).
(a) Impairment and
Voting. Class 2 is unimpaired by the Plan. To the
extent Allowed Other Secured Claims exist, each holder of an Allowed Other
Secured Claim is conclusively presumed to have accepted the Plan and is not
entitled to vote to accept or reject the Plan.
(b) Distributions. Except
to the extent that a holder of an Allowed Other Secured Claim agrees to a
different treatment, each holder of an Allowed Other Secured Claim shall (a)
receive Cash on or as soon as reasonably practicable following the later to
occur of (x) the Effective Date and (y) the date on which such Claim becomes
Allowed, or (b) otherwise be rendered unimpaired within the meaning of section
1124 of the Bankruptcy Code, in full satisfaction of such unpaid Allowed Other
Secured Claim. To the extent any Other Secured Claims are Allowed and
entitled to postpetition interest under the Bankruptcy Code, such Other Secured
Claims shall accrue such interest until they are paid in full.
4.3 Third Lien Claims
(Class 3).
(a) Impairment and
Voting. Class 3 is impaired by the Plan. Each
holder of an Allowed Third Lien Claim is entitled to vote to accept or reject
the Plan in the
12
amounts
set forth on Exhibit “A” hereto in the column entitled “Class 3
Claim.” The amounts listed on Exhibit “A” hereto are estimates used
solely for voting purposes, and shall not govern distributions to the holders of
such Claims.
(b) Distributions. Except
to the extent that a holder of an Allowed Third Lien Claim agrees to a different
treatment, on the Effective Date or as soon as practicable thereafter, but in no
event later than the Initial Distribution Date and on subsequent distribution
dates as determined by the Plan Administrator, after the payment (or
establishment of an adequate reserve therefor) of all then due Allowed
Administrative Expense Claims, Allowed Priority Tax Claims, Allowed Professional
Compensation and Reimbursement Claims, Allowed Other Priority Claims, Allowed
Second Lien Claims (if any), Allowed Other Secured Claims, and expenses of the
Plan Administrator, in each case as provided for under this Plan, the holders of
Allowed Third Lien Claims shall receive the net cash proceeds of all of the
assets of the Debtors and the Post Effective Date Debtors, including the Senior
Indemnity Account and the Debtors’ share of the cash proceeds from the sale of
augment inventory by Gordon Brothers or otherwise for the pro-rata distribution
to holders of Allowed Third Lien Claims; provided that the
Harbinger Cash Contribution, which was set aside for distribution in the Escrow
in accordance with Section 4.4(b) of the Plan, shall be fully satisfied under
the Plan, and therefore all distributions on account of the Third Lien Note
Claims shall go to the holders thereof without the need to deduct for the
Harbinger Cash Contribution; provided, further, that in no
event shall any holder of an Allowed Third Lien Claim receive distributions
under the Plan in excess of the Allowed amount of such Allowed Third Lien
Claim. All distributions to the holders of Allowed Third Lien Claims
shall be made to the holder of such Claims according to the Claims register
maintained by the Debtors’ claims agent.
4.4 General Unsecured
Claims (Class 4).
(a) Impairment and
Voting. Class 4 is impaired by the Plan. Each
holder of a General Unsecured Claim is entitled to vote to accept or reject the
Plan. For the avoidance of doubt, each holder of an Allowed Third
Lien Claim shall be entitled to vote a General Unsecured Claim in Class 4 to
accept or reject the Plan on account of its deficiency Claim in the amount set
forth on Exhibit “A” hereto in the column entitled “Class 4
Claim.” The amounts listed on Exhibit “A” hereto are estimates used
solely for voting purposes, and shall not govern distributions to the holders of
such Claims.
(b) Distributions. Except
to the extent that a holder of an Allowed General Unsecured Claim agrees to a
different treatment, on the Effective Date or as soon as practicable thereafter,
and on subsequent distribution dates as determined by the Plan Administrator,
each holder of an Allowed General Unsecured Claim, including any claims arising
under or relating to the Senior Unsecured Notes, the Senior Unsecured Note
Indenture, or any deficiency claims of holders of Allowed Third Lien Claims
(excluding the Third Lien Claims of Harbinger and its assigns), shall receive
its pro-rata share of the Harbinger Cash Contribution, after deducting (i) any
Excess Plan Administrator GUC Costs, (ii) any Excess Committee Costs, and (iii)
the reasonable fees and expenses of U.S. Bank and its professionals; provided that in no
event shall any holder of an Allowed General Unsecured
13
Claim
receive distributions hereunder in excess of the Allowed amount of such General
Unsecured Claim. For the avoidance of doubt, the deficiency claims of
holders of Allowed Third Lien Claims shall be calculated in each instance by
subtracting the actual Class 3 recovery from the total amount of the Allowed
Third Lien Claim.
4.5 Equity Interests
(Class 5).
(a) Impairment and
Voting. Class 5 is impaired by the Plan. Each
holder of an Equity Interest is deemed to reject the Plan and is not entitled to
vote to accept or reject the Plan.
(b) Distributions. On
the Effective Date, all Equity Interests issued by Finlay Enterprises shall be
cancelled and one new share of Finlay Enterprises’ common stock shall be issued
to the Plan Administrator who will hold such share for the benefit of the
holders of such former Equity Interests consistent with their former economic
entitlements. All Equity Interests of the other Debtors shall be
cancelled when such Debtors are dissolved or merged out of existence in
accordance with Sections 5.4, 5.8, and 5.10 hereof. Each holder
of an Equity Interest shall neither receive nor retain any property or interest
in property on account of such Equity Interest; provided, however, that in
the event all Allowed Claims have been satisfied in accordance with the
Bankruptcy Code and the Plan, holders of Equity Interests may receive a pro rata distribution of
any remaining assets of the Debtors. The rights of an equity holder
under this section shall be nontransferable. On or promptly after the
Effective Date, Finlay Enterprises shall file with the Securities and Exchange
Commission a Form 15 for the purpose of terminating the registration of any of
its publicly traded securities. All common stock in Finlay
Enterprises outstanding after the Effective Date shall be cancelled on the date
Finlay Enterprises is dissolved in accordance with Sections 5.4, 5.8,
and 5.10 hereof.
ARTICLE
V
MEANS
OF IMPLEMENTATION
5.1 Substantive
Consolidation.
The Plan
contemplates and is predicated upon substantive consolidation of the Debtors
into a single entity solely for purpose of all actions and distributions under
the Plan. Entry of the Confirmation Order shall constitute approval,
pursuant to section 105(a) of the Bankruptcy Code, effective as of the Effective
Date, of the substantive consolidation of the Chapter 11 Cases for all purposes
related to the Plan, including, without limitation, for purposes of voting,
confirmation and distribution. On and after the Effective Date, (i)
all assets and liabilities of the Debtors shall be deemed merged so that all of
the assets of the Debtors shall be available to pay all of the liabilities under
the Plan as if it were one company, (ii) no distributions shall be made under
the Plan on account of Intercompany Claims among the Debtors, (iii) no
distributions will be made under the Plan on account of any Equity Interests of
the Subsidiary Debtors, (iv) all guarantees of the Debtors of the obligations of
any other Debtor shall deemed be eliminated so that any claim against any Debtor
and any guarantee thereof executed by any other Debtor and any joint or several
liability of the Debtors shall be deemed one obligation of the
14
consolidated
Debtors, and (v) each and every Claim filed or to be filed in the Chapter 11
Case of any of the Debtors shall be deemed filed against the consolidated
Debtors, and shall be deemed one Claim against and obligation of the
consolidated Debtors.
5.2 Settlement of
Certain Claims.
Pursuant
to Bankruptcy Rule 9019, and in consideration for the classification,
distribution, releases and other benefits provided under the Plan, upon the
Effective Date, the provisions of the Plan shall constitute a good faith
compromise and settlement of all Claims or controversies resolved pursuant to
the Plan. All Plan distributions made to creditors holding Allowed
Claims in any Class are intended to be and shall be final, and no Plan
distribution to the holder of a Claim in one Class, other than the Harbinger
Cash Contribution, shall be subject to being shared with or reallocated to the
holders of any Claim in another Class by virtue of any prepetition collateral
trust agreement, shared collateral agreement, subordination agreement or other
similar inter-creditor arrangement or otherwise.
5.3 The Plan
Administrator.
(a) The Plan
Administrator shall, on behalf of the Post Effective Date Debtors, among other
things, (a) oversee the Claims resolution, distribution and objection process,
and (b) wind down the Debtors and the Post Effective Date Debtors including
through the sale or abandonment of the estates’ remaining assets, subject to an
initial budget in a form reasonably acceptable to the Debtors, HSBC, the
Majority in Interest and the Committee, which budget shall separately allocate
amounts for the reconciliation and payment of General Unsecured Claims; provided, however that any
Excess Plan Administrator GUC Costs shall be paid from the Harbinger Cash
Contribution; provided, further, that any
modification to the aforementioned budget shall be reasonably acceptable to the
Plan Administrator and the Majority in Interest. The Post Effective
Date Debtors, acting through the Plan Administrator, shall be responsible for
reconciling Claims.
(b) The
initial Plan Administrator shall be (i) selected by the Debtors and shall be
reasonably acceptable to HSBC, Harbinger, the Majority in Interest, and the
Creditors’ Committee, and (ii) named in the Plan Supplement.
(c) The
salient terms of the Plan Administrator’s employment, including the Plan
Administrator’s duties and compensation (which compensation shall be negotiated
by the Plan Administrator, the Debtors, HSBC, the Majority in Interest and the
Creditors’ Committee) shall be set forth in the Plan Supplement and the
Confirmation Order, and shall be consistent with that of similar functionaries
in similar types of bankruptcy proceedings.
(d) In the
event the Plan Administrator dies, is terminated, or resigns for any reason, a
successor shall be designated by the Post Effective Date Debtors and shall be
reasonably acceptable to the Majority in Interest.
15
(e) On the
Effective Date, (i) the authority, power and incumbency of the persons then
acting as directors and officers of the Debtors shall be terminated and such
directors and officers shall be deemed to have resigned, (ii) the Plan
Administrator shall have the powers of an officer of the Post-Effective Date
Debtors along with other officers, if elected by the Debtors and reasonably
acceptable to the Committee, HSBC and the Majority in Interest, (iii) the Plan
Administrator shall be deemed to hold 100% of the Equity Interests in the Post
Effective Date Debtors until dissolution of the Post Effective Date Debtors
pursuant to the Plan, (iv) the Post Effective Date Debtors shall assign and
transfer absolutely and unconditionally to the Plan Administrator, on behalf of
the Post Effective Date Debtors, all of their assets and (v) the Post Effective
Date Debtors shall be authorized to be (and, by the conclusion of the winding up
of their affairs, shall be) dissolved.
5.4 Termination
of the Post Effective Date Debtors.
The Post
Effective Date Debtors will terminate after
the liquidation, administration, and distribution of the Cash and any other
asset of the Debtors in accordance with the Plan and their material completion
of all other duties and functions set forth herein, but in no event later than
eighteen (18) months after the Effective Date, unless extended by agreement
between the Plan Administrator and the Majority in Interest. Upon
such termination, the Plan Administrator shall cause to be filed with the States
of Delaware, Florida and any other governmental authority such certificate of
dissolution or cancellation and other certificates or documents as may be or
become necessary to implement the termination of the legal existence of the Post
Effective Date Debtors.
5.5 Duties and Powers of the Plan
Administrator.
(a) General
Authority.
The Plan
Administrator, together with its representatives and professionals, shall
administer the Plan with respect to the Post Effective Date
Debtors. In such capacity, the powers of the Plan Administrator shall
include any and all powers necessary to implement the Plan with respect to the
Post Effective Date Debtors and to administer and distribute the assets and wind
up the business and affairs of the Debtors and Post Effective Date Debtors,
including, but not limited to (i) resolving claims (including the ability to
object to, seek to subordinate, compromise, or settle, any or all Claims against
the Post Effective Date Debtors) other than Claims that are Allowed under the
Plan, (ii) liquidating assets, (iii) abandoning assets, (iv) retaining
professionals, (v) maintaining books and records, (vi) entering into
agreements, (vii) investing Cash, and (viii) paying any and all reasonable
fees and expenses of the Post Effective Date Debtors.
(b) Tax
Obligations.
The Plan
Administrator shall be further authorized to (i) administer and pay taxes,
including filing of tax returns, (ii) request an expedited determination of any
unpaid tax liability of the Post Effective Date Debtors or the Estates under
section 505 of the Bankruptcy Code for all taxable periods of the Debtors
through the liquidation of the Post Effective Date Debtors as
16
determined
under applicable tax laws, and (iii) represent the interest and account of the
Post Effective Date Debtors or the Estates before any taxing authority in all
matters including, without limitation, any action, suit, proceeding or
audit.
5.6 Method of
Distributions Under the Plan.
(a) All
distributions to holders of Allowed Secured Vendor Claims and Allowed General
Unsecured Claims (other than General Unsecured Claims arising under or relating
to the Third Lien Indenture or the Senior Unsecured Note Indenture) against the
Debtors shall be made by the Plan Administrator in accordance with the terms of
the Plan. Unless otherwise agreed to by HSBC, U.S. Bank, the Majority
in Interest and the Plan Administrator, all distributions to holders of Allowed
Third Lien Note Claims and Allowed General Unsecured Claims arising under or
relating to the Third Lien Indenture or the Senior Unsecured Note Indenture
shall be made by HSBC or U.S. Bank, as applicable, as the respective indenture
trustee under the Third Lien Indenture and Senior Unsecured Note Indenture on
the terms described below.
(b) As
Administrative Expense Claims, Professional Compensation and Reimbursement
Claims, Priority Tax Claims, and Other Priority Claims become Allowed, the Plan
Administrator shall pay the holders of such Allowed Claims in Cash as provided
hereunder.
(c) At
reasonable periodic intervals determined by the Plan Administrator, in its sole
discretion, the Plan Administrator shall make payments to holders of Allowed
Third Lien Claims in accordance with Section 4.3 of this Plan, but in no
event shall the first distribution occur later than the Initial Distribution
Date; provided,
however, that,
subject to a budget reasonably acceptable to the Majority in Interest, the Post
Effective Date Debtors shall maintain sufficient Cash as reasonably necessary to
(1) meet the reasonable, necessary administrative expenses of the Post Effective
Date Debtors incurred after the Effective Date, (2) pay reasonable
administrative expenses of the Debtors’ estates that have not been paid
(including the professional fees and expenses of the Debtors) or have not been
Allowed as of the Effective Date but which are subsequently Allowed,
(3) satisfy other liabilities incurred by the Post Effective Date Debtors
permitted in accordance with the Plan, and (4) otherwise perform the functions
and take the actions provided for or permitted herein.
To the
extent any of the assets associated with any of the Debtors’ stores or locations
have not been liquidated on or prior to the Effective Date, such assets shall be
liquidated by the Plan Administrator, and the net proceeds shall be distributed
pro rata to the holders of Allowed Third Lien Claims as soon as practicable
thereafter. All amounts paid to and received by the holders of Third
Lien Claims pursuant to the Plan shall not be subject to avoidance,
disallowance, disgorgement, recharacterization, or subordination (whether
equitable or otherwise) pursuant to the Bankruptcy Code or applicable
non-bankruptcy law.
All
distributions on account of Third Lien Note Claims shall be made in accordance
with the Plan. If a distribution is made to HSBC on account of the
Third Lien Note Claims, it shall administer the distribution in accordance with
the Plan and the Third Lien
17
Indenture
and shall be compensated for all of its reasonable out-of-pocket fees and
expenses related to such distributions (and for the reasonable fees and expenses
of any counsel or professional engaged by HSBC with respect to administering or
implementing such distributions), by the Post Effective Date Debtors or the Plan
Administrator, as appropriate, in the ordinary course upon the presentation of
invoices by HSBC to the Plan Administrator with copies to the Majority in
Interest, but subject to a budget reasonably acceptable to the Majority in
Interest. Compensation of HSBC for services relating to distributions
under this Plan shall be made without the need for filing any application or
request with, or approval by, the Bankruptcy Court.
HSBC,
U.S. Bank, and Wilmington Trust shall not be required to give any bond, surety,
or other security for the performance of their duties with respect to the
administration and implementation of distributions.
(d) At
reasonable periodic intervals determined by the Plan Administrator, in its sole
discretion, the Plan Administrator shall make payments to holders of Allowed
General Unsecured Claims in accordance with Section 4.4 of this Plan, but
in no event shall the first distribution occur later than the Initial
Distribution Date. The Plan Administrator shall maintain a reserve of
Cash from the Harbinger Cash Contribution sufficient to pay (i) Excess Plan
Administrator GUC Costs and Excess Committee Costs, (ii) the reasonable fees and
expenses of U.S. Bank and its professionals, and (iii) holders of Disputed
General Unsecured Claims the amount such holders would be entitled to receive
under the Plan if such Claims were to become Allowed General Unsecured
Claims. In the event the holders of Allowed General Unsecured Claims
have not received payment in full on account of their Claims after the
resolution of all Disputed Claims, then the Plan Administrator shall make a
final distribution of all remaining Cash out of the Harbinger Cash Contribution
(other than the amount of Cash necessary to pay Excess Plan Administrator GUC
Costs and Excess Committee Costs) in accordance with Section 4.4 of this
Plan to all holders of Allowed General Unsecured Claims.
(e) Notwithstanding
anything in this Plan or the Disclosure Statement to the contrary, the Plan
Administrator shall have the authority to object to the allowance or payment of
any Disputed Claims on any grounds in accordance with the procedures set forth
herein; provided, however, the Plan
Administrator shall make distributions in accordance with Section 5.6(d) of this
Plan with respect to the undisputed portion of any Disputed General Unsecured
Claims.
(f) Notwithstanding
the foregoing, if the remaining funds of the Post Effective Date Debtors are
less than $50,000 after the resolution of all Disputed Claims, and the Plan
Administrator, in its sole discretion, determines that it would cost more than
$50,000 to distribute such funds, the Plan Administrator may donate such funds
to an I.R.C. 501(c)(3) tax-exempt organization of its choice.
18
5.7 Closing of the
Debtors’ Chapter 11 Cases.
When all
Disputed Claims have become Allowed Claims or have been disallowed by Final
Order, and all remaining Cash, including the Harbinger Cash Contribution, has
been distributed in accordance with the Plan and the business and affairs of the
Post Effective Date Debtors otherwise wound up, the Plan Administrator shall
seek authority from the Bankruptcy Court to close the Chapter 11 Cases in
accordance with the Bankruptcy Code and the Bankruptcy Rules.
5.8 Cancellation of
Existing Agreements and Equity Interests.
Except
(a) as otherwise expressly provided in the Plan, (b) with respect to executory
contracts or unexpired leases that have been assumed and assigned by the
Debtors, (c) for purposes of evidencing a right to distributions under the Plan,
or (d) with respect to any Claim that is reinstated and rendered unimpaired
under the Plan, on the date of closing of these Chapter 11 Cases in accordance
with Sections 5.7 and 10.3 herein, all instruments evidencing any Claims against
the Debtors or Post Effective Date Debtors or Equity Interests shall be deemed
automatically cancelled without further act or action under any applicable
agreement, law, regulation, order or rule and the obligations of the Debtors and
Post Effective Date Debtors thereunder shall be discharged.
Notwithstanding
anything contained herein to the contrary, following the Effective Date, and
until such time as the closing of these Chapter 11 Cases in accordance with
Sections 5.7 and 10.3 herein occurs, each of the Third Lien Indenture and Senior
Unsecured Note Indenture shall continue to exist solely for the purpose of
allowing HSBC and U.S. Bank to (i) perform all necessary acts in their
capacities as trustee and collateral agent under the Third Lien Indenture and
Senior Unsecured Note Indenture, respectively, as provided under the Plan and
Confirmation Order, including, but not limited to, making distributions under
the applicable indenture, (ii) pursuant to the terms of the applicable
indenture, exercise their rights and perform their obligations under the Plan
and Confirmation Order, and (iii) exercise any contractual right of priority or
charging lien HSBC or U.S. Bank may have under the applicable indenture with
respect to distributions made pursuant to the terms of the
Plan. Following the closing of these Chapter 11 Cases in accordance
with Sections 5.7 and 10.3 herein, HSBC and U.S. Bank shall have no further
obligations under the Third Lien Indenture and the Senior Unsecured Note
Indenture, respectively.
5.9 Surrender
of Existing Securities
As
soon as practicable, on or after the Effective Date, each holder of Third Lien
Note Claims and Senior Unsecured Note Claims shall surrender its note(s) to HSBC
or U.S. Bank, as the applicable indenture trustee, or in the event such note(s)
are held in the name of, or by a nominee of The Depository Trust Company, the
Post Effective Date Debtors shall seek the cooperation of The Depository Trust
Company to provide appropriate instructions to the applicable indenture
trustee. No distributions under the Plan shall be made for or on
behalf of such holder unless and until such note is received by HSBC or U.S
Bank, as applicable, or appropriate instructions from The Depository Trust
Company shall be received by the applicable
19
indenture
trustee or the loss, theft or destruction of such note is established to the
reasonable satisfaction of HSBC or U.S. Bank, as applicable, which satisfaction
may require such holder to submit (a) a lost instrument affidavit and (b) an
indemnity bond holding the Debtors, the Post Effective Date Debtor, and HSBC or
U.S. Bank, as applicable, harmless in respect of such note and any distributions
made thereof. Upon compliance with this Section by a holder of any
note, such holder shall, for all purposes under the Plan, be deemed to have
surrendered such note. Any holder that fails to surrender such note
or satisfactorily explains its non-availability to HSBC or U.S. Bank, as
applicable, within six (6) months of the Effective Date shall be deemed to have
no further Claim against the Debtors, the Post Effective Date Debtors (or their
property), HSBC or U.S. Bank, as applicable, in respect of such Claim and shall
not participate in any distribution under the Plan. All property in
respect of such forfeited distributions, including interest thereon, shall be
promptly returned to the Post Effective Date Debtors by the applicable indenture
trustee to be redistributed in accordance with Section 6.6 of the Plan, and
any such security shall be cancelled.
Notwithstanding
the foregoing, if the record holder of a Third Lien Note Claim or Senior
Unsecured Notes is the Depository Trust Company or its nominee or such other
securities depository or custodian thereof, or if a Third Lien Note Claim or
Senior Unsecured Notes are held in book-entry or electronic form pursuant to a
global security held by the Depository Trust Company, then the beneficial holder
of an Allowed Third Lien Note Claim or Senior Unsecured Notes shall be deemed to
have surrendered such holder’s security, note, debenture or other evidence of
indebtedness upon the cancellation of such global security by the Depository
Trust Company or such other securities depository or custodian
thereof.
5.10 Equity Interests in Subsidiary
Debtors.
On the
Effective Date, at the option of the Plan Administrator, each respective Equity
Interest in any of the Subsidiary Debtors shall either be (i) unaffected by the
Plan, in which case the Debtor holding such Equity Interests shall continue to
hold such Equity Interests, or (ii) cancelled.
ARTICLE
VI
PROVISIONS
GOVERNING VOTING AND DISTRIBUTIONS
6.1 Voting of
Claims.
Each
holder of an Allowed Claim in an impaired class of Claims that is entitled to
vote on the Plan pursuant to Articles III and IV of the Plan shall be entitled
to vote separately to accept or reject the Plan, as provided in such order as is
entered by the Bankruptcy Court establishing procedures with respect to the
solicitation and tabulation of votes to accept or reject the Plan, or any other
order of the Bankruptcy Court.
6.2 Nonconsensual
Confirmation.
If any
impaired class of Claims entitled to vote shall not accept the Plan by the
requisite statutory majority provided in section 1126(c) of the Bankruptcy Code,
the Debtors reserve the right to amend the Plan in accordance with Section 12.5
of the Plan or undertake to
20
have the
Bankruptcy Court confirm the Plan under section 1129(b) of the Bankruptcy Code
or both. With respect to impaired classes of Claims that are deemed
to reject the Plan, the Debtors shall request that the Bankruptcy Court confirm
the Plan pursuant to section 1129(b) of the Bankruptcy Code.1
6.3 Distributions
on Allowed General Unsecured Claims.
All
Allowed General Unsecured Claims held by a single creditor shall be aggregated
and treated as a single Claim. At the written request of the Plan
Administrator, any creditor holding multiple Allowed General Unsecured Claims
shall provide to the Post Effective Date Debtors or the Plan Administrator, as
the case may be, a single address to which any distributions shall be
sent.
6.4 Date of
Distributions.
In the
event that any payment or act under the Plan is required to be made or performed
on a date that is not a Business Day, then the making of such payment or the
performance of such act may be completed on the next succeeding Business Day,
but shall be deemed to have been completed as of the required date.
6.5 Delivery of
Distributions.
Subject
to Bankruptcy Rule 9010, all distributions to any holder of an Allowed Claim
shall be made at the address of such holder as set forth on the Schedules filed
with the Bankruptcy Court or on the books and records of the Debtors or its
agents, as applicable, unless the Debtors or Post Effective Date Debtors have
been notified in writing of a change of address, including, without limitation,
by the filing of a proof of Claim by such holder that contains an address for
such holder different than the address of such holder as set forth on the
Schedules. Payment shall be made to the holder of the Allowed Claim
on the Distribution Record Date, unless the holder of such Allowed Claim has
directed the Debtors or the Post Effective Date Debtors, in writing, to make
payment to a third party (including through the filing of a proof of Claim
instructing the Debtors to make payment to a third party thereon). A
holder of an Allowed Claim shall not receive a distribution under this Plan
unless it provides to the Plan Administrator a tax identification
number. Nothing in this Plan shall require the Post Effective Date
Debtors or the Plan Administrator to attempt to locate any holder of an Allowed
Claim.
6.6 Unclaimed
Distributions.
All
distributions under the Plan that are unclaimed for a period of six (6) months
after distribution thereof shall be deemed unclaimed property under section
347(b) of the Bankruptcy Code and any entitlement of any holder of any Claims to
such distributions shall be extinguished and forever barred. Subject
to the conditions set forth in the Plan, any distributions
_________________
1 The Class
of Equity Interests is deemed to reject the Plan and, therefore, the Debtors
will request confirmation of this Plan pursuant to section 1129(b) of the
Bankruptcy Code over the objection of the Class of Equity Interests (Class
5).
21
that
remain unclaimed after the expiration of the sixth (6) month period set forth in
the immediately preceding sentence shall be redistributed in the following
manner in accordance with the Plan: (a) with regard to any unclaimed
distributions made on account of any Allowed Third Lien Claims, such unclaimed
funds shall be redistributed pro-rata to the holders of Allowed Third Lien
Claims, and (b) with regard to any unclaimed distributions made on account of
any Allowed General Unsecured Claims, such unclaimed funds shall be
redistributed pro-rata to the holders of Allowed General Unsecured
Claims.
6.7 Distribution Record
Date.
With
respect to holders of all Secured Vendor Claims and General Unsecured Claims, on
the Distribution Record Date, the Claims register shall be closed and any
transfer of any Claim thereafter shall be prohibited. The
Debtors and the Post Effective Date Debtors shall have no obligation to
recognize any transfer of any such Secured Vendor Claims or General Unsecured
Claims occurring after the close of business after such date.
6.8 Manner of
Payment.
At the
option of the Plan Administrator, any Cash payment to be made hereunder may be
made by a check or wire transfer or as otherwise required or provided in
applicable agreements. All distributions of Cash to the creditors of
each of the Debtors under the Plan shall be made by, or on behalf of, the
applicable Debtor.
6.9 Cash
Distributions.
No
interim distribution of Cash less than $100 shall be made to any holder of an
Allowed Claim unless a request therefor is made in writing to the Plan
Administrator, with a copy to the Debtors or Post Effective Date Debtors, as
applicable, and the Creditors’ Committee if such request is made prior to the
Effective Date. Any funds not distributed pursuant to this Section
will be held for the benefit of the designated recipient pending a final
distribution.
6.10 Setoffs and
Recoupment.
Other
than with respect to Claims Allowed hereunder, the Debtors may, but shall not be
required to, setoff against or recoup from any Claim and the payments to be made
pursuant to the Plan in respect of such Claim any Claims of any nature
whatsoever that the Debtors may have against the claimant, but neither the
failure to do so nor the allowance of any Claim hereunder shall constitute a
waiver or release by the Debtors or Post Effective Date Debtors of any such
Claim it may have against such claimant.
6.11 Distributions
After Effective Date.
Distributions
made after the Effective Date to holders of Disputed Claims that are not Allowed
Claims as of the Effective Date but which later become Allowed Claims shall be
deemed to have been made on the Effective Date.
22
6.12 Allocation of
Plan Distributions Between Principal and Interest.
To the
extent that any Allowed Claim entitled to a distribution under the Plan consists
of indebtedness and other amounts (such as accrued but unpaid interest thereon),
such distribution shall be allocated first to the principal amount of the Claim
(as determined for federal income tax purposes) and then, to the extent the
consideration exceeds the principal amount of the Claim, to such other
amounts.
6.13 Payment
of Statutory Fees.
The
Debtors shall pay all U.S. Trustee quarterly fees under 28 U.S.C. § 1930(a)(6),
plus interest due and payable under 31 U.S.C. § 3717, on all disbursements,
including plan payments and disbursements in and outside the ordinary course of
business, until the entry of a final decree, dismissal of the cases, or
conversion of the cases to cases under Chapter 7.
ARTICLE
VII
PROCEDURES
FOR TREATING DISPUTED
CLAIMS
UNDER PLAN OF REORGANIZATION
7.1 Objections.
As of the
Effective Date, objections to, and requests for estimation of, Claims against
the Debtors may be interposed and prosecuted only by the Plan Administrator, who
shall consult with the Post Effective Date Debtors. Such objections
and requests for estimation shall be served on the respective claimant and filed
with the Bankruptcy Court on or before the latest of: (i) the later of one
hundred and eighty (180) days after the Effective Date or sixty (60) days after
the date on which such Claim was filed (provided that any Claims filed after the
Effective Date shall be deemed null and void and no further action shall be
required by the Debtors in respect thereof), or (ii) such later date as may
be fixed by the Bankruptcy Court.
7.2 Distributions
After Allowance.
To the
extent that a Disputed Claim ultimately becomes an Allowed Claim or Allowed
Administrative Expense Claim, distributions, if any, shall be made to the holder
of such Allowed Claim in accordance with the provisions of the
Plan. As soon as practicable after the date that the order or
judgment of the Bankruptcy Court Allowing any Disputed Claim or Disputed
Administrative Expense Claim becomes a Final Order, the Plan Administrator will
provide to the holder of such Administrative Expense Claim or Claim the
distribution (excluding any post-petition interest), if any, to which such
holder is entitled under the Plan.
7.3 Resolution of
Claims.
On and
after the Effective Date, the Plan Administrator shall have the authority to
compromise, settle, otherwise resolve or withdraw any objections to Claims after
consulting with the Post Effective Date Debtors, and to compromise, settle or
otherwise resolve any Disputed Claims without approval of the Bankruptcy
Court. The provisions of the Claims Objection
23
Procedures
Order shall remain in full force and effect and shall apply to the Plan
Administrator with respect to the resolution of any Disputed Claims; provided, however, that any
provision of the Claims Objection Procedures Order requiring the Debtors to
submit any proposal to compromise, settle, resolve or withdraw a Claim for the
advice, consent, or approval of the Creditors’ Committee shall have no effect to
the extent the Creditors’ Committee shall have previously been
dissolved.
7.4 Estimation of
Claims.
The
Debtors, the Post Effective Date Debtors or the Plan Administrator may at any
time request that the Bankruptcy Court estimate any Contingent Claim,
Unliquidated Claim or Disputed Claim pursuant to section 502(c) of the
Bankruptcy Code regardless of whether any of the Debtors, the Post Effective
Date Debtors or the Plan Administrator previously objected to such Claim or
whether the Bankruptcy Court has ruled on any such objection, and the Bankruptcy
Court will retain jurisdiction to estimate any Claim at any time during
litigation concerning any objection to any Claim, including, without limitation,
during the pendency of any appeal relating to any such objection. In
the event that the Bankruptcy Court estimates any Contingent Claim, Unliquidated
Claim or Disputed Claim, the amount so estimated shall constitute either the
Allowed amount of such Claim or a maximum limitation on such Claim, as
determined by the Bankruptcy Court. If the estimated amount
constitutes a maximum limitation on the amount of such Claim, the Debtors, the
Post Effective Date Debtors or the Plan Administrator may pursue supplementary
proceedings to object to the allowance of such Claim. All of the
aforementioned objection, estimation and resolution procedures are intended to
be cumulative and not exclusive of one another. Claims may be
estimated and subsequently compromised, settled, withdrawn or resolved by any
mechanism approved by the Bankruptcy Court.
7.5 Interest.
To the
extent that a Disputed Claim becomes an Allowed Claim after the Effective Date,
the holder of such Claim shall not be entitled to any interest thereon that
accrued after the Effective Date.
ARTICLE
VIII
EXECUTORY
CONTRACTS AND UNEXPIRED LEASES
8.1 Rejection of Any
Remaining Executory Contracts and Unexpired Leases.
Pursuant
to sections 365(a) and 1123(b)(2) of the Bankruptcy Code, all executory
contracts and unexpired leases that exist between any of the Debtors and any
person or entity shall be deemed rejected by the Debtors as of the Effective
Date, except for any executory contract or unexpired lease (a) that has been
rejected by a Final Order of the Bankruptcy Court prior to the Effective Date,
(b) that has been assumed or assumed and assigned pursuant to an order of the
Bankruptcy Court, including without limitation the Sale Order and the FF&E
Sale Order, entered prior to the Effective Date, (c) as to which a motion for
approval of the
24
assumption
or assumption and assignment of such executory contract or unexpired lease has
been filed and served prior to the Confirmation Date, or (d) that is listed by
the Debtors in the Plan Supplement. With respect to those executory
contracts and unexpired leases set forth in the Plan Supplement, the period for
the assumption, assumption and assignment, or rejection of such executory
contracts and unexpired leases shall be extended until the date of closing of
the Chapter 11 Cases in accordance with Section 5.7 herein.
8.2 Approval
of Rejection of Executory Contracts and Unexpired Leases.
Entry of
the Confirmation Order shall, subject to and upon the occurrence of the
Effective Date, constitute the approval, pursuant to sections 365(a) and
1123(b)(2) of the Bankruptcy Code, of the assumption or rejection of the
executory contracts and unexpired leases assumed or rejected pursuant to
Section 8.1 of the Plan.
8.3 Bar Date for
Filing Proofs of Claim Relating to Executory Contracts and Unexpired Leases
Rejected Pursuant to the Plan.
Proofs of
Claim for damages arising out of the rejection of an executory contract or
unexpired lease pursuant to Section 8.1 of the Plan must be filed with the
Bankruptcy Court and served upon the attorneys for the Debtors or, on and after
the Effective Date, the Post Effective Date Debtors and the Plan Administrator,
no later than the bar date set in accordance with the Bankruptcy Court’s Order
Pursuant to Section 502(b)(9) of the Bankruptcy Code and Bankruptcy Rule
3003(c)(3) Establishing the Deadline for Filing Proofs of Claim and Approving
the Form and Manner of Notice Thereof dated October 20, 2009, if applicable, or
forty-five (45) days after the effective date of such rejection of such
executory contract or unexpired lease. All such proofs of Claim not filed
within such time will be forever barred from assertion against the Debtors and
their Estates or the Post Effective Date Debtors and their
property.
8.4 Insurance
Policies.
Unless
specifically assumed or rejected by order of the Bankruptcy Court, or unless
listed in the Plan Supplement as set forth in Section 8.1 of the Plan, all of
the Debtors’ insurance policies and any agreements, documents or instruments
relating thereto, are treated as executory contracts under the Plan and shall be
rejected in accordance with Section 8.1 of the Plan. Nothing
contained in this section shall constitute or be deemed a waiver of any cause of
action that the Debtors may hold against any entity, including, without
limitation, the insurer, under any of the Debtors’ policies of
insurance.
ARTICLE
IX
CONDITIONS
PRECEDENT TO EFFECTIVE DATE
9.1 Conditions
Precedent to Effectiveness.
The
Effective Date shall not occur and the Plan shall not become effective unless
and until the following conditions are satisfied in full or waived in accordance
with Section 9.2 of the Plan:
25
(a) The
Confirmation Order, in form and substance acceptable to the Debtors, HSBC,
Harbinger, the Majority in Interest and the Creditors’ Committee shall have been
entered and is a Final Order;
(b) All
actions and all agreements, instruments or other documents necessary to
implement the terms and provisions of the Plan are effected or executed and
delivered, as applicable, in form and substance satisfactory to the
Debtors;
(c) Approval
of a budget for the Plan Administrator in a form reasonably acceptable to the
Debtors, HSBC, the Majority in Interest, and the Creditors’ Committee, as
referenced in section 5.6 of the Plan; and
(d) All
authorizations, consents and regulatory approvals, if any, required by the
Debtors in connection with the consummation of the Plan are obtained and not
revoked.
9.2 Waiver of
Conditions.
Each of
the conditions precedent in Section 9.1 hereof may be waived, in whole or in
part, by the Debtors, with the consent of the HSBC, Harbinger, the Majority in
Interest and the Creditors’ Committee, which consent shall not be unreasonably
withheld. Subject to the foregoing sentence, any such waivers may be
effected at any time, without notice, without leave or order of the Bankruptcy
Court and without any formal action.
9.3 Satisfaction of
Conditions.
Except as
expressly provided or permitted in the Plan, any actions required to be taken on
the Effective Date shall take place and shall be deemed to have occurred
simultaneously, and no such action shall be deemed to have occurred prior to the
taking of any other such action. In the event that one or more of the
conditions specified in Section 9.1 of the Plan have not occurred or otherwise
been waived pursuant to Section 9.2 of the Plan by the earlier of (i) sixty (60)
days after entry of the Confirmation Order as a final non-appealable order or
(ii) June 30, 2010, (a) the Confirmation Order shall be vacated, (b) the Debtors
and all holders of Claims and Equity Interests shall be restored to the status quo ante as of the day
immediately preceding the Confirmation Date as though the Confirmation Date
never occurred and (c) the Debtors’ obligations with respect to Claims and
Equity Interests shall remain unchanged and nothing contained herein shall
constitute or be deemed a waiver or release of any Claims or Equity Interests by
or against the Debtors or any other person or to prejudice in any manner the
rights of the Debtors or any person in any further proceedings involving the
Debtors.
ARTICLE
X
EFFECT
OF CONFIRMATION
10.1 Vesting of
Assets.
On the
Effective Date, pursuant to sections 1141(b) and (c) of the Bankruptcy Code, the
Debtors, their properties and interests in property and their operations shall
be released
26
from the
custody and jurisdiction of the Bankruptcy Court, and all property of the
Estates of the Debtors shall vest in the Post Effective Date Debtors free and
clear of all Claims, Liens, encumbrances, charges and other interests, except as
provided in the Plan.
10.2 Binding
Effect.
Subject
to the occurrence of the Effective Date, on and after the Confirmation Date, the
provisions of the Plan shall bind any holder of a Claim against, or Equity
Interest in, the Debtors and such holder’s respective successors and assigns,
whether or not the Claim or interests including any Equity Interest of such
holder is impaired under the Plan, whether or not such holder has accepted the
Plan and whether or not such holder is entitled to a distribution under the
Plan.
10.3 Termination of
Claims and Equity Interests.
Except as
provided in the Plan, all existing Claims against the Debtors—upon the Effective
Date—and Equity Interests in the Debtors—upon the date of closing of the Chapter
11 Cases pursuant to Section 5.7 herein—shall be, and shall be deemed to be,
terminated, and all holders of such Equity Interests shall be precluded and
enjoined from asserting against the Post Effective Date Debtors, their
successors or assignees or any of their assets or properties, any other or
further Claim or Equity Interest based upon any act or omission, transaction or
other activity of any kind or nature that occurred prior to the Effective Date,
whether or not such holder has filed a proof of Claim or proof of Equity
Interest and whether or not the facts or legal bases therefore were known or
existed prior to the Effective Date.
10.4 Injunction or
Stay.
Except
as otherwise expressly provided herein or in the Confirmation Order, all Persons
or entities who have held, hold or may hold Claims against or Equity Interests
in the Debtors are permanently enjoined, from and after the Effective Date, from
(a) commencing or continuing in any manner any action or other proceeding
of any kind on or with respect to or in any way related to any such Claim or
Equity Interest against any of the Released Parties or the Post Effective Date
Debtors or any of their respective assets or properties including any
distributions payable to them hereunder, (b) the enforcement, attachment,
collection or recovery by any manner or means of any judgment, award, decree or
order against any of the Released Parties or the Post Effective Date Debtors or
any of their respective assets or properties including any distributions payable
to them hereunder with respect to or in any way related to such Claim or Equity
Interest, (c) creating, perfecting or enforcing any encumbrance of any kind
against any of the Released Parties or the Post Effective Date Debtors or
against the property or interests in property of any of the Released Parties or
the Post Effective Date Debtors with respect to or in any way related to such
Claim or Equity Interest, (d) asserting any right of setoff, subrogation or
recoupment of any kind against any obligation due to any of the Released Parties
or the Post Effective Date Debtors or against the property or interests in
property of any Post Effective Date Debtor with respect to or in any way related
to such Claim or Equity Interest, (e) acting or proceeding in any manner in any
place whatsoever, that does
27
not
conform to or comply with the provisions of the Plan, (f) commencing,
continuing, or asserting in any manner any action or other proceeding of any
kind with respect to any Claims which are extinguished, released or settled
pursuant to the Plan, and (g) taking any actions to interfere with the
implementation or consummation of the Plan.
10.5 Terms of
Injunction or Stay.
Unless
otherwise provided in the Confirmation Order, all injunctions or stays arising
under or entered during the Chapter 11 Cases under section 105 or 362 of the
Bankruptcy Code, or otherwise, that are in existence on the Confirmation Date
shall remain in full force and effect until the Effective Date, provided, however, that no such
injunction or stay shall preclude enforcement of parties’ rights under the Plan
and the related documents.
10.6 Reservation of
Causes of Action/Reservation of Rights.
Nothing
contained in the Plan, except as set forth in Sections 2.5, 4.3, 10.7, 10.8,
10.9(a), 10.9(b) and 10.10 of this Plan, or the Confirmation Order shall be
deemed to be a waiver or the relinquishment of any rights or Causes of Action
that the Debtors, or the Post Effective Date Debtors may have or may choose to
assert against any parties.
10.7 Exculpation.
None of
the Debtors, the Post Effective Date Debtors, the Plan Administrator, the
members of the Creditors’ Committee in such capacity, GECC, HSBC, U.S. Bank,
Harbinger, Wilmington Trust, the Senior Lenders, or any of such parties’
respective officers, directors, managers, members accountants, financial
advisors, investment bankers, agents, restructuring advisors, attorneys, and
representatives (solely in their capacity as officers, directors, managers,
members, accountants, financial advisors, investment bankers, agents,
restructuring advisors, attorneys, consultants and representatives)
shall have or incur any liability for any Claim, Cause of Action or other
assertion of liability for any act taken or omitted to be taken in connection
with, or arising out of, the Chapter 11 Cases, the formulation, dissemination,
confirmation, consummation or administration of the Plan, property to be
distributed under the Plan, or any other act or omission in connection with the
Chapter 11 Cases, the Plan, the Disclosure Statement, or any contract,
instrument, document or other agreement related thereto; provided, however, that the
foregoing shall not affect the liability of any person that otherwise would
result from any such act or omission to the extent such act or omission is
determined by a Final Order to have constituted willful misconduct or gross
negligence.
10.8 Releases.
Unless
otherwise agreed to in a writing executed by the Released Party, on the
Effective Date, each of (i) the Debtors and their Estates, (ii) the Creditors’
Committee, (iii) GECC, (iv) Wilmington Trust, (v) HSBC, (vi) Harbinger, (vii)
U.S. Bank, (viii) the Senior Lenders (and in the case of (i) though (viii), each
of their present or former directors, officers, members, managers, partners,
employees, affiliates, agents, financial advisors, restructuring advisors,
attorneys and representatives and their respective
28
affiliates),
(ix) each holder of a Claim or Equity Interest that votes to accept the Plan or
who is deemed to accept the Plan and (x) to the fullest extent permitted by law,
each holder of an Allowed Claim or Equity Interest who does not vote to accept
the Plan but receives a distribution or is entitled to a distribution under the
Plan, shall unconditionally, irrevocably and forever release each of the
Released Parties from any and all Claims, losses, interests, 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, that such entity or person would have been legally
entitled to assert (whether individually or collectively), relating to any act,
omission, transaction, event or other occurrence taking place on or prior to the
Effective Date in any way relating to the Debtors, the Chapter 11 Cases, any
Claims or Interests against the Debtors, or the Plan.
10.9 Causes of
Action/Avoidance Actions/Objections.
(a) All
Avoidance Actions shall be released as of the Effective Date.
(b) Other
than any releases granted in Sections 2.5, 4.3, 10.8 and 10.9(a) herein and
prior orders of the Bankruptcy Court, by the Confirmation Order and by another
Final Order of the Bankruptcy Court, as applicable, from and after the Effective
Date, the Plan Administrator (on behalf of the Post Effective Date Debtor) shall
have the right to file objections to Claims that belong to the Debtors or
Debtors in Possession.
10.10 Extension
of Challenge Period
The
Challenge Period (as defined in the Final Cash Collateral Order) with respect to
the Second Lien Note Claims and Liens and the Third Lien Note Claims and Liens
as set forth in the Final Cash Collateral Order shall be extended to the earlier
of: (i) the Effective Date and (ii) June 30, 2010, and upon such date, each member of the
Creditors’ Committee shall unconditionally, irrevocably and
forever release the holders of Second Lien Note Claims and Third Lien Note
Claims, including without limitation, Wilmington Trust, HSBC, and Harbinger,
from any and all Claims, losses, interests, 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, that such entity or person would have been legally entitled to
assert (whether individually or collectively), arising out of or relating to the
Second Lien Note Claims or Third Lien Note Claims.
10.11 Plan
Supplement
The Plan
Supplement and the documents contained therein shall be in form, scope and
substance satisfactory to the Debtors and reasonably satisfactory to the
Creditors’ Committee, HSBC, Harbinger, and the Majority in Interest, and shall
be filed with the Bankruptcy Court no later than ten (10) calendar days prior to
the deadline set to file objections to confirmation of the Plan, provided that
the documents included therein may thereafter be
29
amended
and supplemented in a manner reasonably acceptable to the Committee, the
Majority in Interest and HSBC prior to execution, so long as no such amendment
or supplement materially affects the rights of holders of Claims. The
Plan Supplement and the documents contained therein are incorporated into and
made a part of the Plan as if set forth in full herein.
ARTICLE
XI
RETENTION
OF JURISDICTION
11.1 The
Bankruptcy Court shall have exclusive jurisdiction of all matters arising out
of, or related to, the Chapter 11 Cases and the Plan pursuant to, and for the
purposes of, sections 105(a) and 1142 of the Bankruptcy Code, including, without
limitation:
(a) To hear
and determine pending applications for the rejection of executory contracts or
unexpired leases and Claims resulting therefrom;
(b) To
determine any and all adversary proceedings, applications and contested
matters;
(c) To hear
and determine all applications for compensation and reimbursement of expenses
under sections 330, 331 and 503(b) of the Bankruptcy Code;
(d) To hear
and determine any timely objections to, or requests for estimation of Disputed
Claims, in whole or in part;
(e) To enter
and implement such orders as may be appropriate in the event the Confirmation
Order is for any reason stayed, revoked, modified or vacated;
(f) To issue
such orders in aid of execution of the Plan, to the extent authorized by section
1142 of the Bankruptcy Code;
(g) To
consider any amendments to or modifications of the Plan or to cure any defect or
omission, or reconcile any inconsistency, in any order of the Bankruptcy Court,
including, without limitation, the Confirmation Order;
(h) To hear
and determine disputes or issues arising in connection with the interpretation,
implementation or enforcement of the Plan, the Confirmation Order, any
transactions or payments contemplated hereby, any agreement, instrument, or
other document governing or relating to any of the foregoing or any settlement
approved by the Bankruptcy Court;
(i) To hear
and determine matters concerning state, local and federal taxes in accordance
with sections 346, 505 and 1146 of the Bankruptcy Code (including, without
limitation, any request by the Debtors prior to the Effective Date or request by
the Post Effective Date Debtors or the Plan Administrator after the Effective
Date for an expedited determination of tax under section 505(b) of the
Bankruptcy Code);
30
(j) To hear
and determine all disputes involving the existence, scope and nature of the
discharges granted under the Plan, the Confirmation Order or the Bankruptcy
Code;
(k) To issue
injunctions and effect any other actions that may be necessary or appropriate to
restrain interference by any person or entity with the consummation,
implementation or enforcement of the Plan, the Confirmation Order or any other
order of the Bankruptcy Court;
(l) To
determine such other matters and for such other purposes as may be provided in
the Confirmation Order;
(m) To hear
and determine any rights, Claims or Causes of Action held by or accruing to the
Debtors pursuant to the Bankruptcy Code or pursuant to any federal or state
statute or legal theory;
(n) To
recover all assets of the Debtors and property of the Debtors’ Estates, wherever
located;
(o) To enter
a final decree closing the Chapter 11 Cases; and
(p) To hear
any other matter not inconsistent with the Bankruptcy Code.
ARTICLE
XII
MISCELLANEOUS
PROVISIONS
12.1 Effectuating
Documents and Further Transactions.
On or
before the Effective Date, and without the need for any further order or
authority, the Debtors shall file with the Bankruptcy Court or execute, as
appropriate, such agreements and other documents that are in form and substance
reasonably satisfactory to the Debtors, the Creditors’ Committee, HSBC,
Harbinger, and the Majority in Interest as may be necessary or appropriate to
effectuate and further evidence the terms and conditions of the
Plan. The Post Effective Date Debtors are authorized to execute,
deliver, file, or record such contracts, instruments, releases, indentures and
other agreements or documents and take such actions as may be necessary or
appropriate to effectuate and further evidence the terms and conditions of the
Plan and any securities issued pursuant to the Plan.
12.2 Withholding and
Reporting Requirements.
In
connection with the Plan and all instruments issued in connection therewith and
distributed thereon, any party issuing any instrument or making any distribution
under the Plan shall comply with all applicable withholding and reporting
requirements imposed by any federal, state or local taxing authority, and all
distributions under the Plan shall be subject to any such withholding or
reporting requirements. Notwithstanding the above, each holder of an
Allowed Claim that is to receive a distribution under the Plan shall have the
sole and exclusive
31
responsibility
for the satisfaction and payment of any tax obligations imposed on such holder
by any governmental unit, including income, withholding and other tax
obligations, on account of such distribution. Any party issuing any
instrument or making any distribution under the Plan has the right, but not the
obligation, to not make a distribution until such holder has made arrangements
satisfactory to such issuing or disbursing party for payment of any such tax
obligations.
12.3 Exemption
from Transfer Taxes.
Pursuant
to section 1146(a) of the Bankruptcy Code, the assignment or surrender of any
lease or sublease, or the delivery of any deed or other instrument of transfer
under, in furtherance of, or in connection with the Plan, including any deeds,
bills of sale, or assignments executed in connection with any disposition of
assets contemplated by the Plan shall not be subject to any stamp, real estate
transfer, mortgage recording, sales, use or other similar tax.
12.4 Corporate
Action.
On the
Effective Date, all matters provided for under the Plan that would otherwise
require approval of the managers or directors of one or more of the Debtors or
Post Effective Date Debtors, as the case may be, shall be in effect from and
after the Effective Date pursuant to the applicable general corporation law of
the states in which the Debtors or the Post Effective Date Debtors are
incorporated or established, without any requirement of further action by the
managers or directors of the Debtors or the Post Effective Date
Debtors.
12.5 Modification of
Plan.
Alterations,
amendments or modifications of or to the Plan may be proposed in writing by the
Debtors, with the reasonable consent of the Creditors’ Committee, HSBC,
Harbinger, and the Majority in Interest, at any time prior to the Confirmation
Date, provided that the Plan, as altered, amended or modified satisfies the
conditions of sections 1122 and 1123 of the Bankruptcy Code and the Debtors
shall have complied with section 1125 of the Bankruptcy Code. The
Plan may be altered, amended or modified at any time after the Confirmation Date
and before substantial consummation, provided that the Plan, as altered, amended
or modified, satisfies the requirements of sections 1122 and 1123 of the
Bankruptcy Code and the Bankruptcy Court, after notice and a hearing, confirms
the Plan, as altered, amended or modified, under section 1129 of the Bankruptcy
Code and the circumstances warrant such alterations, amendments or
modifications. A holder of a Claim that has accepted the Plan shall
be deemed to have accepted the Plan, as altered, amended or modified, if the
proposed alteration, amendment or modification does not materially and adversely
change the treatment of the Claim of such holder.
Prior to
the Effective Date, and with the reasonable consent of the Creditors’ Committee,
HSBC and the Majority in Interest, the Debtors may make appropriate technical
adjustments and modifications to the Plan without further order or approval of
the Bankruptcy Court, provided that such technical adjustments and modifications
do not adversely affect in a material way the treatment of holders of Claims or
Equity Interests.
32
12.6 Revocation or
Withdrawal of the Plan.
The
Debtors reserve the right to revoke or withdraw the Plan prior to the
Confirmation Date. If the Debtors revoke or withdraw the Plan prior
to the Confirmation Date, then the Plan shall be deemed null and
void. In such event, nothing contained herein shall constitute or be
deemed a waiver or release of any Claims or Equity Interests by or against the
Debtors or any other person or to prejudice in any manner the rights of the
Debtors or any person in any further proceedings involving the
Debtors.
12.7 Dissolution of
the Creditors’ Committee.
On the
Effective Date, the Creditors’ Committee shall be dissolved and the members
thereof shall be released and discharged of and from all further authority,
duties, responsibilities and obligations related to and arising from and in
connection with the Chapter 11 Cases, and the retention or employment of the
Creditors’ Committee’s attorneys, accountants and other agents, if any, shall
terminate other than for purposes of filing and prosecuting applications for (i)
final allowances of compensation for professional services rendered and
reimbursement of expenses incurred in connection therewith and (ii)
reimbursement of expenses incurred by Creditors’ Committee members.
12.8 Exhibits/Schedules.
All
exhibits and schedules to the Plan are incorporated into and are a part of the
Plan as if set forth in full herein.
12.9 Substantial
Consummation.
On the
Effective Date, the Plan shall be deemed to be substantially consummated under
sections 1101 and 1127(b) of the Bankruptcy Code.
12.10 Severability of
Plan Provisions.
In the
event that, prior to the Confirmation Date, any term or provision of the Plan is
held by the Bankruptcy Court to be invalid, void or unenforceable, the
Bankruptcy Court shall have the power to alter and interpret such term or
provision to make it valid or enforceable to the maximum extent practicable,
consistent with the original purpose of the term or provision held to be
invalid, void or unenforceable, and such term or provision shall then be
applicable as altered or interpreted. Notwithstanding any such
holding, alteration or interpretation, the remainder of the terms and provisions
of the Plan shall remain in full force and effect and shall in no way be
affected, impaired or invalidated by such holding, alteration or
interpretation. The Confirmation Order shall constitute a judicial
determination and shall provide that each term and provision of the Plan, as it
may have been altered or interpreted in accordance with the foregoing, is valid
and enforceable in accordance with its terms.
33
12.11 Governing
Law.
Except to
the extent that the Bankruptcy Code or other federal law is applicable, or to
the extent an exhibit to the Plan or Plan Supplement provides otherwise (in
which case the governing law specified therein shall be applicable to such
exhibit), the rights, duties, and obligations arising under the Plan shall be
governed by, and construed and enforced in accordance with, the laws of the
State of New York without giving effect to its principles of conflict of
laws.
12.12 Notices.
All
notices, requests and demands to or upon the Debtors to be effective shall be in
writing (including by facsimile transmission) and, unless otherwise expressly
provided herein, shall be deemed to have been duly given or made when actually
delivered or, in the case of notice by facsimile transmission, when received and
telephonically confirmed, addressed as follows:
If to the
Debtors or Post Effective Date Debtors, to:
Finlay
Enterprises, Inc.
529 Fifth
Avenue
New York,
NY 10017
Attn:
Bruce E. Zurlnick
Bonni
G. Davis
Telephone: (212)
808-2800
Facsimile: (212)
808-0349
- and -
Weil,
Gotshal & Manges LLP
767 Fifth
Avenue
New York,
New York 10153
Attn: Lori
R. Fife, Esq.
Shai Y. Waisman, Esq.
Telephone:
(212) 310-8000
Facsimile:
(212) 310-8007
If to the
Creditors’ Committee, to:
Moses
& Singer LLP
405
Lexington Avenue
New York,
New York 10174
Attn.: Lawrence
L. Ginsburg, Esq.
Christopher J. Caruso,
Esq.
Telephone:
(212) 554-7800
Facsimile:
(212) 554-7700
34
If to
HSBC, to:
Pryor
Cashman LLP
7 Times
Square
New York,
New York 10036
Attn:
Tina N. Moss, Esq.
Telephone:
(212) 421-4100
Facsimile:
(212) 326-0806
If to
Harbinger, to:
Paul,
Weiss, Rifkind, Wharton & Garrison LLP
1285
Avenue of the Americas
New York,
New York 10019
Attn: Alan
W. Kornberg, Esq.
Diane Meyers, Esq.
Telephone:
(212) 373-3000
Facsimile:
(212) 757-3990
with
copies to:
Coliseum
Capital Management LLC
767 Third
Avenue, 35th Floor
New York,
New York 10017
Attn:
Adam L. Gray and Christopher S. Shackelton
Telephone: (212)
488-5555
Facsimile:
(212) 644-1001
and
JMB
Capital Partners LP
450 Park
Avenue, 27th Floor
New York,
NY 10022
Attn:
Gilbert Li
Telephone:
(212) 319-4049
Facsimile:
(212) 319-1105
35
and
MFP
Partners LP
667
Madison Avenue, 25th Floor
New York,
New York 10065
Attn:
Timothy E. Ladin, General Counsel and Vice President
Telephone:
(212) 752-7345
Facsimile:
(212) 752-7265
and:
Paul,
Hastings, Janofsky & Walker LLP
Park
Avenue Tower
75 East
55th Street
First
Floor
New York,
New York 10022
Attn:
Leslie A. Plaskon, Esq. and Aaron M. Klein, Esq.
Telephone: (212)
318-6000
Facsimile:
(212) 319-4090
36
Dated:
May 18, 2010
Respectfully submitted, | ||||
Finlay
Enterprises, Inc., Finlay Fine Jewelry Corporation,
Finlay
Merchandising & Buying LLC, eFinlay, Inc.,
Finlay
Jewelry, Inc., Carlyle & Co. Jewelers, LLC,
L.
Congress, Inc., and Park Promenade, LLC
|
||||
By:
|
/s/ Bruce
Zurlnick
|
|||
Name:
|
Bruce
Zurlnick
|
|||
Title:
|
Senior
Vice President and Chief Financial
Officer
|
37