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IN RE FINANCIAL FEDERATED TITLE & TRUST, INC., a/k/a ASSET SECURITY CORP., a/k/a VIATICAL ASSET RECOVERY CORP., a/k/a QUAD B, LTD., and AMERICAN BENEFITS SERVICES, INC., Debtors. ___________________________________/ |
CASE NO. 99-26616-BKC-RBR CHAPTER 11 SUBSTANTIVELY CONSOLIDATED
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AMENDED CHAPTER 11 PLAN
This Amended Chapter 11 plan is proposed pursuant to Section 1121 of the United States Bankruptcy Code by John W. Kozyak, as Chapter 11 Trustee of Financial Federated Title & Trust, Inc., a/k/a Asset Security Corp., a/k/a Viatical Asset Recovery Corp., a/k/a Quad B, Ltd., and Chapter 11 Trustee of American Benefits Services, Inc.
1.1 ABS: American Benefits Services, Inc.
1.2 ABS Claims Bar Date: July 26, 2000.
1.3 ABS Trust: The trust that ABS allegedly formed in April or May of 1999.
1.4 Administrative Expense Claim: Any cost or expense of administration of the Case allowed by the Court pursuant to Section 503(b) of the Code, including, without limitation, any actual and necessary Post-Petition expenses of preserving the Debtors' estate and any actual and necessary Post-Petition expenses of operating the business of the Debtor, including any allowances of compensation or reimbursement of expenses to the extent allowed by the Court under Sections 330 and 331 of the Code and any fees or charges, including post-confirmation fees, assessed against the Debtors' estate under Section 1930, Chapter 123 and Section 586, Chapter 30 of Title 28 of the United States Code, but excluding claims of the type identified in 11 U.S.C. §502(f).
1.5 Allowed Claim: Refers to any Claim (a) with respect to which a proof of claim has been filed with the Court on or before the date fixed by the Court; or (b) that is listed in a schedule and a list of creditors prepared and filed with the Court pursuant to Rule 1007 and not listed as disputed, contingent or unliquidated as to amount; and, in either case, as to which no objection to the allowance thereof has been interposed within any applicable period of limitation fixed by an Order of the Court or the Plan, or which is no longer subject to appeal, or (c) which has otherwise been allowed by, or pursuant to, Order of the Court which is no longer subject to appeal. Unless otherwise specified in the Plan, "Allowed Claim" shall not include (i) interest on the principal amount of the Allowed Claim from and after the Petition Date, or (ii) any punitive damages.
1.6 ASC: Asset Security Corp. which has been determined to be an alter ego of FinFed pursuant to a Final Judgment of the Court dated December 27, 1999.
1.7 Assumed Liabilities: The obligation of the Liquidating Debtor to distribute Collected Cash pursuant to Articles III and IV of the Plan.
1.8 Ballot: The form(s) distributed to each Creditor holding an Allowed Claim in an impaired Class, on which is to be indicated the acceptance or rejection of the Plan.
1.9 Ballot Date: The date set by the Court by which all votes for acceptance or rejection of the Plan must be received by the balloting agent.
1.10 Bankruptcy Rules: The Federal Rules of Bankruptcy Procedure pursuant to Title 28 of the United States Code, 28 U.S.C. § 2075, as they have been or may hereafter be amended.
1.11 Broker: Any person who directly or indirectly solicited others to purchase investments in the ponzi scheme that is the subject of the Criminal Case and who received, or was promised, a commission, in kind or in money, for such solicitation.
1.12 Business Day: Any day except a Saturday, Sunday or any other day on which commercial banks in the State of Florida are authorized or required by applicable law to close.
1.13 Case: The Chapter 11 bankruptcy case of Financial Federated Title and Trust, Inc. pending in the United States Bankruptcy Court for the Southern District of Florida and assigned Case No. 99-26616-BKC-RBR, which includes the substantively consolidated bankruptcy case of ABS.
1.14 Cash: Cash, cash equivalents and other readily marketable securities or instruments issued by a Person other than the Debtors including, without limitation, readily marketable direct obligations of the United States of America, certificates of deposit issued by banks or commercial paper, including interest earned or accrued thereon.
1.15 Class: A group of Claims which are substantially similar to each other, as classified pursuant to the Plan.
1.16 Class 1 Claim, Class 2 Claim, Class 3 Claim, etc.: The specific Class into which Allowed Claims or Allowed Equity Interests are classified pursuant to Article II of the Plan.
1.17 Class Plaintiffs: Herbert P. Scharlow and Virginia H. Scharlow, William R. Mitchell as Trustee of the William M. Mitchell Revocable Trust, John Dickinson, James Tracton, and whomever else a court of competent jurisdiction adjudges to be included in the class these named individuals seek to represent.
1.18 Code: The United States Bankruptcy Code, being Title 11 of the United States Code as enacted in 1978, and thereafter amended.
1.19 Collected Cash: All Cash, and the net cash proceeds realized upon the liquidation of the Debtors' property, including all assets and businesses of the Debtors and recoveries from monetary demands made, or legal actions pursued, by the Debtors and/or the Liquidating Debtor, but not including the net cash proceeds from the sale or disposition of the Seized Assets once they are finally forfeited.
1.20 Collected Cash Account: The account referred to in Article V of the Plan. The Collected Cash Account may take the form of one or more actual deposit accounts. The term "Collected Cash Account" shall refer collectively to all such accounts.
1.21 Committee: The Official Committee of Unsecured Creditors appointed in the case of FinFed by the Office of the United States Trustee for the Southern District of Florida pursuant to Section 1102 of the Code, and its duly appointed successors, if any, as the same may be reconstituted from time to time. No separate committee was appointed for ABS.
1.22 Confirmation Date: The date upon which the Order is entered by the Court confirming the Plan, after a hearing is conducted pursuant to Section 1129 of the Code.
1.23 Confirmation Order: The Order of the Court confirming the Plan.
1.24 Court: The United States Bankruptcy Court for the Southern District of Florida (or such other court as may be administering the Case) and, with respect to any particular proceeding within the Case, any other court which may be exercising jurisdiction over such proceeding.
1.25 Criminal Case: The criminal case currently pending in the United States District Court for the Southern District of Florida, styled United States v. Frederick Brandau, et al., Case No. 99-8125-CR-HURLEY, including all superseding indictments.
1.26 Debtor or Debtors: FinFed, including its alter egos, ASC, VARC and Quad B, and including ABS, whose bankruptcy estate is substantively consolidated with the FinFed estate.
1.27 Disputed Claim: Any claim (i) which is scheduled by the Debtor as disputed, contingent or unliquidated or (ii) proof of which has been filed with the Court and an objection to the allowance thereof, in whole or in part has been or is interposed prior to the final date, if any, provided under the Plan for the filing of such objections (or thereafter pursuant to an Order of the Court) and which objection has not (A) been determined by a Final Order or (B) been settled by the parties under a settlement approved by Final Order of the Court pursuant to Bankruptcy Rule 9019; or (iii) which has not been otherwise allowed by the Court.
1.28 Distribution(s): That Cash or property to be distributed to the holders of Allowed Claims under the Plan. No holder of an Allowed Claim will be entitled to receive a total Distribution that exceeds 100% of such holder's Allowed Claim. In determining whether such holder has received payment equal to 100% of such holder's Allowed Claim, the Liquidating Debtor will take into account any Third Party Payment received by such holder as well as any Restitution Payment received by such holder. Nothing herein will prohibit the payment of interest on an Allowed Claim as authorized hereunder and under the Code.
1.29 Effective Date: The date on which the Liquidating Debtor commences making Distributions to holders of Allowed Administrative Expense Claims and Allowed Priority Claims.
1.30 Equity Interest: Any rights arising out of the ownership of any interest in any of the following: FinFed, ABS, Quad B, ASC or VARC.
1.31 Estate Assets: All assets and property of the Debtors, as defined in Section 541 of the Code (excluding assets previously distributed, expended or otherwise disposed of by the Debtors prior to the Confirmation Date not otherwise subject to recovery), wherever located and of whatever type or nature, existing as of the Confirmation Date, including, without limitation, the Viaticals and any executory contracts assumed by the Debtors pursuant to Order of the Court or this Plan, and all proceeds of the foregoing. The Seized Assets are expressly excluded from the definition of Estate Assets.
1.32 Final Distribution: The Distribution made on the Final Distribution Date.
1.33 Final Distribution Date: The date as soon as practicable after the last to occur of (a) the date that the last Claim becomes an Allowed Claim; or (b) the date upon which all Estate Assets have been liquidated and converted to Collected Cash; or (c) the Final Payment has been made under the Restitution Plan.
1.34 Final Order: A judgment, order, ruling or other decree issued and entered by the Court or by any state or other federal court or other tribunal of competent jurisdiction located in one of the states, territories or possessions of the United States or the District of Columbia, which judgment, order or other decree (i) has not been reversed, stayed or modified; and (ii) one day more than the requisite number of days (under applicable law or procedure) shall have elapsed from the date such judgment, order, ruling or other decree is docketed on the docket of this Case or such other case in which such judgment, order, ruling or other decree is entered, and reversal, stay or modification shall not have been sought or obtained.
1.35 Final Payment: The last payment made under the Restitution Plan to distribute all proceeds of the Seized Assets once they are available for Distribution.
1.36 FinFed: Financial Federated Title and Trust, Inc.
1.37 FinFed Claims Bar Date: April 17, 2000.
1.38 General Unsecured Claim: Any Claim against the Debtors which is not an Administrative Expense Claim, Priority Claim, Secured Claim, Priority Tax Claim, or Subordinated Claim.
1.39 Initial Distribution: The first distribution of Estate Assets to Creditors holding Allowed General Unsecured Claims made by the Liquidating Debtor pursuant to the Plan.
1.40 Initial Distribution Percentage: That percentage, determined by the Liquidating Debtor in its sole discretion, of Class 3 and 4 Claims that are allowed as of the Effective Date, that may be distributed from Collected Cash after (i) payment in full of Administrative Expense Claims, (ii) payment of all current obligations of the Liquidating Debtor with respect of Priority Tax Claims pursuant to Subsection 3.2, (iii) payment of all current obligations of the Liquidating Debtor in respect of Secured Claims, and (iv) retention of appropriate reserves for the purpose of (a) paying Disputed Claims at such time as they become Allowed Claims, and (b) paying future estimated Liquidation Expenses.
1.41 Joint Litigation. The litigation the Trustee is pursuing jointly with the Class Plaintiffs.
1.42 Liquidating Debtor: FinFed will continue its corporate existence after the Effective Date, and will be the Liquidating Debtor. Due to the substantive consolidation, the assets and liabilities of ABS will be administered through the Liquidating Debtor. The Liquidating Debtor will be operated as set forth in Article V.
1.43 Liquidation Expenses: Those costs and expenses incurred by the Liquidating Debtor and its agents and employees, while in the furtherance of the Plan, including, without limitation, any U.S. Trustee fees that may be due and owing, fees of professionals and others who perform services for the Liquidating Debtor under the Plan, and fees and costs payable to the Plan Administrator, the Post-Confirmation Creditors' Committee, and their professionals, or otherwise authorized by the Court that are paid or payable after the Effective Date of the Plan.
1.44 Local Rule: The local rules of the United States Bankruptcy Court for the Southern District of Florida.
1.45 Order: A determination, ruling or judgment made by the Court.
1.46 Overpayments: Payments from the Estate received by any Creditor such that the Creditor will have received more than 100% of its Allowed Claim. For purposes of determining whether there is an Overpayment, interest, to the extent payable under this Plan, will be included when calculating the amount of the Allowed Claim.
1.47 Petition Date: As to FinFed and ABS, the date on which, as to each, an involuntary petition was filed pursuant to Section 303 of the Code. The FinFed Petition Date is October 7, 1999; the ABS Petition Date is October 5, 1999.
1.48 Plan: This Amended Chapter 11 Plan, as it may be amended, supplemented or otherwise modified from time to time in accordance with the provisions of the Code, and any exhibits and schedules annexed hereto.
1.49 Plan Administrator: The person who administers the obligations of the Liquidating Debtor under the Plan. The Plan Administrator will be John W. Kozyak.
1.50 Policies: The life insurance policies that collectively make up the Viatical Portfolio.
1.51 Post-Confirmation: The period commencing on the Confirmation Date and continuing thereafter until this Case is closed by Order of the Court.
1.52 Post-Confirmation Creditors' Committee: The initial members of the Post-Confirmation Creditors' Committee shall be the members of the Committee as of the Confirmation Date.
1.53 Post-Petition: The period commencing on the Petition Date and continuing thereafter until the Confirmation Date.
1.54 Pre-Petition: The period of time preceding the Petition Date and concluding on the Petition Date.
1.55 Priority Claim: A Claim that is entitled to priority under Section 507(a) of the Code, other than an Administrative Expense Claim or a Priority Tax Claim.
1.56 Priority Tax Claim: A Claim that is entitled to priority under Section 507(a)(8) of the Code.
1.57 Proponent: John W. Kozyak, the Chapter 11 Trustee.
1.58 Pro Rata: With respect to an Allowed Claim in a given class, that same proportion that the Allowed Claim bears to the aggregate of all Allowed Claims in such class.
1.59 Quad B: Quad B, Ltd. which has been determined to be an alter ego of FinFed pursuant to a Final Judgment of the Court dated February 29, 2000.
1.60 Reclassified Creditors: Any Creditor whose Claim arises by virtue of funds provided for direct or indirect investment in Viatical Settlement Purchase Agreements who filed the Claim as a secured or a priority Claim, which Claim has been, pursuant to this Plan, reclassified as a Class 4 or Class 5 Claim.
1.61 Relief Date: As to FinFed and ABS, the date on which, as to each, an order for relief was entered pursuant to Section 303 of the Code. As to FinFed, November 6, 1999; as to ABS, March 2, 2000.
1.62 Restitution Payment: A payment made to a Restitution Victim pursuant to the Restitution Plan.
1.63 Restitution Plan: The Plan of Restitution approved by the District Court in the Criminal Case, laying out the procedure for distributing to the Restitution Victims the proceeds of liquidation of the Forfeited Assets.
1.64 Restitution Victims: Those persons identified by the United States as victims in the Criminal Case.
1.65 Secured Claim: (i) Any Claim arising on or before the Petition Date that is secured by a valid lien on the property of the Debtors which is not void or avoidable under any state or federal law, including any provision of the Code, or an Allowed Claim for which the holder asserts a right to setoff under Section 553 of the Code to the extent of the value which is either agreed to by the Trustee pursuant to the Plan or, in the absence of an agreement, has been determined in accordance with Sections 506(a) or 1111(b) of the Code to be the interest of the holder of such Allowed Claim in the Debtors' property, or (ii) an Allowed Claim that the Trustee has agreed to treat as an Allowed Secured Claim pursuant to the Plan. That portion of such Allowed Claim exceeding the value of the security held therefore shall be an Allowed General Unsecured Claim, except as otherwise provided by the Plan.
1.66 Secured Tax Claim: A Secured Claim that is also a Tax Claim.
1.67 Schedules: The schedules filed with the Court by the Trustee in accordance with Bankruptcy Rule 1007, as amended or supplemented in accordance with the Code or an order of the Court.
1.68 Seized Assets: Those assets seized by, and subject to forfeiture to, the United States, as identified in the First Superseding Indictment, the Second Superseding Indictment, and any subsequent indictments, each entered in the Criminal Case.
1.69 Subordinated Claim: Any claim of a Creditor against the Debtors whose Claim is equitably or statutorily subordinated by the Court, under Section 510 of the Code or otherwise.
1.70 Tax Claim: Any Claim of a domestic federal, state or local governmental unit for unpaid taxes.
1.71 Tax Liens: All statutory liens created under state or local law for unpaid state or local taxes, and which secure the obligations of the Debtors for pre-petition or post-petition tangible personal and real property taxes in amounts determined by the Court pursuant to Section 505 of the Code or as agreed to by the Trustee and the holder of such Claim.
1.72 Third Party Payment: Any payment, other than a Restitution Payment, received by a holder of a Claim from any Third Party, in connection with such claim, including, without limitation, recovery from other litigation, and recovery from insurance companies, but not including payments pursuant to which a Claim is assigned for value in accordance with the applicable provisions of the Code and the Bankruptcy Rules.
1.73 Third Party Payment Adjustment: The adjustment made to the percentage calculation of the Final Distribution necessary to reflect that a holder of an Allowed Claim has received payment in full of its Allowed Claim.
1.74 Trustee: John W. Kozyak as Chapter 11 Trustee of the Debtors.
1.75 Ultimately Allowed Claim: Any Disputed Claim that becomes an Allowed Claim.
1.76 Unclaimed Property: Any undistributed Cash, or any other property of the Debtors unclaimed ninety (90) days after the Final Distribution Date.
1.77 United States Trustee: Has the same meaning ascribed to it in 28 U.S.C. Section 581, et seq. and, as used in the Plan, refers to the Office of the United States Trustee for Region 21 located in the Southern District of Florida, Miami, Florida.
1.78 VARC: Viatical Asset Recovery Corp. which has been determined to be an alter ego of FinFed pursuant to a Final Judgment of the Court dated December 29, 1999.
1.79 Viatical Portfolio: The group of life insurance policies owned by the Estate, or the beneficial interest of which are owned by the Estate, or in which the Estate asserts an interest, all as more fully described on Exhibit "A" attached hereto.
1.80 Viatical Settlement Purchase Agreements: As defined in Fla.Stat. §626.9911(9): "A contract or agreement, entered into by a [purchaser], to which the viator is not a party, to purchase a life insurance policy or an interest in a life insurance policy, which is entered into for the purpose of deriving an economic benefit."
CLASSIFICATION OF CLAIMS AND EQUITY INTEREST HOLDERS
The holders of all Claims against the Debtors, and of all interests in the Debtors, whether resulting in an Allowed Claim or Equity Interest or not, shall be bound by the provisions of the Plan and are hereby classified as follows:
Class 1 - Priority Claims (Other Than Priority Tax Claims)
Class 2 - Secured Claims
Class 3 - General Unsecured Claims (other than Class 4 and Class 5 Claims)
Class 4 - General Unsecured Claims of Creditors whose claims arise by virtue of funds provided for direct or indirect investment in viatical settlement purchase agreements (other than Class 5 Claims).
Class 5 - Subordinated Claims
Class 6 - Equity Interests
Administrative Expense Claims are not impaired.
3.2 Priority Tax Claims. Each holder of an Allowed Priority Tax Claim shall receive, on account of such Allowed Priority Tax Claim, over a period not to exceed six years after assessment of such claim, deferred cash payments from the Liquidating Debtor of a value, as of the Effective Date, equal to the Allowed Amount of such Claim.
Priority Tax Claims are not impaired.
The obligations of the Trustee to object to, otherwise resolve and pay Claims shall be assumed and satisfied by the Liquidating Debtor in accordance with the procedures set forth in the Plan, and shall constitute a full and complete novation of such obligations, except that nothing herein is intended to, or shall, relieve any defendant in the Criminal Case of its restitution obligations.
Holders of Claims in Classes 1 and 2 of the Plan are not impaired under the Plan.
Holders of Claims in Classes 3, 4 and 5 of the Plan, and interests under Class 6 of the Plan, are impaired under the Plan.
4.1 Allowed Priority Claims.
A. Class 1. Allowed Priority Claims (Other Than Priority Tax Claims) Each holder of a Class 1 Allowed Priority Claim shall be paid by the Liquidating Debtor (i) the full amount of such Allowed Priority Claim, in Cash, without interest, on the later of (a) as soon after the Effective Date as is practicable; or (b) the date on which such Allowed Priority Claim becomes due and payable pursuant to the terms thereof, the agreement upon which such Allowed Priority Claim is based, or any applicable Final Order; or (ii) in such amount, on such other date and upon such other terms as may be contained in a Final Order or as agreed upon between the holder of such Allowed Priority Claim and the Trustee or Liquidating Debtor. Any Claim filed as a priority Claim by a Creditor whose Claim arose by virtue of funds provided for direct or indirect investment in Viatical Settlement Purchase Agreements, is hereby objected to as to status, and is hereby reclassified as either a Class 4 Claim or, in the case of a claim filed by a broker, as a Class 5 Claim. The Trustee reserves the right to file further objections to such Claim on any basis other than status.
Class 1 Allowed Priority claims are not impaired.
4.2 Class 2. Allowed Secured Claims. Each holder of an Allowed Class 2 Secured Claim shall retain its lien, and shall be paid by the Liquidating Debtor (i) the full amount of such Allowed Secured Claim, in Cash, on the later of (a) the Effective Date or as soon thereafter as is practicable; or (b) the date on which such Allowed Secured Claim becomes due and payable pursuant to the terms of the agreement or statute upon which such Allowed Secured Claim is based, or any applicable Final Order; or (ii) in such amount, on such other date and upon such other terms as may be contained in a Final Order or as agreed upon between the holder of such Allowed Secured Claim and the Trustee or Liquidating Debtor. Upon payment as set forth herein, the lien in favor of such holder shall be deemed released and discharged. In the alternative, and at the Liquidating Debtor's election, the holder of an Allowed Secured Claim may be permitted to retain the collateral securing its claim in full satisfaction of such Allowed Secured Claim. Any Claim filed as a secured Claim by a Creditor whose Claim arose by virtue of funds provided for direct or indirect investment in Viatical Settlement Purchase Agreements, is hereby objected to as to status, and is hereby reclassified as either a Class 4 Claim or, in the case of a claim filed by a broker, as a Class 5 Claim. The Trustee reserves the right to file further objections to such Claim on any basis other than status.
Class 2 Allowed Secured Claims are not impaired.
4.3 Class 3. Allowed General Unsecured Claims. Distributions to the holders of Allowed Class 3 Claims shall be made as follows:
(a) As soon as practicable after the Effective Date, the Liquidating Debtor shall make an Initial Distribution of Cash to holders of Allowed Class 3 Claims in an amount equal to (i) the amount of each Class 3 Claim that is or becomes an Allowed Class 3 Claim prior to the Effective Date, multiplied by (ii) the Initial Distribution Percentage. The date of the Initial Distribution shall be determined by the Liquidating Debtor in its discretion.
(b) Subsequent interim Distributions shall be made by the Liquidating Debtor in its discretion based on the availability of Collected Cash and the cost of such interim Distribution.
(c) By no later than the end of each calendar quarter following the date of the Initial Distribution (or, if later, ten (10) days after a Claim governed by this Paragraph 4.3(c) becomes allowed), the Liquidating Debtor shall make a single Distribution to the holders of Class 3 Claims that become Allowed during said quarter, in the amount of each such Allowed Class 3 Claim, multiplied by the Initial Distribution Percentage.
(d) (1) In the event that the Liquidating Debtor has insufficient Cash on the Final Distribution Date to make payments of Cash to the extent of (i) the aggregate amount of Allowed Claims in Class 3 and Class 4 of the Plan (that had not previously received Distributions under the Plan) multiplied by (ii) the Initial Distribution Percentage, the Liquidating Debtor shall pay to the holders of such Claims all Cash included in the Estate Assets, subject to reserve for certain taxes, liabilities and expenses payable subsequent to such Distributions that the Liquidating Debtor may create and administer as provided in the Plan. Each holder of an Allowed Class 3 Claim (that had not previously received Distributions under the Plan) shall receive its Pro Rata share of the Cash so allocated to Class 3 and Class 4 Claims. Notwithstanding the foregoing, if the holders of Allowed Class 4 Claims have been paid the full amount of their Allowed Claims due to payments received under the Restitution Plan, or otherwise, then only holders of Allowed Class 3 Claims shall be entitled to the distribution described in this Subsection 4.3(d)(1).
(2) In the event that the Liquidating Debtor has sufficient Cash on the Final Distribution Date to make payments of Cash to the extent of (i) the aggregate amount of Allowed Claims in Class 3 and Class 4 of the Plan (that had not previously received Distributions under the Plan) multiplied by (ii) the Initial Distribution Percentage, then, after making such payments, the Liquidating Debtor shall pay each holder of an Allowed Class 3 Claims its Pro Rata share of all remaining Collected Cash, subject to reserve for certain taxes, liabilities and expenses payable subsequent to such Distributions that the Liquidating Debtor may create and administer as provided in the Plan. Such payments shall not exceed the amount necessary to permit the holders of Allowed Claims in Class 3 to be repaid in full, with interest, at a rate to be determined by the Court, from and after the Petition Date, taking into account any Third Party Payment received.
Class 3 General Unsecured Claims are impaired.
4.4 Class 4. General Unsecured Claims of Creditors whose claims arise by virtue of funds provided for the direct or indirect investment in Viatical Settlement Purchase Agreements. Distributions to the holders of Allowed Class 4 Claims shall be made as follows:
(a) As soon as practicable after the Effective Date, the Liquidating Debtor shall make an Initial Distribution of Cash to holders of Allowed Class 4 Claims in an amount equal to (i) the amount of each Class 4 Claim that is or becomes an Allowed Class 4 Claim prior to the Effective Date, multiplied by (ii) the Initial Distribution Percentage. The date of the Initial Distribution shall be determined by the Liquidating Debtor in its discretion.
(b) Subsequent interim Distributions shall be made by the Liquidating Debtor in its discretion based on the availability of Collected Cash and the cost of such interim Distribution.
(c) By no later than the end of each calendar quarter following the date of the Initial Distribution (or, if later, ten (10) days after a Claim governed by this Paragraph 4.4(c) becomes allowed), the Liquidating Debtor shall make a single Distribution to the holders of Class 4 Claims that become Allowed during said quarter, in the amount of each such Allowed Class 4 Claim, multiplied by the Initial Distribution Percentage.
(d) (1) In the event that the Liquidating Debtor has insufficient Cash on the Final Distribution Date to make payments of Cash to the extent of (i) the aggregate amount of Allowed Claims in Class 3 and Class 4 of the Plan (that had not previously received Distributions under the Plan) multiplied by (ii) the Initial Distribution Percentage, the Liquidating Debtor shall pay to the holders of such Claims all Cash included in the Estate Assets, subject to reserve for certain taxes, liabilities and expenses payable subsequent to such Distributions that the Liquidating Debtor may create and administer as provided in the Plan. Each holder of an Allowed Class 4 Claim (that had not previously received Distributions under the Plan) shall receive its Pro Rata share of the Cash so allocated to Class 3 and Class 4 Claims. Notwithstanding the foregoing, if the holders of Allowed Class 3 Claims have been paid the full amount of their Allowed Claims due to Third Party Payments or otherwise , then only holders of Allowed Class 4 Claims shall be entitled to the distribution described in this Subsection 4.4(d)(1).
(2) In the event that the Liquidating Debtor has sufficient Cash on the Final Distribution Date to make payments of Cash to the extent of (i) the aggregate amount of Allowed Claims in Class 4 of the Plan (that had not previously received Distributions under the Plan) multiplied by (ii) the Initial Distribution Percentage, then, after making such payments, the Liquidating Debtor shall pay each holder of an Allowed Class 4 Claims its Pro Rata share of all remaining Collected Cash, subject to reserve for certain taxes, liabilities and expenses payable subsequent to such Distributions that the Liquidating Debtor may create and administer as provided in the Plan. Such payments shall not exceed the amount necessary to permit the holders of Allowed Claims in Class 4 to be repaid in full, with interest, at a rate to be determined by the Court, from and after the Petition Date, taking into account any Restitution Payments or Third Party Payments received.
Class 4 Allowed General Unsecured Claims are impaired.
4.5 Class 5. Allowed Subordinated Claims. Holders of Allowed Class 5 Claims shall receive no Distributions under the Plan until the holders of Allowed Claims in all senior classes have been repaid in full, with interest, at a rate to be determined by the Court, from and after the Petition Date. If, on the Final Distribution Date, all Distributions described in Subsections 4.3(d)(2) and 4.4(d)(2) have been made, then the Liquidating Debtor shall pay each holder of an Allowed Class 5 Claim its Pro Rata share of all remaining Collected Cash, subject to reserve for certain taxes, liabilities and expenses payable subsequent to such Distributions that the Liquidating Debtor may create and administer as provided in the Plan. Such payments shall not exceed the amount necessary to permit the holders of Allowed Claims in Class 5 to be repaid in full, with interest, at a rate to be determined by the Court, from and after the Petition Date, taking into account any Restitution Payments or Third Party Payments received. This class will include the Claims of all Creditors who were Brokers. However, if at Confirmation or otherwise, the Court rules that a Broker's claim is not subordinated, that particular non-subordinated Broker's claim shall be treated as a Class 4 Claim.
Class 5 Allowed Subordinated Claims are impaired.
4.6 Class 6. Equity Interests. Holders of Class 6 Equity Interests shall retain their Interests and shall receive on account of their Equity Interests, pro rata, any Estate Assets and Collected Cash remaining after payment of all Liquidation Expenses and after holders of Allowed Claims in all senior classes have been repaid in full, with interest, at the rate ordered by the Court, from and after the Petition Date or as otherwise provided herein. If a holder's interest has been forfeited to the United States, any payment that would have been made to the holder will instead be made to the appropriate officer of the United States. Notwithstanding the foregoing, no holder of a Class 6 interest will have the ability to exercise any right with respect to that interest, including, but not limited to, any matters relating to corporate governance or asset disposition.
Class 6 Equity Interests are impaired.
THE LIQUIDATING DEBTOR
5.1 Purpose of the Liquidating Debtor. The Liquidating Debtor, through the Plan Administrator, will hold and liquidate all the Estate Assets for the benefit of the Creditors, , and for payments of all Allowed Claims in accordance with the provisions of this Plan. The Liquidating Debtor will not be supervised by the United States Trustee, and is not bonded (except as provided in 5.2(f) of this Plan) in favor of the United States.
5.2 Authority. The Liquidating Debtor, acting through the Plan Administrator, shall have the power and authority to perform the following acts, in addition to any powers granted by law or conferred to it by any other provision of the Plan; provided however, that enumeration of the following powers shall not be considered in any way to limit or control the power of the Liquidating Debtor to act as specifically authorized by any other provision of this Plan and to act in such manner as the Liquidating Debtor may deem necessary or appropriate to discharge all obligations assumed by the Liquidating Debtor or provided herein and to conserve and protect Estate Assets or to confer on the Creditors the benefits intended to be conferred upon them by this Plan:
(a) Perfect and secure the Liquidating Debtor's right, title and interest to the properties comprising the Estate Assets.
(b) Recover, and, to the extent possible, sell and convert the Estate Assets to cash, free and clear of liens, with liens to attach to the proceeds, and distribute the net proceeds as described herein.
(c) Manage and protect the Estate Assets, including the Viatical Portfolio, and distribute the net proceeds as described herein.
(d) Grant options to purchase, or contracts to sell, the Estate Assets or any part or parts thereof where such purchase price is for cash and on such terms as the Post-Confirmation Creditors' Committee shall approve.
(e) Release, abandon, convey, or assign any right, title or interest in the Estate Assets.
(f) Purchase insurance, including "tail" coverage, to protect the Liquidating Debtor, and its officers and directors, and the Estate Assets from liability, and maintain a fidelity bond in an amount approved by the Court.
(g) Deposit estate funds, draw checks and make disbursements thereof.
(h) Employ and retain, and discharge and dismiss, appraisers, financial advisors, attorneys, accountants, auctioneers, agents and such other professionals as the Liquidating Debtor may deem necessary or appropriate to assist in fulfilling the purposes of the Plan, including payment to its professionals in connection with any ongoing litigation being pursued or conducted by the Liquidating Debtor, and to pay reasonable charges, commissions and compensation to all of the foregoing, subject to review, and approval by the Post-Confirmation Creditors' Committee, and if such approval is denied, upon an appropriate Order from the Court.
(i) Perform the obligations of the Debtors or the Trustee pursuant to any Post-Petition settlement agreement to which any Debtors or the Trustee was a party on the Effective Date of the Plan, and which has been approved by Order of the Court;
(j) Exercise any and all powers granted to the Liquidating Debtor by any agreements, by common law or any statute which serves to increase the extent of the powers granted to the Liquidating Debtor hereunder.
(k) Take such other action as the Liquidating Debtor may determine to be necessary or desirable to carry out the purpose of this Plan.
(l) Commence or prosecute, for its own account or in the name of the Debtors (or any of them), any lawsuit or other legal or equitable action, including filing objections to Claims, and seeking recovery of Overpayments, in any court of competent jurisdiction which are necessary to carry out the terms and conditions of the Plan.
(m) Settle, compromise or adjust, pursuant to the standards of Bankruptcy Rule 9019 (which shall be deemed to apply to all Post-Confirmation settlements), any disputes or controversies in favor of, or against, the Liquidating Debtor, subject to review and approval by the Post-Confirmation Creditors' Committee to the extent provided in Sub-section 11.5 of the Plan and, if objected to by the Post-Confirmation Creditors' Committee, subject to review and approval by the Court.
(n) Appoint, remove and act through agents, managers and employees and confer upon them such power and authority as may be necessary or advisable.
(o) Have instituted all claims and causes of action which can be brought by a trustee or the Debtor under the Code, including, without limitation, actions to recover voidable transfers, and prosecute or defend all appeals on behalf of the Debtor or the Liquidating Debtor.
(p) Prepare and file tax returns, as mandated by applicable state and federal law.
(q) In general, without in any manner limiting any of the foregoing, deal with the Estate Assets or any part or parts thereof in all other ways as would be lawful for any person owning the same to deal therewith, whether similar to, or different from, the ways above specified at any time or times hereafter.
5.3 Operations of the Liquidating Debtor.
(a) The Liquidating Debtor shall conduct itself in accordance with Chapter 607 of the Florida Statutes, subject to the modifications set forth in this Plan. The articles and by-laws of the Liquidating Debtor will be amended Post-Confirmation, to the extent necessary, so as to be consistent in all respects with this Plan.
(b) The Liquidating Debtor shall be directed in all things by the Plan Administrator, subject to the oversight of the Post-Confirmation Creditors' Committee as otherwise set forth herein, and the Plan Administrator of the Liquidating Debtor shall have full and complete authority to do and perform all acts and execute all documents and make all payments and disbursements of funds directed to be done, executed, performed, paid and disbursed by the provisions of the Plan.
(c) Except as otherwise provided in this Plan, the cash in the Collected Cash Account shall be invested by the Liquidating Debtor with sole and absolute discretion in only (i) direct obligations of, or obligations guaranteed by, the United States of America; (ii) obligations of any agency or corporation which is or may hereafter be created by or pursuant to an act of the Congress of the United States as an agency or instrumentality thereof; (iii) AAA rated tax-free securities issued by municipalities or state governments or agencies; or (iv) such other obligations or instruments as may from time to time be approved for such investments by the Court; provided, however, that the Liquidating Debtor may, to the extent deemed necessary by the Plan Administrator with sole and absolute discretion to implement the provisions of this Plan, deposit moneys in demand deposits (including money market funds) at any bank, trust company or other financial institution which has, at the time of such deposit a capital stock and surplus aggregating at least $100,000,000. The investment powers of the Liquidating Debtor, other than those reasonably necessary to maintain the value of the Estate Assets and to further its liquidating purpose of the Plan, shall be limited to powers to invest in demand and time deposits, such as short-term certificates of deposit, in banks or other savings or financial institutions, or other temporary, liquid investments, such as U.S. Treasury Bills, such investments shall mature in such amounts and at such times as may be deemed necessary by the Liquidating Debtor with sole and absolute discretion to provide funds when needed to make payments from the Estate Assets, as the case may be.
(d) In no case shall any party dealing with the Liquidating Debtor in any manner whatsoever in relation to the Estate Assets or to any part or parts thereof, be obligated to see that the provisions of the Plan or any direction from the Court have been complied with, or be obligated or privileged to inquire into the authority of the Liquidating Debtor to act, or to inquire into any other limitation or restriction of the power and authority of the Liquidating Debtor, but as to any party dealing with the Liquidating Debtor in any manner whatsoever in relation to the Estate Assets, the power of the Liquidating Debtor to act or otherwise deal with the Estate Assets shall be absolute.
(e) The Liquidating Debtor shall be responsible for making distributions to holders of Allowed Claims from the funds held in the Collected Cash Account pursuant to Articles III and IV of the Plan. Under no circumstances shall the Liquidating Debtor have any power to engage in any trade or business or any other similar activity except as specifically provided herein or otherwise reasonably necessary and advisable for the orderly liquidation of the Estate Assets.
(f) The Liquidating Debtor shall keep an accounting of receipts and disbursements, which shall be open to inspection and review by the Court and members of the Post-Confirmation Creditors' Committee, and Creditors (upon reasonable notice, and without unduly interfering with the operations of the Liquidating Debtor). The Liquidating Debtor shall file with the Court, and provide the Post-Confirmation Creditors' Committee, and other Creditors who request copies of such quarterly reports in writing, with quarterly reports as detailed in Section 11.8 of the Plan.
(g) All costs, expenses and obligations incurred by the Liquidating Debtor in administering and maintaining the Estate Assets or in any manner connected, incidental or related thereto, including but not limited to the fees and expenses of professionals retained by the Liquidating Debtor to assist in carrying out its duties pursuant to the Plan, post-confirmation U.S. Trustee fees, and fees and expenses of the Liquidating Debtor and its professionals in pursuing ongoing litigation, shall be a charge against the Estate Assets, and the Liquidating Debtor shall pay same, maintaining at all times adequate reserves for such payments prior to making distributions to the Creditors.
(h) The Liquidating Debtor shall maintain an adequate reserve fund after payment of all fees, expenses, taxes, etc. which shall be available to cover all expenses and costs associated with carrying out the provisions of the Plan. The balance of the reserve fund shall be included in the Final Distribution to holders of Allowed Claims prior to dissolution of the Liquidating Debtor's corporate existence.
(i) No recourse shall ever be had, directly or indirectly, against the Liquidating Debtor, the Plan Administrator, or the Post-Confirmation Creditors' Committee, their respective officers or directors, employees or professionals, by legal or equitable proceedings or by virtue of any statute or otherwise, or any deed of trust, mortgage, pledge, note, nor upon any promise, contract, instrument, undertaking, obligation, covenant or agreement whatsoever executed by the Liquidating Debtor under the Plan or by reason of the creation of any indebtedness by the Liquidating Debtor under this Plan for any purpose authorized by the Plan, it being expressly understood and agreed that all such liabilities, covenants, and agreements of the Liquidating Debtor, the Post-Confirmation Creditors' Committee, their respective officers, directors, professionals and employees, whether in writing or otherwise, under this Plan shall be enforceable only against, and be satisfied only out of, the Estate Assets, or such part thereof as shall, under the terms of any such agreement, be liable therefor or shall be evidence only of a right of payment out of the income, proceeds and avails of the Estate Assets, as the case may be; every undertaking, contract, covenant or agreement entered into in writing by the Liquidating Debtor shall provide expressly against the personal liability of the Liquidating Debtor.
(j) (1) The Plan Administrator shall be paid based on a percentage of the funds distributed or as otherwise approved by the Court in the same percentage amount as if the Distributions were made by Mr. Kozyak as Trustee. The Plan Administrator's compensation as Trustee will not duplicate his compensation as Plan Administrator but the Trustee's service as Plan Administrator will not reduce the compensation to which the Trustee would otherwise be entitled. If the Plan Administrator is someone other than John W. Kozyak, the Plan Administrator will be compensated as ordered by the Court. The Liquidating Debtor shall submit quarterly budgets for executive compensation to the Post-Confirmation Creditors' Committee for review and approval. The Post-Confirmation Creditors' Committee shall have ten (10) days to object to any such budget. In the event that the Post-Confirmation Creditors' Committee objects to any such budget, or any portion thereof, the dispute shall be submitted to the Court for adjudication. The Court shall retain jurisdiction to adjudicate any such objection. In the event that no objection is raised to the aforementioned respective statements within the ten (10) day period, any such statements shall be due and payable by the Liquidating Debtor.
(2) The Liquidating Debtor's counsel, and any other professionals retained by the Liquidating Debtor or the Post-Confirmation Creditors' Committee, shall submit his, her or its statement(s) for services rendered and costs incurred to the Liquidating Debtor and the Post-Confirmation Creditors' Committee for review and approval. The Post-Confirmation Creditors' Committee shall have ten (10) days to object to any such statement. In the event that either the Liquidating Debtor or the Post-Confirmation Creditors' Committee objects to any such statement, or any portion thereof, the dispute shall be submitted to the Court for adjudication. The Court shall retain jurisdiction to adjudicate any such objection. In the event that no objection is raised to the aforementioned respective statements within the ten (10) day period, any such statements shall be due and payable by the Liquidating Debtor.
(k) The Liquidating Debtor, the Plan Administrator, and the Post-Confirmation Creditors' Committee and their officers, employees and professionals, shall not be liable for any act they may do, or omit to do hereunder or acting in good faith and in the exercise of his, her or its best judgment, and the fact that such act or omission was advised, directed or approved by an attorney acting as attorney for the Liquidating Debtor, the Plan Administrator or the Post-Confirmation Creditors' Committee shall be conclusive evidence of such good faith and best judgment. However, this subparagraph 5.3(k) shall not apply to any gross negligence or willful misconduct by the Liquidating Debtor, the Plan Administrator, the Post Confirmation Creditors' Committee or their officers, employees or professionals.
(l) The Plan Administrator may resign at any time, by giving written notice to the Court and the Post-Confirmation Creditors' Committee, and such resignation shall be effective upon the later of (i) the date provided in such notice or (ii) the date upon which the appointment of a successor chief executive officer becomes effective. In case of the resignation or death of the Plan Administrator, a successor shall thereon be appointed by the Post-Confirmation Creditors' Committee, with said appointment to be approved by the Court. Each succeeding Plan Administrator may, in like manner, resign and another may, in like manner, be appointed in his or her place.
(m) The Liquidating Debtor shall be empowered to (i) make all Distributions required to be made by it pursuant to the Plan; (ii) prosecute any and all litigation; (iii) commence the filing, and/or continue the prosecution, of all objections to Claims and Equity Interests on or before the date fixed by the Confirmation Order or under applicable law; and (iv) otherwise act in accordance with the Plan and the Confirmation Order.
5.4 Collected Cash Account. The Liquidating Debtor shall deposit all cash constituting Estate Assets, plus the net cash proceeds received from liquidation of the Estate Assets, into the Collected Cash Account. The cash in the Collected Cash Account shall be invested by the Liquidating Debtor in a manner consistent with the investment restrictions contained in Section 345 of the Code, or as otherwise authorized hereunder.
5.5 Plan Reserves. Prior to making any Distributions under the terms of the Plan, the Liquidating Debtor shall reserve amounts (i) sufficient to cover the estimated costs to fully and completely administer the Estate Assets; plus (ii) the sum of any Disputed Administrative Expenses and, if sufficient funds remain, the sum of any Disputed Priority Claims. Funds so reserved pursuant to this paragraph 5.5 shall be held by the Liquidating Debtor and shall be used to pay the cost of administering the Estate Assets and satisfying all Disputed Administrative Expenses and Disputed Priority Claims when such claims become Allowed Claims. Any excess cash or other Estate Assets held by the Liquidating Debtor for administering the Estate Assets, or held in respect of the disallowed portion of any Disputed Administrative Expense or Disputed Priority Claim, shall be considered Collected Cash (or shall be reduced to cash). For all Disputed Claims which are not Disputed Administrative or Disputed Priority Claims, the Liquidating Debtor shall reserve Collected Cash in an amount sufficient to make a distribution based on the filed amount of the Disputed Claims, except as otherwise ordered by the Court. The Liquidating Debtor shall reserve said Collected Cash until such time as the Disputed Claim becomes an Ultimately Allowed Claim. Once a Claim becomes an Ultimately Allowed Claim in whole, or in part, the cash then due to the holder of the Ultimately Allowed Claim shall be distributed to the claimant in accordance with Subsections 4.3(c) and 4.4(c) above. The distributions to be made to holders of Ultimately Allowed Claims shall be made as soon as practicable after the date that such Claim becomes an Ultimately Allowed Claim, unless the Liquidating Debtor determines that any such distributions cannot be made until all Claims in a given Class are Ultimately Allowed Claims.5.6 Timing of Distribution Under the Plan. Payments and distributions in respect of Allowed Claims under the Plan shall be made as mandated under the Plan.
5.7 Manner of Payments. Any payments to be made by the Liquidating Debtor pursuant to the Plan shall be made by checks drawn on accounts maintained by the Liquidating Debtor or its professionals (or by wire transfer if circumstances justify) which constitute the Collected Cash Account, at the option of the Liquidating Debtor.
5.8 Reliance on Documents. The Plan Administrator and the Post Confirmation Creditors' Committee may rely upon, and shall be protected in acting, or refraining from acting, upon any certificates, opinions, statements, instruments or reports believed by them to be genuine and to have been signed or presented by the proper person or persons.
5.9 Requirement of Undertaking. The Liquidating Debtor may request any court to require, and any court may in its discretion require, in any suit for the enforcement of any right or remedy under the Plan, or in any suit against the Liquidating Debtor for any action taken or omitted by the Liquidating Debtor, that the filing party litigant in such suit undertake to pay the costs of such suit, and such court may in its discretion assess reasonable costs, including reasonable attorneys' fees, against any party litigant in such suit, having due regard to the merits and good faith of the claims or defenses made by such party litigant.
5.10 Removal Of Plan Administrator. The Court sua sponte, the Post-Confirmation Creditors' Committee, or the U.S. Trustee, by motion filed with the Court, may seek to remove the Plan Administrator for cause, at any time including, without limitation, the Plan Administrator's violation of any provision of the Plan, or in the event that the Plan Administrator becomes incapable of acting as chief executive officer as a result of physical or mental disability and such physical or mental disability continues for a period in excess of sixty (60) days; provided, however, such removal will not be effective, unless otherwise ordered by the Court, until a successor Plan Administrator is appointed, and such appointment is accepted.
5.11 Dissolution of the Liquidating Debtor. Upon making the Final Distribution (including distribution for prepayment of legal and accounting fees to dissolve the Liquidating Debtor, and payment for a three year "tail policy" on directors and officers liability insurance) the Liquidating Debtor shall file a final return where required, cancel the outstanding shares of stock, for the Debtors, including ABS, and dissolve all in accordance with Fla. Stat. Chapter 607.
MEANS FOR EXECUTION OF THE PLAN
6.1 Preservation of Assets, Preservation of Avoidance Claims and Other Claims.
(a) All right, title and interest in the Estate Assets shall remain with the Liquidating Debtor.
(b) All Claims against the Debtors shall continue to be claims against the Liquidating Debtor, and shall be classified and treated pursuant to the Plan.
6.2 Maintenance and Disposition of Viatical Portfolio.
(a) Resolution of Special Interests. The Trustee, and when appropriate, the Liquidating Debtor, shall initiate, and where already pending, continue, the prosecution of various adversaries and contested matters to determine the interests of various parties asserted in certain of the Policies.
(b) Sale of the Viatical Portfolio. Once issues relating to ownership and rights to the Policies are resolved, all interests in Policies that remain in the Viatical Portfolio shall be offered for sale or maintained until maturity based on the business judgment of the Liquidating Debtor. If it is decided to maintain the Viatical Portfolio to maturity, then, after all other Plan administration matters have been completed (other than the completion of Plan payments) the Plan Administrator, subject to the consent of the Post Confirmation Creditors' Committee, or Court order, may set up a mechanism or entity or, if such entity exists, retain an entity, whose sole function is to hold the Policies and distribute the proceeds of matured Policies to the Creditors. If the option to retain the Policies is chosen, then the Liquidating Debtor is authorized to take any action to effectuate the transfer of the Liquidating Debtor's interest in the Policies to the entity contemplated above.
(c) Payment of Premiums. Until the Policies are sold or mature, the Liquidating Debtor shall, to the extent necessary, pay the premiums due necessary to maintain the Policies. Except as otherwise ordered by the Court with respect to Policies in which ABS Trust asserts an interest, such premiums shall be a charge against the Estate Assets as set forth in Subsection 5.3(g) of this Plan.
6.3 Liquidation of Other Assets. The Liquidating Debtor shall liquidate all Estate Assets (including the Policies, except as otherwise provided in 6.2(b)) as quickly as practicable in a commercially reasonable manner and reduce them to Collected Cash, subject to Subsection 5.5 of this Plan, provided however, that if the Liquidating Debtor, in its discretion, determines that an asset is burdensome or of inconsequential value, said asset may be abandoned after written notice to the Post Confirmation Creditors' Committee. If within ten (10) days of receiving the notice, the Post Confirmation Creditors' Committee advises the Liquidating Debtor of its objection to the abandonment, the dispute will be brought before the Court for resolution.
6.4 Prosecution of Claims Against Third Parties. The Trustee has filed, and intends to file, adversary complaints to pursue fraudulent conveyances, preferential transfers and other causes of action against Creditors of the Debtors, and against other third parties. On the Effective Date, the Liquidating Debtor shall succeed to all of the Trustee's right, title and interest in and to such claims, and the funds recovered through these actions shall be included in the Collected Cash. Notwithstanding the foregoing, to the extent that the conveyance or assignment of any such claims would preclude or impair the prosecution thereof by the Liquidating Debtor, then the Liquidating Debtor is intended to be, and shall be deemed to be, a "representative of the estate" approved to retain and enforce such claims as contemplated by 11 U.S.C. §§ 1123(b)(3)(A) and (3)(B).
6.5 Proceeds of Class Action Litigation. On the Effective Date, the Liquidating Debtor shall succeed to all of the Trustee's right, title and interest in and to the Joint Litigation. The distribution of proceeds of the Joint Litigation attributable to the Class Plaintiffs shall be distributed as ordered by the court presiding over the Joint Litigation.
TERMINATION AND SETTLEMENT OF CLAIMS AGAINST ESTATE ASSETS
7.1 Vesting of Property. The Liquidating Debtor shall continue to hold title to the Estate Assets, free and clear of all liens, Claims, encumbrances and Equity Interests, except as specifically provided in this Plan.
7.2 Prior to the Effective Date. On or before the Effective Date, the following actions 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):
(a) All payments to be made on or before the Effective Date by the Trustee or Liquidating Debtor shall be made or duly provided for;
(b) The Estate Assets will automatically vest in the Liquidating Debtor, without any further action on the part of the Trustee or the Liquidating Debtor or the execution, delivery and filing or recording of any documents of conveyance, free and clear of all Liens, Claims, and Equity Interests of Creditors and holders of Equity Interests except to the extent contemplated by the Plan.
(c) The Confirmation Order shall authorize the Trustee, and any other necessary parties, as the case may be, to take or cause to be taken, prior to the Effective Date, all such actions which are necessary to enable the Trustee to implement effectively the provisions of the Plan . Moreover, the Confirmation Order shall empower, authorize and direct the Trustee and the Plan Administrator, as the case may be, to consummate the transactions contemplated by the Plan on or before the Effective Date.
(d) It shall be a condition precedent to the obligations of the parties under the Plan that each of the following shall have occurred:
(1) The Court shall have entered one or more orders (in form and substance reasonably satisfactory to the Trustee and the Committee) granting, decreeing or adjudging in substance the following:
(A) The Confirmation Order shall:
(i) have been entered by the Court in form and substance consistent with the Plan and shall not have been reversed, stayed, modified or amended in any material respects prior to the Effective Date;
(ii) expressly approve the terms and provisions of the Plan under Section 1129 of the Code;
(iii) provide for the rejection on the Effective Date of all executory contracts and leases not included in the Estate Assets and otherwise specifically assumed prior to the Confirmation Date;
(iv) provide that all sales and transfers of the Estate Assets, contemplated by, or provided for, in the Plan shall be free and clear of all transfer and stamp taxes in accordance with section 1146(c) of the Code;
(v) provide for the treatment of the Liens and Claims of holders of Allowed Secured Claims and Liens;
(vi) authorize and direct the Trustee and the Liquidating Debtor to perform their respective obligations under the Plan, and to take all actions and execute all documents and instruments reasonably necessary to consummate the transactions contemplated thereby in accordance with the terms thereof;
(vii) provide that, upon the Effective Date, the Liquidating Debtor shall be vested with the rights and powers granted to the Trustee under section 1107(a) of the Code with respect to the allowance, treatment or avoidance of Liens or Claims to be assumed by the Liquidating Debtor as part of the Assumed Liabilities, and which remain unresolved as of the Effective Date;
(viii) provide that the Estate Assets shall be and remain free and clear of the Liens, Claims, and Equity Interests of any Entity except for those of the respective Creditors and post-confirmation U.S. Trustee fees, and no Entity shall be permitted to execute against or receive Distributions from the Liquidating Debtor except in accordance with the terms of the Confirmation Order and of the Plan;
(ix) provide that the entry of the Confirmation Order shall not have any res judicata or other preclusive effect with respect to any claims of the Trustee against third parties that are not specifically and expressly released by the terms of the Plan or Confirmation Order, and that the entry of the Confirmation Order shall not be deemed a bar to asserting such claims.
7.3 Intentionally omitted.
7.4 Unclaimed Property. Unclaimed Property shall be paid over to the Court ninety (90) days after the Final Distribution Date.
7.5 Further Authorization. Each of the Trustee and the Liquidating Debtor shall be entitled to seek such orders, judgments, injunctions and rulings as each deems necessary to carry out and further the intentions and purposes, and to give full effect to the provisions of the Plan.
PROCEDURES FOR RESOLVING DISPUTED CLAIMS
AND FOR SUBORDINATING CLAIMS
8.1 Objections To Claims. The Trustee or Plan Administrator, as appropriate, shall conclude the review of all proofs of claim filed in the Case, and all scheduled claims, and file objections to Claims, or amendments to schedules, and/or actions to subordinate such Claims, with the Court no later than the later of (i) one hundred eighty (180) days after the Confirmation Date; or (ii) such other date as may be ordered by the Court, after notice and a hearing.
8.2 Distribution. No Distribution shall be made with respect to any Disputed Claim to which an objection is pending unless and until a Final Order allowing the Disputed Claim as an Ultimately Allowed Claim has been entered. An allocable portion of funds shall be reserved on account of such Disputed Claim in accordance with subsection 5.5 of this Plan.
8.3 Subordinated Claims. Under this Plan, the Claim of an Allowed Unsecured Creditor may be subordinated pursuant to Section 510 of the Code to Claims of other Creditors. The Liquidating Debtor shall have the right to seek subordination of claims of any other Creditors after the Effective Date. This Plan shall constitute a motion to subordinate the Claims of any Creditors who are Brokers. If a Subordinated Class of Creditors is established, such Creditor shall not receive disbursement of funds until the prior non-subordinated classes of Creditors have been paid in full. The Court shall have the authority to enter any Order consistent with the Plan establishing the extent, priority and validity of such Subordinated Claims.
9.1 The Court shall retain Post- Confirmation jurisdiction over these proceedings for the following purposes:
(a) To hear and determine any disputes arising under the Plan, including disputes which arise between the Liquidating Debtor and the Post-Confirmation Creditors' Committee or other parties.
(b) To adjudicate and confirm any and all issues relating to corporate governance of the Liquidating Debtor including, without limitation, resignation, removal and replacement of the Plan Administrator, and issues relating to the amount and necessity of any Post-Petition bonds.
(c) To adjudicate all claims or controversies arising out of any purchases, sales, contracts or undertakings by the Trustee or the Liquidating Debtor during the pendency of these proceedings.
(d) To adjudicate any and all claims filed by any Creditor or other parties in interest against the Trustee, the Trustee's professionals, the Committee, or the Committees' professionals, the Liquidating Debtor, the Plan Administrator, the Post-Confirmation Creditors' Committee or their respective professionals, raised in connection with any and all claims or causes of action arising from or related to this Case or this Plan.
(e) To adjudicate all controversies and issues arising out of or relating to the various adversary proceedings discussed in the Plan, which remain open on the Court's docket as of the Confirmation, or which are commenced by the Liquidating Debtor after Confirmation pursuant to the provisions of the Code and this Plan.
(f) To recover all assets and properties of the Debtors, whether title is presently held in the name of the Debtors or a third party.
(g) To make such Orders as are necessary or appropriate to carry out the provisions of the Plan.
(h) To make such other Orders or give such directions as may be appropriate under Section 1142 of the Code.
(i) To adjudicate all Claim objections and subordination motions filed by the Trustee, the Plan Administrator, or other parties in interest in the Case.
(j) To consider and order any Post-Confirmation amendments to the Plan, as may be requested.
(k) To hear and determine all Claims arising from the rejection of executory contracts.
(l) To make all such Orders as are necessary or appropriate to carry out the provisions of the Plan.
(m) To sell the Estate Assets pursuant to Section 363 of the Code.
(n) To enforce all Orders previously entered by the Court, including enforcement and collection efforts made on money judgments awarded to the Trustee or the Liquidating Debtor from actions initiated against third parties pre- or post-confirmation.
(o) To hear and determine supplemental fee applications of professionals after the Confirmation Hearing but on or before the Effective Date.
(p) To adjudicate any actions to recover Overpayments.
(q) To adjudicate any matters or controversies raised by the Trustee or Liquidating Debtor pursuant to Section 505 of the Code.
EXECUTORY CONTRACTS AND UNEXPIRED LEASES
10.1 Executory Agreements Rejected. All executory contracts or unexpired leases not assumed, assumed and assigned or rejected by the Trustee on or before the Confirmation Date (or as to which no motion to assume or assume and assign is pending) shall be deemed to be rejected upon the Confirmation Date. Nothing herein is intended to have, or shall have, any effect on the obligations of any party in connection with any settlement that has been approved by the Bankruptcy Court during the administration of the Case.
10.2 Proof of Claim for Rejected Agreements. Unless otherwise provided by Order of the Court entered before Confirmation, any Claim arising from the rejection of an executory contract or unexpired lease pursuant to a Final Order must be filed with the Court within thirty (30) days after the Confirmation Order is entered.
10.3 Treatment Under Plan of Rejection Damages. Unless otherwise ordered by the Court, all Allowed Claims arising from the rejection of executory contracts or unexpired leases shall be treated as Class 3 General Unsecured Claims.
CREATION OF POST-CONFIRMATION CREDITORS' COMMITTEE
11.1 Creation. On the Effective Date, the Committee shall become the Post-Confirmation Creditors' Committee, and shall have similar powers and duties to that of an unsecured creditors' committee appointed under Section 1102 of the Code. The Post-Confirmation Creditors' Committee shall, at times, be comprised of at least two (2) members and no more than seven (7).
11.2 Resignation. Members of the Post-Confirmation Creditors' Committee may resign by giving written notice thereof to the other members of the Post-Confirmation Creditors' Committee. Such resignation shall be effective upon the receipt of such notice by the Chairman of the Post-Confirmation Creditors' Committee, with a copy to the Liquidating Debtor. A member of the Post-Confirmation Creditors' Committee may be removed at any time, with or without cause, by Creditors holding more than fifty percent (50%) of the allowed amount of General Unsecured Claims.
11.3 Appointment of Successors. Should a member of the Post-Confirmation Creditors' Committee resign or be removed, or die or become incapable of action, or be adjudged a bankrupt or insolvent, a vacancy shall be deemed to exist and a successor shall be appointed by written direction of the other members of the Post-Confirmation Creditors' Committee, provided however that if no such appointment of a successor member to the Post-Confirmation Committee is made within thirty (30) days of the date of a written notice called for by paragraph 11.2 of this Plan or the termination of the member's authority, as the case may be, the Court may appoint a successor member upon application of any holder of a General Unsecured Claim.
11.4 Rights and Duties of Post-Confirmation Creditors' Committee. The Post-Confirmation Creditors' Committee shall be empowered to: (i) oversee the activities of the Liquidating Debtor as set forth in this Plan; (ii) monitor the Liquidating Debtor's efforts to sell all Estate Assets and consult with the Plan Administrator concerning such efforts; (iii) advise the Creditors of the status of all such sales efforts; (iv) review and approve, if appropriate, settlements, compromises or resolutions of disputes or controversies in favor of, or against, the Estate Assets; (v) employ, without further application or Court Order, professionals to assist it, as necessary, in the performance of its duties; and (vi) take such other action as the Post-Confirmation Creditors' Committee deems to be in the best interest of the holders of General Unsecured Claims or as otherwise provided for in this Plan.
11.5 Time Period for Review of Settlements. In connection with the Post-Confirmation Creditors' Committee's duty to review and approve, if appropriate, settlements, compromises or resolutions of disputes or controversies in favor of, or against, Estate Assets or the Liquidating Debtor, the Plan Administrator will be required to submit, in writing, a written settlement agreement for review by the Post-Confirmation Creditors' Committee. The Post-Confirmation Creditors' Committee shall have ten (10) days within which to object to any such settlement. In the event that the Post-Confirmation Creditors' Committee objects to any such settlement, or any portion thereof, the dispute shall be submitted to the Court for adjudication. The Court shall retain jurisdiction to adjudicate any such objection.
11.6 Term of Committee and Compensation. The Post-Confirmation Creditors' Committee shall continue in existence until the Claims of all Creditors are satisfied to the extent of all funds in the Collected Cash Account or all Estate Assets have been liquidated or abandoned and all distributions have been made to Creditors. Members of the Post-Confirmation Creditors' Committee shall serve without compensation, except for reimbursement of expenses.
11.7. Liability of the Post-Confirmation Creditors' Committee. (a) No recourse shall ever be had, directly or indirectly, against the Post-Confirmation Creditors' Committee or any of its members, by legal or equitable proceedings or by virtue of any statute or otherwise, or any deed of trust, mortgage, pledge, note, nor upon any promise, contract, instrument, undertaking, obligation, covenant or agreement whatsoever executed by the Liquidating Debtor or the Post Confirmation Creditors' Committee under the Plan or by reason of the creation of any indebtedness by the Liquidating Debtor under this Plan for any purpose authorized by the Plan, it being expressly understood and agreed that all such liabilities, covenants, and agreements of the Liquidating Debtor, its officers, directors, and employees, whether in writing or otherwise, under this Plan shall be enforceable only against, and be satisfied only out of, the Estate Assets, or such part thereof as shall, under the terms of any such agreement, be liable therefor or shall be evidence only of a right of payment out of the income, proceeds and avails of the Estate Assets, as the case may be; every undertaking, contract, covenant or agreement entered into in writing by the Liquidating Debtor shall provide expressly against the personal liability of the Liquidating Debtor, the Plan Administrator, or the Post-Confirmation Creditors' Committee, or its members.
(b) The members of the Post-Confirmation Creditors' Committee shall not be liable for any act they may do, or omit to do, hereunder or acting in good faith and in the exercise of his or her best judgment, and the fact that such act or omission was advised, directed or approved by an attorney acting as attorney for the Post-Confirmation Creditors' Committee shall be conclusive evidence of such good faith and best judgment. However, this subparagraph 11.7(b) shall not apply to any gross negligence or willful misconduct by any member of the Post-Confirmation Creditors' Committee.
11.8 Information Regarding Status of Liquidation. The Plan Administrator shall provide the following information to the Post-Confirmation Creditors' Committee on a quarterly basis: (i) a cash receipts and disbursements analysis, substantially in the form of the monthly Chapter 11 cash flow reports; and (ii) a pending litigation status report. This information shall also be filed with the Court.
AVOIDANCE ACTIONS
12.1 Assignment of Rights. The Liquidating Debtor shall succeed to the Trustee's right to pursue all causes of action or voidable transfers under Sections 542 through 553 of the Code in which the Trustee holds an interest. All amounts recovered pursuant to Sections 542 through 553 of the Code by the Liquidating Debtor shall be transferred to the Collected Cash Account maintained by the Liquidating Debtor. Notwithstanding the foregoing, to the extent that the conveyance or assignment of any such claims would preclude or impair the prosecution thereof by the Liquidating Debtor, then the Liquidating Debtor is intended to be, and shall be deemed to be, a "representative of the estate" approved to retain and enforce such claims as contemplated by 11 U.S.C. §§ 1123(b)(3)(A) and (3)(B).
12.2 Causes of Action. The Trustee is investigating whether to initiate, or already has pending actions, to recover fraudulent transfers under 11 U.S.C. §548, 11 U.S.C. §544 or 11 U.S.C. §550, preferential transfers under 11 U.S.C. §547, federal or state usury claims and/or other federal or state law causes of actions against various persons. On the Effective Date the Liquidating Debtor shall succeed the Trustee in all pending actions in which a Final Order has not been entered, as well as all causes in action for which litigation has not yet been initiated and, accordingly the Liquidating Debtor will be substituted, pursuant to this Plan, as the Plaintiff in those actions.
BY ONE
13.1 Each Impaired Class Entitled to Vote Separately. Each Impaired Class of Claims shall be entitled to vote separately to accept or reject the Plan. Each Creditor in an Impaired Class, including Reclassified Creditors, shall receive a Ballot which will be used to cast their votes in respect to the Plan.
13.2 Acceptance by a Class of Creditors. A Class of Claims shall have accepted the Plan if the Plan is accepted by Creditors that hold at least two-thirds (2/3) in amount and more than one-half (½) in the number of Allowed Claims of such Class that has voted to accept or reject the Plan.
13.3 1129(b) Issues. If any Class of Claims entitled to vote fails to accept the Plan by the requisite majorities in number and amount required by section 1126 of the Bankruptcy Code, the provisions of section 1129(b) of the Bankruptcy Code may be invoked at the request of the Debtor at the Confirmation Hearing, and such request may be made orally. The Trustee shall invoke section 1129(b) of the Code with respect to Class 6 Equity Interests, who are deemed to have rejected the Plan.
MISCELLANEOUS PROVISIONS
14.1 Binding Effect of the Plan. The provisions of the Plan shall be binding upon and inure to the benefit of the Trustee, the Debtors' estates, the Creditors, the Committee, the Post-Confirmation Creditors' Committee, Equity Interest holders and the Liquidating Debtor and their respective predecessors, successors, assigns, agents, officers and directors.
14.2 Amendments/Modification of Plan. The Trustee may propose amendments or modifications of the Plan any time prior to Confirmation, with leave of the Court upon notice to appropriate parties. After Confirmation, the Liquidating Debtor or the Post-Confirmation Creditors' Committee may, with approval of the Court, and so long as it does not materially or adversely affect the interests of Creditors, amend the Plan to remedy any defect or omission or to reconcile any inconsistencies in the Plan or the Confirmation Order in such manner as may be necessary to carry out the purposes and effect of the Plan.
14.3 Discharge. Entry of an Order confirming the Plan acts as a discharge of any and all liabilities of the Debtors that are dischargeable under Section 1141 of the Code, other than the debts or obligations which are expressly created in the Plan.
14.4 Class Voting. Each impaired Class of Creditors with a claim against the Debtors' estates shall be entitled to vote separately to accept or reject the Plan. Each vote shall be set forth on a Ballot, as mandated by the Code, which each voting entity and Creditor shall return to the balloting agent. If sufficient acceptances are not received, the Trustee reserves the right to proceed to "cram-down" the Plan pursuant to Section 1129(b) of the Code.
14.5 Governing Law. Except as mandated by the Code or Rules as applicable, the rights and obligations arising under the Plan shall be governed by, and construed and enforced in accordance with the laws of the State of Florida.
14.6 Venue of Proceedings against Professionals. Should any Creditor or other party in interest file an action against the Trustee, the Trustee's professionals, the Committee or the Committee's professionals, the Liquidating Debtor, the Plan Administrator, the Post-Confirmation Creditors' Committee or their respective professionals, in connection with any claims or causes of action arising from or related to this Case, or this Plan, venue of any such action shall lie only in the United States Bankruptcy Court for the Southern District of Florida.
14.7 Headings. The headings of articles, paragraphs, subparagraphs of the Plan are inserted for convenience only and shall not effect the interpretation of any provision of the Plan.
14.8 Successors and Assigns. The Plan and all provisions hereof shall be binding upon and inure to the benefit of the parties hereto and their respective successors and assigns.
14.9 Time. In computing any time periods described or allowed by the Plan, the day of the act or event from which the designated period begins to run shall not be included. The last day of the period so computed shall be included, unless it is a Saturday, Sunday or a legal holiday, in which event, the period will run until the next succeeding day which is not one of those aforementioned days.
14.10 Severability. Should any provision of the Plan be determined to be unenforceable after the Effective Date such determination shall in no way limit or effect the enforceability and operative effect of any and all of the other provisions of the Plan.
14.11 Revocation. The Trustee reserves the right to revoke, and withdraw the Plan prior to Confirmation. If the Trustee revokes or withdraws the Plan, then the Plan shall be deemed null and void and nothing contained herein shall be deemed to constitute a waiver or release of any claims by or against the Debtors, the Liquidating Debtor, the Trustee or any other person or entity or to prejudice in any manner the rights of such parties in any further proceedings involving the Debtors.
14.12 Plan Controls. In the event, and to the extent that any provision of the Plan is inconsistent with the provisions of the Disclosure Statement, or any other agreement or instrument required or contemplated to be executed by the Liquidating Debtor, the Trustee, the Committee or any other entity pursuant to the Plan, the provisions of the Plan shall control and take precedence. In the event of any inconsistency between any provision of any of the foregoing documents and any provision of the Confirmation Order, the Confirmation Order shall control and take precedence.
14.13 Post-Confirmation U.S. Trustee Fees. Notwithstanding any other provisions of the Plan to the contrary, the Trustee, and when appropriate, the Liquidating Debtor, shall pay the United States Trustee the appropriate sum required pursuant to 28 U.S.C. §1930(a)(6), within ten (10) days of the entry of the Order confirming this Plan, for pre-confirmation periods and simultaneously provide to the United States Trustee an appropriate affidavit indicating the cash disbursements for the relevant period. The Trustee, and when appropriate, the Liquidating Debtor, shall further pay the United States Trustee the appropriate sum required pursuant to 28 U.S.C. §1930(a)(6) for post-confirmation periods within the time period set forth in 28 U.S.C. § 1930(a)(6), based upon all post-confirmation disbursements made by the Liquidating Debtor, until the earlier of the closing of this Case by the issuance of a Final Decree by the Court, or upon the entry of an Order by the Court dismissing this Case or converting this Case to another chapter under the Code, and the Liquidating Debtor shall provide to the United States Trustee upon the payment of each post-confirmation payment an appropriate affidavit indicating all the cash disbursements for the relevant period.
This Amended Chapter 11 Plan is dated this 25th day of April, 2001, in Miami-Dade County, Florida.
Respectfully submitted,
Kozyak Tropin & Throckmorton ,
P.A.
Attorneys for John W. Kozyak, Trustee
2800 First Union Financial Center
200 South Biscayne Boulevard
Miami, Florida 33131-2335
Tel: (305) 372-1800
By: /s/
Laurel Myerson Isicoff
Florida Bar No.350923
David L. Rosendorf
Florida Bar No. 996823