Opinion
Case No. 01-61299
September 12, 2002
ORDER CONFIRMING SECOND AMENDED PLAN OF LIQUIDATION OF AMF BOWLING, INC.
Upon: (i) the Second Amended Plan of Liquidation of AMF Bowling, Inc., dated July 22, 2002 (as may have been amended and/or modified at or in connection with the Confirmation Hearing or by this Order, the "Plan"), filed with this Court by the above-captioned debtor and debtor-in-possession (the "Debtor"); (ii) the related disclosure statement (the "Disclosure Statement"); (iii) the record of the hearing held before this Court on July 18, 2002 where this Court approved and signed that certain Order Approving Disclosure Statement and Fixing Hearing on Confirmation and Times for Filing Objection to Confirmation and Acceptances or Rejections of Plan (the "Disclosure Statement Order"); (iv) the Disclosure Statement Order having fixed September 7, 2002 as the deadline for filing of objections to confirmation of the Plan; (v) no objections having been filed to the Plan; (vi) the declaration of Angharad Bowdler of Bankruptcy Services, LLC ("BSI"), the Debtor's balloting agent, sworn to on September 10, 2002 (the "Ballot Certification") and filed with the Court on September 12, 2002; (vii) the affidavits of mailing and publication filed with this Court; (viii) the Debtor's memorandum of law, dated September 10, 2002, filed in support of confirmation of the Plan; and (ix) the record of the hearing before this Court on September 12, 2002 to consider confirmation of the Plan (the "Confirmation Hearing"); and after due deliberation and sufficient cause appearing therefor;
FINDINGS
IT IS HEREBY FOUND that:
A. Definitions. All capitalized terms used but not defined herein shall have the meanings ascribed to such terms in the Plan.
B. Notice of Confirmation Hearing. Notice of the Confirmation Hearing and the relevant deadlines for submission of objections and ballots, as prescribed by this Court in the Disclosure Statement Order, has been provided, as more fully reflected in the relevant affidavits of publication and service, and such notice is adequate and sufficient pursuant to section 1128 of the Bankruptcy Code, Bankruptcy Rules 2002(b) and 3020(b) and other applicable law and rules.
C. Transmission of Ballots. Ballots were transmitted to holders of Claims in Classes eligible to vote on the Plan in accordance with the Disclosure Statement Order.
D. Good Faith Solicitation. The Debtors solicited votes for the Plan in good faith and in a manner consistent with the Bankruptcy Code.
E. Ballot Certification (Bankruptcy Rule 3018). The Ballot Certification provided by BSI is consistent with Bankruptcy Rule 3018.
F. Proper Classification ( 11 U.S.C. § 1122(a). 1123(a)(1)). The classification scheme of Claims and Equity Interests under the Plan is reasonable. Claims or Equity Interests in each Class are substantially similar to other Claims or Equity Interests in such Class and the Plan satisfies the requirements of section 1122(a) of the Bankruptcy Code. The Plan establishes the following Classes of Claims and Equity Interests: Class I (Priority Claims), Class 2 (Secured Claims), Class 3 (Unsecured Claims) and Class 4 (Equity Interests). The Plan satisfies the requirements of section 1123(a)(1) of the Bankruptcy Code.
G. Impaired Classes ( 11 U.S.C. § 1123(a)(2)-(3)). The following classes of Claims are impaired and entitled to vote under the Plan: Class 2 (Secured Claims) and Class 3 (Unsecured Claims). The treatment of Claims in impaired Classes is specified in Article 3 of the Plan, and the Plan satisfies the requirements of sections 1123(a)(2) and 1123(a)(3) of the Bankruptcy Code.
H. Treatment of Claims Within Classes ( 11 U.S.C. § 1123 (a)(4)). The Plan provides for the same treatment for each Claim or Equity Interest of a particular Class, and the Plan satisfies the requirements of section 1123(a)(4) of the Bankruptcy Code.
I. Means for Implementation ( 11 U.S.C. § 1123(a)(5)). The Plan provides for adequate means for its implementation, and therefore satisfies the requirements of section 1123(a)(5) of the Bankruptcy Code.
J. Non-voting Equity Securities ( 11 U.S.C. § 1123(a)(6)). Section 1123(a)(6) is inapplicable to the Plan as the Plan provides that the Debtor will liquidate all of its Remaining Assets and not issue any new securities.
K. Board of Directors ( 11 U.S.C. § 1123(a)(7)). The Plan provides that, upon confirmation, the members of the Board of Directors and the officers of the Debtor shall resign and the Board of Directors shall be disbanded. Such members and officers shall be replaced by a plan administrator, which position shall be filled by the Chief Financial Officer of the Debtor or any successor thereto. This provision is wholly consistent with the interests of creditors, comports with public policy and satisfies the requirements of section 1123(a)(7) of the Bankruptcy Code.
L. Permissive Plan Provisions ( 11 U.S.C. § 1123(b)). The Plan's provisions are appropriate and not inconsistent with applicable provisions of the Bankruptcy Code, including, inter alia, the Plan provisions that impair or leave unimpaired, as the case may be, each Class of Claims or Equity Interests, and the Plan provisions that provide for the assumption or rejection of executory contracts and unexpired leases, the Bankruptcy Court's retention of jurisdiction, and the release of certain claims and causes of action. Therefore, the Plan complies with the provisions of section 1123(b) of the Bankruptcy Code.
M. Compliance with Bankruptcy Code ( 11 U.S.C. § 1129(a)(1)). The Plan complies with the applicable provisions of the Bankruptcy Code including, without limitation, sections 1122 and 1123 of the Bankruptcy Code. Therefore, the Plan satisfies the requirements of section 1129(a)(1) of the Bankruptcy Code.
N. Compliance with Bankruptcy Rule 3016(a). In accordance with Bankruptcy Rule 3016(a), the Plan is dated and identified with the name of the Debtor.
O. Debtors' Compliance with Bankruptcy Code ( 11 U.S.C. § 1129(a)(2)). The Debtor, as the proponent of the Plan, has complied with the applicable provisions of the Bankruptcy Code including, without limitation, sections 1125 and 1126 of the Bankruptcy Code, and has therefore satisfied the requirements of section 1129(a)(2) of the Bankruptcy Code.
P. Plan Proposed in Good Faith ( 11 U.S.C. § 1129(a)(3)). The Plan has been proposed in good faith and not by any means forbidden by law, and therefore satisfies the requirements of section 1129(a)(3) of the Bankruptcy Code.
Q. Payments for Services or Costs and Expenses ( 11 U.S.C. § 1129(a)(4)). Any payments made or to be made by the Debtor for services or for costs and expenses in, or in connection with, the Debtor's chapter 11 case, have been approved by, or are subject to the approval of, this Court as reasonable. Accordingly, the Plan satisfies the requirements of section 1129(a)(4) of the Bankruptcy Code.
R. Directors, Officers and Insiders ( 11 U.S.C. § 1129(a)(5). The Plan provides that, upon confirmation, the members of the Board of Directors and the officers of the Debtor shall resign and the Board of Directors shall be disbanded. Such members and officers shall be replaced by a plan administrator, which position shall be filled by the Chief Financial Officer of the Debtor or any successor thereto. Accordingly, the Plan satisfies the requirements of section 1129(a)(5) of the Bankruptcy Code.
S. No Rate Changes ( 11 U.S.C. § 1129(a)(6)). As the Debtor conducts no business operations and will liquidate pursuant to the Plan, the provisions of section 1129(a)(6) are inapplicable to the Plan.
T. Best Interests of Creditors ( 11 U.S.C. § 1129(a)(7)). With respect to each impaired Class of Claims or Equity Interests, each holder of a Claim or Equity Interest of such Class: (a) has accepted the Plan; or (b) will receive or retain under the Plan, on account of such Claim or Equity Interest, property of a value, as of the Effective Date, that is not less than the amount that such holder would so receive or retain if the Debtors were liquidated under chapter 7 of the Bankruptcy Code on such date. Accordingly, the Plan satisfies the requirements of section 1129(a)(7) of the Bankruptcy Code.
U. Acceptance by Certain Classes ( 11 U.S.C. § 1129(a)(8)). Classes 2, 3 and 4 are impaired under the Plan. As evidenced by the Ballot Certification, greater than two-thirds in dollar amount and greater than one-half in number of the claimants in each of Class 2 and 3 have voted to accept the Plan. Pursuant to Section 1126(g) of the Bankruptcy Code, Class 4, whose members will not receive any distribution or retain any property on account of their Interests, is deemed to have rejected the Plan.
V. Treatment of Administrative and Tax Claims ( 11 U.S.C. § 1129(a)(9) . The Plan provides that, except to the extent that the holder of an Allowed Claim has agreed or will agree to a different treatment of such Claim, Allowed Administrative Expense Claims, and Priority Claims (including, inter alia, tax claims), respectively, will be treated in accordance with section 1129(a)(9) of the Bankruptcy Code. Accordingly, the requirements of section 1129(a)(9) of the Bankruptcy Code are satisfied with respect to the Plan.
W. Acceptance by Impaired Classes ( 11 U.S.C. § 1129(a)(10). The Plan has been accepted by two impaired Classes of Claims (Classes 2 and 3), which acceptance has been determined without including any acceptance of the Plan by any insider holding a Claim in such Class. Accordingly, the requirements of section 1129(a)(10) of the Bankruptcy Code are satisfied with respect to the Plan.
X. Feasibility ( 11 U.S.C. § 1129(a)(11)). Pursuant to the Plan, the Debtor will liquidate all of its Remaining Assets and will require no further financial reorganization. Accordingly, the requirements of section 1129(a)(10) of the Bankruptcy Code are satisfied with respect to the Plan.
Y. Payment of Fees ( 11 U.S.C. § 1129(a)(12)). The fees payable under 28 U.S.C. § 1930 constitute Allowed Administrative Expense Claims entitled to priority under section 507(a)(1) of the Bankruptcy Code, and the treatment of such fees in the Plan satisfies the requirements of section 1129(a)(12) of the Bankruptcy Code.
Z. Continuation of Retiree Benefits ( 11 U.S.C. § 1129(a)(13)). The Debtor is not obligated to and does not provide any "retiree benefits" (as such term is defined in Section 1114 of the Bankruptcy Code) and thus, section 1129(a)(13) of the Bankruptcy Code is inapplicable to the Plan.
AA. Fair and Equitable; No Unfair Discrimination ( 11 U.S.C. § 1129(b)). The requirements of section 1129(b) of the Bankruptcy Code are satisfied as to Class 4 because (a) there is no Class of Claims or Equity Interests junior to such Class retaining or receiving any property under the Plan, (b) there is no Class of Claims senior to such Class receiving more than the full value of its senior Claims under the Plan and (c) the Plan is fair and equitable, and does not discriminate unfairly, with respect to such Class.
BB. Only One Plan ( 11 U.S.C. § 1129(c)). Other than the Plan (including previous versions thereof), no plan has been filed in this case. Accordingly, the requirements of section 1129(c) of the Bankruptcy Code have been satisfied.
CC. Principal Purpose of the Plan ( 11 U.S.C. § 1129(d)). No party in interest that is a governmental unit has requested that the Court not confirm the Plan on grounds that the principal purpose of the Plan is the avoidance of taxes or the avoidance of the application of section 5 of the Securities Act of 1933, and the principal purpose of the Plan is not such avoidance. Accordingly, the Plan satisfies the requirements of section 1129(d) of the Bankruptcy Code.
DD. Good Faith Solicitation ( 11 U.S.C. § 1125(e)). The Debtor and its representatives have acted in good faith and in compliance with the applicable provisions of the Bankruptcy Code, pursuant to section 1125(e) of the Bankruptcy Code, with respect to the administration of the Plan, the solicitation of acceptances with regard thereto and the securities and other property to be distributed thereunder.
EE. Assumption and Rejection. Article 8 of the Plan, which governs the assumption and rejection of executory contracts and unexpired leases, satisfies the requirements of section 365(b) of the Bankruptcy Code.
FF. Satisfaction of Confirmation Requirements. The Plan satisfies the requirements for confirmation set forth in section 1129 of the Bankruptcy Code.
GG. Retention of Jurisdiction. This Court may properly retain jurisdiction over the matters set forth in Article 9 of the Plan and section 1142 of the Bankruptcy Code.
DECREES
IT IS THEREFORE ORDERED, ADJUDGED AND DECREED
THAT:
1. Bankruptcy Rule 7052. The findings of this Court set forth above and the conclusions of law stated herein shall constitute findings of fact and conclusions of law pursuant to Bankruptcy Rule 7052, made applicable to this proceeding by Bankruptcy Rule 9014. To the extent any finding of fact shall be determined to be a conclusion of law, it shall be so deemed, and vice versa.
2. Confirmation. The Plan is hereby confirmed pursuant to section 1129 of the Bankruptcy Code.
3. Treatment of Claims and Equity Interests. The treatment of Claims and Equity Interests as provided in the Plan is approved.
4. Actions Necessary to Effectuate Plan. The Debtor shall be authorized to execute, deliver, file or record the Plan Documents and such other documents, contracts, instruments, releases, and other agreements and take such other action as may be necessary to effectuate and further evidence the terms and conditions of the Plan and this Order.
5. Statutory Fees. The Debtor shall pay all fees incurred pursuant to 28 U.S.C. § 1930(a)(6) and file with this Court and serve on the United States Trustee monthly financial reports until such time as a final decree is entered closing this case or this case is converted or dismissed, or this Court orders otherwise.
6. Retention of Jurisdiction. On and after the Effective Date, this Court shall retain jurisdiction over all matters arising in, arising under, or related to the Reorganization Cases for, among other things, the purposes set forth in Article 9 of the Plan.
7. Plan Modifications. So long as such action does not materially and adversely affect the treatment of holders of Claims or Equity Interests pursuant to the Plan, the Debtor may institute proceedings in this Court to remedy any defect or omission or reconcile any inconsistencies in the Plan of Reorganization or this Order, with respect to such matters as may be necessary to carry out the purposes and effects of the Plan.
8. Technical Modifications. Prior to the Effective Date, the Debtor may make appropriate technical adjustments and modifications to the Plan without further order or approval of this Court, provided, however, that such technical adjustments and modifications do not adversely affect in a material way the treatment of holders of Claims or Equity Interests.
9. Revocation of Plan. The Debtor may revoke or withdraw the Plan prior to the Effective Date. If the Debtor takes such action, the Plan and this Order shall be deemed null and void.
10. Exemption From Certain Transfer Taxes. To the fullest extent permitted by applicable law, any transfer or encumbrance of assets or any portion(s) of assets pursuant to, in furtherance of, or in connection with the Plan shall constitute a "transfer under a plan" within the purview of section 1146(c) of the Bankruptcy Code and shall not be subject to transfer, stamp or similar taxes.
11. Notice of Entry of this Order. The Debtor or its authorized agent(s) shall serve a notice of entry of this Order, as provided in Bankruptcy Rule 2002(f)(7), to all creditors and equity security holders of the Debtor previously served with notice of the Confirmation Hearing within ten (10) days from the date of entry of this Order.
12. Consummation of Plan. The provisions of Federal Rule of Civil Procedure 62, as applicable pursuant to Bankruptcy Rule 7062, and Bankruptcy Rule 3020(e) shall not apply to this Order and the Debtor is authorized to consummate the Plan immediately upon entry of this Order.
13. Conflicts. To the extent this Order and/or the Plan conflicts with: (i) the Disclosure Statement; (ii) any other agreement entered into between the Debtor and any party; or (iii) other orders of the Court, the Plan controls the Disclosure Statement and any such agreements or prior orders, and this Order controls the Plan.
14. Reference to Plan. Failure specifically to include or reference particular sections or provisions of the Plan or any related agreement in this Order shall not diminish or impair the effectiveness of such sections or provisions, it being the intent of the Court that the Plan be confirmed and such related agreements be approved in their entirety.