Opinion
Case No. 03-11540 (BRL), (Jointly Administered).
May 25, 2005
RECITALS
A. On March 17, 2003 (the "Petition Date"), each of Spiegel, Inc. and certain of its direct and indirect subsidiaries, as debtors and debtors in possession in the above-captioned cases (collectively, the "Debtors"), filed a voluntary petition in this Court for relief under chapter 11 of title 11 of the United States Code, 11 U.S.C. §§ 101- 1330, as amended (the "Bankruptcy Code").
B. On March 24, 2003, the United States Trustee for the Southern District of New York (the "U.S. Trustee") appointed a statutory committee of unsecured creditors (the "Creditors' Committee"). As of the date hereof, no request has been made for the appointment of a trustee or examiner in these cases.
C. The Debtors have continued in possession of their property and have continued to operate and manage their businesses as debtors in possession pursuant to sections 1107(a) and 1108 of the Bankruptcy Code.
D. As of the Petition Date, the Debtors operated their retail and catalog businesses through their three merchant divisions: Eddie Bauer, Spiegel Catalog, and Newport News. This Court has previously approved the sale of the Spiegel Catalog and Newport News businesses.
E. Since the Petition Date, the Debtors have been working diligently to move their cases forward. On March 28, 2005, the Debtors filed their First Amended Joint Plan of Reorganization of Affiliated Debtors Pursuant to Chapter 11 of the Bankruptcy Code (Docket No. 3082) and accompanying First Amended Disclosure Statement Pursuant to Section 1125 of the Bankruptcy Code for the First Amended Joint Plan of Reorganization of Affiliated Debtors (Docket No. 3084) (as modified, amended or supplemented from time to time and including all exhibits and schedules thereto, the "Disclosure Statement"). On May 23, 2005, the Debtors filed a Modified First Amended Joint Plan of Reorganization of Affiliated Debtors Pursuant to Chapter 11 of the Bankruptcy Code (Docket No. 3556) (the "Plan") that incorporated certain non-material technical amendments and modifications.
Unless otherwise specified, capitalized terms and phrases used herein have the meanings as defined in the Plan.
F. On June 13, 2003, Spiegel Group Teleservices-Canada, Inc. and Eddie Bauer of Canada, Inc. were granted ancillary relief by the Ontario Superior Court of Justice (the "Canadian Court") pursuant to section 18.6 of the (Canada) Companies' Creditors Arrangement Act. The Canadian Court has made a series of Orders more particularly described in the Disclosure Statement at pages 50 to 53. A condition precedent to the Effective Date of the Plan is that the Canadian Court enter the Canadian Confirmation Order that complies with the criteria set forth in Section 12.2(b) of the Plan, and the Canadian Confirmation Order be a Final Order. A hearing before the Canadian Court for confirmation of the Plan has been scheduled for May 27, 2005.
G. On March 29, 2005, after due notice and a hearing held on March 29, 2005, this Court entered an order (Docket No. 3116) (the "Disclosure Statement Order") that, among other things, (a) approved the Disclosure Statement as containing adequate information, (b) fixed a voting record date, (c) approved solicitation packages (the "Solicitation Packages") and procedures for distribution thereof, (d) approved the forms of ballots (the "Ballots") and established procedures for voting on the Plan, (e) scheduled a hearing on May 25, 2005 at 10:00 a.m. (prevailing Eastern Time) to consider confirmation of the Plan (the "Confirmation Hearing") and (f) established notice and objection procedures in respect of confirmation of the Plan, including a form of confirmation hearing notice (the "Confirmation Hearing Notice").
H. The Solicitation Packages were transmitted and served in compliance with the Bankruptcy Code, the Federal Rules of Bankruptcy Procedure (the "Bankruptcy Rules") and the Disclosure Statement Order as evidenced by the Affidavit of Mailing of Kate Mailloux, dated and sworn April 11, 2005 (Docket No. 3176) and the Affidavit of Mailing of Kate Mailloux dated and sworn April 22, 2005 (Docket No. 3292) (together, the "BSI Affidavits").
I. Adequate and sufficient notice of the Confirmation Hearing and other requirements and deadlines, hearings and matters described in the Disclosure Statement Order was provided in compliance with the Bankruptcy Code, the Bankruptcy Rules and the Disclosure Statement Order. As evidenced by the BSI Affidavits, the Confirmation Hearing Notice was mailed on or about April 5, 2005 to Holders of Claims against and Equity Interests in the Debtors and other parties in interest. As evidenced by the Certifications of Publication filed with this Court on April 19, 2005 (Docket No. 3244) and the Affidavit of Publication filed with this Court on April 21, 2005 (Docket No. 3266) (collectively, the "Publication Affidavits"), the Confirmation Hearing Notice was published, on April 14, 2005 in USA Today (National Edition), and on April 15, 2005 in The New York Times (National Edition), The Wall Street Journal (National Edition), and The Globe and Mail (National Edition). No other or further notice of the Confirmation Hearing was or is required.
J. On May 3, 2005, in accordance with the terms of the Disclosure Statement Order and the Plan, the Debtors filed the Plan Supplement, which included, among other things, the Cure Payment Schedule (Docket No. 3332). On May 13, 2005, the Debtors filed certain amendments to the Cure Payment Schedule (Docket No. 3415). On May 20, 2005 the Debtors filed certain amendments to the Plan Supplement (Docket No. 3527) (the "Amendments"). On May 23, 2005, the Debtors filed an amended Creditor Trust Agreement (Docket No. 3527) (the "Amended Creditor Trust Agreement"). On May 24, 2005 the Debtors filed a list summarizing the experience of the proposed members of the Board of Directors of Eddie Bauer Holdings (Docket No. 3579) (collectively with the Amendments and the Amended Creditor Trust Agreement, the "Amendment to the Plan Supplement").
K. The Disclosure Statement Order established March 29, 2005 as the record date (the "Record Date") for determining which creditors are entitled to vote to accept or reject the Plan and 4:00 p.m. (prevailing Eastern Time) on May 13, 2005 as the voting deadline to return completed Ballots to the Debtors. On May 20, 2005, the Debtors filed the Affidavit of Cassandra Murray of Bankruptcy Services LLC Regarding the Methodology for the Tabulation of and Results of Voting with respect to the First Amended Joint Plan of Reorganization of Affiliated Debtors Pursuant to Chapter 11 of the Bankruptcy Code, dated and sworn to on May 19, 2005 (Docket No. 3517) attesting and certifying the method and results of the ballot tabulation for the Classes of Claims entitled to vote to accept or reject the Plan (the "Voting Report"). As evidenced by the Voting Report, ballots were tabulated in compliance with the Bankruptcy Code, the Bankruptcy Rules and the Disclosure Statement Order.
L. The Disclosure Statement Order established 4:00 p.m. (prevailing Eastern Time) on May 13, 2005 as the deadline to object to confirmation of the Plan. The following objections to confirmation of the Plan were filed: Objector Date Filed Docket No. Texas Counties Taxing Entities Pyramid Landlords Texas Taxing Authorities Texas Taxing Entities KE
KE was granted an extension of time to file such objection by counsel to the Debtors.
M. On May 23, 2005, the Debtors filed the (i) Memorandum of Law in Support of Approval of Confirmation of the First Amended Joint Plan of Reorganization of Affiliated Debtors (Docket No. 3558) and (ii) Debtors' Omnibus Response to Confirmation of the First Amended Joint Plan of Reorganization of Affiliated Debtors (Docket No. 3559) (together, the "Confirmation Papers").
N. The Confirmation Hearing was held before this Court on May 25, 2005.
NOW, THEREFORE, this Court having reviewed and considered the Disclosure Statement, the Plan, the Plan Supplement and the documents contained therein, the Amendment to the Plan Supplement and the documents contained therein, the BSI Affidavits, the Publication Affidavits, the Voting Report, the Objections, the Confirmation Papers, and statements and comments regarding confirmation of the Plan; this Court having heard statements of counsel in support of and in opposition to confirmation of the Plan at the Confirmation Hearing; this Court having considered all testimony presented and evidence admitted at the Confirmation Hearing; this Court having taken judicial notice of the papers and pleadings on file in these Chapter 11 Cases; it appearing to this Court that (a) notice of the Confirmation Hearing was adequate and appropriate as to all parties to be affected by the Plan and the transactions contemplated thereby and (b) the legal and factual bases set forth in the Confirmation Papers and presented at the Confirmation Hearing establish just cause for the relief granted herein; and after due deliberation thereon and good cause appearing therefor, this Court hereby makes and issues the following Findings of Fact and Conclusions of Law:
FINDINGS OF FACT AND CONCLUSIONS OF LAW
IT IS HEREBY FOUND AND DETERMINED THAT:
1. Exclusive Jurisdiction; Venue; Core Proceeding ( 28 U.S.C. §§ 157, 1334(a), 1408 and 1409). This Court has jurisdiction over the Chapter 11 Cases pursuant to 28 U.S.C. §§ 157 and 1334. Confirmation of the Plan is a core proceeding under 28 U.S.C. § 157(b)(2), and this Court has exclusive jurisdiction to determine whether the Plan complies with the applicable provisions of the Bankruptcy Code and should be confirmed, and such jurisdiction does not conflict with the jurisdiction of the Canadian Court with respect to the Canadian Debtors in respect of the Canadian Confirmation Hearing. Venue is proper before this Court pursuant to 28 U.S.C. §§ 1408 and 1409. Venue in the Southern District of New York was proper as of the Petition Date and continues to be proper.
2. Judicial Notice. This Court takes judicial notice of the docket of the Chapter 11 Cases maintained by the Clerk of the Court or its duly appointed agent, including, without limitation, all pleadings and other documents filed, all orders entered, and all evidence and arguments made, proffered or adduced at, the hearings held before this Court during the pendency of the Chapter 11 Cases.
3. Transmittal and Mailing of Materials, Notice; Solicitation. The Solicitation Packages were transmitted and served in compliance with the Bankruptcy Code, the Bankruptcy Rules and applicable nonbankruptcy law and the Disclosure Statement Order. Such transmittal and service of the Solicitation Packages were adequate and sufficient. Adequate and sufficient notice of the Confirmation Hearing was given in compliance with the Bankruptcy Code, the Bankruptcy Rules and the Disclosure Statement Order, and no other or further notice is or shall be required. Votes for acceptance and rejection of the Plan were solicited in good faith and such solicitation complied with sections 1125 and 1126 of the Bankruptcy Code, Rules 3017 and 3018 of the Bankruptcy Rules, all other applicable provisions of the Bankruptcy Code, the Disclosure Statement Order and all other applicable rules, laws and regulations.
4. Burden of Proof. The Debtors, as proponents of the Plan, have met their burden of proving the elements of sections 1129(a) and (b) of the Bankruptcy Code by a preponderance of the evidence.
5. Modifications to the Plan. As disclosed on the record of the Confirmation Hearing, clause (v) of the definition of "Class 4 Distributable Cash" is amended to insert the phrase "or pursuant to a Final Order of the Bankruptcy Court" prior to the word "plus" at the conclusion of such clause.
6. Plan Compliance with the Applicable Provisions of the Bankruptcy Code ( 11 U.S.C. § 1129(a)(1)). As set forth below, the Plan complies with the applicable provisions of the Bankruptcy Code, thereby satisfying section 1129(a)(1) of the Bankruptcy Code.
(a) Proper Classification of Claims and Equity Interests ( 11 U.S.C. §§ 1122 and 1123(a)(1)). In addition to Administrative Claims and Priority Tax Claims, which need not be classified, the Plan designates six Classes of Claims and Equity Interests. See Plan Articles III and IV. The Claims or Equity Interests placed in each Class are substantially similar to other Claims or Equity Interests, as the case may be, in such Class. Valid business, factual and legal reasons exist for separately classifying the various Classes of Claims and Equity Interests created under the Plan, and such Classes do not unfairly discriminate among Holders of Claims or Equity Interests. Thus, the Plan satisfies sections 1122 and 1123(a)(1) of the Bankruptcy Code.
(b) Specification of Unimpaired Classes ( 11 U.S.C. § 1123(a)(2)). Article IV of the Plan specifies that each of Class 1, Class 2, and Class 3 is Unimpaired under the Plan, thereby satisfying section 1123(a)(2) of the Bankruptcy Code.
(c) Specification of Treatment of Impaired Classes ( 11 U.S.C. § 1123(a)(3)). Article IV of the Plan designates each of Class 4, Class 5 and Class 6 as Impaired and specifies the treatment of Claims and Equity Interests in those Classes, thereby satisfying section 1123(a)(3) of the Bankruptcy Code.
(d) Equal Treatment Within Classes ( 11 U.S.C. § 1123(a)(4)). The Plan provides for the same treatment by the Debtors for each Claim or Equity Interest in a particular Class unless the Holder of a particular Claim or Equity Interest in such Class has agreed to a less favorable treatment of its Claim or Equity Interest, thereby satisfying section 1123(a)(4) of the Bankruptcy Code.
(e) Implementation of Plan ( 11 U.S.C. § 1123(a)(5)). The Plan and Plan Supplement provide adequate and proper means for implementation of the Plan, including, but not limited to, (a) the substantive consolidation of the Debtors for all purposes related to the Plan, including for purposes of voting, confirmation and distribution, (b) the restructuring transactions contemplated by section 7.7 of the Plan, (c) entry into definitive documentation for the Working Capital Facility, (d) entry into definitive documentation for the Senior Debt Facility, (e) the issuance of Eddie Bauer Holdings Common Stock and (f) the establishment of the Creditor Trust, thereby satisfying section 1123(a)(5) of the Bankruptcy Code.
(f) Charter Provisions ( 11 U.S.C. § 1123(a)(6)). Section 7.12(a) of the Plan provides that, on or as soon as reasonably practicable after the Effective Date, each of the certificates of incorporation and bylaws for each of the Reorganized Debtors and, unless dissolved on or as soon as practicable after the Effective Date, the Creditor Trust Debtors shall be amended as necessary to satisfy the provisions of the Plan and the Bankruptcy Code, including, without limitation, the prohibition against the issuance of nonvoting equity securities set forth in section 1123(a) of the Bankruptcy Code, subject to the further amendment of such certificates of incorporation and bylaws as permitted by applicable law. Section 7.12(b) of the Plan provides that the Eddie Bauer Holdings Certificate of Incorporation and the Eddie Bauer Holdings Bylaws shall contain, among other things, provisions necessary to prohibit the issuance of nonvoting equity securities as required by section 1123(a) of the Bankruptcy Code, subject to the further amendment of such certificates of incorporation and bylaws as permitted by applicable law. Thus, the requirements of section 1123(a)(6) of the Bankruptcy Code are satisfied.
(g) Selection of Officers and Directors ( 11 U.S.C. § 1123(a)(7)). Section 7.12(c) of the Plan provides that subject to any requirement of Bankruptcy Court approval pursuant to section 1129(a)(5) of the Bankruptcy Code, as of the Effective Date, a total of nine directors shall serve as the initial directors of Eddie Bauer Holdings, eight of which will be nominated by the Creditors' Committee. The provisions of the Plan for the selection of directors and officers are consistent with the interests of creditors and equity security holders and with public policy as to the manner and selection of any officer, director or trustee and any successor thereto, thereby satisfying section 1123(a)(7) of the Bankruptcy Code. Pursuant to section 1129(a)(5) of the Bankruptcy Code, the Debtors have disclosed, on or prior to the Confirmation Date, the identity and affiliations of any Person proposed to serve on the initial board of directors, board of managers or as the managing member, as applicable, of each of the Reorganized Debtors and the Creditor Trust Debtors or employed as an officer of the Reorganized Debtors, and, to the extent such Person is an insider, the nature of any compensation for such Person. The classification and composition of the board of directors or managing members, as appropriate, of each of the Reorganized Debtors and the Creditor Trust Debtors are consistent with the applicable Amended Certificate of Incorporation and Bylaws. Each such director, officer and managing member shall serve from and after the Effective Date pursuant to the terms of the applicable Amended Certificate of Incorporation and Bylaws or other applicable constituent documents or law. Any directors, officers, or managing member of a Debtor that will not continue in such capacity after the Effective Date with the applicable Creditor Trust Debtor or Reorganized Debtor shall be deemed to have resigned from such positions without the need for any corporate action on the part of the Debtors or documentation of such resignations on the part of any party.
7. Bankruptcy Rule 3016. The Plan is dated and identifies the entities submitting it, thereby satisfying Bankruptcy Rule 3016(a). The filing of the Disclosure Statement with the Clerk of the Court satisfies Bankruptcy Rule 3016(b).
8. Bankruptcy Rule 3017. The Debtors have given notice of the Confirmation Hearing as required by Bankruptcy Rule 3017(d) and the Disclosure Statement Order. The transmittal and service of the Solicitation Packages was in compliance with the Disclosure Statement Order and adequate and sufficient under the Bankruptcy Rules and the circumstances surrounding these Chapter 11 Cases.
9. Bankruptcy Rule 3018. The solicitation of votes to accept or reject the Plan solely from Holders of Allowed Claims in Classes entitled to vote to accept or reject the Plan as of the Record Date satisfies Bankruptcy Rule 3018. Votes to accept and reject the Plan have been solicited and tabulated fairly, in good faith, and in a manner consistent with the Bankruptcy Code, the Bankruptcy Rules, the Disclosure Statement Order and industry practice.
10. Debtors' Compliance with the Applicable Provisions of the Bankruptcy Code ( 11 U.S.C. § 1129(a)(2)). The Debtors have complied with the applicable provisions of the Bankruptcy Code, thereby satisfying section 1129(a)(2) of the Bankruptcy Code. Specifically:
(a) the Debtors are proper debtors under section 109 of the Bankruptcy Code and proper proponents of the Plan under section 1121(a) of the Bankruptcy Code;
(b) the Debtors have complied with applicable provisions of the Bankruptcy Code, except as otherwise provided or permitted by orders of the Court; and
(c) the Debtors have complied with the applicable provisions of the Bankruptcy Code, including sections 1125 and 1126(b), the Bankruptcy Rules and the Disclosure Statement Order in transmitting the Solicitation Materials and in soliciting and tabulating votes on the Plan.
11. Plan Proposed in Good Faith ( 11 U.S.C. § 1129(a)(3)). The Debtors have proposed the Plan in good faith and not by any means forbidden by law, thereby satisfying section 1129(a)(3) of the Bankruptcy Code. In determining that the Plan has been proposed in good faith, this Court has examined the totality of the circumstances surrounding the filing of the Chapter 11 Cases and the formulation of the Plan. The Chapter 11 Cases were filed and the Plan was proposed with the legitimate and honest purposes of reorganizing the Debtors and expeditiously making distributions to the Debtors' creditors. The Debtors, the Creditors' Committee and other interested parties and their respective agents, accountants, business consultants, representatives, attorneys and advisors, through their participation in arms'-length negotiations and preparation of the Plan and related documents, including those included in the Plan Supplement, have participated in the Chapter 11 Cases in good faith and in compliance with the applicable provisions of the Bankruptcy Code.
12. Payments for Services or Costs and Expenses ( 11 U.S.C. § 1129(a)(4)). Any payment made or to be made by the Debtors for services or for costs and expenses in or in connection with the Chapter 11 Cases, or in connection with the Plan and incident to the Chapter 11 Cases, has been approved by, or is subject to the approval of, this Court as reasonable, thereby satisfying section 1129(a)(4) of the Bankruptcy Code.
13. Directors, Officers and Insiders ( 11 U.S.C. § 1129(a)(5)). The Debtors have complied with section 1129(a)(5) of the Bankruptcy Code. On May 20, 2005, the Debtors, as part of the Amendment to the Plan Supplement disclosed the identity and affiliations of any Person proposed to serve on the initial board of directors, board of managers or as the managing member, as applicable, of each of the Reorganized Debtors, the Creditor Trust Debtors and Eddie Bauer Holdings or employed as an officer of the same, and, to the extent such Person is an insider, the nature of any compensation for such Person.
14. No Rate Changes ( 11 U.S.C. § 1129(a)(6)). The Plan does not provide for any change in rates subject to governmental regulation. Thus, section 1129(a)(6) of the Bankruptcy Code is not applicable in these Chapter 11 Cases.
15. Best Interests of Creditors Test ( 11 U.S.C. § 1129(a)(7)). The Plan satisfies section 1129(a)(7) of the Bankruptcy Code. The liquidation analysis contained in the Disclosure Statement and other evidence proffered or adduced at the Confirmation Hearing (i) are persuasive and credible, (ii) have not been challenged or controverted by other evidence, and (iii) establish that each Holder of a Claim or Equity Interest in an Impaired Class either (x) has accepted the Plan or (y) will receive or retain under the Plan, on account of such Claim or Equity Interest, property of a value, as of the Effective Date of the Plan, that is not less than the amount that it would receive if the Debtors were liquidated under chapter 7 of the Bankruptcy Code.
16. Acceptance or Rejection by Certain Classes ( 11 U.S.C. § 1129(a)(8)). Holders of Claims in Classes 1, 2 and 3 are deemed to have accepted the Plan pursuant to section 1126(f) of the Bankruptcy Code. As set forth in the Voting Report, the percentages of Holders of Claims in Classes entitled to vote on the Plan that voted to accept or reject the Plan are as follows:
Percentage Percentage Accepting AcceptingImpaired Class of Claims (Dollar Amount) (Number of Claims)
Class 4 99.87% 99.30% Class 5 99.02% 99.12%
Accordingly, Holders of Claims in Classes 4 and 5 have each accepted the Plan pursuant to section 1126(c) of the Bankruptcy Code. Holders of Equity Interests in Class 6 are conclusively deemed to have rejected the Plan pursuant to section 1126(g) of the Bankruptcy Code. The Plan therefore does not satisfy section 1129(a)(8) of the Bankruptcy Code. Notwithstanding the lack of compliance of section 1129(a)(8) of the Bankruptcy Code with respect to Class 6, the Plan is confirmable because it satisfies section 1129(b)(1) of the Bankruptcy Code with respect to such Class, as set forth below.
17. Treatment of Priority Claims ( 11 U.S.C. § 1129(a)(9)). The treatment of Allowed Administrative Expense Claims and Allowed Non-Tax Priority Claims pursuant to sections 3.2 and 4.1 of the Plan satisfies the requirements of sections 1129(a)(9)(A) and (B) of the Bankruptcy Code, and the treatment of Allowed Priority Tax Claims pursuant to section 3.6 of the Plan satisfies the requirements of section 1129(a)(9)(C) of the Bankruptcy Code.
18. Acceptance of at Least One Impaired Class ( 11 U.S.C. § 1129(a)(10)). As set forth in the Voting Report, each of Class 4 and Class 5 has voted to accept the Plan and has accepted the Plan in requisite numbers and amounts without the need to include any acceptance of the Plan by any insider. Thus, the Plan satisfies section 1129(a)(10) of the Bankruptcy Code.
19. Feasibility ( 11 U.S.C. § 1129(a)(11)). The Plan satisfies section 1129(a)(11) of the Bankruptcy Code because confirmation of the Plan is not likely to be followed by liquidation or the need for further financial reorganization of the Reorganized Debtors. The Plan provides for, among other things, (i) the payment of the Cash Settlement Payment by SHI in the amount of $104 million, (ii) the availability of the Working Capital Facility in the amount of $150 million, and (iii) the availability of the Senior Debt Facility in the amount of $300 million on the Effective Date. The record of these Chapter 11 Cases, including the financial projections attached as Exhibit F to the Disclosure Statement, supports that these amounts, existing cash balances, and projected revenue will be sufficient to meet the ongoing financial needs of the Reorganized Debtors and to implement the Plan. The cash available to the Debtors from the Cash Settlement Payment, the Working Capital Facility, the Senior Debt Facility, and the Debtors' existing cash balances will be sufficient to make the distributions contemplated by the Plan. The Plan presents a workable scheme of reorganization and is found and determined to be feasible. The Plan satisfies section 1129(a)(11) of the Bankruptcy Code.
20. Payment of Certain Fees ( 11 U.S.C. § 1129(a)(12)). All fees payable under 28 U.S.C. § 1930 either have been paid or will be paid pursuant to Section 3.4 of the Plan. Accordingly, the Plan satisfies section 1129(a)(12) of the Bankruptcy Code.
21. Continuation of Retiree Benefits ( 11 U.S.C. § 1129(a)(13)). Section 11.7(a) of the Plan provides that, except as otherwise expressly provided therein, all employment and severance policies, and all compensation and benefit plans, policies, and programs of the Debtors applicable to their employees, retirees and non-employee directors and the employees and retirees of their subsidiaries, including, without limitation, all savings plans, retirement plans, healthcare plans, disability plans, severance benefit plans, incentive plans, vacation, life and accidental death and dismemberment insurance plans in effect as of the Effective Date shall be treated as executory contracts under the Plan and on the Effective Date will be assumed pursuant to the provisions of sections 365 and 1123 of the Bankruptcy Code and shall be transferred to Eddie Bauer Holdings. Section 11.7(b) of the Plan further provides that Eddie Bauer Holdings shall be the sponsor of the Spiegel, Inc. Pension Plan. Thus, the requirements of section 1129(a)(13) of the Bankruptcy Code are satisfied.
22. Satisfaction of Confirmation Requirements. The Plan satisfies all the requirements for confirmation set forth in section 1129(a) of the Bankruptcy Code.
23. Principal Purpose ( 11 U.S.C. § 1129(d)). The principal purpose of the Plan is neither the avoidance of taxes nor the avoidance of section 5 of the Securities Act, and no governmental unit has objected to the confirmation of the Plan on any such grounds. The Plan, therefore, satisfies the requirements of section 1129(d) of the Bankruptcy Code.
24. Good Faith Solicitation ( 11 U.S.C. § 1125(e)). Based upon the record before this Court, the Post-Petition Released Parties have participated in the solicitation of votes for the acceptance or rejection of the Plan in good faith and in compliance with the applicable provisions of the Bankruptcy Code and are entitled to the protections afforded by section 1125(e) of the Bankruptcy Code and the exculpatory, indemnification and injunctive provisions set forth in Article XIII of the Plan.
25. Confirmation of Plan Over Nonacceptance of Impaired Classes ( 11 U.S.C. § 1129(b)). As described in paragraphs 5 through 23 above, the Plan satisfies all of the applicable requirements of section 1129(a) of the Bankruptcy Code other than section 1129(a)(8). Pursuant to section 1129(b)(1) of the Bankruptcy Code, the Plan may be confirmed notwithstanding the fact that not all Impaired Classes have voted to accept the Plan. Each of Class 4 and Class 5, the only Impaired Classes other than Class 6, have voted to accept the Plan. With respect to Class 6, no Holders of Claims or Equity Interests that are subordinate to a Class 6 Equity Interest will receive or retain any property under the Plan. Accordingly, the requirements of section 1129(b)(2)(C)(ii) are satisfied with respect to Class 6, the Plan is fair and equitable with respect to such Class, and the Plan does not unfairly discriminate against such Class. Accordingly, the Plan satisfies the requirements of section 1129(b) of the Bankruptcy Code and shall be confirmed notwithstanding the requirements of section 1129(a)(8) of the Bankruptcy Code.
26. Exemption from Securities Laws. The issuance and the distribution transfer or exchange thereof in accordance with the Plan and the Creditor Trust Agreement of the Eddie Bauer Holdings Common Stock and the Creditor Trust Interests pursuant to the terms of the Plan is on account of, and in exchange for, the Claims against the Debtors within the meaning of section 1145(a)(1) of the Bankruptcy Code. In addition, under section 1145 of the Bankruptcy Code, to the extent, if any, that the above-listed items constitute "securities" (A) the offering of such items is exempt and the issuance and distribution of such items will be exempt from Section 5 of the Securities Act and any state or local law requiring registration prior to the offering, issuance, distribution, or sale of securities and (B) all of the above-described items (other than the Creditor Trust Interests) will be subject to, as applicable, the Eddie Bauer Holdings Certificate of Incorporation and Bylaws and shall be further subject to (1) the provisions of section 1145(b)(1) of the Bankruptcy Code relating to the definition of an underwriter in Section 2(a)(11) of the Securities Act, (2) compliance with any rules and regulations of the Securities and Exchange Commission, if any, applicable at the time of any future transfer of such securities or instruments and (3) all applicable regulatory approvals.
27. Rule 9019 Settlement of Claims and Controversies. The provisions of the Plan constitute a good faith compromise and settlement of all claims or controversies relating to the enforcement or termination of all contractual, legal and equitable subordination and turnover rights that a Holder of a Claim or Equity Interest may have with respect to any Allowed Claim or Equity Interest, or any distribution to be made pursuant to the Plan on account of such Claim. Such settlement, as reflected in the relative distributions and recoveries of Holders of Allowed Claims under the Plan, (a) will save the Debtors and their estates the costs and expenses of prosecuting various disputes, the outcome of which is likely to consume substantial resources of the Debtors' estates and require substantial time to adjudicate, and (b) have facilitated the creation and implementation of the Plan and benefits the Debtors' estates and creditors. The compromise or settlement of all such claims or controversies is approved under Rule 9019 of the Bankruptcy Rules as being fair, equitable and reasonable and in the best interests of the Debtors, the Reorganized Debtors, the Creditor Trust Debtors, and the Holders of Claims and Equity Interests.
28. Rule 9019 SHI Settlement. Pursuant to section 1123(b)(3) of the Bankruptcy Code and Bankruptcy Rule 9019, the Plan incorporates the SHI Settlement. The SHI Settlement plays an important part in the Plan, and absent the releases and corresponding injunction that are critical components of the SHI Settlement, the Released Parties (including, but not limited to, the Holders of the Otto KG Goods Unsecured Claims and the SHI Unsecured Claims) would not be willing to enter into the SHI Settlement. The SHI Settlement is the compromise of disputed claims and a good faith settlement and release of those claims and associated alleged injuries. Such settlement, as reflected in the relative distributions and recoveries of Holders of Allowed Claims under the Plan, (i) will save the Debtors and their estates the costs and expenses of prosecuting various disputes, the outcome of which is likely to consume substantial resources of the Debtors' estates and require substantial time to adjudicate and (ii) have facilitated the creation and implementation of the Plan and benefits the Debtors' estates and creditors. Accordingly, such settlement is fair, equitable and reasonable.
29. Exit Financing. Except as otherwise provided in the Plan, on the Effective Date, the Reorganized Debtors shall enter into definitive documentation with respect to the Working Capital Facility and the Senior Debt Facility. The Working Capital Facility and the Senior Debt Facility were negotiated between the Debtors and the counterparties thereto in good faith and at arms'-length. The terms of the Working Capital Facility and the Senior Debt Facility, together with the payment of fees and expenses thereunder, are fair and reasonable, reflect the Debtors' exercise of prudent business judgment consistent with their fiduciary duties, and are supported by reasonably equivalent value and fair consideration. The terms of the Working Capital Facility and Senior Debt Facility are in the best interests of the Reorganized Debtors, the Debtors, and their estates, creditors and other parties in interest.
30. Assumed Executory Contracts and Unexpired Leases. The Plan satisfies all requirements for the assumption of such contracts and leases contained in the Bankruptcy Code, including, without limitation, the requirement to cure all outstanding defaults, if any, and to provide adequate assurance of such contracts and leases.
31. Conditions to Confirmation. Entry of this Order shall satisfy the conditions set forth in Section 12.1(a) of the Plan.
32. Releases, Exculpations and Injunctions. Pursuant to section 1123(b)(3) of the Bankruptcy Code and Bankruptcy Rule 9019(a), the settlements, compromises, releases, discharges, exculpations, and injunctions set forth in the Plan and implemented by this Confirmation Order, including but not limited to the SHI Settlement, are fair, equitable, reasonable, in good faith and in the best interests of the Debtors and their estates, the Reorganized Debtors, the Creditor Trust Debtors, the Creditors' Committee, the Creditor Trust, Eddie Bauer Holdings, and Holders of Claims and Equity Interests. The releases of non-Debtors under the Plan and related injunctions are fair to Holders of Claims and Equity Interests and are necessary to the proposed reorganization of the Debtors and the successful administration of their estates, thereby satisfying the requirements of In re Drexel Burnham Lambert Group, Inc., 960 F.2d 285 (2d Cir. 1992), In re Johns-Mansville, 837 F.2d 89 (2d Cir. 1988), and In re Ionosphere Clubs, Inc., 184 B.R. 648, 655 (S.D.N.Y. 1995). The record of the Confirmation Hearing and the Chapter 11 Cases is sufficient to support the releases, exculpations and injunctions provided for in Article XIII of the Plan.
33. Substantive Consolidation. The facts adduced by the Debtors during the Confirmation Hearing supporting the substantive consolidation of all of the Debtors for all purposes related to the Plan are persuasive and credible, have not been controverted by other persuasive evidence and have not been challenged, and provide an adequate basis for the substantive consolidation of all the Debtors as provided in the Plan.
34. The Plan and Amendment to the Plan Supplement. The technical modifications to the First Amended Joint Plan of Reorganization of Affiliated Debtors set forth in the Plan, the Amendment to the Plan Supplement, and this Order do not materially or adversely affect or change the treatment of any Claim or Equity Interest. Accordingly, pursuant to Rule 3019 of the Bankruptcy Rules, these modifications and amendments do not require additional disclosure under section 1126 of the Bankruptcy Code nor do they require that Holders of Allowed Claims or Equity Interests be afforded an opportunity to change previously cast acceptances or rejections of the Plan as distributed in the Solicitation Packages.
35. Retention of Jurisdiction. Pursuant to sections 105(a) and 1142 of the Bankruptcy Code, and notwithstanding the entry of this Confirmation Order or the occurrence of the Effective Date, this Court, except as otherwise provided in the Plan or herein, shall retain exclusive jurisdiction over all matters arising out of, and related to, the Chapter 11 Cases and the Plan to the fullest extent permitted by law and shall also have exclusive jurisdiction over the matters set forth in Article XIV of the Plan subject to Section 15.10 of the Plan; provided, however that nothing in Section 14.1 of the Plan or this Order shall modify the Debtors' or Pyramid Landlords' rights under that certain Stipulation dated September 29, 2003 and so ordered as of September 30, 2003 (Docket No. 865).
DECREES
NOW THEREFORE, IT IS HEREBY ORDERED, ADJUDGED, DECREED AND DETERMINED THAT:
36. Confirmation. The Plan is confirmed under section 1129 of the Bankruptcy Code. All objections to the Plan not heretofore withdrawn are overruled in their entirety.
37. Provisions of Plan and Order Nonseverable and Mutually Dependent. The provisions of the Plan and this Confirmation Order, including the findings of fact and conclusions of law set forth herein, are nonseverable and mutually dependent.
38. Modifications to Plan. Upon entry of this Confirmation Order, the Debtors may, upon order of this Court and subject to Section 15.1 of the Plan, amend or modify the Plan, in accordance with section 1127(b) of the Bankruptcy Code, or remedy any defect or omission or reconcile any inconsistency in the Plan in such manner as may be necessary to carry out the purpose and intent of the Plan. Claimants that have accepted the Plan shall be deemed to have accepted the Plan as modified if the proposed modification does not materially and adversely change the treatment of the Claim.
39. Plan Classification Controlling. The classification of Claims and Equity Interests for purposes of the distributions to be made under the Plan shall be governed solely by the terms of the Plan. The classifications and amounts of Claims, if any, set forth on the Ballots returned by the Debtors' creditors in connection with voting on the Plan (a) were set forth on the Ballots solely for purposes of voting to accept or reject the Plan, (b) do not necessarily represent, and in no event shall be deemed to modify or otherwise affect, the actual amount or classification of such Claims under the Plan for distribution purposes and (c) shall not be binding on the Debtors, the Reorganized Debtors, the Creditor Trust Debtors, Eddie Bauer Holdings or the Creditor Trust except with respect to voting on the Plan.
40. Discharge of Debtors. Except as otherwise expressly provided in the Plan or this Confirmation Order, the discharge set forth in Section 13.2 of the Plan is approved; provided that nothing in this Section shall affect, limit, or enlarge the discharge provided to the Debtors under section 1141 of the Bankruptcy Code.
41. Binding Effect. Pursuant to section 1141 of the Bankruptcy Code, except as otherwise expressly provided in the Plan, on and after the Effective Date, the Plan and all exhibits thereto (including the Plan Supplement and Amendment to the Plan Supplement) shall bind all Holders of Claims and Equity Interests.
42. Exemption from Certain Transfer Taxes. Pursuant to section 1146 of the Bankruptcy Code: (a) the issuance, transfer or exchange of any securities, instruments or documents; (b) the creation of any other Lien, mortgage, deed of trust or other security interest; (c) the making or assignment of any lease or sublease or the making or delivery of any deed or other instrument of transfer under, pursuant to, in furtherance of, or in connection with the Plan, including, without limitation, any deeds, bills of sale or assignments executed in connection with any of the transactions contemplated under the Plan or the reinvesting, transfer or sale of any real or personal property of the Debtors pursuant to, in implementation of, or as contemplated in the Plan; and (d) the issuance, renewal, modification or securing of indebtedness by such means, and the making, delivery or recording of any deed or other instrument of transfer under, in furtherance of, or in connection with, the Plan, including, without limitation, this Confirmation Order, shall not be taxed under any law imposing a stamp tax or similar tax save and except such taxes, if any, as may be applicable under the applicable laws of Canada or any province thereof. Consistent with the foregoing, each recorder of deeds or similar official for any county, city or governmental unit in which any instrument hereunder is to be recorded is hereby ordered and directed to accept such instrument without requiring the payment of any stamp tax or similar tax. Eddie Bauer Holdings, the Reorganized Debtors, the Creditor Trust Debtors, and the respective agent lenders under the Working Capital Facility and the Senior Debt Facility are authorized to serve upon all filing and recording officers a notice, substantially in the form annexed hereto asExhibit A, in connection with the filing and recording of any instrument hereunder in accordance with the Plan, to evidence and implement the provisions of this paragraph. This Court retains jurisdiction to enforce the foregoing authorization.
43. Documentation. The Debtors, the Reorganized Debtors, the Creditor Trust Debtors, and Eddie Bauer Holdings, as applicable, are authorized to execute, deliver, file or record such contracts, instruments, releases, indentures and other agreements or documents of take such actions as may be necessary or appropriate to effectuate and further evidence the terms and conditions of the Plan and any securities issued pursuant to the Plan.
44. Substantive Consolidation. The estates of the Debtors shall be substantively consolidated for all purposes related to the Plan, including for purposes of voting, Confirmation, and Distribution. On and after the Effective Date and except with respect to SHI Unsecured Claims, (a) all assets and liabilities of the Debtors shall be treated as though they were merged, (b) no Distributions shall be made under the Plan on account of any Claim held by any Debtor against any other Debtor, (c) all guarantees of any Debtor of any obligation of any other Debtor shall be eliminated so that any Claim against any Debtor and any guarantee thereof expected by any other Debtor and any joint or several liability of any of the Debtors shall be one obligation of the Debtors, and (d) each and every Claim Filed or to be Filed against any of the Debtors shall be deemed Filed against the Debtors, and shall be one Claim against and an obligation of the Debtors. The substantive consolidation effected pursuant this Confirmation Order and Section 7.1(a) of the Plan shall not (other than for purposes related to funding Distributions under the Plan and as set forth above in Section 7.1 of the Plan) affect: (i) the legal and organizational structure of the Debtors (which structures will be reorganized in the manner set forth in Section 7.7 of the Plan), (ii) defenses to any Right of Action or requirements for any third party to establish mutuality in order to assert a right of setoff, (iii) Distributions out of any insurance policies or proceeds of such policies, and (iv) the obligation of any Debtor, Reorganized Debtor, or Creditor Trust Debtor to pay quarterly fees to the Office of the U.S. Trustee pursuant to 28 U.S.C. § 1930(a)(6) until such time as such Debtor's particular case is closed, dismissed or converted.
45. Cancellation of Intercompany Claims. On the Effective Date, all Intercompany Claims shall be eliminated and extinguished.
46. Cancellation of Notes, Instruments, Common Stock and Stock Options. On the Effective Date, except to the extent provided otherwise in the Plan or this Confirmation Order, and provided that the treatments provided for therein and the Distributions contemplated by Article IV of the Plan are made and transactions in Section 7.7 of the Plan are consummated (i) all notes, instruments, certificates, guaranties and other documents evidencing Claims in any of the Debtors shall be cancelled and deemed terminated; (ii) all Equity Interests in Spiegel, Inc. shall be cancelled and deemed terminated; and (iii) all options, warrants, conversions, privileges or other legal or contractual rights to acquire any Equity Interests in any of the Debtors shall be cancelled and deemed terminated.
47. Rule 9019(a) Settlement. The provisions of this Plan constitute a good faith compromise of all Claims or controversies relating to the contractual, legal and subordination rights that a Holder of a Claim may have with respect to any Allowed Claim with respect thereto, or any Distribution to be made on account of such an Allowed Claim. The entry of this Confirmation Order constitutes this Court's approval of the compromise or settlement of all such Claims or controversies, and this Court's finding that such compromise or settlement is in the best interests of the Debtors, their estates and Holders of Claims, and is fair, equitable and reasonable. This Court has found that the settlements embodied in the Plan will save the Debtors and their estates the costs and expenses of prosecuting various disputes, the outcome of which is likely to consume substantial resources of the Debtors' estates and require substantial time to adjudicate. This Court has also found that such settlements have facilitated the creation and implementation of the Plan and benefit the creditors and shareholders of the Debtors.
48. Dissolution of Creditors' Committee; Creation of Plan Oversight Committee and Creditor Trust; Trustees. The provisions of Sections 6.4, 7.9 and 7.10 of the Plan, including, without limitation, the dissolution of the Creditors' Committee, the creation of the Plan Oversight Committee and the Creditor Trust, and the appointment of the Trustees are hereby approved and found to be reasonable. Without the permission of this Court, no judicial, administrative, arbitral or other action or proceeding shall be commenced against either Trustee in its official capacity, with respect to its status, duties, powers, acts or omissions as a Trustee or against the Creditor Trust in any forum other than this Court.
49. Restructuring Transactions. The mergers, transfers of assets, dissolutions, consolidations and other transactions contemplated in Section 7.7 of the Plan are approved and authorized in all respects.
50. Reorganized Debtors and Creditor Trust Debtors as Separate Corporate Entities; Vesting and Revesting. The Debtors shall continue to exist after the Effective Date, with each Reorganized Debtor and Creditor Trust Debtor being a separate corporate entity with all the powers of a corporation or limited liability company under applicable law, as the case may be, without prejudice to any right to terminate such existence (whether by merger or otherwise) under applicable law on or after the Effective Date. Except as otherwise provided in the Plan and subject to the occurrence of the Effective Date, pursuant to sections 1123(a)(5) and 1141 of the Bankruptcy Code (a) the Equity Interests in or common stock of Eddie Bauer, Inc., Financial Services Acceptance Corporation and Spiegel Acceptance Corporation shall vest in Eddie Bauer Holdings or its successor, (b) the Equity Interests in Distribution Fulfillment Services, Inc. (DFS) and Spiegel Group Teleservices-Canada, Inc. shall vest in Reorganized Eddie Bauer, (c) the Equity Interests in each of the Creditor Trust Debtors, S.I. Reinsurance Limited, East Coast Collection Agency, Inc., Spiegel Credit Corporation III, First Consumers National Bank, The Spiegel Foundation, Spiegel Cares, Spiegel General Service, LLC and Together Retail U.S.A., Inc. shall vest in the Creditor Trust, (d) all of the Assets of each of the Debtors that will become Reorganized Debtors shall vest in such Reorganized Debtor or its successor, free and clear of all Claims, Liens, charges, encumbrances and interests of Creditors and Holders of Equity Interests on the Effective Date, (e) all Assets comprising the estate of each Creditor Trust Debtor (other than the Creditor Trust Rights of Action) shall vest in such Creditor Trust Debtor, (f) the Eddie Bauer Rights of Actions shall vest in Eddie Bauer Holdings and its subsidiaries, (g) the Creditor Trust Rights of Action shall vest in the Creditor Trust, in each case free and clear of all Claims, Liens, charges, encumbrances and interests of Creditors and Holders of Equity Interests on the Effective Date, and (h) each of the Creditor Trust Operating Expense Fund and the Disputed Claim Reserve shall vest in the Creditor Trust. As of the Effective Date, Eddie Bauer Holdings, the Reorganized Debtors, and the Creditor Trust Debtors may operate their businesses and use, acquire and dispose of property, and settle and compromise Claims or Equity Interests without the supervision or approval of this Court and free and clear of any restrictions of the Bankruptcy Code or Bankruptcy Rules, other than those restrictions expressly imposed by the Plan or this Confirmation Order.
51. Section 13.1 Injunction. Except as otherwise expressly provided in the Plan or to enforce any obligation of any Entity under the Plan, all Entities who have held, hold or may hold Claims or Equity Interests are permanently enjoined, from and after the Effective Date, from: (a) commencing or continuing in any manner any action or other proceeding of any kind on any such Claim or Interest against the Debtors, their estates, the Reorganized Debtors, the Creditor Trust Debtors, Eddie Bauer Holdings, the Creditor Trust, or the Trustees; (b) enforcing, attaching, collecting or recovering by any manner or means of any judgment, award, decree or order against the Debtors, their estates, the Reorganized Debtors, the Creditor Trust Debtors, Eddie Bauer Holdings, the Creditor Trust, or the Trustees; (c) creating, perfecting, or enforcing any encumbrance of any kind against the Debtors, their estates, the Reorganized Debtors, the Creditor Trust Debtors, Eddie Bauer Holdings, the Creditor Trust or the Trustees against the property or interests in property of any of the foregoing Entities; (d) commencing or continuing in any manner any action or other proceeding of any kind with respect to any Claims, Equity Interests that are extinguished or released pursuant to the Plan; and (e) taking any actions to interfere with the implementation or consummation of the Plan that do not conform to or comply with the provisions of the Plan, provided however, the Pyramid Landlords are not enjoined from prosecuting that certain civil action pending in the United States District Court for the Northern District of New York, commenced by the Pyramid Landlords on or about May 17, 2002 (Index No. 5:02-cv-669) (the "Percentage Rent Action") and enforcing any recovery thereunder in accordance with the terms of the Plan. With respect to any actions or controversies against the Creditor Trust, the Trustees or the Plan Oversight Committee, all Persons and Entities shall be and are permanently enjoined from commencing or continuing any such matter except in this Court and this Court shall retain exclusive jurisdiction over such matters; provided however, that (i) this ordered paragraph and Section 13.1(b) of the Plan shall not prevent any Excluded Defendant from asserting defenses in any court adjudicating claims brought by the Creditor Trust against such Excluded Defendant, to the extent such defenses are not discharged or released pursuant to the Plan and this Confirmation Order and (ii) the Pyramid Landlords are not enjoined from prosecuting the Percentage Rent Action and enforcing any recovery thereunder in accordance with the terms of the Plan.
52. SHI Settlement. The SHI Settlement is a good faith settlement and release of claims and associated alleged injuries, is fair and reasonable and is accordingly approved in all respects pursuant to Bankruptcy Rule 9019(a) and section 1123(b)(3)(A) of the Bankruptcy Code. This Court has found that (a) the SHI Settlement was reached as a result of arm's-length good faith negotiations among the parties, (b) the SHI Settlement plays a vital part in the Plan, and absent the releases and corresponding injunctions that are critical components of the SHI Settlement, the Released Parties (including, but not limited to, the Holders of the Otto KG Goods Unsecured Claims and the SHI Unsecured Claims) would not be willing to enter into the SHI Settlement, and (c) such settlement, as reflected in the relative distributions and recoveries of Holders of Allowed Claims under the Plan, (i) will save the Debtors and their estates the substantial costs and expenses of prosecuting various disputes, the outcome of which is likely to consume substantial resources of the Debtors' estates and require substantial time to adjudicate and (ii) has facilitated the creation and implementation of the Plan and provided substantial benefits to the Debtors' estates and creditors. SHI or its designee shall pay the Cash Settlement Payment to the Debtors on the Effective Date as provided in the Plan.
53. Termination of TRO. In accordance with section 2.8 of the Plan, the portion of this Court's Order, dated June 27, 2003 (Docket No. 522), temporarily restraining Deutsche Bank Trust Company Americas ("DBTCA") from transferring to SHI any assets held in any escrow account, disbursement account and/or a custodial account created pursuant to that certain Deposit Escrow and Custody Agreement among First Consumers National Bank, SHI, and Deutsche Bank Trust Company Americas, dated on or about May 14, 2002 (any such account, the "Escrow Account"), which order may have been extended indefinitely by this Court on the record at a hearing on July 8, 2003, shall be terminated as of the date of receipt by the Debtors of the Cash Settlement Payment. No later than one business day after the Debtors' receipt of the Cash Settlement Payment, the Debtors shall provide DBTCA with written notice, with copies to SHI and the Committee, advising of the Debtors' receipt of the Cash Settlement Payment (the "Cash Settlement Receipt"), and upon receipt of the Cash Settlement Receipt by DBTCA, DBTCA shall be free to transfer all funds in the Escrow Account to SHI as instructed by SHI.
54. Section 13.4(b) Injunction. On the Effective Date, each Holder of a Claim (but not shareholders or former shareholders of Spiegel, Inc. solely in their capacity as shareholders or former shareholders of Spiegel, Inc. or any Governmental Unit) are hereby permanently enjoined from asserting any and all claims, obligations, suits, judgments, damages, rights, causes of action and liabilities whatsoever (including those arising under the Bankruptcy Code), whether known or unknown, foreseen or unforeseen, existing or hereinafter arising, in law, equity or otherwise, based in whole or in part on any act, omission, transaction, event or other occurrence taking place during the period beginning at the beginning of time through and including the Effective Date and related to the Debtors or their direct or indirect subsidiaries, including, but not limited, to Contribution Claims, against any of the Released Parties (the "Section 13.4(b) Injunction"). This Section 13.4(b) Injunction shall apply to: (i) any Person or Entity that is or was the Holder of a Claim on or after the Petition Date and (ii) to any Person or Entity acquiring a Claim directly or indirectly from a Person or Entity that is bound by the release pursuant to Section 13.4(b) of the Plan as if such acquiring Person or Entity had agreed to be bound to such release with respect to such acquired Claim. Notwithstanding the foregoing, the Section 13.4(b) Injunction shall have no effect on the liability of any Post-Petition Released Party who is not an SHI Released Party that results from any of such Post-Petition Released Party's act or omission after the Petition Date that is determined in a Final Order to have constituted gross negligence or willful misconduct, and shall not apply with respect to any action against such Post-Petition Released Party in respect of such act or omission.
55. Other Injunctions. All Persons or Entities that release claims pursuant to Sections 13.2, 13.3, 13.4 and 13.6 of the Plan are hereby permanently enjoined from (a) commencing or continuing in any manner any action or other proceeding of any kind on any such released claims except as otherwise permitted pursuant to Section 2.6 of the Plan; (b) enforcing, attaching, collecting or recovering by any manner or means of any judgment, award, decree or order on such released claims; and (c) creating, perfecting, or enforcing any encumbrance of any kind on such released claims. Neither this injunction nor the Section 13.4(b) Injunction (or any other provision of this Confirmation Order or the Plan) enjoins the plaintiffs in Federal Securities Class Action from prosecuting the claims asserted or to be asserted in the Federal Securities Class Action against any non-Debtors, by or on behalf of present or former shareholders of Spiegel, Inc. solely in their capacity as present or former shareholders of Spiegel, Inc.
56. Releases. Except as otherwise expressly provided in the Plan, this Confirmation Order or a separate order of this Court, the release provisions set forth in Article XIII of the Plan are approved.
57. Exculpation. Except as otherwise expressly provided in the Plan, this Confirmation Order or a separate order of this Court, the exculpation provisions set forth in Section 13.6 of the Plan are approved.
58. Preservation of All Rights of Action Not Expressly Settled or Released. Unless a claim or Right of Action against a Creditor or other Entity is expressly waived, relinquished, released, compromised or settled in the Plan or any Final Order, such claim or Right of Action shall be expressly reserved for later enforcement by Eddie Bauer Holdings and its subsidiaries (if such Right of Action constitutes an Eddie Bauer Right of Action) or the Creditor Trust (if such Right of Action constitutes a Creditor Trust Right of Action, including, without limitation, claims and Rights of Action not specifically identified or of which Debtors may presently be unaware or which may arise or exist by reason of additional facts or circumstances unknown to Debtors at this time or facts or circumstances which may change or be different from those which Debtors now believe to exist) and, therefore, no preclusion doctrine, including, without limitation, the doctrines of res judicata, collateral estoppel, issue preclusion, claim preclusion, waiver, estoppel (judicial, equitable or otherwise) or laches shall apply to such claims or Rights of Action upon or after Confirmation or Consummation based on the Disclosure Statement, the Plan or this Confirmation Order, except where such claims or Rights of Action have been expressly released in the Plan or other Final Order. In addition, Eddie Bauer Holdings, its subsidiaries, and the Creditor Trust shall have the right to pursue or adopt any claims, crossclaims or counterclaims alleged in any lawsuit in which any of the Debtors are a defendant or an interested party against any person or entity, including, without limitation, the plaintiffs or co-defendants in such lawsuits, subject to the provisions in the Plan, this Confirmation Order, or any Final Order.
59. Continuation of Automatic Stay. Except as otherwise expressly provided in the Plan, this Confirmation Order or a separate Order of this Court, all injunctions or stays provided for in the Chapter 11 Cases under sections 105 or 362 of the Bankruptcy Code, or otherwise, and in existence on the Confirmation Date, shall remain in full force and effect through and including the Effective Date.
60. Provisions Regarding Distributions and Reserves. The provisions contained in Articles IV and IX of the Plan, including without limitation, the provisions governing distributions and reserves, are found to be reasonable and are hereby approved. The Distribution Record Date shall be June 6, 2005.
61. No Distributions to Class 6. Pursuant to Section 4.7 of the Plan, Holders of Class 6 Equity Interests shall not receive or retain any property or Distributions under the Plan, including but not limited to the proceeds of any insurance policy to the extent they are or may be deemed to be property of the Debtors or of the Debtors' estates.
62. Set-Offs. Except as expressly provided in the Plan, the Debtors, Eddie Bauer Holdings and the Creditor Trust may, pursuant to section 553 of the Bankruptcy Code or applicable non-bankruptcy law, set off against any Allowed Claim and the Distributions to be made pursuant to this Plan on account thereof (before any Distribution is made on account of such Claim), the claims, rights and causes of action of any nature that any of the Debtors may hold against the Holder of such Allowed Claim. The Holders of Claims may, pursuant to section 553 of the Bankruptcy Code or applicable non-bankruptcy law, set off any Allowed Claims such Holder possesses against the Debtors or any claim, rights or causes of action of any nature that the Debtors may hold against such Holder. Neither the failure to effect such a setoff nor the allowance of any Claim hereunder shall constitute a waiver or release by the Debtors, Eddie Bauer Holdings, the Creditor Trust or such Holders of any such claims, rights and causes of action that such parties may possess under section 553 of the Bankruptcy Code. Notwithstanding anything to the contrary in Sections 4.3, 7.11 or 13.2 of the Plan, any rights of the Pyramid Landlords to setoff or recoupment in connection with that certain civil action pending in the United States District Court for the Northern District of New York styled Brookstone Company, Inc., et al. v. Pyramid Company of Hadley, et al., (96-CV-1215) (the "Brookstone Action") and any rights of the Pyramid Landlords to setoff and recoupment against any claims of any of the Debtors or Reorganized Debtors asserted in the Brookstone Action are preserved and any defenses or counterclaims thereto of the Debtors, the Creditor Trust Debtors or the Reorganized Debtors hereby are preserved. The immediately preceding sentence shall be binding on the Creditor Trust.
63. Exemption from Securities Laws. Pursuant to section 1145(a) of the Bankruptcy Code, the offer, issuance, transfer or exchange of any security under the Plan (including, if applicable, the Creditor Trust Interests), or the making or delivery of an offering memorandum or other instrument of offer or transfer under the Plan, shall be exempt from section 5 of the Securities Act or any similar state or local law requiring the registration for offer or sale of a security or registration or licensing of an issuer, or underwriter of, or broker or dealer in, or a security.
64. Issuance of Eddie Bauer Holdings Common Stock. Eddie Bauer Holdings is authorized to issue Eddie Bauer Holdings Common Stock as necessary to effectuate the Plan including any distributions thereunder. The issuance of the Eddie Bauer Holdings Common Stock and the distribution, transfer or exchange thereof in accordance with the Plan and the Creditor Trust Agreement shall be exempt from registration or similar requirement under applicable securities laws (including, without limitation, section 5 of the Securities Act or any similar state or local law requiring the registration for offer or sale of a security or registration or licensing of an issuer of a security) pursuant to section 1145 of the Bankruptcy Code, and may be sold without registration to the extent permitted under section 1145 of the Bankruptcy Code.
65. Management Stock Incentive Program. Subject only to the occurrence of the Effective Date, the board of directors of Eddie Bauer Holdings shall have the authority to adopt the Management Stock Incentive Program.
66. Procedures for Resolving Disputed Claims and Unresolved Claims. The provisions contained in Article X of the Plan, including without limitation, the provisions governing the procedures for resolving Disputed Claims and Unresolved Claims, are found to be reasonable and are hereby approved. All objections to Claims shall be Filed and served upon the Holders of each of the Claims to which objections are made by the later of (a) ninety days after the Effective Date or (b) ninety days after a timely Proof of Claim or request for payment with respect to such Claim is Filed; provided, however, that the Creditor Trust and Eddie Bauer Holdings may seek an extension of such time to object upon notice to all Holders of Unresolved Claims.
67. Professional Compensation and Reimbursement Claims. The provisions in Section 3.5 of the Plan are hereby approved and found to be fair and reasonable. Except as otherwise provided by order of this Court for a specific Professional, Professionals or other entities requesting compensation or reimbursement of expenses pursuant to sections 327, 328, 330, 331, 363, 503(b) and/or 1103 of the Bankruptcy Code for services rendered prior to the Effective Date must File and serve, pursuant to the notice provisions of the Interim Compensation Order and the Bankruptcy Code, an application for final allowance of compensation and reimbursement of expenses no later than forty-five days after the Effective Date (collectively, the "Final Fee Applications"). Any objection to Professional Fee Claims shall be written and Filed on or before the fifteenth day after the date such application for final compensation or reimbursement has been Filed. Any requirement set forth in the Interim Compensation Order that Professionals or other entities requesting compensation or reimbursement of expenses pursuant to sections 327, 328, 330, 331, 363, 503(b) and/or 1103 of the Bankruptcy Code file interim fee applications before the deadline for the Filing of Final Fee Application is hereby waived and such interim applications shall be incorporated in the Final Fee Applications.
68. Treatment of Iowa Department of Revenue and Illinois Department of Revenue Claims. Each Allowed Priority Tax Claim of the Iowa Department of Revenue and the Illinois Department of Revenue shall be paid by Eddie Bauer Holdings or the Reorganized Debtors, or if Allowed after the Effective Date, by the Creditor Trust, in full, in Cash, upon the later of (i) the Effective Date, (ii) the date upon which there is a Final Order allowing such Allowed Priority Tax Claim, (iii) the date such an Allowed Priority Tax Claim would have been due and payable if the Chapter 11 Cases had not been commenced, or (iv) as may be agreed upon between the Holder of such Allowed Priority Tax Claim and, as applicable, the Debtors or the Creditor Trust. The rights of (a) the Iowa Department of Revenue and the Illinois Department of Revenue to assert that they are entitled to interest with respect to their Claims from the Effective Date until the date that such Claims are paid and (b) the Debtors or the Creditor Trust to object to such claim for post-confirmation interest are hereby preserved.
69. Treatment of Texas Taxing Entity Claims.
(a) The Claims of the Texas Taxing Authorities are Other Secured Claims and are included in Class 2 under the Plan.
(b) On the Effective Date the Creditor Trust shall create, as part of the Disputed Claims Reserve, a separate escrow account (the "Texas Taxing Entity Escrow Account"), and transfer into such account Cash from the Disputed Claims Reserve equal to the amount of the reserve established for the Other Secured Claims asserted by the Texas Taxing Entities. On the Effective Date, the Liens, if any, that secure the Other Secured Claims held by the Texas Taxing Authorities shall attach to the Texas Taxing Entity Escrow Account to the extent that such liens were valid and properly perfected immediately prior to such date.
(c) Each of the Texas Taxing Authorities shall receive interest on account of its Other Secured Claim from the Petition Date to the date such Claim is paid at a rate of 12%.
(d) All taxes that may become due and owing to the Texas Taxing Entities for the 2005 tax year shall be paid by Eddie Bauer Holdings, Inc. in the ordinary course of its business pursuant to section 503(b) of the Bankruptcy Code without recourse to this Court.
(e) Notwithstanding anything contained in the Plan or this Order to the contrary, the liens, if any, that secure any taxes that may become due and owing to the Texas Taxing Entities for the 2005 tax year are not released or primed pursuant to the Plan or this Order.
70. Executory Contracts and Unexpired Leases. The provisions contained in Article XI of the Plan, including, without limitation, the provisions regarding the assumptions, assumptions and assignments, and rejections of the Debtors' executory contracts and unexpired leases are hereby approved and found to be fair and reasonable. The assumptions, assumptions and assignments, and rejections of the Debtors' executory contracts and unexpired leases pursuant to the procedures set forth in Article XI of the Plan are hereby approved pursuant to sections 365 and 1123 of the Bankruptcy Code provided, however, that no unexpired leases or executory contracts to which the Canadian Debtors are party will be rejected pursuant to the Plan. Each executory contract and unexpired lease assumed pursuant to Article XI of the Plan shall revest in and be fully enforceable by the applicable Reorganized Debtor or Creditor Trust Debtor in accordance with its terms, except as modified by the provisions of the Plan, or any order of this Court authorizing and providing for its assumption or applicable federal law. The amounts set forth in the Cure Payment Schedule (as amended) for the leases of the Pyramid Landlords are exclusive of any amounts that may be due or become due under such leases as sought in the Percentage Rent Action (such excluded amounts constitute cure claims under leases being assumed); provided however, that any such amounts shall be subject to recoupment against any amounts owing to the Reorganized Debtors under such leases pursuant to the Brookstone Action. Notwithstanding the foregoing, each executory contract and unexpired lease to which a Canadian Debtor is a party shall be assumed as of the Effective Date, the Canadian Debtors shall cure all defaults under each such executory contract and unexpired lease (except for defaults of the kind set forth in section 365(b)(2) of the Bankruptcy Code) and each executory contract and unexpired lease shall be binding on the Canadian Debtor and other Entities party thereto as of the Effective Date. No Person who is a party to, or is entitled to any benefit from, any such contract or lease shall, on or following the Effective Date, accelerate, terminate, rescind, refuse to perform or otherwise repudiate its obligations thereunder, or enforce or exercise any right, directly or indirectly, in any manner whatsoever under or in respect of any such contract or lease by reason of the effect on the Canadian Debtors of the completion of any of the transactions contemplated under the Plan. All proofs of claim with respect to Claims arising from the rejection of executory contracts or unexpired leases, if any, must be Filed within thirty (30) days after the later of (a) the entry of entry of an order of this Court approving such rejection or (b) the effective date of such rejection; provided, however, that all proofs of claim with respect to any Claims arising from the rejection of any executory contract or unexpired lease that is initially set forth in the Cure Payment Schedule Filed by the Debtors and is subsequently withdrawn from such schedule or is otherwise rejected must be Filed within thirty (30) days after the later of the Effective Date and the date the order authorizing such rejection becomes a Final Order. Any Claims arising from the rejection of an executory contract or unexpired lease not Filed within such time shall be forever barred from assertion against the Debtors, their respective estates, the Reorganized Debtors, the Creditor Trust Debtors, Eddie Bauer Holdings, the Creditor Trust and the Trustees and their property unless otherwise ordered by this Court or provided for in the Plan. All such Allowed Claims for which proofs of claim are required to be Filed will be treated as Allowed General Unsecured Claims subject to the provisions of Article IV of the Plan and to any limitation on allowance of such Claims under section 502(b) of the Bankruptcy Code or otherwise.
71. Authorization to Take Acts Necessary to Implement Plan. Pursuant to section 1142(b) of the Bankruptcy Code, section 303 of the Delaware General Corporation Law and any comparable provision of the business corporation laws of any other state, each of the Debtors, the Reorganized Debtors, the Creditor Trust, the Creditor Trust Debtors, and Eddie Bauer Holdings hereby is authorized and empowered to take such actions and to perform such acts as may be necessary, desirable or appropriate to comply with or implement the Plan and any matters under the Plan, and all documents, instruments and agreements related thereto, including but not limited to those contained in the Plan Supplement, and all annexes, exhibits, and schedules appended thereto, and the obligations thereunder shall constitute legal, valid, binding and authorized obligations of each of the respective parties thereto, enforceable in accordance with their terms without the need for any shareholders' or board of directors' approval. Each of the Debtors, the Reorganized Debtors, the Creditor Trust, the Creditor Trust Debtors, and Eddie Bauer Holdings hereby is authorized and empowered to take such actions, to perform all acts, to make, execute, file and deliver all instruments and documents, and to pay all fees and expenses as set forth in the documents relating to the Plan, including but not limited to those contained in the Plan Supplement, and that may be required or necessary for its performance thereunder without the need for any shareholders' or board of directors' approval. On the Effective Date, the appropriate officers or representatives of the Reorganized Debtors, the Creditor Trust, the Creditor Trust Debtors and Eddie Bauer Holdings and members of the boards of directors of the same are authorized and empowered to issue, execute, file and deliver the agreements, documents, securities and instruments contemplated by the Plan, including, but not limited to, those contained in the Plan Supplement, in the name of and on behalf of the Reorganized Debtors, the Creditor Trust Debtors and Eddie Bauer Holdings. Each of the Debtors, the Reorganized Debtors and the officers and directors thereof are authorized to take any such actions without further corporate action or action of the directors or stockholders of the Debtors, the Reorganized Debtors, the Creditor Trust Debtors, or Eddie Bauer Holdings. Furthermore, pursuant to section 1142(b) of the Bankruptcy Code, the Managing Trustee shall be authorized and empowered to complete and execute on behalf of the Creditor Trust Debtors any document necessary to carry out the provisions of the Plan, including but not limited to, state and federal tax returns.
72. Second Amended and Restated Loan and Security Agreement. The "Termination Date" of the Second Amended and Restated Loan and Security Agreement and the "Closing Date" of the Loan and Security Agreement shall both occur on the Effective Date. On the Effective Date, if there are any Letters of Credit outstanding under the Second Amended and Restated Loan and Security Agreement or any unpaid Obligations under the Second Amended and Restated Loan and Security Agreement, the following shall occur: (i) to the extent there are any undrawn Letters of Credit issued under the Second Amended and Restated Loan and Security Agreement outstanding on the Effective Date, the Debtors or Reorganized Debtors, as the case may be, shall either deposit with the Agent under the Second Amended and Restated Loan and Security Agreement cash in the amount of one hundred five percent (105%) of the face amount of each such undrawn Letter of Credit or provide to the Agent a "Supporting Letter of Credit" for each such outstanding Letter of Credit in accordance with section 2.3(k) of the Second Amended and Restated Loan and Security Agreement or, at the option of the Debtors and the Agent under the Working Capital Facility, shall be deemed to constitute Letters of Credit issued under the Working Capital Facility; (ii) to the extent there are any unpaid Obligations under the Second Amended and Restated Loan and Security Agreement on the Effective Date, such Obligations will be repaid by the Debtors on the Effective Date; and (iii) with respect to the Cash, if any, deposited with the Agent with respect to undrawn Letters of Credit that were outstanding on the Effective Date, any Cash that was deposited with the Agent with respect to a Letter of Credit that eventually expires without being drawn will be promptly delivered by the Agent to Reorganized Eddie Bauer upon the expiration of any such Letter of Credit. In addition, upon the completion of clauses (i) and (ii) in the immediately preceding sentence, the Agent under the Second Amended and Restated Loan and Security Agreement shall terminate and release its liens and security interests in the Collateral granted to it under the Second Amended and Restated Loan and Security Agreement, the Final Bankruptcy Court Order and the Confirmation of Borrowing Order, and the Debtors, on the one hand, and the Agent and the Lenders, on the other hand, will release, remise and discharge each other, and their respective officers, directors, agents, employees, servants, accountants, attorneys, parents, subsidiaries and affiliates, from any and all claims, debts, liabilities, torts, claims for relief or causes of action arising under or relating to the Second Amended and Restated Loan and Security Agreement or the negotiation and documentation thereof, the administration thereof, of the payment or enforcement thereof.
73. The Working Capital Facility. The terms and conditions of the Working Capital Facility and any documents related thereto are approved and ratified as being entered into in good faith and being critical to the success and feasibility of the Plan. Eddie Bauer Holdings and the Reorganized Debtors are hereby authorized to execute and deliver the loan and security agreement for the Working Capital Facility, all mortgages, security documents and all other related documents (the "Working Capital Facility Documents") and perform their obligations thereunder. The Working Capital Facility Documents shall constitute legal, valid, binding and authorized obligations of Eddie Bauer Holdings or the Reorganized Debtors, as applicable, enforceable in accordance with their terms. On the Effective Date, all of the liens and security interests to be granted in accordance with the Working Capital Facility Documents shall be deemed approved and shall be legal, valid, binding and enforceable first priority liens on the collateral for the Working Capital Facility (the "Working Capital Facility Collateral"). In furtherance of the foregoing, Eddie Bauer Holdings and the Reorganized Debtors, as applicable, and the other persons granting such liens and security interests are authorized to make all filings and recordings, and to obtain all governmental approvals and consents necessary to establish and perfect such liens and security interests under the provisions of any applicable state, provincial, federal or other law (whether domestic or foreign) that would be applicable in the absence of this Confirmation Order, and will thereafter cooperate to make all other filings and recordings that otherwise would be necessary under applicable law to give notice of such liens and security interests to third parties. All fees, costs and expenses paid by or to be paid by Eddie Bauer Holdings and the Reorganized Debtors in connection with the Working Capital Facility are ratified and approved.
74. Senior Debt Facility. The terms and conditions of the Senior Debt Facility and any documents related thereto are approved and ratified as being entered into in good faith and being critical to the success and feasibility of the Plan. Eddie Bauer Holdings and the Reorganized Debtors are hereby authorized to execute and deliver the loan agreement for the Senior Debt Facility, all mortgages, security documents and all other related documents (the "Senior Debt Facility Documents") and perform their obligations thereunder. The Senior Debt Facility Documents shall constitute legal, valid, binding and authorized obligations of Eddie Bauer Holdings or Reorganized Debtors, as applicable, enforceable in accordance with their terms. On the Effective Date, all of the liens and security interests to be granted in accordance with the Senior Debt Facility Documents shall be deemed approved and shall be legal, valid, binding and enforceable (i) first priority liens on the collateral for the Senior Debt Facility, except for the Working Capital Facility Collateral, and (ii) second priority liens on the Working Capital Facility Collateral. In furtherance of the foregoing, Eddie Bauer Holdings and the Reorganized Debtors, as applicable, and the other persons granting such liens and security interests are authorized to make all filings and recordings, and to obtain all governmental approvals and consents necessary to establish and perfect such liens and security interests under the provisions of any applicable state, provincial, federal or other law (whether domestic or foreign) that would be applicable in the absence of this Confirmation Order, and will thereafter cooperate to make all other filings and recordings that otherwise would be necessary under applicable law to give notice of such liens and security interests to third parties. All fees, costs and expenses paid by or to be paid by Eddie Bauer Holdings and the Reorganized Debtors in connection with the Senior Debt Facility are ratified and approved. Eddie Bauer Holdings and the Reorganized Debtors are authorized to enter into and perform under an intercreditor agreement between themselves and the respective lenders and agents under the Working Capital Facility and the Senior Debt Facility.
75. Execution By Third Parties. Each and every federal, state and local governmental agency or department is hereby directed to accept, and lessors and holders of liens are directed to execute, any and all documents and instruments necessary and appropriate to consummate the transactions contemplated by the Plan including, without limitation, documents and instruments for recording in county and state offices where the Amended Certificates of Incorporation and Bylaws and the Eddie Bauer Holdings Certificate of Incorporation and Bylaws or any other agreement, document or instrument that may need to be filed in order to effectuate the Plan.
76. Governmental Approvals Not Required. This Confirmation Order shall constitute all approvals and consents required, if any, by the laws, rules or regulations of any State or any other governmental authority with respect to the implementation or consummation of the Plan and any documents, instruments or agreements, and any amendments or modifications thereto, and any other acts referred to in or contemplated by the Plan, the Disclosure Statement, the Plan Supplement and any documents, instruments or agreements contained therein, and any amendments or modifications of any of the foregoing.
77. Notice of Entry of Confirmation Order. Within thirty days following the date of entry of this Confirmation Order, the Debtors shall serve notice of entry of this Confirmation Order, substantially in the form annexed hereto as Exhibit B (the "Confirmation Notice"), upon all parties that received notice of the Confirmation Hearing and shall cause publication of the Confirmation Notice once in The New York Times (National Edition), USA Today (National Edition), The Wall Street Journal (National Edition) and The Globe and Mail (National Edition). The form of Confirmation Notice is hereby approved. Service of the Confirmation Notice as provided herein shall constitute good and sufficient notice pursuant to Bankruptcy Rules 2002(f)(7), 2002(k) and 3020(c) of entry of this Confirmation Order and, except as provided herein, no other or further notice need be given.
78. Notice of Effective Date. Within ten business days after the occurrence of the Effective Date, the Reorganized Debtors shall publish a notice the occurrence of the Effective Date of the Plan substantially in the form annexed hereto as Exhibit C (the "Effective Date Notice") in The New York Times (National Edition), USA Today (National Edition), The Wall Street Journal (National Edition) and The Globe and Mail (National Edition). The form of Effective Date Notice is hereby approved. Publication of the Effective Date Notice as provided herein shall be good and sufficient notice of the occurrence of the Effective Date under Bankruptcy Rule 2002(l).
79. References to Plan Provisions. The failure specifically to include or reference any particular provision of the Plan in this Confirmation Order shall not diminish or impair the effectiveness of such provision, it being the intent of this Court that the Plan be confirmed in its entirety.
80. Confirmation Order Controlling. If there is any direct conflict between the Plan and this Confirmation Order, the terms of this Confirmation Order shall control.
81. Reversal. If any or all of the provisions of this Confirmation Order are hereafter reversed, modified or vacated by subsequent order of this Court or any other court, such reversal, modification or vacatur shall not affect the validity of the acts or obligations incurred or undertaken under or in connection with the Plan prior to the Debtors' receipt of written notice of any such order. Notwithstanding any such reversal, modification or vacatur of this Confirmation Order, any such act or obligation incurred or undertaken pursuant to, and in reliance on, this Confirmation Order prior to the effective date of such reversal, modification or vacatur shall be governed in all respects by the provisions of this Confirmation Order, the Plan and any related documents or any amendments or modifications thereto.
82. Applicable Non-Bankruptcy Law. Pursuant to sections 1123(a) and 1142(a) of the Bankruptcy Code, the provisions of this Confirmation Order, the Plan and the Plan Documents or any amendments or modifications thereto shall apply and be enforceable notwithstanding any otherwise applicable non-bankruptcy law.
83. Release of Liens. Except as otherwise provided in the Plan or in any contract, instrument or other agreement or document entered into in connection with the consummation of the Plan: (i) each Holder of (a) a Secured Claim, (b) a Claim that is purportedly secured, and/or (c) a judgment, mechanics or similar Lien, shall on or immediately before the Effective Date: (x) turn over and release to the Debtors any and all property of the Debtors that secures or purportedly secures such Claim, as it pertains to the properties currently owned or leased by the Debtors, or such Liens shall automatically, and without further action by the Debtors, the Reorganized Debtors, the Creditor Trust, or the Creditor Trust Debtors, be deemed released; and (y) execute such documents and instruments as the Debtors, the Reorganized Debtors, the Creditor Trust, or the Creditor Trust Debtors request to evidence such Claim Holder's release of such property or Lien; and (ii) on the Effective Date, as set forth in Section 7.1 of the Plan, all right, title and interest in any and all property of the Debtors' estates other than the Creditor Trust Assets shall be transferred to Eddie Bauer Holdings free and clear of all Claims and interests, including, without limitation, Liens, escrows, charges, pledges, encumbrances and/or security interests of any kind. No Distribution under the Plan shall be made to or on behalf of any Claim Holder unless and until such Holder executes and delivers to the Debtors or Eddie Bauer Holdings, as the case may be, such release of Liens or otherwise turns over and releases such Cash, pledge, or other possessory Liens. Any such Holder that fails to execute and deliver such release of Liens within one hundred and twenty days of the Effective Date shall be deemed to have no further Claim against the Debtors, the Reorganized Debtors, the Creditor Trust Debtors, the Creditor Trust or their assets or property in respect of such Claim and shall not participate in any Distribution under the Plan. Notwithstanding the immediately preceding sentence, any such Holder of a Disputed Claim shall not be required to execute and deliver such release until such time as the Claim is Allowed or Disallowed.
84. The MBIA Settlement. Nothing in the Plan, the Disclosure Statement, or this Order approving the confirmation of the Plan, in any way affects, alters or amends the provisions, terms, enforceability or effectiveness of the Settlement Agreement and the MBIA Settlement Trust Agreement as such are more particularly described in that certain Motion filed by certain of the Debtors dated December 3, 2004 (Docket No. 2409)and as approved by this Court on December 15, 2004.
85. Effectiveness of Order. Notwithstanding Bankruptcy Rules 3020(e), 6004(g) and 6006(d), or any other provision of the Bankruptcy Code or the Bankruptcy Rules, this Confirmation Order shall be effective immediately upon its entry. This Order is and shall be deemed to be a separate order with respect to each of the Debtors for all purposes.
86. Substantial Consummation. Substantial consummation of the Plan shall be deemed to occur on the Effective Date.
87. The Record. The record of the Confirmation Hearing is closed. The findings of fact and conclusions of law of this Court set forth herein and at the Confirmation Hearing shall constitute findings of fact and conclusions of law pursuant to Bankruptcy Rule 7052, as made applicable herein by Bankruptcy Rule 9014, and the findings of fact and conclusions of law of this Court at the Confirmation Hearing are incorporated herein by reference. To the extent that any of the foregoing findings of fact constitute conclusions of law, they are adopted as such. To the extent any that any of the foregoing conclusions of law constitute findings of fact, they are adopted as such.