HomeMy WebLinkAbout20100819.tiff Michelle Martin
From: Michelle Martin
Sent: Monday, April 12, 2010 1:54 PM
To: 'Kyle Pottorff
Subject: RE: Potential Revisions at Tire Mountain
Kyle,
Planning Staff has reviewed your below email dated April 8, 2010 and has determined that the removal of the two
existing mobile homes (located in the NE4 of the property) and replacing them with two new mobile homes are not a
substantial change from the 3r°AMUSR-842. You will need to obtain the necessary building permits from the Weld
County Building Department for the removal of the existing mobile homes and the replacement of the new ones. Let
me know if you have any other questions.
Michelle Martin
Planner Ill
1555 N 17th Ave
Greeley, CO 80631
mmartin@co.weld.co.us
PHONE: (970) 353-6100 x 3540
FAX: (970)304-6498
From: Kyle Pottorff [mailto:kyle_pottorff@yahoo.com]
Sent: Thursday, April 08, 2010 11:32 AM
To: Michelle Martin
Subject: Potential Revisions at Tire Mountain
Michelle,
Per your request, this email will detail our planned intentions to the mobile homes located at:
12311 Weld County Rd 41
Hudson, CO 80642
There are two mobile homes located on our property. The intention is to maintain one of the homes under the
caretaker clause attached to the USR. With the second home we would like to change it to an office building. Both of
these buildings have existed on the property for a number of years and are a bit beyond repair. We were hoping to take
these buildings off the property and replace them with newer habitable buildings. We did not know the process in
which to make this a possibility. Hopefully you understand what we are thinking. I appreciate you taking it to the
meeting tomorrow to discuss our options. Thank you very much and have a great day!
Respectfully Submitted,
Kyle C. Pottorff
Business Manager
Magnum Recycling USA, Inc.
12311 Weld County Rd 41
Hudson, CO 80642 2010-0819
303.536.4581 (o)
303.536.4723 (f)
1 PL. 1,56
•
M. STEPHEN PETERS
Trustee
5310 Ward Road,#G-7
Arvada, Colorado 80002 -
(303) 422-8501
email: peters@msplaw.org -
Apri17, 2010 •
Creditors Holding Claims Against
Renewable Resources, Inc.,Tire Recycling,Inc.,
and Midway Landfill, Inc.
Re: Chapter 11 Trustee's Plan of Reorganization (Dated February 10, 2010) (the"Plan")
Dear Creditor:
I am the Chapter 11 Trustee in the Renewable Resources, Inc. ("RRI"), Tire Recycling, Inc.
("TRI"), and Midway Landfill, Inc. ("MLI")bankruptcy cases. With this letter you are receiving
four documents: 1) the Plan that I have filed in these three bankruptcy cases, 2)the Disclosure
Statement relating to the Plan, 3) Judge Brook's Order Approving Disclosure Statement and
Setting Confirmation Hearing, and 4) the Ballot for Accepting or Rejecting Chapter 11 Plan
Classes 7B, 7C, 7D, 7E, 7F and 8.
The purpose of this letter is to encourage you to read the documents and then vote to accept the
Plan using the enclosed ballot. Under the provisions of this Plan all allowed unsecured claims in
both the I_RI and the MLI bankruptcy estates will be paid in full, with interest at 5% per year
since the petition date of July 17, 2007. Any proceeds remaining after payments are made in the
TRI and the MLI estates will be distributed to the parent corporation, RRI, and then applied
towards payment of claims in the RRI estate. As is stated in the Disclosure Statement, I appear
to have sufficient funds in both the TRI and MLI estates to pay allowed claims in those estates in
full. However,the Plan needs to be confirmed before I will be authorized to pay the allowed
claims and distribute the proceeds.
Your vote is important to the confirmation process. Therefore, I urge you to fill out the ballot
enclosed in this packet, mark it as accepting the Plan, and return it as indicated on the ballot.
Sine r y,
•
M. Stephen Peters
0-1/ 11/71 a/u /(✓ccflty 71,
�r/� y1/4o pLdy57,
IN THE UNITED STATES BANKRUPTCY COURT
FOR THE DISTRICT OF COLORADO
In re: )
RENEWABLE RESOURCES, INC., )
Case No. 07-17680 SBB
Debtor. ) Chapter 11
)
)
)
In re: )
) Case No. 07-17687 SBB
MIDWAY LANDFILL, INC., ) Chapter 11
Debtor. )
)
)
In re: )
) Case No. 07-17691 SBB
TIRE RECYCLING, INC., ) Chapter 11
Debtor. )
) JOINTLY ADMINISTERED CASE
) NO. 07-17680-SBB
MODIFIED
DISCLOSURE STATEMENT FOR CHAPTER 11 TRUSTEE'S PLAN OF
REORGANIZATION (DATED FEBRUARY 10, 2010)
Lindquist& Vennum P.L.L.P.
John C. Smiley, #16210
Harold G. Morris, #8409
Harrie F. Lewis, #10972
600 17th Street
Suite 1800 South
Denver, Colorado 80202
Telephone: (303) 573-5900
Facsimile: (303) 573-1956
Doc#3198178\2
TABLE OF CONTENTS
ARTICLE I. DEFINITIONS 2
ARTICLE II. PURPOSE OF DISCLOSURE STATEMENT 2
ARTICLE III. DESCRIPTION AND HISTORY OF DEBTOR 2
Section 3.01 Background of Debtors and the Debtors' Business 2
Section 3.02 Summary of Debtors' Financial Condition/Reasons for Filing Chapter 11 2
Section 3.03 Operations in Chapter 11 3
ARTICLE IV. TRUSTEE'S PROPOSED CHAPTER 11 PLAN 9
Section 4.01 Concept of the Plan 9
Section 4.02 Classification of Claims and Interests in the Plan. 9
Section 4.03 Claims Allowance Process. 11
Section 4.04 Treatment Afforded Claims and Interests Under the Plan. 11
Section 4.05 Post-Petition Interest 16
Section 4.06 Retention of Jurisdiction 17
Section 4.07 Discharge of Debtors and the Trustee. 18
Section 4.08 Exoneration and Reliance 18
Section 4.09 Payment of Statutory Fees 19
ARTICLE V. DEBTORS' ASSETS, CLAIMS AGAINST THE ESTATES, AND
ESTIMATED DISTRIBUTION TO CREDITORS 19
Section 5.01 Assets 19
Section 5.02 Claims 19
ARTICLE VI. CHAPTER 7: LIQUIDATION 22
ARTICLE VII. MEANS FOR EXECUTING THE PLAN 22
MANNER OF VOTING AND CONFIRMATION OF THE PLAN 23
Section 7.01 Solicitation of Acceptances. 23
Section 7.02 Persons Entitled to Vote on the Plan. 23
Section 7.03 Counting Votes and Acceptance of the Plan. 23
Section 7.04 Examining Schedules and Filing Proofs of Claim 23
Section 7.05 Manner of Voting. 24
Section 7.06 Hearing on Confirmation 24
ARTICLE VIII. TAX AND SECURITIES LAW CONSEQUENCE OF THE
PLAN 25
ARTICLE IX. CONCLUSION 26
Doc#3198178\2 1
SUMMARY INFORMATION
Debtors Renewable Resources, Inc. ("RRI"); Case No. 07-17680 SBB
Tire Recycling, Inc. ("TRI"); Case No. 07-17687 SBB
Midway Landfill, Inc. ("MLI"); Case No. 07-17691 SBB
Plan Summary The Plan, which is included with this Disclosure Statement, provides for
(i) the classification of Claims and Equity Interests (ii) payment in full of
the MLI's creditors from cash generated by the MLI Sale (as defined in
Article I of the Plan), (iii) payment in full of the TRI's creditors from cash
generated by the TRI Sale (as defined in Article I of the Plan), (iv) the
payment of RRI creditors from any proceeds remaining after the MIA
creditors and the TRI creditors, and (v) the final administration of the
jointly administered estates by the Chapter 11 Trustee.
Plan Proponent M. Stephen Peters, Chapter 11 Trustee
THE PRECEDING PLAN SUMMARY IS MERELY A SUMMARY
OF THE PROVISIONS OF THE PLAN AND IS NOT INTENDED
AS A SUBSTITUTE FOR READING THE PLAN IN ITS
ENTIRETY. PLEASE READ THIS DISCLOSURE STATEMENT,
THE PLAN, AND ANY EXHIBITS IN THEIR ENTIRETY PRIOR
TO VOTING ON THE PLAN. IN THE EVENT OF ANY
INCONSISTENCY BETWEEN THIS SUMMARY, OR THIS
DISCLOSURE STATEMENT AND THE PLAN, THE PROVISIONS
OF THE PLAN WILL CONTROL.
Vote Required At least one impaired class of Claims must accept a plan in order for it to
be confirmed. Section 1126(c) of the Bankruptcy Code defines
acceptance of a plan by a class of claims as acceptance by holders of two-
thirds in dollar amount and a majority in number of the allowed claims of
that class that actually vote to accept or reject a plan. Section 1126(d) of
the Bankruptcy Code defines acceptance of a plan by a class of interests as
acceptance by holders of two-thirds in amount of the allowed interest of
that Class that actually vote to accept or reject a plan.
Balloting and Ballots must be received by May 7, 2010. Objections to confirmation
Confirmation of the plan are also due by May 7, 2010. A hearing on confirmation of the
plan will be held commencing at 9:00 a.m. on Wednesday, May 12,
2010, before the Honorable Sidney B. Brooks, United States Bankruptcy
Judge, in Courtroom E, 5th Floor, 721 19th Street, Denver, Colorado.
The hearing on confirmation of the plan may be adjourned from time to
time without further notice except as given in open court.
Claims Bar Date The Bankruptcy Court has established October 15, 2007, as the bar date
for filing proofs of claim or interest.
Doc#3198178\2 1
ARTICLE I.
DEFINITIONS
Section 1.1 All capitalized defined terms in this Disclosure Statement shall be the
same as those defined in the Plan or as defined herein.
Section 1.2 Any undefined terms in this Disclosure Statement shall have the same
meanings as used in the Plan, and otherwise shall be interpreted in accordance with the
Bankruptcy Code and applicable law.
ARTICLE II.
PURPOSE OF DISCLOSURE STATEMENT
The Trustee is the Proponent of the Plan and he has prepared this Disclosure Statement to
disclose information that, in his opinion, is material, important and necessary to an evaluation of
the Plan. The material contained in this Disclosure Statement is intended solely for that purpose
and solely for the use of creditors of the Debtors and accordingly may not be relied upon for any
purpose other than determination of how to vote on the Plan.
ARTICLE III.
DESCRIPTION AND HISTORY OF DEBTOR
Section 3.01 Background of Debtors and the Debtors' Business.
Dwain Immel acquired Tire Mountain, Inc. in 2003 and changed the name of the
company to TM Corporation. TM Corporation operated a scrap tire landfill at Hudson (the
"Hudson Facility") through a wholly owned subsidiary named TRI. In 2004, TM Corporation
acquired a second tire landfill located in Midway, Colorado located between Colorado Springs
and Pueblo, Colorado (the "Midway Facility"). MLI was formed to operated the Midway
Facility. After the acquisition of the Midway Facility, TM Corporation's name was changed to
RRI. Initially, Mr. Immel and his wife owned all of the stock of RRI. Over the course of several
years Mr. Immel brought additional investors into RRI, which reduced the Immels stock
position. On the Petition Date the Immels owned approximately 71% of the stock of RRI and
RRI owned 100% of both TRI and MLI.
RRI was a holding company and TRI and MLI the operating entities. The primary
business purpose of TRI and MLI was the disposal and storage of waste and scrap tires at the
Hudson Facility and Midway Facility. The Debtors' long term business plan was to develop
additional business opportunities in the waste tire recycling and environmental clean-up business
as well the development of a related independent power plant (IPP) facility to generate electricity
for sale to end-users and utility customers. The IPP facility was to be designed to use tire
derived fuel ("TDF") from recycled scrap tires as fuel for the IPP facility.
Section 3.02 Summary of Debtors' Financial Condition/Reasons for Filing Chapter 11.
(1) RRI. On the Petition Date, RRI was indebted to RRI Acquisition, LLLP
("RRI Acquisition") in the amount of $500,000. RRI had pledged its stock in TRI and
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Doc#3198178\2
MLI to secure the RRI Acquisition debt. RRI also was indebted to Ron and Margaret
King in the original face amount of$1,000,000 on a promissory note.
(2) TRI. On the Petition Date, TM had secured debt as follows:
(a) Cache Bank: $1,250,000 secured by a first deed of trust on the Hudson
Facility and a lien on inventory, equipment, accounts, and deposit accounts:
(b) Preferred Lending Partners: One note in the amount of $500,000
secured by a second deed of trust on the Hudson Facility and a second note in the
amount of$1,000,000, secured by a fourth deed of trust on the Hudson Facility
and a lien on specific equipment.
(c) Horizon Bank: $540,000 secured by a third deed of trust on the Hudson
Facility.
Additionally, TM scheduled approximately $950,000 of unsecured debt on the Petition
Date.
(3) MLI. On the Petition Date, MLI had secured debt as follows:
(a) Solutions Finance, LLC in the amount $533,000 secured by a first deed
of trust on the Midway Facility.
(b) James and Mary Kirkland: $85,000 secured by a second deed of trust
on the Midway Facility.
(c) Erie Exchange, LLC: $32,000 secured by a third deed of trust on the
Midway Facility. Midway also had approximately $470,000 in unsecured inter-
company debt owed to TRI.
(d) MHC Truck Leasing, Inc.: $33,674 judgment lien on the Midway
Facility.
For some time prior to filing for bankruptcy protection, TRI and MLI were unable to
service their respective secured debt, were unable to stay current with their trade creditors' debt
as it came due, and were facing imminent foreclosure proceedings from secured creditors and
from an entity that had acquired RRI Acquisition, LLLP's debt against RRI, which was secured
by RRI's stock in TRI and MLI. At the time of filing for bankruptcy protection, the Debtors
were in negotiations for a long term TDF contract and other business opportunities that would
have provided the funding to reorganize the Debtors. The Debtors believed a temporary stay of
actions by their creditors provided by Chapter 11 would provide an opportunity to consummate
the on-going negotiations for the benefit of its creditors and shareholders.
Section 3.03 Operations in Chapter 11.
Immediately following the Petition Date, the Debtors filed combined motions for
expedited entry of orders, seeking joint administration of their Chapter 11 Cases and other orders
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to govern their post-petition operations. These requests were granted by the Court. Also early in
the proceeding TRI and its secured creditors negotiated, and the Court approved, a cash collateral
stipulation that allowed TRI to continue to operate the Hudson Facility.
At the time of filing Chapter 11, both the Hudson Facility and the Midway Facility were
the subject of compliance actions brought the Colorado Department of Public Health and
Environment (the "CDPHE"). As a first order of business, TRI and MLI entered into
stipulations with the CDPHE to address and resolve the compliance issues. The stipulations
were approved in pending lawsuits in Weld and El Paso Counties, respectively.
The Debtors then turned to long term solutions to their financial problems by continuing
negotiations with an IPP in Goodland, Kansas for the sale of TDF to be used as fuel for the
power plant. These negotiations coincided with discussions with Republic Financial Group
("Republic") to obtain a debtor-in-possession loan and to procure investment capital to
reorganize the Debtors. After many months, negotiations broke down with both Republic and
the Goodland group. Both Republic and the Goodland group decided not to pursue a business
opportunity with the Debtors.
However, the Debtors were simultaneously pursuing discussions with other third parties
to acquire the Debtors. One of these entities, NM2, LLC ("NM2"), after considering the
acquisition of both the Hudson Facility and the Midway Facility, entered into an agreement to
acquire the Midway Facility. In July 2008, MIA filed a motion to approve the sale of the
Midway Facility to NM2. NM2's offer was subject to competitive bidding and eventually MLI
accepted a competing bid from Colorado Recyclers, Inc that was approved by the Court in
August 2008 (the "MLI Sale"). The MLI Sale was closed on December 22, 2008. All of the
secured claims of the MLI estate were satisfied at closing. Additionally, MLI repaid, with Court
approval, approximately $450,000 of its inter-company debt to TRI. The MLI estate has
approximately $75,000 in cash to satisfy remaining claims in that estate.
MLI's payment of the inter-company debt to TRI provided TRI with working capital to
address environmental compliance issues and operational needs at the Hudson Facility. TRI
continued to operate the Hudson Facility in the winter and spring of 2009. However, due to
various environmental compliance and regulatory issues, the Weld County Commissioners
suspended the permit to operate the Hudson Facility in May of 2009. To address this operational
nightmare and other mounting problems, the Debtors consented to the appointment of a Chapter
11 Trustee.
On June 3, 2009, M. Stephen Peters was appointed as the Chapter 11 Trustee for all three
of the bankruptcy estates. As a first order of business, Mr. Peters had to assess both the legal
issues facing the bankruptcy estates and the operational issues facing, in particular, the TRI
estate at the Hudson Facility.
In the first two months after his appointment, Mr. Peters devoted a majority of his work
schedule to these bankruptcy estates. On the operational side of the cases, Mr. Peters met with
Mr. Immel within the first several days after his appointment both at the Hudson Facility and at
the office of Lindquist & Vennum, to coordinate the transition from the debtor-in-possession
operation of the three bankruptcy estates to being operated under the supervision of the Chapter
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11 Trustee. To accomplish this transition Mr. Peters was required to immediately understand the
basic operation of TRI's tire collection business, to assess the environmental issues facing the
facility at both the State and Weld County levels, to oversee the collection of accounts
receivable, to assess the cash position of TM and determine what accounts payable needed
immediate payment while keeping TRI administratively solvent, and to formulate a course of
action for the bankruptcy estates that would be in the best interests of creditors. Overseeing the
operational side of the TRI estate required Mr. Peters to travel from his offices in Arvada to the
Hudson Facility approximately 18 times during the three months the Hudson Facility was under
his supervision and before the TM Sale was consummated in late August. A general narrative of
the operational and legal issues relating to the Hudson Facility follows.
A key and urgent matter, and one of the reasons for appointment of Mr. Peters as Trustee
in June of 2009, was the Debtor's inability to operate its tire collection business due to the fact
that its permit to operate the Hudson Facility had been suspended in May of 2009 by the Weld
County Commissioners for continuing compliance issues resulting from inspections conducted
by the Weld County public health and planning departments. Since hauling and accepting tires at
the Hudson Facility was the heart and soul to the Debtor's business and primary source of
revenue, Mr. Peters had to devise a plan to literally get the tire collection business back on the
road. Mr. Peters therefore immediately directed counsel to petition the Weld County
Commissioners to reinstate the permit to operate the Hudson Facility.
While his counsel was concentrating on having the operating permit reinstated, the
Trustee focused on resolving problems caused by the Debtor's decision to continue operating the
tire collection business even though Weld County had caused the Hudson Facility to close by
suspending its permit to operate a tire landfill. In response to the suspension, the Debtor had
leased additional semi-trailers as a means to continue gathering tires from its customers. Rather
than bringing the trailers full of tires from its customers to the Hudson Facility and emptying
them on a rotating basis, as was done prior to the suspension, the Debtor had commenced storing
trailers full of tires in a storage yard in Adams County and replacing the full trailers with newly
leased empty trailers at the customer's places of business. The Debtor believed this was a short
term solution to continuing it tire collection business pending the lifting of the suspension by
Weld County. Anticipating the suspension would be lifted with a matter of days or weeks at
most, the Debtor intended to empty the stored trailers at the Hudson Facility. During the
suspension period, customers who would drive in were turned away. The Debtor's decision to
continue operating via trailer rental and storing tires offsite in Adams County created a myriad of
problems for the Debtor that the Trustee had to resolve. The Trustee immediately assessed that
the Debtor's temporary plan was flawed because the Weld County suspension had continued
much longer than a few days or weeks and the cost to the Debtor for leasing and storing the new
trailers under the interim plan was more than the revenue the collection business was generating.
To address the untenable state of the business that he found upon his appointment as
Trustee, Mr. Peters appeared two times before the Weld County Commissioners to assure them
that their concerns that had led to the suspension of the operational permit would be respected
and the problems that led to the suspension would be corrected. These concerns included fire
lane maintenance, removing piles of tires that had been deposited in unauthorized areas,
removing rimmed tires from storage areas, providing for the required "measuring" posts on each
tire storage cell and other matters. None of these matters taken alone were especially
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Doc#3198178\2
burdensome, but taken together required almost a Herculean effort by all employees to correct.
During this period, the Trustee met at the Hudson Facility several times with Weld County health
department representatives, Troy Swain and Jacqueline Hatch, to understand their concerns and
work with them to address those concerns.
The Trustee had assumed the Debtor had the key permits needed operate its tire
collection business, including the requisite State tire hauler's permit. Approximately two weeks
after his appointment the Trustee was advised by a representative of the Weld County health
department that the Debtor did not have a tire hauler's permit and that this representative was
going to investigate and, if appropriate, report the Debtor's violation of both hauling without a
permit and illegally storing the trailers full of tires in Adams County to the State. It seems the
Debtor had concluded that a tire monifil had the automatic right to haul tires, but the relevant
statutes and regulations had no explicit exception for landfill operators and the CDPHE personal
responsible for regulating the Hudson Facility were adamant that there was no such exception.
Upon discovering that the Debtor was operating without the necessary tire hauling permit, the
Trustee ordered an immediate cessation of all hauling activities to the Adams County location,
which caused great havoc and consternation from the Debtor's customers, as well as cutting off
the Debtor's only source of revenue that, in turn, created a delay in paying for the leased trailers
that contained the stored tires in Adams County, among other financial problems for the Debtor.
A hurried and concerted effort by the Trustee and Trustee's counsel was made to obtain the
proper permit for the Debtor from the State, in addition to obtaining a lifting of the suspension
imposed by Weld County. The tire hauling permit required a $10,000 bond. After much effort
including the Trustee's offer to personally guarantee this bond, no underwriter would issue a
bond necessitating posting a cash bond for $10,000 from the cash strapped debtor. This process
was further complicated due to the fact that the State had no mechanism for a cash bond since
permit applicants would typically obtain a bond. This process took much time and effort by the
Trustee's counsel and the Trustee. As a result, the Trustee restarted the collection business and
the Debtor again started accepting tires from "drop off" customers since at approximately the
same time the Trustee had successfully obtained a reinstatement of the Weld County permit to
operate the Hudson Facility.
In its "normal operating mode" prior to the permit being suspended, the Debtor used
approximately 30 leased trailers for hauling tires in its business. An empty trailer would be
taken to a customer and exchanged for the trailer full of tires, which was then hauled and
emptied at the Hudson Facility. The leased trailers were critical to the Debtor's ability to
maintain an on-going business, but the Trustee discovered that the Debtor was in arrears on its
trailer lease payments. Because of that situation, the Trustee found it necessary and appropriate
to meet with the trailer lessors. Beyond the issue of the lease arreages, the Trustee was
concerned that the Debtor had many leased trailers scattered around the front range, and as far
away as Steamboat Springs, Colorado and Casper, Wyoming, and it appeared to the Trustee that
there might be no way to retrieve these trailers and return them to the lessors, once the sale to
Magnum was consummated since at that point the Debtor would have no drivers and no tractors
to retrieve these trailers. The Trustee therefore obtained a written agreement from the lessor of
most of these trailers that after July 31, 2009, they would release the estate from any liability for
these trailers.
6
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•
The Trustee was very much aware from the outset of his appointment as Trustee of
alleged improprieties by Mr. Immel, who was the CEO of the Debtor. As a result of the
concerns of Weld County regarding Mr. Immel's past operation of the Hudson Facility, the
Trustee imposed a restriction that Mr. Immel was not allowed to be at the Hudson Facility unless
the Trustee was also there or otherwise had the permission from the Trustee to be at the facility.
This condition was critical to the Weld County Commissioners' reinstatement of the permit to
operate the Hudson Facility. The Trustee understood that especially for small businesses such
as the Debtor, Mr. Immel, as most officers of small businesses, would likely treat the business as
his own and resent the Trustee's intrusion into "his" business. Such was the case. The Debtor had
approximately five employees on its payroll: two men who had CDL licenses who drove the
Debtor's over-the-road tractors, and operated its heavy equipment on site, Mr. Immel, Mr.
Immel's wife and Mr. Kacimi, his son-in law to be. There were other occasional contract
workers for the Debtor as well, including on-site residents who acted as 24 hour a day security
for the business. All parties to a degree performed many different functions. Mr. Immel's wife,
and son in law to be were the principal office managers of the Debtor as well, and Mr. Kacimi
performed the in-house accounting/bookkeeping functions of the company. While the other
employees were on the payroll, Mr. Immel only received reimbursement of expenses and not
wages during the Trustee's tenure in this case. The Trustee was concerned about the close and
familial relation of this small work force with Mr. Immel, but after serious deliberation with his
counsel, the Trustee decided to retain the employees, including Mrs. Immel and Mr. Kacimi. In
hindsight the Trustee believes this was the correct decision. However, one of the consequences
of the decision was the Trustee was required to have a fairly constant hands on involvement in
the business until it was sold. If the Trustee were to have replaced all personnel, he would have
been left with a loss of all the intellectual capital that was needed to understand and operate the
business and thus keep its value up as high as possible to attract the best buyer. In the end, the
Trustee made a conscious and calculated decision to maintain the status quo, but oversee the
operations with many visits, some announced and some unannounced, to the Hudson Facility
from the beginning of June to the end of August 2009.
The Debtor faced the end of its ability to receive tires at the facility in early August 2009
as a result of enactment of a law in the Spring of 2009 that forbid the disposal of tires in any
scrap tire monifil in the State unless the tires were shredded prior to disposal. The Debtor did not
have a tire shredder so it was faced with the end of its revenue source in August of 2009. This
situation magnified the urgency to either sell the business promptly or run the risk that its value
would be depreciated because of its inability to operate. Mr. Immel had expressed an ability to
obtain shredding equipment and was reported to have explored that option with a company in
Wyoming, but apparently to no avail. The Debtor already struggled to meet its fairly modest
payroll and mandatory insurance payment obligations. The installation of shredding machinery,
even if available, would have been costly to obtain and would have added large additional
infrastructure costs such as electrical upgrades, new liability insurance obligations, equipment
maintenance fees, and storage issues. Further, the installation of shredding equipment would
have required a whole new permitting process with Weld County that would most likely have
required additional costly upgrades. Therefore, although the Trustee was open to the idea of
operating as a "shredding" facility that could have kept the debtor in business after August of
2009 that would have theoretically enhanced the Hudson Facility's fair market value, the Trustee
believes that the costs associated with such an operation made it an unrealistic endeavor.
Therefore, the Debtor faced a deadline of sorts in August 2009.
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Dock 3198178\2
Facing all these operational and legal hurdles, Mr. Peters concluded that it was necessary
to pursue an immediate sale of the Hudson Facility based on his assessment that it would be
impossible to keep the TRI estate administratively solvent for any appreciable period of time
while addressing all the operational and legal obstacles that the scrap tire business, in general,
and the Hudson Facility, in particular, faced at the time. Accordingly, Mr. Peters directed his
counsel to revive negotiations with Magnum D'Or Resources, Inc. ("Magnum") for the purchase
and sale of the Hudson Facility. Magnum and TM had engaged in extensive negotiations prior
to Mr. Peters' appointment as the Trustee. These negotiations resulted in an agreement being
reached and on June 18, 2009, the Trustee filed a motion to approve a sale of the Hudson Facility
to Magnum for $6,500,000 ("TRI Sale"). The TRI Sale was subject to competitive bids and Mr.
Peters spent considerable time in the weeks after the filing of the sale motion responding to
inquires from potential competitive bidders, providing materials to them, and meeting with them
if appropriate. Competing offers required an overbid and earnest money. The Trustee and his
counsel provided these bid procedures to any party that expressed an interest in filing a
competing bid. One serious buyer from Utah with whom the Trustee met for the better part of
one Saturday at the Hudson Facility made an offer considerably in excess of Magnum's $6.5
million purchase price. However, this prospective buyer was unable to pay the earnest money
and requested additional time to get its funding together and/or to work out contracts with huge
utilities for the purchase of tire derived fuel before it could really follow-through on its offer.
The Trustee and his counsel made overtures to others who had expressed an interest in the
business. The Trustee had encouraged Mr. Immel to direct any and all potential buyers of the
Debtor to the Trustee to explore a sale of the Debtor. In the end, however, the Trustee
determined that Magnum's offer was the best available offer and the Trustee sought approval of
the TM Sale to Magnum.
A number of parties filed objections to the sale to Magnum. Opponents of the sale
argued that the sale was a "fire sale" and that the Debtor was worth millions more than the $6.5
million sales price. Objectors also complained that there was not enough time to match or beat
the Magnum offer, despite the fact that most if not all of these suitors were at least familiar with
the Debtor's business for a long period of time or had the opportunity to become familiar with it
for a long time. After a contentious, three day hearing, the Court approved the sale to Magnum
when a settlement was reached between the objecting party, Magnum, and the Debtor.
A key and novel operational issue arose in connection with the TRI Sale that involved
dealing with approximately 20 different "junk yard" lot owners at the Hudson Facility. The
debtor had lease agreements with approximately 20 renters of outside, chain-link fenced storage
areas at the Hudson Facility. Most renters stored old vehicles but some areas included other
items best classified as true "junk." As a condition of sale, Magnum required these tenancies to
be terminated and all the "junk" and other personal property that these tenants had stored in their
lots removed from the premises. The result was having to persuade owners who in some cases
had been at the facility for 15 to 20 years, to remove their junk within an approximate 2 month
time. Several of the owners had no money to haul away their junk. Several owners advised that
they could not move their junk within the time constraints provided. This resulted in the Trustee
contracting with some junk haulers to assist these owners to remove their junk. The largest junk
space owner was several months behind in his rents and stored approximately 250 Jeep vehicles
at the site. Contacting, persuading, cajoling and assisting all of the junk owners to vacate
premises took a significant amount of effort by the Trustee and his counsel. During this period
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the operation of the Hudson Facility had ceased and no personal was on site. The removal of the
lot renters junk required a number of parties to have access to the property throughout the day.
To facilitate this effort, the Trustee engaged Dickensheet & Associates to be on location during
business hours and a security company to maintain an after-hours patrol of the facility. This also
was in keeping with the Weld County requirement that the Hudson Facility have security 24
hours a day. With a concerted push by the Trustee in the final days before the closing with
Magnum, these tenants did vacate the premises such that the sale to Magnum was consummated
at the end of August 2009.
After the closing of the TRI Sale, the Trustee has turned his attention to winding up the
estates and addressing administrative issues that he inherited from the debtor-in-possession. The
Trustee has employed David Dennis as an accountant for the estate and has met with Mr. Dennis
on several occasions to provide the information necessary for Mr. Dennis to file the necessary
operating reports that had not been filed by the Debtor since February 2009 and to file the
necessary tax returns and other accounting functions that will need to be accomplished to wind
up these estates.
ARTICLE IV.
TRUSTEE'S PROPOSED CHAPTER 11 PLAN
Section 4.01 Concept of the Plan.
The Trustee believes he will have funds available to pay in full all of creditors' Allowed
Claims in both the TRI estate and the MLI estate with any remaining proceeds from either estate
flowing up to the RRI estate to pay claims in the RRI estate according to priority or on a pro rata
basis. All Claims against the Debtors shall be bound by the provisions of the Plan and as
classified in the Plan.
THIS DESCRIPTION OF THE PLAN IS A BRIEF SUMMARY ONLY AND IS QUALIFIED
IN ITS ENTIRETY BY THE TERMS OF THE PLAN ITSELF.
Section 4.02 Classification of Claims and Interests in the Plan.
The Plan provides in the preamble to Article 3 that as of the Confirmation Hearing, any
Class of Claims that does not contain any Claim will be deemed deleted automatically from the
Plan and any Class of Claims that does not contain an Allowed (or a Claim temporarily or
provisionally allowed by the Bankruptcy Court for voting purposes) will be deemed deleted
automatically from the Plan with respect to the voting on confirmation of the Plan. The
following are the Classification of Claims and Interests in the Plan:
(1) The Class 1 Claims will be all Allowed Claims that are Administrative Claims.
For purposes of distribution and administering this Plan, the Class 1 Claims are divided into the
following three subclasses: Class 1A, Administrative Claims against MLI; Class 1B,
Administrative Claims against TRI; and Class IC, Administrative Claims against RRI. Class 1
Claims are unimpaired.
(2) The Class 2 Claims will be all Allowed Claims that are Priority Unsecured
Claims. For purposes of distribution and administering this Plan, the Class 2 Claims are divided
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into the following three subclasses: Class 2A, Priority Unsecured Claims against MLI; Class 2B,
Priority Unsecured Claims against TRI; and Class 2C, Priority Unsecured Claims against RRI.
Class 2 Claims are impaired under the Plan.
(3) The Class 3 Claims will be all Allowed Claims that are Priority Tax Claims. For
purposes of distribution and administering this Plan, the Class 3 Claims are divided into the
following three subclasses: Class 3A, Priority Tax Claims against MLI; Class 3B, Priority Tax
Claims against TRI; and Class 3C, Priority Tax Claims against RRI. Class 3 Claims are
impaired under the Plan.
(4) The Class 4 Claims will be all Allowed Claims that are Secured Claims against
MLI, including without limitation the Secured Claims identified on Exhibit B to the MLI Sale
Order. Class 4 Claims are unimpaired under the Plan.
(5) The Class 5 Claims will be all Allowed Claims that are Secured Claims against
TM, including without limitation the Credit Bid Claims as defined in the TRI Sale Order, the
judgment lien claims of Power Screening, Inc., and Lind Lawrence & Ottenhoff LLP, the
Disputed Claim of Volvo Finance, and the Secured Claims of Bank of Colorado. Class 5 Claims
are unimpaired under the Plan.
(6) The Class 6 Claims will be all Allowed Claims that are Secured Claims against
RRI, including without limitation the Claims of Athena Investments, Inc., and Ron and Margaret
King. Class 6 Claims are unimpaired under the Plan.
(7) The Class 7 Claims will be all Allowed Claims that are General Unsecured
Claims, except for the Claims in Class 8, or are Late Claims against MLI or TRI. For purposes
of voting to accept or reject the Plan, and for purposes of distribution and administering this
Plan, the Class 7 Claims are divided into the following six subclasses: Class 7A, MLI Settlement
Claims; Class 7B, Remaining General Unsecured Claims against MLI; Class 7C, General
Unsecured Claims against TRI; Class 7D, General Unsecured Claims against RRI; Class 7E,
Late Claims against MLI; and Class 7F, Late Claims against TRI. Claims in Class 7A are
unimpaired under the Plan. Claims in Classes 7B, 7C, 7D, 7E and 7F are impaired under the
Plan.
(8) The Class 8 Claims will be the Intercompany Claims. Class 8 Claims are
impaired under the Plan.
(9) The Class 9 Claims will be all Allowed Claims against RRI that are Subordinated
Unsecured Claims. Class 9 Claims are impaired under the Plan.
(10) The Class 10 interests are RRI's Intercompany Equity Interests, which are
unimpaired under the Plan.
(11) The Class 11 Equity Interests will be all Allowed Equity Interests. Class 11
Equity Interests are impaired under the Plan.
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Section 4.03 Claims Allowance Process.
A Claim will receive a distribution under the Plan only if it is an "Allowed Claim."
Creditors whose Claims were not scheduled by the Debtors or were scheduled as contingent,
disputed or unliquidated are required to file a proof of claim in order to participate in the Plan. A
proof of claim is deemed allowed unless it is objected to by a party in interest. If an objection is
filed, the Bankruptcy Court must determine whether the claim should be allowed. Under the
Bankruptcy Code, the Debtors and other parties in interest may continue to file objections even
after the Plan is confirmed. The Debtors intend to object to each Claim that they believe should
be disallowed, reduced or reclassified on or before the Effective Date of the Plan.
Section 4.04 Treatment Afforded Claims and Interests Under the Plan.
(1) Treatment of Class 1 (Administrative Claims).
(a) Except as provided in Section 4.1(b) of the Plan, every Creditor
holding a Class 1 Administrative Claim that is an Allowed Claim will be paid by its
respective Estate: (a) fully and in Cash on the Effective Date; (b) fully and in Cash when
and if the Administrative Claim becomes an Allowed Claim after the Effective Date; or
(c) as otherwise agreed in writing by the Creditor holding the Allowed Administrative
Claim or ordered by the Bankruptcy Court.
(b) Every Class 1 Administrative Claim that is for an operating
expense of a Debtor, incurred in the ordinary course of that Debtor's operations after the
Petition Date and for which there is no dispute as to that Debtor's liability has been or
will be paid fully and in Cash by that Debtor's Estate in the ordinary course of business
(including any payment terms applicable to any such expense) upon presentment or
otherwise in accordance with the particular terms of any agreement relating thereto.
(c) ALL REQUESTS FOR PAYMENT OF ADMINISTRATIVE
CLAIMS ARISING ON OR BEFORE THE EFFECTIVE DATE (OR ANY OTHER
MEANS OF PRESENTING AND OBTAINING PAYMENT OF ADMINISTRATIVE
CLAIMS FOUND TO BE EFFECTIVE BY THE BANKRUPTCY COURT) SHALL BE
FILED NOT LATER THAN (I) THIRTY (30) DAYS AFTER THE DATE OF
SERVICE OF NOTICE OF THE EFFECTIVE DATE, OR (II) ANY APPLICABLE
ADMINISTRATIVE BAR DATE THAT HAS HERETOFORE BEEN, OR MAY
SUBSEQUENTLY BE, ESTABLISHED BY THE BANKRUPTCY COURT AND
NOTICED SEPARATELY BY THE DEBTORS. If pre-Effective Date Administrative
Claims are not so filed, they will be forever barred and will not be assertable in any
manner against the Debtors or the Trustee; provided, however, that no such request for
payment shall be required with respect to Administrative Claims that have been paid
previously (such as the Administrative Claim of Republic Financial Corporation allowed
by the Bankruptcy Court's order dated January 13, 2009, Docket #260) or with respect to
Administrative Claims representing an operating expense of a Debtor, incurred in the
ordinary course of that Debtor's operations after the Petition Date and for which there is
no dispute as to that Debtor's liability, or unless the provisions of the Bankruptcy Code
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require approval or allowance by the Bankruptcy Court as a precondition to payments
being made on any such liability.
(d) An Administrative Claim with respect to which a request for
payment has been properly and timely filed pursuant to Section 4.1(c) of the Plan shall
become an Allowed Administrative Claim only to the extent allowed by Final Order.
(e) Administrative Claims for professional and trustee fees and
expenses arising after the Effective Date shall remain subject to application and
allowance as provided by the Bankruptcy Code and any applicable order of the
Bankruptcy Court until the Chapter 11 Cases are closed, and shall become Allowed
Administrative Claims only to the extent allowed by Final Order.
(2) Treatment of Class 2 (Priority Unsecured Claims). Every Claimant holding a
Class 2 Priority Unsecured Claim will be paid by its respective Estate: (a) fully and in Cash
(including simple interest at the Interest Rate from and after the Petition Date) on the Effective
Date if the Claim is then an Allowed Claim; (b) fully and in Cash (including simple interest at
the Interest Rate from and after the Petition Date) when and if the Claim becomes an Allowed
Claim after the Effective Date; or (c) as otherwise agreed in writing by the Claimant holding the
Allowed Priority Unsecured Claim or ordered by the Bankruptcy Court. Accordingly, Class 2
Claims are impaired pursuant to the Plan and Bankruptcy Code §1124.
(3) Treatment of Class 3 (Priority Tax Claims). Every Claimant holding a Class 3
Priority Tax Claim will be paid by its respective Estate: (a) fully and in Cash (including simple
interest at the Interest Rate from and after the Petition Date) on the Effective Date if the Claim is
then an Allowed Claim; (b) fully and in Cash (including simple interest at the Interest Rate from
and after the Petition Date) when and if the Claim becomes an Allowed Claim after the Effective
Date; or (c) as otherwise agreed in writing by the Claimant holding the Allowed Priority Tax
Claim or ordered by the Bankruptcy Court. Only taxes attributable to the pre-Effective Date
period shall be Priority Tax Claims. Accordingly, Class 3 Priority Tax Claims are impaired
pursuant to the Plan and Bankruptcy Code §1124.
(4) Treatment of Class 4 (Secured Claims Against MLI). All Allowed Secured
Claims against MLI have been paid in full or otherwise satisfied from proceeds of the MLI Sale,
pursuant to the terms of the MLI Sale Order. Accordingly, Class 4 Secured Claims are
unimpaired pursuant to the Plan and Bankruptcy Code § 1124, and are deemed to have accepted
the Plan pursuant to Bankruptcy Code § 1126(f).
(5) Treatment of Class 5 (Secured Claims Against TRI). All Secured Claims against
TRI have been paid in full or otherwise satisfied from, or adequately protected by, proceeds of
the TRI Sale, pursuant to the terms of the TRI Sale Order. Accordingly, Class 5 Secured Claims
are unimpaired pursuant to the Plan and Bankruptcy Code § 1124, and are deemed to have
accepted the Plan pursuant to Bankruptcy Code § 1126(1).
(6) Treatment of Class 6 (Secured Claims Against RRI). The Class 6 Claim of
Athena Investments, Inc., has been paid in full or otherwise satisfied from proceeds of the MLI
Sale, pursuant to the terms of the MLI Sale Order and as confirmed in the TRI Sale Order. The
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Class 6 Claim of Ron and Margaret King with respect to RRI treasury shares and the legal,
equitable and contractual rights to which such Claim entitles Ron and Margaret King are (to the
extent such Claim is an Allowed Claim) unaltered by this Plan. Accordingly, Class 6 Secured
Claims are unimpaired pursuant to the Plan and Bankruptcy Code § 1124, and are deemed to
have accepted the Plan pursuant to Bankruptcy Code § 1126(0.
(7) Treatment of Class 7A (MLI Settlement Claims). Allowed General Unsecured
Claims against MLI that are held by parties to, or beneficiaries of, the MLI Settlement
Agreement have been paid in full or otherwise satisfied from the proceeds of the MLI Sale, as
provided in the MLI Settlement Agreement and pursuant to the MLI Sale Order. Accordingly,
Class 7A General Unsecured Claims are unimpaired pursuant to the Plan and Bankruptcy Code §
1124, and are deemed to have accepted the Plan pursuant to Bankruptcy Code § 1126(0
(8) Treatment of Class 7B (Remaining General Unsecured Claims Against MLI).
The Trustee estimates that MLI will have Cash on hand sufficient to pay all General Unsecured
Claims against MLI that are not MLI Settlement Claims in full, with interest at the Interest Rate
from and after the Petition Date. There will be no distribution on account of Class 7B Claims
until all Allowed Claims in Classes 1A, 2A, 3A, 4A, and 7A have been paid in full or adequately
reserved for, and the Trustee has established in his sole discretion a reserve or reserves for post-
Effective Date Administrative Claims against MLI. Thereafter, each Class 7B Claim shall
receive distributions until such Claim is paid in full with interest at the Interest Rate from and
after the Petition Date, as follows:
(a) If such Claim is an Allowed Claim on the Initial Distribution Date,
then out of MLI's unreserved Cash: (i) an amount equal to the product of the amount of
such Allowed Claim multiplied by the Unsecured Recovery Fraction; and (ii) on any
subsequent quarterly distribution date, an amount provided for under and calculated in
accordance with Section 12.1 of this Plan.
(b) If such Claim becomes an Allowed Claim after the Initial
Distribution Date, then (i) on the first quarterly distribution date that is at least twenty
(20) days after such Claim becomes an Allowed Claim, out of MLI's unreserved Cash, an
amount provided for under and calculated in accordance with Section 12.1 of this Plan;
and (ii) on any subsequent quarterly distribution date, out of MLI's unreserved Cash, an
amount provided for under and calculated in accordance with Section 12.1 of this Plan.
(c) A Class 7B Claimant may agree in writing with the Trustee to
receive distributions in full satisfaction of its Allowed Claim in a manner other than set
forth in this Section 6.1.
(9) Treatment of Class 7C (General Unsecured Claims Against TRI). The Trustee
estimates that TRI will have Cash on hand sufficient to pay all General Unsecured Claims
against TRI in full, with interest at the Interest Rate from and after the Petition Date. There will
be no distribution on account of Class 7C Claims until all Allowed Claims in Classes 1B, 2B,
3B, and 4B have been paid in full or adequately reserved for, and the Trustee has established in
his sole discretion a reserve or reserves for post-Effective Date Administrative Claims against
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TRI. Thereafter, each Class 7C Claim shall receive distributions until such Claim is paid in full
with interest at the Interest Rate from and after the Petition Date, as follows:
(a) If such Claim is an Allowed Claim on the Initial Distribution Date,
then out of TRI's unreserved Cash: (i) an amount equal to the product of the amount of
such Allowed Claim multiplied by the Unsecured Recovery Fraction; and (ii) on any
subsequent quarterly distribution date, an amount provided for under and calculated in
accordance with Section 12.1 of this Plan.
(b) If such Claim becomes an Allowed Claim after the Initial
Distribution Date, then (i) on the first quarterly distribution date that is at least twenty
(20) days after such Claim becomes an Allowed Claim, out of TRI's unreserved Cash, an
amount provided for under and calculated in accordance with Section 12.1 of this Plan;
and (ii) on any subsequent quarterly distribution date, out of TRI's unreserved Cash, an
amount provided for under and calculated in accordance with Section 12.1 of this Plan.
(c) A Class 7C Claimant may agree in writing with the Trustee to
receive distributions in full satisfaction of its Allowed Claim in a manner other than set
forth in this Section 6.2.
(10) Treatment of Class 7D Claims (General Unsecured Claims Against RRI). Each
General Unsecured Claim that is an Allowed Claim against RRI shall receive distributions of
Available Cash from the Trustee as follows:
(a) To the extent of Available Cash, every Class 7D Claim shall
receive distributions in Cash on the Initial Distribution Date, up to the full amount of the
Allowed Claim. However, no Class 7D Claim shall receive any distribution under this
Plan unless there is Available Cash remaining after the application of the funds to, and
full payment of or the establishment of adequate reserves for, all other Claims against
RRI entitled to prior distribution under this Plan (i.e., Class 1C Claims, Class 2C Claims,
Class 3C Claims, and Class 6 Claims). If the Class 7D Claims that are Allowed Claims
exceed the amount of funds available for distribution, each Allowed Class 7D Claim shall
be paid a Pro Rata share of the available funds calculated as set forth below.
(b) If such Claim is an Allowed Claim on the Initial Distribution Date,
then (i) out of the Available Cash, an amount equal to the product of the amount of such
Allowed Claim multiplied by the Unsecured Recovery Fraction; and (ii) on any
subsequent quarterly distribution date, an amount from the Available Cash provided for
under and calculated in accordance with Section 12.1 of this Plan;
(c) If such Claim becomes an Allowed Claim after the Initial
Distribution Date, then (i) on the first quarterly distribution date that is at least twenty
(20) days after such Claim becomes an Allowed Claim, out of the Available Cash, an
amount provided for under and calculated in accordance with Section 12.1 of this Plan;
and (ii) on any subsequent quarterly distribution date, out of the Available Cash, an
amount provided for under and calculated in accordance with Section 12.1 of this Plan.
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(11) Treatment of Class 7E (Late Claims Against MLI). The Trustee estimates that
MLI will have Cash on hand sufficient to pay all Late Claims against MLI in full, with interest at
the Interest Rate from and after the Petition Date. There will be no distribution on account of
Class 7E Claims until all Allowed Claims in Classes 1A, 2A, 3A, 4A, 7A and 7B have been paid
in full or adequately reserved for, and the Trustee has established in his sole discretion a reserve
or reserves for post-Effective Date Administrative Claims against MLI. Thereafter, each Class
7E Claim shall receive distributions until such Claim is paid in full with interest at the Interest
Rate from and after the Petition Date, as follows:
(a) If such Claim is an Allowed Claim on the Initial Distribution Date,
then out of MLI's unreserved Cash: (i) an amount equal to the product of the amount of
such Allowed Claim multiplied by the Unsecured Recovery Fraction; and (ii) on any
subsequent quarterly distribution date, an amount provided for under and calculated in
accordance with Section 12.1 of this Plan.
(b) If such Claim becomes an Allowed Claim after the Initial
Distribution Date, then (i) on the first quarterly distribution date that is at least twenty
(20) days after such Claim becomes an Allowed Claim, out of MLI's unreserved Cash, an
amount provided for under and calculated in accordance with Section 12.1 of this Plan;
and (ii) on any subsequent quarterly distribution date, out of MLI's unreserved Cash, an
amount provided for under and calculated in accordance with Section 12.1 of this Plan.
(c) A Class 7E Claimant may agree in writing with the Trustee to
receive distributions in full satisfaction of its Allowed Claim in a manner other than set
forth in this Section 6.3.
(12) Treatment of Class 7F (Late Claims Against TRI). The Trustee estimates that
TRI will have Cash on hand sufficient to pay all Late Claims against TRI in full, with interest at
the Interest Rate from and after the Petition Date. There will be no distribution on account of
Class 7F Claims until all Allowed Claims in Classes 1B, 2B, 3B, 4B and 7C have been paid in
full or adequately reserved for, and the Trustee has established in his sole discretion a reserve or
reserves for post-Effective Date Administrative Claims against TRI. Thereafter, each Class 7F
Claim shall receive distributions until such Claim is paid in full with interest at the Interest Rate
from and after the Petition Date, as follows:
(a) If such Claim is an Allowed Claim on the Initial Distribution Date,
then out of TRI's unreserved Cash: (i) an amount equal to the product of the amount of
such Allowed Claim multiplied by the Unsecured Recovery Fraction; and (ii) on any
subsequent quarterly distribution date, an amount provided for under and calculated in
accordance with Section 12.1 of this Plan.
(b) If such Claim becomes an Allowed Claim after the Initial
Distribution Date, then (i) on the first quarterly distribution date that is at least twenty
(20) days after such Claim becomes an Allowed Claim, out of TRI's unreserved Cash, an
amount provided for under and calculated in accordance with Section 12.1 of this Plan;
and (H) on any subsequent quarterly distribution date, out of TRI's unreserved Cash, an
amount provided for under and calculated in accordance with Section 12.1 of this Plan.
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(c) A Class 7F Claimant may agree in writing with the Trustee to
receive distributions in full satisfaction of its Allowed Claim in a manner other than set
forth in this Section 6.4.
(13) Treatment of Class 8 Claims (Intercompany Claims). All Intercompany Claims
shall be canceled, extinguished, and deemed null and void. Each Debtor agrees and consents to
such treatment of its Intercompany Claims (if any).
(14) Treatment of Class 9 Claims (Subordinated Unsecured Claims Against RRI).
(a) Distribution. To the extent of Available Cash after payment of all
Allowed Claims in Classes 1C, 2C, 3C, 6, and 7C, every Class 9 Claim that is Allowed
shall be paid in Cash on the Effective Date (or as soon thereafter as additional funds
become available), up to the full amount of the Allowed Claim.
(b) Deemed Rejection. The Trustee believes there will not be
sufficient funds available on the Effective Date (or any time thereafter) to pay any portion
of the Class 9 Claims or to make any distribution on account of such Claims.
Consequently, the Subordinated Unsecured Claims which comprise the Class 9 Claims
are impaired under the Plan and are deemed to have rejected the Plan pursuant to
Bankruptcy Code §1126(g).
(15) Treatment of Class 11 Equity Interests (Equity Interests).
(a) Distribution. After all Available Cash has been distributed in
accordance with this Plan, all Equity Interests will be canceled, annulled and terminated.
(b) Deemed Rejection. The Trustee believes that there will not be
sufficient funds available on the Effective Date (or any time thereafter) to make any
distribution on account of such Equity Interests. Consequently, the Equity Interests
which comprise the Class 11 Equity Interests are impaired under the Plan and are deemed
to have rejected the Plan pursuant to Bankruptcy Code §1126(g).
Section 4.05 Post-Petition Interest.
As a general rule, the Bankruptcy Code requires the disallowance of a claim for
unmatured Postpetition interest against the Debtor. See 11 U.S.C. § 502(b)(2). However, where
a debtor in a chapter 7 bankruptcy case is solvent, an unsecured creditor is entitled to "payment
of interest at the legal rate from the date of the filing of the petition" prior to the bankruptcy
trustee's distribution of remaining assets to the debtor. See 11 U.S.C. § 726(a)(5). One circuit
court has concluded that the Bankruptcy Code's reference to "legal rate" means the federal
judgment rate as set forth in 28 U.S.C. § 1961(a) instead of a contractual rate to the contrary.
The court further held that the provisions of 11 U.S.C. § 726(a)(5) applied in the Chapter 11 Plan
context, and mandated application of the federal judgment interest rate. See, Onik v. Duke (In re
Cardelucci, 285 F.3d 1231 (9th Cir. 2002). Accordingly, to the extent that Class 7B unsecured
claims are paid in full, they will be entitled to payment of interest from the date of the filing of
the petition until the date of distribution at the federal judgment rate on the Petition Date. The
federal judgment rate on the Petition Date was 5.00%.
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Section 4.06 Retention of Jurisdiction.
Under the Plan, the Bankruptcy Court shall retain jurisdiction over matters that may be
pending before it on the date the Plan is confirmed, and over a variety of matters that may arise
subsequent to entry of the Confirmation Order. These matters include, but are not limited to, the
following:
(1) Jurisdiction to determine the allowance and payment of any Claim upon any
objection thereto (or other appropriate proceedings) by the Debtor or by any other party in
interest entitled to proceed in that manner. As part of such retained jurisdiction, the Bankruptcy
Court will continue to determine the allowance of Administrative Claims and any request for
payment thereof;
(2) Jurisdiction to determine any dispute which may arise regarding the interpretation
of any provision of the Plan. The Court also will retain jurisdiction to enforce any provisions of
the Plan and any and all documents relating to the Plan;
(3) Jurisdiction to facilitate the performance of the Plan by entering any further
necessary or appropriate order regarding enforcement of the Plan and any provision thereof. In
addition, the Bankruptcy Court will retain jurisdiction to facilitate or implement the discharge of
any Claim, or any portion thereof, pursuant to the Plan;
(4) Jurisdiction to adjudicate any cause of action or other proceeding presently
pending or otherwise referenced in the Plan, including, but not limited to, the adjudication of any
and all "core proceedings" under 28 U.S.C. §157(b) which may be pertinent to the Chapter 11
Cases, and which the Debtors may deem appropriate to initiate and prosecute before the Court in
aid of the reorganization of the Debtors. The Debtors are not restricted, however, from
proceeding in any other court of competent jurisdiction;
(5) Jurisdiction to enter an appropriate final decree in the Chapter 11 Cases;
(6) In the event of an appeal of the Confirmation Order or any other kind of review or
challenge to the Confirmation Order, and provided that no stay of the effectiveness of the
Confirmation Order has been entered, the Bankruptcy Court will retain jurisdiction to implement
and enforce the Confirmation Order and the Plan according to their terms, including, but not
limited to,jurisdiction to enter such orders regarding the Plan or the performance thereof as may
be necessary to effectuate the reorganization of the Debtors;
(7) Jurisdiction to determine any and all matters regarding Executory Contracts until
any such Executory Contracts are assumed and assigned, and any and all Claims arising
therefrom;
(8) Jurisdiction to determine any and all applications, adversary proceedings, and
contested or litigated matters that may be pending on the Effective Date;
(9) Jurisdiction to recover all assets of the Debtors and property of the Estates
wherever located;
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(10) Jurisdiction to hear and determine matters concerning state, local and federal
taxes in accordance with Bankruptcy Code §§ 345, 505 and 1145;
(11) Jurisdiction to hear and determine any objections to the proofs of claims or to
Claims or Equity Interests filed and/or asserted both before and after the Confirmation Date,
including any objections to the classification of any Claim or Equity Interest, or any motion or
request to estimate any Claim, and to allow or disallow any Disputed Claim, in whole or part;
(12) Jurisdiction to hear and determine all Avoidance Actions, regardless of whether
filed or instituted before or after the Effective Date;
(13) Jurisdiction to hear any other matter not inconsistent with the Bankruptcy Code;
(14) Jurisdiction to issue any orders in aid of execution of the Plan as are authorized by
Bankruptcy Code §1142.
Section 4.07 Discharge of Debtors and the Trustee.
Upon the Effective Date, except as specifically provided otherwise in the Plan or in the
Confirmation Order, the rights afforded under the Plan and the treatment of Claims and Equity
Interests under the Plan shall be in exchange for and in complete satisfaction, discharge and
release of all Claims and termination of all Claims and all Equity Interests, including all principal
and any interest accrued on Claims from the Petition Date. Confirmation of the Plan as of the
Effective Date shall (a) discharge and release the Debtors and the Trustee from all claims or
other debts, liabilities or obligations of every kind and nature that arose in whole or in part before
the Effective Date, including all claims of governmental entities and taxing authorities and all
debts of the kind specified in Bankruptcy Code §§502(g), (h) or (i), whether or not a proof of
Claim based on such debt is filed or deemed filed pursuant to Bankruptcy Code §501, a Claim
based on such debt is allowed pursuant to Bankruptcy Code §502, or the holder of a Claim based
on such debt has accepted the Plan; and (b) terminates all Equity Interests and other rights of
holders of Equity Interests. Upon the Effective Date, the Confirmation Order shall permanently
enjoin all Persons from taking any actions against the Debtors or the Trustee to enforce or collect
any Claim or Equity Interest unless provided for in the Plan.
Section 4.08 Exoneration and Reliance.
If the respective affiliates, officers, directors, shareholders, members, representatives,
attorneys, accountants, financial advisors, and agents of the Debtors or the Trustee act in good
faith, they shall not be liable to any holder of a Claim or Equity Interest, or other party with
respect to any action, forbearance from action, decision, or exercise or discretion taken during
the period from the Petition Date to the Effective Date in connection with (a) the operation of the
Debtors; (b) the administration of the Debtors' bankruptcy estates; (c) the proposal or
implementation of any of the transactions provided for, or contemplated in, the Plan or the Plan
Documents; or (d) the administration of the Plan or the Assets and property to be distributed
pursuant to the Plan and the Plan Documents; other than for willful misconduct or gross
negligence; provided, however, that the foregoing shall not supersede the "safe harbor" from
liability provided by § 1125(e) of the Bankruptcy Code for violation of applicable laws
governing the solicitation of votes on the Plan or the offer, issuance, sale or purchase of
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securities in connection with the Plan. The Debtors, the Trustee, and their respective affiliates,
officers, directors, shareholders, members, representatives, attorneys, financial advisors, and
agents may rely upon the opinions of counsel, certified public accountants, and other experts or
professionals employed by the Debtors and the Trustee, respectively, and such reliance shall
conclusively establish good faith. In any action, suit or proceeding by any holder of a Claim or
Equity Interest or other party in interest contesting any action by, or non-action of, the Debtors,
the Trustee, or their respective affiliates, officers, directors, shareholders, members,
representatives, attorneys, financial advisors, and agents as not being in good faith, the
reasonable attorneys' fees and costs of the prevailing party shall be paid by the losing party and
as a condition to going forward with such action, suit, or proceeding at the outset thereof, all
parties thereto shall be required to provide appropriate proof and assurance of their capacity to
make such payments of reasonable attorneys' fees and costs in the event they fail to prevail.
Section 4.09 Payment of Statutory Fees.
All quarterly fees payable pursuant to § 1930 of Title 28 of the United States Code to the
United States Trustee will be paid in full on or before the Effective Date. The Trustee shall
continue to file appropriate reports and to pay such statutory fees until the Bankruptcy Cases are
closed, dismissed, or converted.
ARTICLE V.
DEBTORS' ASSETS, CLAIMS AGAINST THE ESTATES, AND ESTIMATED
DISTRIBUTION TO CREDITORS
Section 5.01 Assets.
Substantially all of the Debtors assets have been converted to cash from the MLI Sale and
the TRI Sale. The Trustee has the following cash on hand:
RRI: $221.00
TRI: $1,685,000.00
MLI: $42,000.00
The Debtors' have no remaining real property.
The Debtors' remaining personal property has no material value.
The Debtors do not have any litigation claims against third parties other than potential
causes of action relating to possible claims litigation discussed in more detail below.
The Debtors' do not have executory contracts or leases that have market value.
Section 5.02 Claims.
(1) RRI: The Debtor scheduled two secured claims on Schedule D in the RRI
estate in the total amount $1,500,000 and three general unsecured claims on Schedule F
in the amount of$291,260. Eleven claims were filed in the RRI estate in a total amount
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of$4,643,953.17. The filed claims include both secured and unsecured claims and proofs
of interests.
The Trustee has concluded the scheduled secured claims should be classified as
unsecured claims, including the claim of Ron and Margaret King (the "Kings") in the
amount of$1,472,162.55 (the "Kings' Claim").
All of the scheduled unsecured claims in the RRI estate were held by Dwain
Immel or an entity controlled by Dwain Immel (the "Immel RRI Claims"). Pursuant to
Transfers of Claim Other Than for a Security that have been filed with the Court, the
Immel RRI Claims have been transferred to Magnum.
The Trustee believes that all filed claims in the RRI estate other than the Immel
RRI Claims and the Kings' Claim have been satisfied either from the MLI Sale or the
TRI Sale, or will be satisfied from the distributions in the TRI estate. The only claims
remaining in the RRI estate, therefore, are the Immel RRI Claims and the Kings' Claim.
The Immel RRI Claims and the Kings' Claim total approximately $1,763,000.
(2) TRI: The Debtor scheduled secured claims on Schedule D in the total
amount $3,969,193 and general unsecured claims on Schedule F in the amount of
$966,662.93. Thirty-five proofs of claim were filed in the TM estate in a total amount of
$3,086,600.16. The filed claims include both secured and unsecured claims and proofs of
interests.
Magnum acquired various secured claims in the TM estate. Magnum was
authorized to credit bid the secured claims it acquired in the TRI estate pursuant to the
terms of the purchase and sales agreement between the Trustee and Magnum. Magnum
credit bid the following secured claims in the following amounts as part of the purchase
price of the Hudson Facility:
Cache Bank: $1,600,000.00
Mile High Bank(Horizon Banks): $1,101,045.74
FGH Financial LLC (Preferred Lending): $587,036.60
FGH Financial LLC (Preferred Lending): $1,150,566.40
Also at the closing of the sale of the Hudson Facility to Magnum, the following
secured claims were paid from the sale proceeds:
Lind, Lawrence & Ottenhoff (judgment lien): $9, 187.59
Power Screening (judgment lien): $30,000.00
Bank of Colorado (lien on vehicles): $10,346.81
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These credit bids or payments to secured creditors at the closing of the Hudson
Facility sale satisfied all of the secured claims in the TRI estate.'
Included in the general unsecured claims set forth on Schedule F are unsecured
claims held by Dwain Immel or entities controlled by Mr. Immel, totaling $493,228.52
("Immel TRI Claims"). The Court's records show that all of the Immel TRI Claims have
been transferred to Magnum pursuant to various Transfers of Claim Other Than for a
Security filed with the Court. In addition to the Immel TRI Claims, the Trustee estimates
after claims objections are resolved that other general unsecured claims in the TRI estate
will total approximately $500,000.
(3) Midway: Substantially all of the claims in the Midway estate were
satisfied from the sale proceeds from the MLI sale. There are two remaining taxes
claims to which the Debtor filed objections that remain unresolved.
Section 5.03: Estimated Distribution to Creditors
(1) RRI: Trustee cannot estimate the distribution to creditors in the RRI
estate at this juncture because the distribution in the RRI estate is wholly dependent on funds
being available from the TRI estate after all creditors are paid in full in that estate. The Trustee
has been advised of a possible objection to the Immel TRI Claims and the availability of funds to
upstream from the TRI estate to the RRI estate will be determined in large part on the resolution
of any such objection.
(2) TRI: The TRI estate has approximately $1,685,000 in cash to be
distributed to creditors. All secured claims have been satisfied. The Trustee estimates that
administrative claims in the TRI estate will total approximately $400,000. The administrative
claims will include quarterly payments to the United States Trustee of approximately $6,000,
Chapter 11 Trustee fees of approximately $243,000 ($220,000 attributable to the TRI case,
$8,000 to the MLI case, and $15,000 to the RRI case), legal fees to Lindquist & Vennum of
approximately $100,000, and accountant fees to David Dennis of approximately $50,000. After
the payment of administrative claims, therefore, the TRI estate will have approximately
$1,285,000 to distribute to general unsecured claims.
The Trustee estimates that there are approximately $993,229 of unsecured claims in the
TRI estate. Under the terms of the Plan, these unsecured claims will be entitled to interest of
approximately $150,000, for a total of$1,143,229 in unsecured claims. The Trustee estimates
that if all unsecured claims are allowed, there will be approximately $150,000 available to
upstream to the RRI estate. That amount would be increased if any of unsecured TRI claims are
disallowed.
I Pursuant to the terms of the purchase and sale agreement, the credit bid on the Mile High
Banks claim was less than the full pay off amount of the loan and left a balance of$44,454.26.
This amount will be paid, with interest, under the Plan.
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(3) MLI: The MLI estate has approximately $42,000 in cash. All claims have been
paid in the MLI estate other than two tax claims to which the Debtor filed objections. The tax
claims are based on estimates filed by the IRS and the Colorado Department of Revenue.
Trustee estimates that the tax claims will be resolved for $25,000 or less. The balance of the
cash will then be paid to the TRI estate to pay off an inter-company debt.
The Trustee has used his best efforts formulating the estimates of distribution in the
three Debtors' estates, but the estimated distribution is not intended to be binding. The Trustee
has made certain assumptions regarding the allowance and disallowance of claims based on his
review of the claims registers and schedules in the cases to reach the conclusions he has
regarding the projected distributions to creditors. Further, the Trustee has estimated costs for
the final administration of these estates based on his estimate of the time that will be spent by
professionals resolving claims objections, confirming the Plan, and preparing the requisite
reports with the UST's office. Any significant variation in any of these factors will affect the
distribution to creditors.
ARTICLE VI.
CHAPTER 7: LIQUIDATION
In the event that the Debtors' assets had been liquidated on the Petition Date, it is
unlikely that unsecured creditors would have received any distribution on their claims. Through
the MLI Sale and the Hudson Sale, the Debtors' assets have been converted to cash that will be
distributed to creditors as described in this Disclosure Statement. The Plan provides for the cash
in the TRI estate and the MLI estate to be distributed to creditors in their respective estates. The
Trustee believes that distributing the cash on hand through a liquidating Chapter 11 plan is more
efficient and less expensive than had the Debtors' estates been converted to Chapter 7s after
consummation of the MLI Sale and the TRI Sale. The Trustee bases this conclusion on the costs
that are inherently associated with converting cases from Chapter 11 to Chapter 7.
ARTICLE VII.
MEANS FOR EXECUTING THE PLAN
The means for executing this Plan flow from the MLI Sale and the TRI Sale. Both sales
were free and clear of Liens and the MLI Sale involved the MLI Settlement, which resolved
most Claims in that Estate. Accordingly, numerous Allowed Claims have already been fully
paid or otherwise satisfied and discharged. Remaining sale proceeds will fund the Plan, first
paying in full all remaining Allowed Claims against MLI and TRI. Once the Claims in those
Estates are paid or otherwise resolved, each Estate will have Cash left over. That Cash will be
distributed to the RRI Estate as Available Cash, on account of the Intercompany Equity Interests.
Allowed Claims against RRI will be paid to the extent of Available Cash, according to the
priorities in the Bankruptcy Code as set forth in this Plan. MLI and TRI shall cease to exist upon
payment of the Allowed Claims in their Estates and the turnover of Available Cash to the RRI
Estate. RRI will cease to exist upon exhaustion of the Available Cash.
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MANNER OF VOTING AND CONFIRMATION OF THE PLAN
Chapter 11 debtors are not guaranteed an absolute right to reorganize, but they are
afforded only the right to present a Plan to their creditors and equity security holders for
acceptance. Majorities in impaired classes as classified by a debtor can control unwilling
minorities and the debtor may elect to "cram down" certain claims under the provisions of
Bankruptcy Code § 1129(b) discussed below.
Section 7.01 Solicitation of Acceptances.
This Disclosure Statement shall have been approved by the Court in accordance with
Bankruptcy Code § 1125 of the Bankruptcy Code before being provided to each creditor whose
claim has been scheduled by the Debtors (or to each Equity Interest holder). Under the
Bankruptcy Code, acceptances of the Plan may not be solicited unless accompanied by a copy of
this Disclosure Statement.
Section 7.02 Persons Entitled to Vote on the Plan.
Pursuant to section 1126 of the Bankruptcy Code, each class of impaired claims or
interests which is not deemed to have accepted or rejected a plan is entitled to vote to accept or
reject the plan. Holders of Allowed Claims in Classes 7C and 11 are entitled to vote to accept or
reject the Plan. Classes 1, 2, 3, 4, 5, 6, 7A, 7B, and 10 are unimpaired and are deemed to have
accepted the Plan. Classes 8 and 9 will not receive or retain any property under the Plan and are
deemed to have rejected the Plan.
Section 7.03 Counting Votes and Acceptance of the Plan.
(1) Votes to be Counted. In determining acceptance of the Plan, a vote will be
counted if submitted by a holder of a Claim that is impaired:
(a) Whose Claim is duly scheduled by the Debtors as undisputed, non-
contingent and liquidated; or
(b) Who has timely filed with the Court a proof of Claim that has not been
disallowed or objected to prior to computation of the votes on the Plan.
(2) An impaired class shall be deemed to accept the Plan if at least:
(a) Fifty percent plus one of the number of Allowed Claims voting vote to
accept the Plan; and
(b) Two-thirds of the aggregate dollar amount of the Allowed Claims voting
vote to accept the Plan.
Section 7.04 Examining Schedules and Filing Proofs of Claim.
Creditors and interested parties may examine the Debtors' schedules of assets and
liabilities that are on file in the Office of the Clerk of the Bankruptcy Court, 721 19th Street,
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Denver, Colorado, to determine whether their Claims or Equity Interests are correctly scheduled.
The Clerk of the Court will not provide this information by telephone. The Bankruptcy Court
has set October 15, 2007, as the last day for filing proofs of Claims and Equity Interests in this
Case.
Section 7.05 Manner of Voting.
A ballot to be used for voting your acceptance or rejection of Debtors' Plan is being
mailed to you together with this Disclosure Statement and the Plan. Holders of Claims and
Equity Interests should read the instructions carefully, complete, date and sign the ballot, and
transmit it to the Debtors in the postage-prepaid envelope enclosed. IN ORDER TO BE
TABULATED, YOUR BALLOT MUST BE RECEIVED AT THE INDICATED ADDRESS
NOT LATER THAN 5:00 P.M. MOUNTAIN TIME, MAY 7, 2010. FAILURE TO VOTE FOR
OR VOTE TO REJECT THE PLAN WILL NOT AFFECT THE TREATMENT TO BE
ACCORDED A CLAIM OR EQUITY INTEREST IF THE PLAN NEVERTHELESS IS
CONFIRMED.
Section 7.06 Hearing on Confirmation.
Objections to confirmation of the Plan are due not later than May 7, 2010. The hearing
on confirmation of the Plan has been set for Wednesday, May 12, 2010, at 9:00 a.m., before the
Honorable Sidney B. Brooks, United States Bankruptcy Judge, in Courtroom E, 5th Floor, 721
19th Street, Denver, Colorado. The Bankruptcy Court shall confirm the Plan at that hearing only
if the following requirements, as further set forth in Section 1129 of the Bankruptcy Code, are
satisfied:
(1) Best Interests of Creditors. In order to satisfy this requirement, the Debtors must
establish that with respect to each Class that each holder of a Claim or interest in that Class has
accepted the Plan or will receive or retain under the Plan on account of such Claim or interest
property of a value that is not less than the amount that such holder would receive if the Debtors
were to be liquidated under Chapter 7 of the Bankruptcy Code. The Debtors anticipate that the
Court will make such a determination at the time of the hearing on confirmation.
(2) Feasibility. The Debtors must establish that confirmation of the Plan is not likely
to be followed by liquidation, or the need for further financial reorganization, of the Debtors.
The Debtors believe that the Plan is feasible and that the Bankruptcy Court will so find after
considering the evidence presented at the confirmation hearing.
(3) Confirmation Without Acceptance by All. The Bankruptcy Code contains
provisions for confirmation of a Plan even if the Plan is not accepted by all impaired Classes, as
long as at least one impaired Class of Claims has accepted it. The so-called "cram down"
provisions permit confirmation of a Plan notwithstanding its rejection by one or more Classes.
If a Class of Secured Claims rejects the Plan, the Plan may still be confirmed so long as
the Plan does not discriminate unfairly as to the Class, and is "fair and equitable" to such Class
under § 1129(b) of the Bankruptcy Code. Section 1129(b) of the Bankruptcy Code states that the
"fair and equitable" standard requires, among other things, that the Plan provide (i) that the Lien
securing the Claims of members of the Class is to be left in place and the holders of the Claims
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will receive deferred cash payments of a present value equal to the lesser of the amount of such
Claims or the value of the collateral securing such Claims; (ii) that the collateral securing the
Claims be sold free of the Lien with the Lien attaching to the proceeds and with such Lien on the
proceeds being treated under one of the two other standards described in this paragraph; or (iii) a
treatment for the Claim that is the "indubitable equivalent" of the Claim. The Debtors believe
that the Plan meets this test and can be confirmed to the extent necessary.
If the Class of unsecured Claims rejects the Plan, the Plan may still be confirmed so long
as the Plan is not unfairly discriminatory as to that Class and is "fair and equitable" to such
Class. Under § 1129(b)(2)(B) of the Bankruptcy Code, the Plan is "fair and equitable" as to the
Class of unsecured Claims if, among other things, the Plan provides that (i) each holder of a
Claim included in the rejecting Class receive or retain on account of that Claim property that has
a value, as of the effective date, equal to the allowed amount of such Claim; or that (ii) the holder
of any Claim or interest that is junior to the Claims of such Class will not received or retain on
account of such junior Claim or interest any property at all. The Debtors believe that the Plan
meets this test as to the impaired Class of unsecured Claims. Therefore, the Debtors believe that
the Bankruptcy Court could confirm the Plan even if it is rejected by Class 7C and Class 11, as
long as one impaired Class of Claims accepts it.
(4) Confirmation in Less Than all Estates. Under the Severability and Reformation
clause in the Plan contained in section 17.7, the Trustee will seek confirmation of the Plan in any
of the three estates that receives the requisite acceptances even if the Plan cannot be confirmed as
to the other Debtor or Debtors.
ARTICLE VIII.
TAX AND SECURITIES LAW CONSEQUENCE OF THE PLAN
THE TREATMENT OF CLAIMS AND INTERESTS UNDER THE PLAN MAY
HAVE TAX AND SECURITIES LAW IMPLICATIONS. HOLDERS OF THE CLAIMS
AND INTERESTS ARE URGED TO OBTAIN INDEPENDENT ADVICE FROM THEIR
OWN COUNSEL REGARDING THE APPLICABILITY OF FEDERAL AND STATE
TAX AND SECURITIES LAWS.
THE FOREGOING SUMMARY OF THE PLAN DOES NOT DISCUSS ALL
ASPECTS OF FEDERAL INCOME TAXATION THAT MAY BE RELEVANT TO A
PARTICULAR HOLDER IN LIGHT OF EACH HOLDER'S PARTICULAR
CIRCUMSTANCES AND INCOME TAX SITUATION. HOLDERS OF CLAIMS AND
INTERESTS ARE HEREBY NOTIFIED THAT: (A) ANY DISCUSSION OF U.S.
FEDERAL TAX ISSUES IN THIS DISCLOSURE STATEMENT IS NOT INTENDED TO
BE RELIED UPON, AND CANNOT BE RELIED UPON, BY ANY HOLDER FOR ANY
PURPOSE; (B) ANY DISCUSSION OF U.S. FEDERAL TAX ISSUES IN THIS
DISCLOSURE STATEMENT IS INCLUDED IN CONNECTION WITH THE PLAN
ONLY; AND (C) EACH HOLDER OF A CLAIM OR INTEREST SHOULD SSEK
ADVISE FROM AN INDEPENDENT TAX ADVISOR.
The federal income tax consequences of the Plan to holders of Claims and Interests will
depend on, among other things: the origin of each holder's Claim or Interest, when the Claim
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becomes an Allowed Claim, when the holder receives a payment on account of an Allowed
Claim, whether the holder reports income using the accrual or cash method of accounting,
whether the holder has taken a bad debt deduction or worthless security deduction with respect to
the Claim, and whether the Claim constitutes a"security" for federal income tax purposes.
THE FOREGOING IS INTENDED ONLY AS A SUMMARY OF CERTAIN
FEDERAL INCOME TAX ASPECTS OF THE PLAN AND IS NOT A SUBSTITUTE
FOR CAREFUL TAX PLANNING AND ADVICE FROM INDEPENDENT TAX
PROFESSIONALS. HOLDERS OF CLAIMS AND INTEREST ARE URGED TO
CONSULT WITH THEIR OWN TAX ADIVSORS REGARDING THE TAX
CONSQUENCES OF THE PLAN.
ARTICLE IX.
CONCLUSION
The Trustee encourages all creditors to vote to accept the Plan and to evidence such
acceptance by returning properly completed ballots immediately.
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DATED this 7th day of April,2010.
By:
M. STEP PE S
Chapter 1 T tee for Renewable
7/7,In
By:
M. STE EN ETERS
Chapter 11 Tru tee for Tire Recycling,Inc.
By: r
M. S EN PETERS
Chapter 11 Trustee for Midway Landfill
Inc.
•
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Doti 3198178/2
Approved as to form:
LINDQUIST & VENNUM P.L.L.P.
By: /s/Harrie F. Lewis
Harrie F. Lewis, #10972
Harold G. Morris, Jr., #8409
John C. Smiley, #16210
600 17th Street, Suite 1800 South
Denver, Colorado 80202
Telephone: (303) 573-5900
Facsimile: (303) 573-1956
E-mail: hlewis@lindquist.com
E-mail: hmorris@lindquist.com
E-mail: jsmiley@lindquist.com
Attorneys for the Chapter 11 Trustee
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UNITED STATES BANKRUPTCY COURT
FOR THE DISTRICT OF COLORADO
In re: )
RENEWABLE RESOURCES, INC., ) Case No. 07-17680 SBB
Debtor. ) Chapter 11
)
)
In re: )
) Case No. 07-17687 SBB
MIDWAY LANDFILL, INC., ) Chapter 11
Debtor. )
)
)
In re: )
) Case No. 07-17691 SBB
TIRE RECYCLING, INC., ) Chapter 11
Debtor. )
) JOINTLY ADMINISTERED CASE
) NO. 07-17680-SBB
CHAPTER 11 TRUSTEE'S PLAN OF REORGANIZATION
(DATED FEBRUARY 10, 2010)
Doc#3096802\4
TABLE OF CONTENTS
ARTICLE 1. INTRODUCTION 1
ARTICLE 2. DEFINITIONS 2
2.1 Administrative Claim. 2
2.2 Allowed Claim 2
2.3 Allowed Interest. 3
2.4 Assets 3
2.5 Available Cash 3
2.6 Ballot. 3
2.7 Bankruptcy Code. 3
2.8 Bankruptcy Court or Court 4
2.9 Bankruptcy Rules. 4
2.10 Bar Date 4
2.11 Business Day. 4
2.12 Cash. 4
2.13 Chapter 11 Cases. 4
2.14 Claim. 4
2.15 Claimant 4
2.16 Class 4
2.17 Confirmation Date. 4
2.18 Confirmation Hearing 4
2.19 Confirmation Order. 4
2.20 Creditor 5
2.21 Debtors 5
2.22 Disallowed Claim. 5
2.23 Disallowed Interest 5
2.24 Disclosure Statement. 5
2.25 Disputed Claim 5
2.26 Disputed Interest 5
2.27 Effective Date. 5
2.28 Equity Interests 5
2.29 Estate. 5
2.30 Estimated Amount. 5
2.31 Executory Contract 6
2.32 Face Amount 6
2.33 Final Order 6
2.34 General Unsecured Claim 6
2.35 Initial Distribution Date 6
2.36 Insurance Company. 6
2.37 Insurance Policy. 6
2.38 Insurance Claim 6
2.39 Intercompany Claims 6
2.40 Intercompany Equity Interests 7
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2.41 Interest Rate 7
2.42 Late Claim. 7
2.43 Lien 7
2.44 MLI 7
2.45 MLI Sale 7
2.46 MLI Sale Order 7
2.47 MLI Settlement Agreement. 7
2.48 Penalty Claim. 7
2.49 Person. 7
2.50 Petition Date. 7
2.51 Plan. 7
2.52 Priority Tax Claim 8
2.53 Priority Unsecured Claims 8
2.54 Pro Rata. 8
2.55 RRI 8
2.56 Secured Claim 8
2.57 Statements and Schedules 8
2.58 Subordinated Unsecured Claims. 8
2.59 TRI 8
2.60 TRI Sale 8
2.61 TRI Sale Order 8
2.62 Trustee. 9
2.63 Unsecured Claims Base. 9
2.64 Unsecured Recovery Fraction. 9
ARTICLE 3. CLASSIFICATIONS OF CLAIMS AND EQUITY INTERESTS 9
3.1 Class 1: Administrative Claims. 9
3.2 Class 2: Priority Unsecured Claims 9
3.3 Class 3: Priority Tax Claims 10
3.4 Class 4: Secured Claims Against MLI. 10
3.5 Class 5: Secured Claims Against TRI. 10
3.6 Class 6: Secured Claims Against RRI. 10
3.7 Class 7: General Unsecured Claims and Late Claims. 10
3.8 Class 8: Intercompany Claims 10
3.9 Class 9: Subordinated Unsecured Claims Against RRI 10
3.10 Class 10: Intercompany Equity Interests 10
3.11 Class 11: Equity Interests. 10
ARTICLE 4. TREATMENT OF CLASSES OF CLAIMS THAT ARE NOT IMPAIRED
UNDER THE PLAN 11
4.1 Treatment of Class 1 (Administrative Claims) 11
4.2 Treatment of Class 4 (Secured Claims Against MLI). 12
4.3 Treatment of Class 5 (Secured Claims Against TRI). 12
4.4 Treatment of Class 6 (Secured Claims Against RRI) 12
4.5 Treatment of Class 7A (MLI Settlement Claims). 12
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Dock 3096802\4
4.6 Treatment of Class 10 Interests (Intercompany Equity Interests). 12
ARTICLE 5. TREATMENT OF PRIORITY CLAIMS 12
5.1 Treatment of Class 2 (Priority Unsecured Claims). 12
5.2 Treatment of Class 3 (Priority Tax Claims). 13
ARTICLE 6. TREATMENT OF GENERAL UNSECURED AND LATE CLAIMS
AGAINST MLI AND TRI 13
6.1 Treatment of Class 7B (Remaining General Unsecured Claims Against MLI). 13
6.2 Treatment of Class 7C (General Unsecured Claims Against TRI). 14
6.3 Treatment of Class 7E (Late Claims Against MLI). 14
6.4 Treatment of Class 7F (Late Claims Against TRI) 15
ARTICLE 7. TREATMENT OF CLASS 7D CLAIMS 16
7.1 Distribution 16
7.2 Impairment 16
ARTICLE 8. TREATMENT OF CLASS 8 CLAIMS 16
ARTICLE 9. TREATMENT OF CLASS 9 CLAIMS 17
9.1 Distribution 17
9.2 Deemed Rejection 17
ARTICLE 10. TREATMENT OF CLASS 11 EQUITY INTERESTS 17
10.1 Distribution 17
10.2 Deemed Rejection 17
ARTICLE 11. MEANS FOR EXECUTION OF THE PLAN 17
11.1 Implementing Actions. 17
11.2 Discharge of Debtors. 18
11.3 Valuation of Collateral. 18
11.4 Preservation of Debtors' Claims, Demands and Causes of Action. 18
11.5 Compliance With Tax Requirement. 18
11.6 Exoneration and Reliance 18
11.7 Distribution to Holders of Insurance Claims 19
ARTICLE 12. DISTRIBUTION PROCEDURES 19
12.1 Procedures for Calculating Distributions on Account of General Unsecured
and Late Claims 19
12.2 Limitation on De Minimus Payments 20
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ARTICLE 13. GENERAL PROCEDURES FOR OBJECTING TO CLAIMS AND
EQUITY INTERESTS AND RESOLVING AND TREATING CONTESTED AND
CONTINGENT CLAIMS AND EQUITY INTERESTS 20
13.1 Objections and Bar Date for Filing Objections to Claims 20
13.2 Settlement of Claims. 20
13.3 Estimation of Claims. 21
13.4 Payment of Disputed Claims. 21
ARTICLE 14. EXECUTORY CONTRACTS, UNEXPIRED LEASES AND RELATED
MATTERS 21
14.1 Rejection 21
14.2 Filing Claims. 21
ARTICLE 15. MODIFICATION OF THE PLAN 21
15.1 Authority 21
15.2 Acceptance 22
15.3 Subsequent Modifications. 22
ARTICLE 16. RETENTION OF JURISDICTION 22
16.1 In General. 22
16.2 Plan Disputes and Enforcement 22
16.3 Further Orders 22
16.4 Other Claims 22
16.5 Final Decree 22
16.6 Appeals. 22
16.7 Executory Contracts. 23
16.8 Contested Matters 23
16.9 Purchase Agreements. 23
16.10 Asset Recovery. 23
16.11 Taxes 23
16.12 Objections to Claims. 23
16.13 Avoidance Actions. 23
16.14 Other Matters 23
16.15 Facilitation of The Plan. 23
16.16 Failure of Bankruptcy Court to Exercise Jurisdiction. '3
ARTICLE 17. GENERAL PROVISIONS 24
17.1 Extension of Payment Dates 24
17.2 Confirmation By Non-Acceptance Method 24
17.3 Captions. 24
17.4 Payment of Statutory Fees 24
17.5 Closing of the Case 24
17.6 Successors and Assigns. 24
iv
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17.7 Severability and Reformation 24
17.8 Disclosure Statement. 25
17.9 Notices. 25
v
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ARTICLE 1.
INTRODUCTION
This Plan of Reorganization (the "Plan"), including any modification(s), is
proposed by M. Stephen Peters as Chapter 11 Trustee for the following affiliated debtors:
(i) RENEWABLE RESOURCES, INC., a Colorado corporation ("RRI"), (ii) MIDWAY
LANDFILL, INC., a Colorado corporation ("MLI"), and (iii) TIRE RECYCLING, INC.,
a Colorado corporation ("TRI") (collectively, RRI, MLI, and TM will be referred to as
the "Debtors"). The Chapter 11 Cases of the Debtors were filed on July 17, 2007, and
these cases have been jointly administered pursuant to an Order of the Bankruptcy Court
dated July 23, 2007.
MLI and TRI are wholly-owned subsidiaries of RRI. The assets of MLI were
sold to Colorado Energy Recyclers, Inc., on December 22, 2008 the ("MLI Sale"),
pursuant to an order of the Bankruptcy Court (Docket #226) dated October 23, 2008
("MLI Sale Order"). The assets of TM were sold to Magnum D'Or Resources, Inc., on
August 25, 2009 (the "TRI Sale"), pursuant to an order of the Bankruptcy Court (Docket
#336) dated August 4, 2009 ("TRI Sale Order"). The Plan provides for the payment in
full of all Allowed Claims (as defined below) against MLI and all Allowed Claims
against TM from the proceeds of their respective sales. Any proceeds remaining after
such payment shall be distributed to the parent corporation, RRI, and then applied toward
the payment of Allowed Claims against RRI. Upon full consummation of the Plan,
Debtors shall cease to exist.
ALL CREDITORS AND EQUITY INTEREST HOLDERS SOLICITED TO
VOTE ARE ENCOURAGED TO CONSULT THE DISCLOSURE STATEMENT
THAT ACCOMPANIES THIS PLAN BEFORE VOTING TO ACCEPT OR REJECT
THE PLAN. AS ORDERED BY THE BANKRUPTCY COURT, BALLOTS TO
ACCEPT OR REJECT THE PLAN MUST BE CAST BY 5:00 P.M., DENVER TIME,
ON MAY 7, 2010. AMONG OTHER INFORMATION, THE DISCLOSURE
STATEMENT CONTAINS INFORMATION CONCERNING THE DEBTORS, THE
HISTORICAL BACKGROUND OF THE DEBTORS DURING THE CHAPTER 11
CASES AND THE PRE-PETITION PERIOD, THE FINANCIAL RESULTS DURING
THE COURSE OF THESE CHAPTER 11 CASES, THE APPOINTMENT OF THE
TRUSTEE, AND A SUMMARY AND ANALYSIS OF THE PLAN. NO
SOLICITATION MATERIALS, OTHER THAN THE DISCLOSURE STATEMENT
AND RELATED MATERIALS TRANSMITTED THEREWITH, HAVE BEEN
APPROVED BY THE BANKRUPTCY COURT OR ARE AUTHORIZED BY THE
BANKRUPTCY CODE FOR USE IN SOLICITING ACCEPTANCES AND
REJECTIONS OF THE PLAN.
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ARTICLE 2.
DEFINITIONS
For purposes of the Plan, and except as expressly provided otherwise herein or
unless the context otherwise requires, all of the defined terms stated in Article 2 will have
the meanings hereafter stated. For purposes of the Plan and such defined terms, the
singular and plural uses of such defined terms will be fungible and interchangeable
(unless context otherwise requires); and the defined terms will include masculine,
feminine and neutered genders. The defined terms stated in Article 2 are substantive
terms of the Plan; and Article 2 will be deemed incorporated throughout the rest of the
Plan to apply the substantive provisions included in the defined terms.
Any term used in the Plan that is not defined herein, but that is used in the
Bankruptcy Code or the Bankruptcy Rules, shall have the meaning assigned to that term
in the Bankruptcy Code or the Bankruptcy Rules. Unless otherwise specified, all section,
article and exhibit references in this Plan are to the respective section in, article of, or
exhibit to this Plan, as the same may be amended, waived, or modified from time to time.
The headings of this Plan are for convenience of reference only and shall not limit or
otherwise affect the provisions hereof Accordingly, the defined terms are as follows:
2.1 Administrative Claim. This term will refer to and mean any Claim or
portion of a Claim that: is a cost or expense of the administration of an Estate under
§ 503(b) of the Bankruptcy Code that is entitled to priority under § 507(a) of the
Bankruptcy Code, including, without limitation, (i) any actual and necessary cost and
expense of preserving an Estate or operating the business of a Debtor, (ii) all fees and
expenses of professionals entitled to compensation under §§ 326, 327, 328, 330, 331 and
503 of the Bankruptcy Code, which shall not include the allowance of any Claim for, or
award or payment to any professional (other than the Trustee) of, any success fee, bonus,
fee enhancement or similar reward over and above the reasonable and necessary fees and
expenses at the usual and customary hourly rates of such professional, subject to any
additional allowances or limitations as may have been approved by the Bankruptcy
Court, and (iii) all fees and charges assessed against an Estate under 28 U.S.C. § 1930 et.
seq. Compensation payable to the Trustee shall be payable pursuant to 11 U.S.C.
§ 330(a)(7) as a commission. Administrative Claims are classified in Class 1.
2.2 Allowed Claim. In case of an Administrative Claim, this term will refer to
and mean an Administrative Claim that has become allowed pursuant to Section 4.1 of
the Plan. In case of Claims other than Administrative Claims, this term shall refer to a
Claim against a Debtor: (a) (i) as to which a proof of such Claim has been filed with the
Bankruptcy Court on or before the Bar Date or, if such Claim arises from the rejection of
an Executory Contract, on or before the first Business Day which is the earlier of thirty
(30) days after the entry of the order rejecting the Executory Contract or thirty (30) days
after the Confirmation Date, or (ii) which has been or hereafter is scheduled as liquidated
in amount and not disputed or contingent and, in either event; (b) (i) as to which no
objection to the allowance of such Claim, or request for subordination thereof(which (if
granted) would affect the distribution to the creditor asserting such Claim), has been filed
within any applicable time period fixed by the Bankruptcy Code, the Bankruptcy Rules or
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the Bankruptcy Court, or (ii) as to which the order allowing such Claim has become a
Final Order. If any Claim, or portion thereof, or the Creditor holding such Claim is
subject to any defense, set off, counterclaim, recoupment, or other adverse claim of any
kind of a Debtor, that Claim will be deemed a Disputed Claim, only to the extent of any
such defense, setoff, counterclaim, recoupment or other adverse claim; and the disputed
portion of such claim will not become an Allowed Claim unless and until all such matters
are resolved or adjudicated fully and finally, with all appellate rights and remedies having
been exhausted. UNLESS ANY EARLIER TIME IS FIXED BY ORDER OF THE
BANKRUPTCY COURT, AND SUBJECT TO AMENDMENT RIGHTS AND THE
RELATION BACK OF AMENDMENTS UNDER APPLICABLE FEDERAL OR
STATE PROCEDURAL RULES, ANY OBJECTION TO THE ALLOWANCE OF
ANY CLAIM AND THE ASSERTION OF ANY DEFENSE, SET OFF,
COUNTERCLAIM, RECOUPMENT, OR OTHER ADVERSE CLAIM OF ANY KIND
MUST BE FILED ON OR BEFORE THE FIRST BUSINESS DAY THAT IS THIRTY
(30) DAYS AFTER THE EFFECTIVE DATE.
2.3 Allowed Interest. This term will refer to and mean every Equity Interest:
(a) (i) as to which a proof of interest has been filed with the Bankruptcy Court on or
before the date designated by the Bankruptcy Court as the last date for filing proofs of
interests, or (ii) which has been or hereafter is scheduled as liquidated in amount and not
disputed or contingent and, in either event; (b) (i) as to which no objection to the
allowance of such interest has been filed within any applicable time period fixed by the
Bankruptcy Code, the Bankruptcy Rules or an order of the Bankruptcy Court, or (ii) as to
which any objection has been determined by a Final Order of the Bankruptcy Court
allowing such interest.
2.4 Assets. This term will refer to and mean all of the right, title, and interest
in and to property of whatsoever type or nature of a Debtor as of the Petition Date,
together with property subsequently acquired by a Debtor, and including, but not limited
to, property as defined in § 541 of the Bankruptcy Code (each identified item of property
being herein sometimes referred to as an Asset).
2.5 Available Cash. This term will refer to and mean the Cash remaining in
the Estates of MLI and TRI after payment, or adequate reserve for payment, of all
Allowed Claims against MLI and TRI pursuant to this Plan, which remaining Cash shall
then be paid over to RRI on account of its Intercompany Equity Interests. Available Cash
in the Estate of RRI for purposes of distribution shall mean Available Cash less any
reserves established by the Trustee in his sole discretion for payment of post-Effective
Date Administrative Claims.
2.6 Ballot. This term will refer to and mean the ballot for accepting or
rejecting the Plan which will be distributed to the Creditors holding the Claims in the
Classes of Claims that are impaired under the Plan and entitled to vote on the Plan.
2.7 Bankruptcy Code. This term will refer to and mean Title 11 of the United
States Code, 11 U.S.C. §§101, et seq., as it may be amended from time to time during the
Chapter 11 Cases.
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2.8 Bankruptcy Court or Court. These terms are completely synonymous
and interchangeable, and will refer to and mean the United States Bankruptcy Court for
the District of Colorado, or such other court that exercises jurisdiction over part or all of
the Chapter 11 Cases, including the United States District Court for the District of
Colorado to the extent that the reference of part or all of the Chapter 11 Cases is
withdrawn.
2.9 Bankruptcy Rules. This term will refer to and mean the Federal Rules of
Bankruptcy Procedure, as amended from time to time, as applicable to the Chapter 11
Cases, promulgated under 28 U.S.C. §2075 of the United States Code and the local rules
for the Bankruptcy Court and the District Court for the District of Colorado.
2.10 Bar Date. This term will refer to and mean October 15, 2007, which is the
date established by order of the Bankruptcy Court by which a Claim must be evidenced
by the filing of a proof of Claim with the Bankruptcy Court.
2.11 Business Day. This term will refer to and mean every day except
Saturdays, Sundays, federal holidays observed by the Bankruptcy Court, and Colorado
state holidays observed by the Bankruptcy Court.
2.12 Cash. This term will refer to and mean cash, cash equivalents, bank
deposits, and negotiable instruments payable on demand.
2.13 Chapter 11 Cases. This term will refer to and mean the jointly
administered cases of RRI, MIA and TRI commenced by each of them under Chapter 11
of the Bankruptcy Code on the Petition Date in the Bankruptcy Court.
2.14 Claim. This term will refer to and mean "claim" as defined in Bankruptcy
Code §101(5).
2.15 Claimant. This term will refer to and mean a holder of a Claim or a holder
of an Equity Interest.
2.16 Class. This term will refer to and mean each of the classifications of the
Claimants' Claims and Equity Interests described in Article 3 of the Plan.
2.17 Confirmation Date. This term will refer to and mean the date on which
the Bankruptcy Court enters the Confirmation Order.
2.18 Confirmation Hearing. This term will refer to and mean the hearing
regarding confirmation of the Plan conducted pursuant to Bankruptcy Code §1128, as
adjourned or continued from time to time.
2.19 Confirmation Order. This term will refer to and mean the order entered by
the Bankruptcy Court which confirms the Plan pursuant to Bankruptcy Code §1129. The
Confirmation Order shall be in form and substance satisfactory to the Trustee.
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2.20 Creditor. This term will refer to and mean "creditor" as defined in
Bankruptcy Code §101(10).
2.21 Debtors. This term will refer to and mean RRI, MLI and TRI in all of
their capacities as pre-petition, post-petition or post-confirmation Debtors.
2.22 Disallowed Claim. This term will refer to and mean a Claim, or any
portion thereof, that has been disallowed or expunged by a Final Order.
2.23 Disallowed Interest. This term will refer to and mean an Equity Interest,
or any portion thereof, that has been disallowed or expunged by a Final Order.
2.24 Disclosure Statement. This term will refer to and mean the Disclosure
Statement prepared by the Trustee, presented by the Trustee with respect to the Plan, and
approved by the Bankruptcy Court in accordance with Bankruptcy Code §1125, and
Bankruptcy Rule 3017, including, but not limited to, any modification(s) and additional
disclosure(s) (if any) provided by the Trustee to comply with Bankruptcy Code §1127(c).
2.25 Disputed Claim. This term will refer to and mean every Claim that is not
an Allowed Claim and that has not become a Disallowed Claim and includes, without
limitation, Claims that: (a) (i) have not been scheduled by the Debtors in their respective
Statements and Schedules, or (ii) have been Scheduled at $0.00; (b) are the subject of an
objection in the Bankruptcy Court; (c) require a proof of Claim to be filed, and as to
which no such application or proof of Claim has been timely filed or otherwise deemed
timely filed with the Bankruptcy Court pursuant to the Bankruptcy Code, any Final Order
or under applicable law; or (d) the allowance or disallowance of which is not yet the
subject of a Final Order.
2.26 Disputed Interest. This term will refer to and mean every Equity Interest
that is not an Allowed Interest and that has not become a Disallowed Interest.
2.27 Effective Date. This term will refer to and mean the date upon which the
Confirmation Order becomes a final Order.
2.28 Equity Interests. This term will refer to and mean any ownership interest
or share in RRI (including, without limitation, all options, warrants or other rights to
obtain such an interest or share), whether or not transferrable, preferred, voting or
denominated "stock", or a similar security and whether issued or not. Equity Interests are
classified in Class 11.
2.29 Estate. This term will refer to and mean the legal entity administering the
property of RRI, MLI and TRI, respectively, immediately prior to the Confirmation Date.
2.30 Estimated Amount. This term will refer to and mean with respect to a
Claim that is not a Disallowed Claim, an amount to be allowed with respect to such
Claim as agreed by the Trustee and the holder of the Claim, or if no agreement can be
reached, by Order of the Bankruptcy Court.
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2.31 Executory Contract. This term will refer to and mean every unexpired
lease and other contract that is subject to being assumed or rejected under Bankruptcy
Code §365.
2.32 Face Amount. This term will refer to and mean: (i) when used in
reference to a Disputed or Disallowed Claim, the full stated amount claimed by the
holder of such Claim in any proof of Claim timely filed with the Bankruptcy Court or
otherwise deemed timely filed by any Order of the Bankruptcy Court or other applicable
bankruptcy law; and (ii) when used in reference to an Allowed Claim, the allowed
amount of such Claim.
2.33 Final Order. This term will refer to and mean any order of the Bankruptcy
Court as to which (a) the time for appeal has expired and no appeal has been timely
taken; (b) any appeal that has been timely taken and has been finally determined or
dismissed; or (c) an appeal has been timely taken but such order has not been stayed.
2.34 General Unsecured Claim. This term will refer to and mean every
unsecured Claim against MLI, TRI, and RRI (including but not limited to, every such
Claim arising from the rejection of an Executory Contract) that is not an Administrative
Claim, a Priority Unsecured Claim, or a Priority Tax Claim. The General Unsecured
Claims against each Debtor are separately classified for voting and administrative
purposes as Classes 7A (MLI), 7B (MLI), 7C (TRI), and 7D (RRI).
2.35 Initial Distribution Date. This term will refer to and mean the date,
occurring as soon as practicable after the Effective Date, upon which distributions may be
calculated with reasonably certainty, and thereafter paid within ten (10) Business Days,
from an Estate to the Classes of Claims against it in accordance with this Plan.
2.36 Insurance Company. This term will refer to and mean any entity that has
provided insurance coverage to any of the Debtors pursuant to an Insurance Policy.
2.37 Insurance Policy. This term will refer to and mean any policy of insurance
provided by a Person under which any Debtor is insured, and which policy may provide
coverage for a Claim, including, without limitation, policies relating to workers'
compensation, property and marine, business auto liability, business auto physical
damage coverage, casualty (foreign) package, commercial crime, commercial general
liability, contractors professional and pollution liability, directors and officers liability,
employment practices liability, executive risk coverage (special risk), fiduciary liability,
flood coverage, owners and contractors protective liability, pollution and remediation (air
systems), railroad protective liability, stop gap coverage, temporary disability, umbrella
coverage and exposure buyback.
2.38 Insurance Claim. This term will refer to and mean any Claim for which
there may be either partial or full coverage under an Insurance Policy.
2.39 Intercompany Claims. This term will refer to and mean any Claims
between or among the Debtors. Intercompany Claims are classified in Class 8.
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2.40 Intercompany Equity Interests. This term will refer to and mean all direct
and indirect stock and/or equity interests held by RRI in MLI and in TRI. Intercompany
Equity Interests are classified in Class 10.
2.41 Interest Rate. This term will refer to and mean the federal statutory
interest rate pursuant to 28 U.S.C. § 1961(a) which, as of the Petition Date, was five
percent (5.00%) per annum.
2.42 Late Claim. This term will refer to and mean every Claim against MLI or
TRI represented by a proof of Claim that was first filed after the Bar Date. Late Claims
are separately classified for voting and administrative purposes as Classes 7E (MLI) and
7F (TRI).
2.43 Lien. This term will refer to and mean a charge against or interest in an
Asset to secure payment of a debt or performance of an obligation.
2.44 MLI. This term will refer to and mean Midway Landfill, Inc., a Colorado
corporation, the debtor in Case No. 07-17687 SBB.
2.45 MLI Sale. As defined in Article I of this Plan.
2.46 MLI Sale Order. As defined in Article 1 of this Plan.
2.47 MLI Settlement Agreement. This term will refer to and mean the
Settlement Agreement entered into by MLI with various Claimants on July 21, 2008, as
modified October 16, 2008, and approved by Bankruptcy Court Orders dated October 6,
2008 (Docket#213), and November 10, 2008 (Docket#238).
2.48 Penalty Claim. This term will refer to and mean a General Unsecured
Claim: (i) for any fine, penalty or forfeiture or for multiple, exemplary or punitive
damages arising before the Petition Date, or arising after the Petition Date with respect to
a Claim arising prior to the Petition Date, to the extent such fine, penalty, forfeiture or
damages is not compensation for actual pecuniary loss suffered by the holder of such
Claim, including, without limitation, any penalty assessed by any governmental unit with
respect to taxes arising prior to the Petition Date; or (ii) that is subordinated by Final
Order of the Bankruptcy Court, issued pursuant to Bankruptcy Code §510, below the
priority of General Unsecured Claims.
2.49 Person. This term will refer to and mean "person" as defined in
Bankruptcy Code §101(41).
2.50 Petition Date. This term will refer to and mean the filing date of the
voluntary Chapter 11 petitions of RRI, MLI and TRI commencing the Chapter 11 Cases.
The Petition Date in each of the Chapter 11 Cases was July 17, 2007.
2.51 Plan. This term will refer to and mean this Chapter 11 plan of
reorganization, either in its present form or as it may be altered, amended, modified or
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self-amended from time to time by the Trustee in accordance with the Plan, the
Bankruptcy Code and the Bankruptcy Rules.
2.52 Priority Tax Claim. This term will refer to and mean any and all Claims
that are Allowed Claims and that are entitled to priority pursuant to Bankruptcy Code
§507(a)(8). Priority Tax Claims are classified in Class 3.
2.53 Priority Unsecured Claims. This term will refer to and mean every
General Unsecured Claim or portion thereof that is an Allowed Claim and that is not an
Administrative Claim or Priority Tax Claim, and that is entitled to priority under the
applicable provisions of Bankruptcy Code §507. Priority Unsecured Claims are
classified in Class 2.
2.54 Pro Rata. This term will refer to and mean the proportion that an Allowed
Claim or Equity Interest in a particular Class bears to the total amount of all Allowed
Claims or Equity Interests in that Class.
2.55 RRI. This term will refer to and mean Renewable Resources, Inc., a
Colorado corporation, the debtor in Case No. 07-17680 SBB.
2.56 Secured Claim. This term will refer to and mean a Claim against a Debtor
held by any Person or entity, including a judgment creditor of a Debtor, secured by a
Lien, which Lien is valid, perfected and enforceable under applicable law or by reason of
an order of the Bankruptcy Court, and is not subject to avoidance under the Bankruptcy
Code or applicable non-bankruptcy law, but only to the extent of the value of any interest
in property of the respective Estate securing such Claim or, if applicable, the amount
permitted pursuant to an election made under Bankruptcy Code §1111(b). Secured
Claims are classified in Classes 4, 5, and 6.
2.57 Statements and Schedules. This term will refer to and mean the Statement
of Affairs and related schedules filed by the Debtors in their respective Chapter 11 Cases
on or about August 10, 2007, in accordance with Rule 1007 of the Bankruptcy Rules, and
any and all amendments thereto.
2.58 Subordinated Unsecured Claims. This term will refer to and mean any
and all Allowed Claims that are Penalty Claims; Claims arising from the rescission of the
purchase and sale of securities of RRI or from claims for damages arising from such a
purchase and sale; Claims that are subordinated pursuant to Bankruptcy Code §510; and
any other claims subordinated pursuant to final order of the Bankruptcy Court.
Subordinated Unsecured Claims are classified in Class 9.
2.59 TRI. This term will refer to and mean Tire Recycling, Inc., a Colorado
corporation, the debtor in Case No. 07-17691 SBB.
2.60 TRI Sale. As defined in Article 1 of this Plan.
2.61 TRI Sale Order. As defined in Article 1 of this Plan.
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2.62 Trustee. This term will refer to and mean M. Stephen Peters, in his
capacity as Chapter 11 trustee for each of the Debtors pursuant to the order of the
Bankruptcy Court approving his appointment as such (Docket #276) and entered June 3,
2009.
2.63 Unsecured Claims Base. This term will refer to and mean on any
distribution date (i) the sum of the amount of all General Unsecured Claims that are
Allowed Claims, plus (ii) the Estimated Amount or the Face Amount, if any, whichever
is less, of any and all General Unsecured Claims that are Disputed Claims on such date;
plus.(iii) the amount provided in any other applicable orders of the Bankruptcy Court
dealing with the estimation of, or establishing reserves on account of, contingent or
unliquidated General Unsecured Claims, plus (iv) the amount of additional reserves
established by the Trustee from time to time on account of General Unsecured Claims.
2.64 Unsecured Recovery Fraction. This term will refer to and mean as to each
holder of a General Unsecured Claim and on the date of each distribution, the fraction to
be applied to Allowed Claims for distribution purposes of this Plan, the numerator of
which is the amount of the Allowed Claim and the denominator of which is the
Unsecured Claims Base.
ARTICLE 3.
CLASSIFICATIONS OF CLAIMS AND EQUITY INTERESTS
All Claims against the Debtors of whatever nature, whether or not scheduled or
unliquidated, absolute or contingent, including all Claims arising from the rejection of
Executory Contracts, and all Equity Interests, whether or not resulting in an Allowed
Claim or Allowed Interest, shall be bound by the provisions of the Plan and are hereby
classified under the Plan as hereinafter stated in this Article 3. As of the Confirmation
Hearing, any Class of Claims that does not contain any Claim will be deemed deleted
automatically from the Plan; and any Class of Claims that does not contain an Allowed
Claim (or a Claim temporarily or provisionally allowed by the Bankruptcy Court for
voting purposes) will be deemed deleted automatically from the Plan with respect to the
voting on confirmation of the Plan.
3.1 Class 1: Administrative Claims. The Class I Claims will be all Allowed
Claims that are Administrative Claims. For purposes of distribution and administering
this Plan, the Class 1 Claims are divided into the following three subclasses: Class 1A,
Administrative Claims against MLI; Class 1B, Administrative Claims against TRI; and
Class 1C, Administrative Claims against RRI. Class 1 Claims are unimpaired.
3.2 Class 2: Priority Unsecured Claims. The Class 2 Claims will be all
Allowed Claims that are Priority Unsecured Claims. For purposes of distribution and
administering this Plan, the Class 2 Claims are divided into the following three
subclasses: Class 2A, Priority Unsecured Claims against MLI; Class 2B, Priority
Unsecured Claims against TRI; and Class 2C, Priority Unsecured Claims against RRI.
Class 2 Claims are impaired under the Plan.
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3.3 Class 3: Priority Tax Claims. The Class 3 Claims will be all Allowed
Claims that are Priority Tax Claims. For purposes of distribution and administering this
Plan, the Class 3 Claims are divided into the following three subclasses: Class 3A,
Priority Tax Claims against MLI; Class 3B, Priority Tax Claims against TRI; and Class
3C, Priority Tax Claims against RRI. Class 3 Claims are impaired under the Plan.
3.4 Class 4: Secured Claims Against MLI. The Class 4 Claims will be all
Allowed Claims that are Secured Claims against MLI, including without limitation the
Secured Claims identified on Exhibit B to the MLI Sale Order. Class 4 Claims are
unimpaired under the Plan.
3.5 Class 5: Secured Claims Against TRI. The Class 5 Claims will be all
Allowed Claims that are Secured Claims against TRI, including without limitation the
Credit Bid Claims as defined in the TRI Sale Order, the judgment lien claims of Power
Screening, Inc., and Lind Lawrence & Ottenhoff LLP, the Disputed Claim of Volvo
Finance, and the Secured Claims of Bank of Colorado and Athena Investments, Inc.
Class 5 Claims are unimpaired under the Plan.
3.6 Class 6: Secured Claims Against RRI. The Class 6 Claims will be all
Allowed Claims that are Secured Claims against RRI, including without limitation the
Claims of Athena Investments, Inc., and Ron and Margaret King. Class 6 Claims are
unimpaired under the Plan.
3.7 Class 7: General Unsecured Claims and Late Claims. The Class 7 Claims
will be all Allowed Claims that are General Unsecured Claims, except for the Claim in
Class 8, or are Late Claims against MLI or TRI. For purposes of voting to accept or
reject the Plan, and for purposes of distribution and administering this Plan, the Class 7
Claims are divided into the following six subclasses: Class 7A, MIA Settlement Claims;
Class 7B, Remaining General Unsecured Claims against MLI; Class 7C, General
Unsecured Claims against TRI; Class 7D, General Unsecured Claims against RRI; Class
7E, Late Claims against MLI; and Class 7F, Late Claims against TRI. Claims in Class
7A are unimpaired under the Plan. Claims in Classes 7B, 7C, 7D, 7E and 7F are
impaired under the Plan.
3.8 Class 8: Intercompany Claims. The Class 8 Claims will be the
Intercompany Claims. Class 8 Claims are impaired under the Plan.
3.9 Class 9: Subordinated Unsecured Claims Against RRI. The Class 9
Claims will be all Allowed Claims against RRI that are Subordinated Unsecured Claims.
Class 9 Claims are impaired under the Plan.
3.10 Class 10: Intercompany Equity Interests. The Class 10 interests are RRI's
Intercompany Equity Interests, which are unimpaired under the Plan.
3.11 Class 11: Equity Interests. The Class 11 Equity Interests will be all
Allowed Equity Interests. Class 11 Equity Interests are impaired under the Plan.
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ARTICLE 4.
TREATMENT OF CLASSES OF CLAIMS THAT ARE NOT IMPAIRED UNDER
THE PLAN
4.1 Treatment of Class 1 (Administrative Claims).
(a) Except as provided in Section 4.1(b) of the Plan, every Creditor
holding a Class 1 Administrative Claim that is an Allowed Claim will be paid by its
respective Estate: (a) fully and in Cash on the Effective Date; (b) fully and in Cash when
and if the Administrative Claim becomes an Allowed Claim after the Effective Date; or (c)
as otherwise agreed in writing by the Creditor holding the Allowed Administrative Claim
or ordered by the Bankruptcy Court.
(b) Every Class 1 Administrative Claim that is for an operating expense
of a Debtor, incurred in the ordinary course of that Debtor's operations after the Petition
Date and for which there is no dispute as to that Debtor's liability has been or will be paid
fully and in Cash by that Debtor's Estate in the ordinary course of business (including any
payment terms applicable to any such expense) upon presentment or otherwise in
accordance with the particular terms of any agreement relating thereto.
(c) ALL REQUESTS FOR PAYMENT OF ADMINISTRATIVE
CLAIMS ARISING ON OR BEFORE THE EFFECTIVE DATE (OR ANY OTHER
MEANS OF PRESENTING AND OBTAINING PAYMENT OF ADMINISTRATIVE
CLAIMS FOUND TO BE EFFECTIVE BY THE BANKRUPTCY COURT) SHALL BE
FILED NOT LATER THAN (I) THIRTY (30) DAYS AFTER THE DATE OF SERVICE
OF NOTICE OF THE EFFECTIVE DATE, OR (II) ANY APPLICABLE
ADMINISTRATIVE BAR DATE THAT HAS HERETOFORE BEEN, OR MAY
SUBSEQUENTLY BE, ESTABLISHED BY THE BANKRUPTCY COURT AND
- NOTICED SEPARATELY BY THE DEBTORS. If pre-Effective Date Administrative
Claims are not so filed, they will be forever barred and will not be assertable in any
manner against the Debtors or the Trustee; provided, however, that no such request for
payment shall be required with respect to Administrative Claims that have been paid
previously (such as the Administrative Claim of Republic Financial Corporation allowed
by the Bankruptcy Court's order dated January 13, 2009, Docket #260) or with respect to
Administrative Claims representing an operating expense of a Debtor, incurred in the
ordinary course of that Debtor's operations after the Petition Date and for which there is no
dispute as to that Debtor's liability, or unless the provisions of the Bankruptcy Code
require approval or allowance by the Bankruptcy Court as a precondition to payments
being made on any such liability.
(d) An Administrative Claim with respect to which a request for payment
has been properly and timely filed pursuant to Section 4.1(c) of the Plan shall become an
Allowed Administrative Claim only to the extent allowed by Final Order.
(e) Administrative Claims for professional and trustee fees and expenses
arising after the Effective Date shall remain subject to application and allowance as
provided by the Bankruptcy Code and any applicable order of the Bankruptcy Court until
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the Chapter 11 Cases are closed, and shall become Allowed Administrative Claims only to
the extent allowed by Final Order.
4.2 Treatment of Class 4 (Secured Claims Against MLI). All Allowed
Secured Claims against MLI have been paid in full or otherwise satisfied from proceeds
of the MLI Sale, pursuant to the terms of the MLI Sale Order. Accordingly, Class 4
Secured Claims are unimpaired pursuant to the Plan and Bankruptcy Code § 1124, and
are deemed to have accepted the Plan pursuant to Bankruptcy Code § 1126(O.
4.3 Treatment of Class 5 (Secured Claims Against TRI). All Secured Claims
against TRI have been paid in full or otherwise satisfied from, or adequately protected by,
proceeds of the TM Sale, pursuant to the terms of the TRI Sale Order. Accordingly, Class
5 Secured Claims are unimpaired pursuant to the Plan and Bankruptcy Code § 1124, and
are deemed to have accepted the Plan pursuant to Bankruptcy Code § 1126(O.
4.4 Treatment of Class 6 (Secured Claims Against RRI). The Class 6 Claim
of Athena Investments, Inc., has been paid in full or otherwise satisfied from proceeds of
the MLI Sale, pursuant to the terms of the MLI Sale Order and as confirmed in the TM
Sale Order. The Class 6 Claim of Ron and Margaret King with respect to RRI treasury
shares and the legal, equitable and contractual rights to which such Claim entitles Ron
and Margaret King are (to the extent such Claim is an Allowed Claim) unaltered by this
Plan. Accordingly, Class 6 Secured Claims are unimpaired pursuant to the Plan and
Bankruptcy Code § 1124, and are deemed to have accepted the Plan pursuant to
Bankruptcy Code § 1126(O.
4.5 Treatment of Class 7A (MLI Settlement Claims). Allowed General
Unsecured Claims against MLI that are held by parties to, or beneficiaries of, the MLI
Settlement Agreement have been paid in full or otherwise satisfied from the proceeds of
the MLI Sale, as provided in the MLI Settlement Agreement and pursuant to the MLI
Sale Order. Accordingly, Class 7A General Unsecured Claims are unimpaired pursuant
to the Plan and Bankruptcy Code § 1124, and are deemed to have accepted the Plan
pursuant to Bankruptcy Code § 1126(O.
4.6 Treatment of Class 10 Interests (Intercompany Equity Interests). The
Intercompany Equity Interests of RRI in MLI and TM shall be allocated all Available
Cash after all Allowed Claims against MLI and TM are paid or otherwise satisfied
pursuant to this Plan, or adequately reserved for in the Trustee's sole and absolute
discretion or as approved by the Court. Upon the transfer of all Available Cash to RRI,
the Intercompany Equity Interests shall be canceled, annulled, and terminated.
ARTICLE 5.
TREATMENT OF PRIORITY CLAIMS
5.1 Treatment of Class 2 (Priority Unsecured Claims). Every Claimant
holding a Class 2 Priority Unsecured Claim will be paid by its respective Estate: (a) fully
and in Cash (including simple interest at the Interest Rate from and after the Petition
Date) on the Effective Date if the Claim is then an Allowed Claim; (b) fully and in Cash
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(including simple interest at the Interest Rate from and after the Petition Date) when and
if the Claim becomes an Allowed Claim after the Effective Date; or (c) as otherwise
agreed in writing by the Claimant holding the Allowed Priority Unsecured Claim or
ordered by the Bankruptcy Court. Accordingly, Class 2 Claims are impaired pursuant to
the Plan and Bankruptcy Code §1124.
5.2 Treatment of Class 3 (Priority Tax Claims). Every Claimant holding a
Class 3 Priority Tax Claim will be paid by its respective Estate: (a) fully and in Cash
(including simple interest at the Interest Rate from and after the Petition Date) on the
Effective Date if the Claim is then an Allowed Claim; (b) fully and in Cash (including
simple interest at the Interest Rate from and after the Petition Date) when and if the
Claim becomes an Allowed Claim after the Effective Date; or (c) as otherwise agreed in
writing by the Claimant holding the Allowed Priority Tax Claim or ordered by the
Bankruptcy Court. Only taxes attributable to the pre-Effective Date period shall be
Priority Tax Claims. Accordingly, Class 3 Priority Tax Claims are impaired pursuant to
the Plan and Bankruptcy Code §1124.
ARTICLE 6.
TREATMENT OF GENERAL UNSECURED AND LATE CLAIMS AGAINST
MLI AND TM
6.1 Treatment of Class 7B (Remaining General Unsecured Claims Against
MIA). The Trustee estimates that MLI will have Cash on hand sufficient to pay all
General Unsecured Claims against MLI that are not MLI Settlement Claims in full, with
interest at the Interest Rate from and after the Petition Date. There will be no distribution
on account of Class 7B Claims until all Allowed Claims in Classes 1A, 2A, 3A, 4A, and
7A have been paid in full or adequately reserved for, and the Trustee has established in
his sole discretion a reserve or reserves for post-Effective Date Administrative Claims
against MLI. Thereafter, each Class 7B Claim shall receive distributions until such
Claim is paid in full with interest at the Interest Rate from and after the Petition Date, as
follows:
(a) If such Claim is an Allowed Claim on the Initial Distribution Date,
then out of MLI's unreserved Cash: (i) an amount equal to the product of the amount of
such Allowed Claim multiplied by the Unsecured Recovery Fraction; and (ii) on any
subsequent quarterly distribution date, an amount provided for under and calculated in
accordance with Section 12.1 of this Plan.
(b) If such Claim becomes an Allowed Claim after the Initial Distribution
Date, then (i) on the first quarterly distribution date that is at least twenty (20) days after
such Claim becomes an Allowed Claim, out of MLI's unreserved Cash, an amount
provided for under and calculated in accordance with Section 12.1 of this Plan; and (ii) on
any subsequent quarterly distribution date, out of MLI's unreserved Cash, an amount
provided for under and calculated in accordance with Section 12.1 of this Plan.
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(c) A Class 7B Claimant may agree in writing with the Trustee to receive
distributions in full satisfaction of its Allowed Claim in a manner other than set forth in
this Section 6.1.
6.2 Treatment of Class 7C (General Unsecured Claims Against TRI). The
Trustee estimates that TM will have Cash on hand sufficient to pay all General
Unsecured Claims against TRI in full, with interest at the Interest Rate from and after the
Petition Date. There will be no distribution on account of Class 7C Claims until all
Allowed Claims in Classes 1B, 2B, 3B, and 4B have been paid in full or adequately
reserved for, and the Trustee has established in his sole discretion a reserve or reserves
for post-Effective Date Administrative Claims against TRI. Thereafter, each Class 7C
Claim shall receive distributions until such Claim is paid in full with interest at the
Interest Rate from and after the Petition Date, as follows:
(a) If such Claim is an Allowed Claim on the Initial Distribution Date,
then out of TM's unreserved Cash: (i) an amount equal to the product of the amount of
such Allowed Claim multiplied by the Unsecured Recovery Fraction; and (ii) on any
subsequent quarterly distribution date, an amount provided for under and calculated in
accordance with Section 12.1 of this Plan.
(b) If such Claim becomes an Allowed Claim after the Initial Distribution
Date, then (i) on the first quarterly distribution date that is at least twenty (20) days after
such Claim becomes an Allowed Claim, out of TRI's unreserved Cash, an amount
provided for under and calculated in accordance with Section 12.1 of this Plan; and (ii) on
any subsequent quarterly distribution date, out of TRI's unreserved Cash, an amount
provided for under and calculated in accordance with Section 12.1 of this Plan.
(c) A Class 7C Claimant may agree in writing with the Trustee to receive
distributions in full satisfaction of its Allowed Claim in a manner other than set forth in
this Section 6.2.
6.3 Treatment of Class 7E (Late Claims Against MLI). The Trustee estimates
that MLI will have Cash on hand sufficient to pay all Late Claims against MLI in full,
with interest at the Interest Rate from and after the Petition Date. There will be no
distribution on account of Class 7E Claims until all Allowed Claims in Classes 1A, 2A,
3A, 4A, 7A and 7B have been paid in full or adequately reserved for, and the Trustee has
established in his sole discretion a reserve or reserves for post-Effective Date
Administrative Claims against MLI. Thereafter, each Class 7E Claim shall receive
distributions until such Claim is paid in full with interest at the Interest Rate from and
after the Petition Date, as follows:
(a) If such Claim is an Allowed Claim on the Initial Distribution Date,
then out of MLI's unreserved Cash: (i) an amount equal to the product of the amount of
such Allowed Claim multiplied by the Unsecured Recovery Fraction; and (ii) on any
subsequent quarterly distribution date, an amount provided for under and calculated in
accordance with Section 12.1 of this Plan.
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(b) If such Claim becomes an Allowed Claim after the Initial Distribution
Date, then (i) on the first quarterly distribution date that is at least twenty (20) days after
such Claim becomes an Allowed Claim, out of MLI's unreserved Cash, an amount
provided for under and calculated in accordance with Section 12.1 of this Plan; and (ii) on
any subsequent quarterly distribution date, out of MLI's unreserved Cash, an amount
provided for under and calculated in accordance with Section 12.1 of this Plan.
(c) A Class 7E Claimant may agree in writing with the Trustee to receive
distributions in full satisfaction of its Allowed Claim in a manner other than set forth in
this Section 6.3.
6.4 Treatment of Class 7F (Late Claims Against TRI). The Trustee estimates
that TRI will have Cash on hand sufficient to pay all Late Claims against TRI in full, with
interest at the Interest Rate from and after the Petition Date. There will be no distribution
on account of Class 7F Claims until all Allowed Claims in Classes 1B, 2B, 3B, 4B and
7C have been paid in full or adequately reserved for, and the Trustee has established in
his sole discretion a reserve or reserves for post-Effective Date Administrative Claims
against TRI. Thereafter, each Class 7F Claim shall receive distributions until such Claim
is paid in full with interest at the Interest Rate from and after the Petition Date, as
follows:
(a) If such Claim is an Allowed Claim on the Initial Distribution Date,
then out of TRI's unreserved Cash: (i) an amount equal to the product of the amount of
such Allowed Claim multiplied by the Unsecured Recovery Fraction; and (ii) on any
subsequent quarterly distribution date, an amount provided for under and calculated in
accordance with Section 12.1 of this Plan.
(b) If such Claim becomes an Allowed Claim after the Initial Distribution
Date, then (i) on the first quarterly distribution date that is at least twenty (20) days after
such Claim becomes an Allowed Claim, out of TRI's unreserved Cash, an amount
provided for under and calculated in accordance with Section 12.1 of this Plan; and (ii) on
any subsequent quarterly distribution date, out of TRI's unreserved Cash, an amount
provided for under and calculated in accordance with Section 12.1 of this Plan.
(c) A Class 7F Claimant may agree in writing with the Trustee to receive
distributions in full satisfaction of its Allowed Claim in a manner other than set forth in
this Section 6.4.
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ARTICLE 7.
TREATMENT OF CLASS 7D CLAIMS
(General Unsecured Claims Against RRI)
7.1 Distribution. Each General Unsecured Claim that is an Allowed Claim
against RRI shall receive distributions of Available Cash from the Trustee as follows:
(a) To the extent of Available Cash, every Class 7D Claim shall receive
distributions in Cash on the Initial Distribution Date, up to the full amount of the Allowed
Claim. However, no Class 7D Claim shall receive any distribution under this Plan unless
there is Available Cash remaining after the application of the funds to, and full payment of
or the establishment of adequate reserves for, all other Claims against RRI entitled to prior
distribution under this Plan (i.e., Class 1C Claims, Class 2C Claims, Class 3C Claims, and
Class 6 Claims). If the Class 7D Claims that are Allowed Claims exceed the amount of
funds available for distribution, each Allowed Class 7D Claim shall be paid a Pro Rata
share of the available funds calculated as set forth below.
(b) If such Claim is an Allowed Claim on the Initial Distribution Date,
then (i) out of the Available Cash, an amount equal to the product of the amount of such
Allowed Claim multiplied by the Unsecured Recovery Fraction; and (ii) on any subsequent
quarterly distribution date, an amount from the Available Cash provided for under and
calculated in accordance with Section 12.1 of this Plan;
(c) If such Claim becomes an Allowed Claim after the Initial Distribution
Date, then (i) on the first quarterly distribution date that is at least twenty (20) days after
such Claim becomes an Allowed Claim, out of the Available Cash, an amount provided for
under and calculated in accordance with Section 12.1 of this Plan; and (ii) on any
subsequent quarterly distribution date, out of the Available Cash, an amount provided for
under and calculated in accordance with Section 12.1 of this Plan.
7.2 Impairment. The Trustee estimates that there will be Available Cash to
pay a portion of each Class 7D Claim. However, the Trustee estimates that there will not
be sufficient funds available on the Effective Date (or any time thereafter) to pay the
Class 7D Claims in full. Consequently, the General Unsecured Claims that comprise the
Class 7D Claims are impaired under the Plan.
ARTICLE 8.
TREATMENT OF CLASS 8 CLAIMS
(Intercompany Claims)
All Intercompany Claims shall be canceled, extinguished, and deemed null and
void. Each Debtor agrees and consents to such treatment of its Intercompany Claims (if
any).
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ARTICLE 9.
TREATMENT OF CLASS 9 CLAIMS
(Subordinated Unsecured Claims Against RRI)
9.1 Distribution. To the extent of Available Cash after payment of all
Allowed Claims in Classes 1C, 2C, 3C, 6, and 7C, every Class 9 Claim that is Allowed
shall be paid in Cash on the Effective Date (or as soon thereafter as additional funds
become available), up to the full amount of the Allowed Claim.
9.2 Deemed Rejection. The Trustee believes there will not be sufficient funds
available on the Effective Date (or any time thereafter) to pay any portion of the Class 9
Claims or to make any distribution on account of such Claims. Consequently, the
Subordinated Unsecured Claims which comprise the Class 9 Claims are impaired under
the Plan and are deemed to have rejected the Plan pursuant to Bankruptcy Code
§1126(g).
ARTICLE 10.
TREATMENT OF CLASS 11 EQUITY INTERESTS
(Equity Interests)
10.1 Distribution. After all Available Cash has been distributed in accordance
with this Plan, all Equity Interests will be canceled, annulled and terminated.
10.2 Deemed Rejection. The Trustee believes that there will not be sufficient
funds available on the Effective Date (or any time thereafter) to make any distribution on
account of such Equity Interests. Consequently, the Equity Interests which comprise the
Class 11 Equity Interests are impaired under the Plan and are deemed to have rejected the
Plan pursuant to Bankruptcy Code §1126(g).
ARTICLE 11.
MEANS FOR EXECUTION OF THE PLAN
The means for execution of the Plan are and will be as follows:
11.1 Implementing Actions. This Plan may be implemented because of the
MLI Sale and the TRI Sale. Both sales were free and clear of Liens and the MIA Sale
involved the MLI Settlement, which resolved most Claims in that Estate. Accordingly,
numerous Allowed Claims have already been fully paid or otherwise satisfied and
discharged. Remaining sale proceeds will fund the Plan, first paying in full all remaining
Allowed Claims against MIA and TRI. Once the Claims in those Estates are paid or
otherwise resolved, each Estate may have Cash left over. That Cash will be distributed to
the RRI Estate as Available Cash, on account of the Intercompany Equity Interests.
Allowed Claims against RRI will be paid to the extent of Available Cash, according to
the priorities in the Bankruptcy Code as set forth in this Plan. MLI and TRI shall cease to
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exist upon payment of the Allowed Claims in their Estates and the turnover of Available
Cash to the RRI Estate. RRI will cease to exist upon exhaustion of the Available Cash.
11.2 Discharge of Debtors. Upon the Effective Date, except as specifically
provided otherwise in this Plan or in the Confirmation Order, the following shall occur:
(a) The rights afforded under this Plan and the treatment of Claims and Equity Interests
under this Plan shall be in exchange for and in complete satisfaction and release of all
Claims and termination of all Claims and all Equity Interests, including all principal and
any interest accrued on Claims from the Petition Date; (b) confirmation of this Plan as of
the Effective Date shall discharge and release each Debtor from all claims or other debts,
liabilities or obligations of every kind and nature that arose in whole or in part before the
Effective Date, including all claims of governmental entities and taxing authorities and
all debts of the kind specified in Bankruptcy Code §§502(g), (h) or (i), whether or not a
proof of Claim based on such debt is filed or deemed filed pursuant to Bankruptcy Code
§501, a Claim based on such debt is allowed pursuant to Bankruptcy Code §502, or the
holder of a Claim based on such debt has accepted this Plan, to the extent provided by
§ 1141 of the Bankruptcy Code; and (c) all Equity Interests and other rights of holders of
Equity Interests shall be terminated. Upon the Effective Date, the Confirmation Order
shall permanently enjoin all Persons from taking any actions against any Debtor or the
Trustee to enforce or collect any Claim or Equity Interest unless provided for in this Plan.
11.3 Valuation of Collateral. If it becomes necessary to obtain a Court order
determining the value of any collateral in connection with establishing the amount of any
Claim secured by collateral, then the relevant provisions of this Plan shall constitute a
motion for determination of the value of collateral pursuant to Bankruptcy Code §506(a),
and the Bankruptcy Court shall determine the value of the collateral that is the subject of
such motion in conjunction with and as part of the Confirmation Hearing on this Plan.
11.4 Preservation of Debtors' Claims, Demands and Causes of Action. All
claims, demands and causes of action held by, through or on behalf of the Debtors and/or
the Estates against any other Person are hereby preserved in full (except for the
Intercompany Claims) unless otherwise provided by this Plan.
11.5 Compliance With Tax Requirement. In connection with this Plan, the
Trustee shall comply with all withholding and reporting requirements imposed by federal,
state, local and foreign taxing authorities and all distributions hereunder shall be subject
to such withholding and reporting requirements.
11.6 Exoneration and Reliance. If the Trustee and the respective affiliates,
officers, directors, shareholders, members, representatives, attorneys, accountants,
financial advisors, and agents of the Debtors act in good faith, they shall not be liable to
any holder of a Claim or Equity Interest, or other party with respect to any action,
forbearance from action, decision, or exercise or discretion taken during the period from
the Petition Date to the Effective Date in connection with (a) the operation of the
Debtors; (b) the administration of the Debtors' bankruptcy estates, including the MLI
Sale, the MLI Settlement, and the TRI Sale; (c) the proposal or implementation of any of
the transactions provided for, or contemplated in, the Plan; or (d) the administration of
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the Plan or the Assets and property to be distributed pursuant to the Plan, other than for
willful misconduct or gross negligence; provided, however, that the foregoing shall not
supersede the "safe harbor" from liability provided by § 1125(e) of the Bankruptcy Code
for violation of applicable laws governing the solicitation of votes on the Plan or the
offer, issuance, sale or purchase of securities in connection with the Plan. The Trustee,
and the Debtors' respective affiliates, officers, directors, shareholders, members,
representatives, attorneys, financial advisors, and agents may rely upon the opinions of
counsel, certified public accountants, and other experts or professionals employed in the
Chapter 11 Cases, and such reliance shall conclusively establish good faith. In any
action, suit or proceeding by any holder of a Claim or Equity Interest or other party in
interest contesting any action by, or non-action of, the Trustee, the Debtors, or their_
respective affiliates, officers, directors, shareholders, members, representatives, attorneys,
financial advisors, and agents as not being in good faith, the reasonable attorneys' fees
and costs of the prevailing party shall be paid by the losing party and as a condition to
going forward with such action, suit, or proceeding at the outset thereof, all parties
thereto shall be required to provide appropriate proof and assurance of their capacity to
make such payments of reasonable attorneys' fees and costs in the event they fail to
prevail.
11.7 Distribution to Holders of Insurance Claims. To the extent a General
Unsecured Claim is an Insurance Claim, the automatic stay shall be modified on the
earlier of: (i) thirty (30) days after the Effective Date or (ii) ninety (90) days after the
Confirmation Date to permit the Claimant to liquidate its Claim in the appropriate non-
bankruptcy forum, or through settlement and compromise with the Trustee. When a
General Unsecured Claim covered by an Insurance Policy becomes liquidated, and an
Insurance Company becomes obligated to pay upon such claim, proceeds from any
Insurance Policy which become payable as a consequence of such liquidation shall be
disbursed pursuant to the terms of any applicable Insurance Policy by the insurer(s)
obligated to pay such insurance proceeds to the Claimant. The Claimant may, pursuant to
Section 14.3 of the Plan, seek allowance of an Estimated Amount for any portion of such
Claim the Claimant believes is not covered by an Insurance Policy as a General
Unsecured Claim and upon allowance of the Estimated Amount, the Claimant shall
receive its distribution as a Class 7 Claim.
ARTICLE 12.
DISTRIBUTION PROCEDURES
12.1 Procedures for Calculating Distributions on Account of General
Unsecured and Late Claims. Within ten (10) Business Days after the Initial Distribution
Date for a Class, the Trustee will provide to each holder of a General Unsecured Claim or
a Late Claim that is an Allowed Claim in the Estate in question a distribution of Cash in
the amount equal to the product of the unreserved Cash (in the case of MLI or TRI) or the
Available Cash (in the case of RRI) on such date, multiplied by the Unsecured Recovery
Fraction. In addition, within ten (10) Business Days after each subsequent quarterly
distribution date, until Claims are paid in full as provided in Articles 6 and 7 of this Plan,
the Trustee will distribute to each holder of a General Unsecured Claim or a Late Claim,
that has been an Allowed Claim in the Estate for not less than twenty (20) days, a
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distribution in an amount equal to (i) the product of the unreserved Cash or the Available
Cash (as the case may be) on the last day of the immediately preceding fiscal quarter,
multiplied by the Unsecured Recovery Fraction calculated as of the Initial Distribution
Date or the last quarterly distribution date, as the case may be, less (ii) the aggregate
amount of distributions of Cash on account of such Claim previously made under the
Plan.
12.2 Limitation on De Minimus Payments. The Trustee shall make no
distributions of less than $25.00 to any Claimant. If a Claimant holding an Allowed
Claim does not receive a distribution due to the provisions of this paragraph on any
distribution date, then the Claims will remain eligible for distributions on any subsequent
distribution date, subject to the provisions of this paragraph.
ARTICLE 13.
GENERAL PROCEDURES FOR OBJECTING TO CLAIMS AND EQUITY
INTERESTS AND RESOLVING AND TREATING CONTESTED AND
CONTINGENT CLAIMS AND EQUITY INTERESTS
13.1 Objections and Bar Date for Filing Objections to Claims. AS SOON AS
PRACTICABLE, BUT IN NO EVENT LATER THAN THE FIRST BUSINESS DAY
THAT IS THIRTY (30) DAYS AFTER THE EFFECTIVE DATE (UNLESS SUCH
DEADLINE IS EXTENDED BY THE COURT FOR GOOD CAUSE), OBJECTIONS
TO CLAIMS SHALL BE FILED WITH THE BANKRUPTCY COURT AND SERVED
UPON THE HOLDERS OF EACH OF THE CLAIMS TO WHICH OBJECTIONS ARE
MADE PURSUANT TO THE BANKRUPTCY CODE, BANKRUPTCY RULES, OR
ANY APPLICABLE NON-BANKRUPTCY LAW. OBJECTIONS FILED AFTER
SUCH DATE WILL BE BARRED. The Trustee and any other party-in-interest shall
have full right, power and authority to investigate and, if necessary, object to Claims
within the time deadline. The Trustee will prosecute, settle, compromise, or otherwise
resolve objections to claims filed prior to the time deadline set forth in this Section.
13.2 Settlement of Claims. Only the Trustee shall have the authority to settle
Claims. With respect to any settlement of a Claim involving an amount of $20,000 (or
such other amount determined by the Court at the Confirmation Hearing) or less, no
notice to creditors, or approval by the Bankruptcy Court, of the settlement will be
required. With respect to any Claim involving an amount greater than $20,000 (or such
other amount determined by the Court at the Confirmation Hearing) , settlement by the
Trustee of any objection to any Claim shall be permitted on the eleventh (11th) day after
notice of the settlement has been provided by the Trustee or the objector to the claimant,
and all persons specifically requesting such notice following Confirmation of this Plan.
If on or before the objection deadline no written objection to the proposed settlement is
submitted to the Trustee, such settlement shall be conclusively approved. If a written
objection to the proposed settlement is submitted before the objection deadline, the
Trustee and the objector shall confer to reach a consensual resolution of the dispute. If
no resolution is reached within thirty (30) days after the Trustee's receipt of the
objection, the Trustee shall file an application with the Bankruptcy Court to approve the
settlement and the settlement shall be subject to approval by the Bankruptcy Court (in
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accordance with the standards developed under Bankruptcy Rule 9019) and upon notice
to the objecting party.
13.3 Estimation of Claims. For purposes of making distributions provided for
under the Plan, all Claims objected to may be estimated by the Trustee at an amount
equal to (a) such lesser amount that is agreed to by the holder of such Claim, (b) the
amount claimed if the Court has not made an estimation of such Claims or the holder of
such Claim has not agreed to a lesser amount, or(c) the amount, if any, determined by the
Court pursuant to § 502(c) of the Bankruptcy Code as an estimate for distribution
purposes. In any event, the estimated amount shall be the maximum amount of the Claim
for distribution purposes under this Plan and any Order of the Court estimating the Claim
shall also set the maximum amount of the Claim if it becomes an Allowed Claim. The
Trustee shall create a reserve from the Cash in the pertinent Estate sufficient to pay the
Estimated Claims, when and if they become Allowed Claims. Notwithstanding anything
herein to the contrary, no distributions shall be made on account of any Claim so
estimated until such Claim is an Allowed Claim.
13.4 Payment of Disputed Claims. Except as otherwise provided by this Plan,
no distribution will be made with respect to any portion of a Claim that is a Disputed
Claim until such time as the Disputed Claim becomes an Allowed Claim. When a
Disputed Claim becomes an Allowed Claim, the Trustee shall pay the Claim in the
amount allowed and in accordance with this Plan.
ARTICLE 14.
EXECUTORY CONTRACTS, UNEXPIRED LEASES AND RELATED
MATTERS
14.1 Rejection. All Executory Contracts that exist between the Debtors and
any Person are hereby specifically rejected as of the Effective Date in accordance with
the provisions and requirements of Bankruptcy Code §§365 and 1123.
14.2 Filing Claims. ALL PROOFS OF CLAIM WITH RESPECT TO
CLAIMS ARISING FROM THE REJECTION OF EXECUTORY CONTRACTS
UNDER THE PLAN OR OTHERWISE, IF ANY, MUST BE FILED WITH THE
BANKRUPTCY COURT WITHIN THIRTY (30) DAYS AFTER THE LATTER OF
THE DATE OF ENTRY OF AN ORDER AUTHORIZING SUCH REJECTION OR
THE EFFECTIVE DATE. ANY SUCH CLAIMS NOT FILED WITHIN SUCH TIME
SHALL BE FOREVER BARRED. Unless otherwise ordered by the Bankruptcy Court,
all claims arising from the rejection of Executory Contracts shall be resolved by the
Bankruptcy Court.
ARTICLE 15.
MODIFICATION OF THE PLAN
15.1 Authority. The Plan may be modified by the Trustee subject to and in
accordance with the provisions and requirements of Bankruptcy Code §1127.
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15.2 Acceptance. Any holder of a Claim and any holder of an Equity Interest
that has accepted or rejected this Plan will be deemed to have accepted or rejected, as the
case may be, this Plan as modified unless, within the time fixed by the Bankruptcy Court
for doing so, such holder changes its previous acceptance or rejection.
15.3 Subsequent Modifications. Every modification of this Plan will supersede
the previous version(s) of this Plan as and whenever each such modification is effective
as provided in this Article 15. When superseded, the previous version(s) of this Plan will
be in the nature of a withdrawn or rejected settlement proposal(s), and will be null, void
and unusable by any party for any purpose(s) whatsoever with respect to any of the
contents of such version(s) of this Plan.
ARTICLE 16.
RETENTION OF JURISDICTION
Notwithstanding confirmation of the Plan, the Bankruptcy Court will retain
jurisdiction for the following purposes:
16.1 In General. The Bankruptcy Court will retain jurisdiction to determine the
allowance and payment of any Claim upon any objection thereto (or other appropriate
proceedings) by the Trustee, or by any other party in interest entitled to proceed in that
manner. As part of such retained jurisdiction, the Bankruptcy Court will continue to
determine the allowance of Administrative Claims and any request for payment thereof.
16.2 Plan Disputes and Enforcement. The Bankruptcy Court will retain
jurisdiction to determine any dispute which may arise regarding the interpretation of any
provision of the Plan. The Court also will retain jurisdiction to enforce any provisions of
the Plan and any and all documents relating to the Plan.
16.3 Further Orders. The Bankruptcy Court will retain jurisdiction to facilitate
the performance of the Plan by entering any further necessary or appropriate order
regarding enforcement of the Plan and any provision thereof In addition, the Bankruptcy
Court will retain jurisdiction to facilitate or implement the discharge of any Claim, or any
portion thereof, pursuant to the Plan.
16.4 Other Claims. The Bankruptcy Court will retain jurisdiction to adjudicate
any cause of action or other proceeding presently pending or otherwise referenced here or
elsewhere in the Plan, including, but not limited to, the adjudication of any and all "core
proceedings" under 28 U.S.C. §157(b) which may be pertinent to the Chapter 11 Cases,
and which the Trustee may deem appropriate to initiate and prosecute before the Court in
aid of the liquidation of the Debtors. This provision will not restrict the rights of the
Trustee to proceed in any other court of competent jurisdiction.
16.5 Final Decree. The Bankruptcy Court will retain jurisdiction to enter an
appropriate final decree in the Chapter 11 Cases.
16.6 Appeals. In the event of an appeal of the Confirmation Order or any other
kind of review or challenge to the Confirmation Order, and provided that no stay of the
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effectiveness of the Confirmation Order has been entered, the Bankruptcy Court will
retain jurisdiction to implement and enforce the Confirmation Order and the Plan
according to their terms, including, but not limited to, jurisdiction to enter such orders
regarding the Plan or the performance thereof as may be necessary to effectuate the
liquidation of the Debtors.
16.7 Executory Contracts. The Bankruptcy Court will retain jurisdiction to
determine any and all matters regarding Executory Contracts until any such Executory
Contracts are assumed or rejected, and any and all Claims arising therefrom.
16.8 Contested Matters. The Bankruptcy Court will retain jurisdiction to
determine any and all applications, adversary proceedings, and contested or litigated
matters that may be pending on the Effective Date.
16.9 Purchase Agreements. The Bankruptcy Court will retain all jurisdiction to
determine all controversies, suits and disputes that may arise in connection with the
interpretation, enforcement and consummation of the MLI Sale and the TRI Sale or the
obligations of the purchasers and Debtors thereunder.
16.10 Asset Recovery. The Bankruptcy Court will retain jurisdiction to recover
all Assets, wherever located.
16.11 Taxes. The Bankruptcy Court will retain jurisdiction to hear and
determine matters concerning state, local and federal taxes in accordance with
Bankruptcy Code §§345, 505 and 1145.
16.12 Objections to Claims. The Bankruptcy Court will retain jurisdiction to
hear and determine any objections to the proofs of claims or to Claims or Equity Interests
filed and/or asserted both before and after the Confirmation Date, including any
objections to the classification of any Claim or Equity Interest, or any motion or request
to estimate any Claim, and to allow or disallow any Disputed Claim, in whole or part.
16.13 Avoidance Actions. The Bankruptcy Court will retain jurisdiction to hear
and determine all Avoidance Actions, regardless of whether filed or instituted before or
after the Effective Date.
16.14 Other Matters. The Bankruptcy Court will retain jurisdiction to hear any
other matter not inconsistent with the Bankruptcy Code.
16.15 Facilitation of The Plan. The Bankruptcy Court will retain jurisdiction to
issue any orders in aid of execution of this Plan as are authorized by Bankruptcy Code
§1142.
16.16 Failure of Bankruptcy Court to Exercise Jurisdiction. If the Bankruptcy
Court abstains from exercising or declines to exercise jurisdiction, or is otherwise without
jurisdiction over any matter or proceeding arising in or related to the Chapter 11 Cases,
including any of the matters set forth in the Plan, the Plan shall not prohibit or limit the
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exercise of jurisdiction by any other court of competent jurisdiction with respect to such
matter.
ARTICLE 17.
GENERAL PROVISIONS
17.1 Extension of Payment Dates. If any payment date falls due on any day
which is not a Business Day, then such payment date will be extended to the next
Business Day.
17.2 Confirmation By Non-Acceptance Method. The Trustee hereby requests,
if necessary, confirmation of the Plan pursuant to Bankruptcy Code §1129(b), with
respect to any impaired Class of Claims that does not vote to accept the Plan.
17.3 Captions. Section captions used in the Plan are for convenience only, and
will not affect the construction of the Plan.
17.4 Payment of Statutory Fees. All quarterly fees payable pursuant to § 1930
of Title 28 of the United States Code to the United States Trustee will be paid in full on
or before the Effective Date. The Trustee shall continue to file appropriate reports and to
pay such statutory fees until the Bankruptcy Cases are closed, dismissed, or converted.
17.5 Closing of the Case. At such time as the Chapter 11 Cases have been fully
administered (that is, when all things requiring action by the Trustee have been done, and
the Plan has been substantially consummated) and in all events within sixty (60) days
after the final quarterly distribution date, the Trustee shall file an Application For Final
Order showing that the Chapter 11 Cases have been fully administered and that the Plan
has been substantially consummated. The Trustee shall file an Application For Final
Order upon notice to all Creditors, Equity Interest holders and parties specifically
requesting notices after confirmation of this Plan, after which an order approving the
Trustee's final report and closing the cases may be entered.
17.6 Successors and Assigns. The rights and obligations of any Claimant or
any holder of an Equity Interest referred to in the Plan will be binding upon, and will
inure to the benefit of, the successors, assigns, heirs, devisees, executors, and personal
representatives of such Claimant or such holder of an Equity Interest.
17.7 Severability and Reformation. It is the Trustee's intention to comply fully
with the Bankruptcy Code and applicable non-bankruptcy law in proposing the Plan.
Therefore, if any provision of the Plan is determined by the Bankruptcy Court to be
contrary to the Bankruptcy Code or applicable non-bankruptcy law, that provision will be
deemed severed and automatically deleted from the Plan, if it cannot be reformed; or the
provision or its interpretation will be deemed reformed to ensure compliance. Pursuant to
any ruling by the Bankruptcy Court regarding the subject matter of this Section, any such
severance or reformation will be stated specifically in the Confirmation Order, which
then will control notwithstanding any contrary or inconsistent provision(s) of the Plan.
24
Dock 3096802\4
17.8 Disclosure Statement. All Creditors, the holders of all Equity Interests,
and all other interested parties (if any) are referred to the Disclosure Statement, which
will accompany the Plan in conjunction with any solicitation by the Proponents of
acceptances of the Plan. In the event of any inconsistency between the Plan and the
Disclosure Statement, the Plan shall govern and take precedence over the Disclosure
Statement.
17.9 Notices. Any notice required or permitted to be provided under this Plan
shall be in writing and served by: (a) certified mail, return receipt requested; (b) hand-
delivery; (c) facsimile; (d) electronic mail; or (e) overnight delivery service.
25
Doc#3096802\4
Dated: February 10, 2010.
/s/M. Stephen Peters
M. Stephen Peters
Chapter 11 Trustee for Renewable
Resources, Inc., Midway Landfill, Inc. and
Tire Recycling, Inc.
Harold G. Morris, Jr., Esq.
Harrie F. Lewis, Esq.
John C. Smiley, Esq.
Lindquist& Vennum P.L.L.P.
600 17th Street, Suite 1800 South
Denver, CO 80202
Telephone: (303) 573-5900
Facsimile: (303) 573-1956
E-Mail: hmorris(a�lindquist.com
E-Mail: hlewis@lindquist.com
E-Mail: jsmiley@lindquist.com
ATTORNEYS FOR M. STEPHEN PETERS,
CHAPTER 11 TRUSTEE
26
Doc#3096802\4
.
Dated: 7,2010.
M.Stephen eter
Chapter 11 Trustee for Renewable
Resources,Inc.,Midway Landfill,Inc. and
Tire Recycling,Inc.
Harold G.Morris,Jr.,Esq.
Harrie F.Lewis, Esq.
John C. Smiley,Esq.
Lindquist&Vennum P.L.L.P.
600 17th Street, Suite 1800 South
Denver,CO 80202
Telephone: (303) 573-5900
Facsimile: (303) 573-1956
E-Mail: hmorris@lindquist.com
E-Mail: hlewisnalindquist.com
E-Mail: jsrniley@lindquist.com
ATTORNEYS FOR M. STEPHEN PETERS,
CHAPTER 11 TRUSTEE
26
Doc*3096802\4
Case:07-17680-SBB Doc#:391 Filed:04/01/10 Entered:04/01/10 09:49:47 Pagel of 2
UNITED STATES BANKRUPTCY COURT
FOR THE DISTRICT OF COLORADO
Bankruptcy Judge Sid Brooks
In re: )
) Bankruptcy Case No.
RENEWABLE RESOURCES, INC., ) 07-17680-SBB
Debtor. ) Chapter 11
Address: 1801 Broadway, Suite 910 )
Denver, CO 80202 )
Employer's Tax Identification )
No.: 32-0107530 )
)
In re: )
) Bankruptcy Case No.
MIDWAY LANDFILL, INC., ) 07-17687-SBB
Debtor. ) Chapter 11
Employer's Tax Identification )
No.: 84-1077802 )
)
In re: )
Bankruptcy Case No.
TIRE RECYCLING, INC., ) 07-17691-SBB
Debtor. ) Chapter 11
Employer's Tax Identification ) JOINTLY ADMINISTERED CASE NO.
No.: 84-0999485 ) 07-17680-SBB
ORDER APPROVING DISCLOSURE STATEMENT
AND SETTING CONFIRMATION HEARING
THIS MATTER comes before the Court for consideration of the adequacy of the Chapter
II Trustee's Modified Disclosure Statement filed March 31, 2010 (Docket#389). The Court
finds that adequate notice has been given and that the Modified Disclosure Statement contains
adequate information as the term is defined by 11 U.S.C. § 1125. It is therefore
ORDERED that the Modified Disclosure Statement is hereby approved; and
IT 1S FURTHER ORDERED that the Chapter 11 Trustee and all parties-in-interest may
now solicit acceptances or rejections of the Plan of Reorganization pursuant to 11 U.S.C. § 1125;
and
IT IS FURTHER ORDERED that on or before April 9,2010, the Chapter 11 Trustee
shall transmit by mail to all creditors and other parties-in-interest, a copy of(1) this Order, (2)
the Plan of Reorganization and approved Modified Disclosure Statement, and (3) a Ballot for
Voting on the Plan; and
Case:07-17680-SBB Doc#:391 Filed:04/01/10 Entered:04/01/10 09:49:47 Page2 of 2
IT IS FURTHER ORDERED that the Plan Proponent shall file with the Court, on or
before May 7,2010, a certificate of mailing reflecting service of this Order, the Plan, the
approved Modified Disclosure Statement, and the Ballot, as identified above; and
IT IS FURTHER ORDERED that voting ballot acceptances or rejections of the Plan of
Reorganization be submitted in writing by the holders of all claims or interests on or before May
7,2010, to Plan Proponent's counsel, John C. Smiley, 600 17ih Street, Suite 1800-S, Denver, CO
80202; and
IT IS FURTHER ORDERED that objections to confirmation of the Plan of
Reorganization shall be filed on or before May 7, 2010,with the original and one copy of such
objection to be filed with the Court and a copy received by the Plan Proponent's counsel on or
before May 7,2010.
IT IS FURTHER ORDERED that a hearing for consideration of confirmation of the Plan,
and such objections as may be made to confirmation of the Plan, will be heard on Wednesday,
May 12,2010,at 9:00 a.m. in Courtroom E, United States Bankruptcy Court for the District of
Colorado, U.S. Custom House, 721 19th Street, Denver, Colorado 80202-2508; and
IT IS FURTHER ORDERED that any motion,whether written or oral, to convert this
case to a case under Chapter 7 or to dismiss this case, made at any hearing on confirmation will
be heard forthwith by the Court without further notice; and
IT IS FURTHER ORDERED that the hearing on confirmation of the Plan may be
continued from time to time by Order made in Open Court without other written notice to any
parties-in-interest.
Dated this 1st day of April, 2010.
BY THE COURT:
Sidney B. Brooks,
United States Bankruptcy Judge
2
IN THE UNITED STATES BANKRUPTCY COURT
FOR THE DISTRICT OF COLORADO
In re: )
) Case No. 07-17680 SBB
RENEWABLE RESOURCES, INC., ) Chapter 11
Debtor. )
)
)
)
In re: ) Case No. 07-17687 SBB
) Chapter 11
MIDWAY LANDFILL, INC., )
Debtor. )
)
)
In re: ) Case No. 07-17691 SBB
Chapter 11
TIRE RECYCLING, INC., )
Debtor. ) JOINTLY ADMINISTERED CASE
) NO. 07-17680-SBB
)
BALLOT FOR ACCEPTING OR REJECTING CHAPTER 11 PLAN
CLASSES 7B, 7C, 7D, 7E, 7F and 8
PLEASE READ THE VOTING INFORMATION AND INSTRUCTIONS BELOW
BEFORE COMPLETING THE BALLOT ON PAGE THREE (3)
A. The document on page 3 is a ballot for voting your claims in the Chapter 11 cases of
Renewable Resources,Inc.,Tire Recycling,Inc.and Midway Landfill,Inc. (the"Debtors"). In order
for you to vote for or against the plan,you must complete the ballot by indicating your acceptance or
rejection of the plan. You also must designate for which of the Debtors you are casting your
ballot. You may select more than one of the Debtors for voting purposes to the extent you are
entitled to vote in more than one of the Debtors' cases.
B. On April 1, 2010 the United States Bankruptcy Court for the District of Colorado
approved the Chapter 11 Trustee's Modified Disclosure Statement for the Chapter 11 Trustee's Plan
of Reorganization (Dated February 10, 2010) (the"Plan") filed in the above-captioned cases. This
ballot is being sent to holders of Claims under the Plan to accept or reject the Plan. Please refer to
the Plan and Disclosure Statement to ascertain the treatment provided to holders of Allowed
Claims. You may wish to seek legal advice concerning the Plan and your classification and
treatment under the Plan. The following may assist you to determine the appropriate
classification of your claim:
Doc#3200736\I
Vote your claim in Class 7B if you hold an unsecured claim in the Midway Landfill, Inc.
estate;
Vote your claim in Class 7C if you hold an unsecured claim in the Tire Recycling,Inc.estate;
Vote your claim in Class 7D if you hold an unsecured claim in the Renewable Resources,
Inc. estate;
Vote your claim in Class 7E if you are a creditor with a late filed claim in the Midway
Landfill, Inc. estate;
Vote your claim in Class 7F if you are a creditor with a late filed claim in the Tire Recycling,
Inc. estate; and
Vote your claim in Class 8 if you hold an Intercompany Claim.
C. The ballot must(i)fully and properly be completed by each Creditor entitled to vote on
the Plan of the Chapter 11 Trustee,and(ii)it must be forwarded to Trustee's counsel: do Sue Toms,
Paralegal,Lindquist& Vennum P.L.L.P.,60017" Street,Suite 1800-South,Denver,Colorado
80202, on or before 5:00 p.m. MST on May 7, 2010 (the "Voting Deadline"). To be accepted,
fully and properly completed ballots must actually be received by Trustee's counsel on or
before the Voting Deadline. If a ballot is received after the Voting Deadline,or if it is unsigned, it
will not be counted. Facsimile ballots will not be counted.
D. The ballot does not constitute and shall not be deemed a proof of claim or interest or an
assertion of a claim or interest. Further, the ballot does not constitute and shall not be deemed an
allowance of your claim in the amounts indicated or provided by you. Your election should be based
upon your best,good faith estimate of your claim(s);such estimate may be evidence of your claim in
the event an objection to your claim is filed. YOU MUST DESIGNATE THAT YOUR BALLOT
APPLIES TO A SPECIFIC DEBTOR OR DEBTORS.
Doc',3200736\1 2
BALLOT
FOR HOLDERS OF CLAIMS CATEGORIZED AS CLASS 7B, 7C, 7D, 7E ,7F AND/OR
CLASS 8 UNDER THE CHAPTER 11 TRUSTEE'S PLAN OF REORGANIZATION
(DATED FEBRUARY 10,2010)
PLEASE COMPLETE IN FULL
The undersigned is the holder of a Class 7B, 7C, 7D, 7E, 7F and/or 8.
(Please Complete )
ACCEPTS THE PLAN $
AMOUNT OF CLAIM
REJECTS THE PLAN
Debtor designation:
This ballot applies to the following estate(s):
MIDWAY LANDFILL,INC., Case No. 07-17687 SBB(CLASS 7B-UNSECURED CLAIM);
TIRE RECYCLING, INC., CASE NO.07-17691 SBB(CLASS 7C-UNSECURED CLAIM);
RENEWABLE RESOURCES,INC.,CASE NO.07-17680 SBB(CLASS 7D-UNSECURED CLAIM);
MIDWAY LANDFILL, INC., Case No. 07-17687 SBB (CLASS 7E-LATE CLAIM);
TIRE RECYCLING, INC., CASE NO.07-17691 SBB(CLASS 7F-LATE CLAIM);AND/OR
CLASS 8 INTERCOMPANY CLAIMS.
Dated:
(Signature of Claimant)
(Print Name of Signatory)
ADDRESS CORRECTION:
(If By Authorized Agent,Name and Title)
(Print Name of Creditor, If Different)
BALLOT MUST BE RECEIVED BY 5:00 P.M. ON MAY 7,
2010. SEND TO: SUE TOMS,PARALEGAL,LINDQUIST&
VENNUM P.L.L.P.,600 17TH STREET,SUITE 1800-SOUTH,
DENVER,COLORADO 80202.
Doc#3200736A1 3
VOTING INFORMATION AND INSTRUCTIONS
1. For your vote to be counted, you must complete the Ballot, indicate acceptance or rejection
of the Plan in the boxes, designate the estate of the debtor or debtors to which your vote
should apply, and sign and return the Ballot to the Chapter 11 Trustee's counsel. Ballots
must be received by MAY 7. 2010 (the "Voting Deadline"). If a Ballot is received after
the Voting Deadline, it will not be counted.
2. Whenever a voter submits more than one Ballot voting the same claim prior to the Voting
Deadline, the last Ballot received shall be deemed to reflect the voter's intent and thus to
supersede any prior Ballots.
3. If you hold Claims in more than one class entitled to vote under the Plan, each Ballot votes
only the Claims marked on the Ballot. Please complete and return the Ballot you receive.
You must vote all of the Claims within a single class under the Plan to either accept or
reject the Amended Plan. Accordingly, a Ballot (or multiple Ballots with respect to
multiple Claims within a single class)that partially rejects and partially accepts the Plan will
not be counted.
4. If a voter does not affirmatively check the rejection box,then that Ballot shall be deemed to
be an acceptance. If a Ballot does not designate the estate of the debtor or debtors to
which the vote should apply, the vote will not be counted.
5. The Ballot is for voting purposes only and does not constitute and shall not be deemed a
Proof of Claim or an assertion or admission of a Claim or Interest.
IF YOU HAVE ANY QUESTIONS REGARDING THIS BALLOT OR THE VOTING
PROCEDURES, PLEASE CONTACT:
LINDQUIST & VENNUM P.L.L.P.
600 Seventeenth Street, Suite 1800 South
Denver, Colorado 80202-5441
Telephone: (303) 573-5900
Doc?!3200736\1 4
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