Case No. 01-60386-DOT Procedurally Consolidated.United States Bankruptcy Court, E.D. Virginia, Richmond Division.
February 9, 2005.
Benjamin C. Ackerly, VSB #9120, Tyler P. Brown, VSB #28072, Michael G. Wilson, VSB #48927, Hunton Williams LLP, Riverfront Plaza, East Tower, Richmond, Virginia, Counsel for Keith L. Phillips, Chapter 11 Trustee.
Leander D. Barnhill, Esq., OFFICE OF THE UNITED STATES TRUSTEE, Richmond, Virginia, William A. Gray, Esq., SANDS ANDERSON MARKS
MILLER, Richmond, Virginia, Counsel for Commerce and Industry Insurance Company.
FINDINGS OF FACT, CONCLUSIONS OF LAW AND ORDER CONFIRMING JOINT PLAN OF LIQUIDATION OF FAS MART CONVENIENCE STORES, INC. AND ITS AFFILIATED DEBTORS AS PROPOSED BY KEITH L. PHILLIPS, CHAPTER 11 TRUSTEE
DOUGLAS TICE, Chief Judge, Bankruptcy
Keith L. Phillips (the “Trustee”), the duly appointed Chapter 11 Trustee for the abovecaptioned debtors (the “Debtors”), having filed the Joint Plan of Liquidation of Fas Mart Convenience Stores, Inc. and Its Affiliated Debtors as Proposed by Keith L. Phillips, Chapter 11 Trustee (as it may have been amended from time to time, the “Plan”) and the Disclosure Statement for the Joint Plan of Liquidation of Fas Mart Convenience Stores, Inc. and Its Affiliated Debtors as Proposed by Keith L. Phillips, Chapter 11 Trustee (the “DisclosureStatement”), each originally dated November 3, 2004; the Trustee having distributed the Plan, the Disclosure Statement, the appropriate Ballot or Ballots[2] to accept or reject the Plan for those
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Impaired Classes entitled to vote on the Plan, the Notice of (i) Approval of the Disclosure Statement, (ii) Hearing on Confirmation of Plan, (iii) Deadline and Procedures for Filing Objections to Confirmation of Plan, (iv) Deadline and Procedures for Temporary Allowance of Certain Claims for Voting Purposes, and (v) Voting Deadline for Receipt of Ballots, and certain instructions and related materials (collectively, the “Solicitation Package”) by first-class, U.S. Mail, postage pre-paid, on or before December 22, 2004 to each known or suspected Holder of a Claim against or an Interest in one or more of the Debtors in accordance with the Court’s Order Establishing (I) Voting Deadline and Procedures for Temporary Allowance of Certain Claims; (II) Procedures for Filing Objections to Joint Plan of Liquidation; (III) Procedure for Balloting, Soliciting and Tabulating Votes on the Plan; and (IV) a Hearing Date to Consider Confirmation of the Plan Under Chapter 11 of the Bankruptcy Code (the “Solicitation Procedures Order”) as evidenced by the various affidavits of service attesting that a Solicitation Package was served upon each known or suspected Holder of a Claim against or an Interest in one or more of the Debtors, including each impaired Class of Claims or Interests entitled to vote to accept or reject the Plan (collectively, the “Affidavits of Service”); the Trustee having filed the Certified Report of Balloting, dated February 1, 2005 (the “Voting Certification”), certifying that all Impaired Classes voting on the Plan voted to accept the Plan; the Court having fixed February 3, 2005 at 2:00 p.m. as the date and time of the hearing to consider confirmation of the Plan pursuant to Section 1129 of the Bankruptcy Code (the “Confirmation Hearing”); the Trustee having served the Notice to Unimpaired Creditors of (i) Filing of Joint Plan of Reorganization; (ii) Treatment of Claims Under the Plan; (iii) Hearing on Confirmation of Plan; and (iv) Deadline and Procedures for Filing Objections to Confirmation of Plan and the Notice of (i) Nonvoting Status With Respect to Holders of Equity Interests; (ii) Approval of Disclosure Statement; (iii) Hearing
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on Confirmation of Plan; and (iv) Deadline and Procedures for Filing Objections to Confirmation of Plan, each in accordance with the Solicitation Procedures Order as evidenced by the Affidavits of Service; this Court having reviewed the Plan, the Disclosure Statement and all filed objections and responses, if any, to, and statements and comments regarding, confirmation of the Plan; the Confirmation Hearing having commenced on February 3, 2005 at 2:00 p.m.; this Court having heard the statements of counsel at the Confirmation Hearing, having considered all evidence presented or proffered at the Confirmation Hearing and having taken judicial notice of the papers and pleadings on file in the above-captioned Chapter 11 Cases; and it appearing to this Court that (a) notice of the Confirmation Hearing and the opportunity for any party in interest to object to confirmation of the Plan was adequate and appropriate as to all parties to be affected by the Plan and the transactions contemplated thereby and (b) the legal and factual bases presented at the Confirmation Hearing establish just cause to confirm the Plan and for all other relief granted herein; this Court hereby makes the following findings of fact, conclusions of law, and order (the “Confirmation Order”):
I. FINDINGS OF FACT. A. Jurisdiction, Venue and Other Matters.
1. Findings of Fact and Conclusions of Law. This Confirmation Order constitutes this Court’s findings of fact and conclusions of law under Federal Rule of Civil Procedure 52, as made applicable herein by Rules 7052 and 9014 of the Federal Rules of Bankruptcy Procedure (the “Bankruptcy Rules”). Any and all findings of fact shall constitute findings of fact even if stated as conclusions of law, and any and all conclusions of law shall constitute conclusions of law even if stated as findings of fact.
2. Judicial Notice. This Court takes judicial notice of the docket in these Chapter 11 Cases maintained by the Clerk of the Bankruptcy Court, including, without limitation, all
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pleadings and other documents filed, all orders entered, and evidence and argument made, proffered, or adduced at the hearings held before the Court during the pendency of these Chapter 11 Cases.
3. Burden of Proof. The Trustee, as proponent of the Plan, has the burden of proving the elements of Section 1129(a) of the Bankruptcy Code and, with regard to Class 6, Section 1129(b) of the Bankruptcy Code, in each case, by a preponderance of the evidence. The Trustee has met that burden as further found and determined herein.
4. Transmittal and Mailing of Materials; Notice. The Solicitation Packages, the Disclosure Statement, the Plan, the Ballots, and the notices of the Confirmation Hearing were transmitted and served as set forth in the Affidavits of Service, and such transmittal and service was sufficient and satisfied in all respects the requirements of the Bankruptcy Code, the Bankruptcy Rules and the Local Rules of this Court, and no other and further notice is or shall be required.
5. Voting and Tabulation. Votes to accept or reject the Plan have been solicited and tabulated fairly, in good faith, and in a manner consistent with the Bankruptcy Code, the Bankruptcy Rules and the Local Rules of this Court.
B. Compliance With the Applicable Requirements of theBankruptcy Code.
6. Section 1129(a)(1) — Compliance With Applicable Provisionsof the Bankruptcy Code. The Plan complies with all, and is not inconsistent with, the applicable provisions of the Bankruptcy Code as required by Section 1129(a)(1) of the Bankruptcy Code, as follows:
a. Pursuant to Sections 1122(a) and 1123(a)(1) of the Bankruptcy Code, Article III of the Plan designates Classes of Claims and Interests, other than Administrative Claims, Priority Tax Claims, and Fee Claims. As required by Section 1122, each Class of Claims and Interests contains only Claims and Interests that are substantially similar to other Claims or Interests within the Class.
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b. Pursuant to Sections 1123(a)(2) and (3) of the Bankruptcy Code, Article III of the Plan specifies all Claims and Interests that are not impaired and Article IV specifies the treatment of unimpaired Claims and Interests. Article V specifies the treatment of all Claims and Interests that are impaired. Pursuant to Section 1123(a)(4) of the Bankruptcy Code, Articles IV and V of the Plan also provide the same treatment for each Claim or Interest within a particular Class.
c. Pursuant to Section 1123(a)(5) of the Bankruptcy Code, the Plan provides adequate means for the Plan’s implementation. The Trustee will have, upon the Effective Date of the Plan, sufficient Cash to make all payments required to be made on the Effective Date pursuant to the terms of the Plan. Moreover, Article VI and various other provisions of the Plan specifically provide adequate means for the Plan’s implementation, including, without limitation: (i) substantive consolidation of the Debtors, and (ii) the creation of the Liquidation Trust.
d. The Plan contemplates the eventual dissolution of the Debtors. Accordingly, no issue exists regarding the issuance of any securities or the appropriate allocation of voting “power” as described in Section 1123(a)(6) of the Bankruptcy Code, and that section is inapplicable.
e. As required by Section 1123(a)(7) of the Bankruptcy Code, (i) the Trustee selected the Liquidation Trustee for the Liquidation Trust in a manner consistent with the best interests of the Holders of Claims and Interests and with public policy, and (b) the manner in which any successor Liquidation Trustee will be chosen as set forth in the Plan and the Liquidation Trust Agreement also is consistent with those Interests and with such public policy.
f. The Plan is dated and identifies the person submitting it as the proponent, thereby satisfying Rule 3016(a) of the Bankruptcy Rules.
g. Other than conduct automatically enjoined by the Bankruptcy Code, the Plan describes in specific and conspicuous language (bold) all acts to be enjoined and identifies the entities that would be subject to any injunction, thereby satisfying Rule 3016(c) of the Bankruptcy Rules.
7. Section 1129(a)(2) — Compliance by the Trustee WithApplicable Provisions of the Bankruptcy Code. The Trustee, as proponent of the Plan, complied with all applicable provisions of the Bankruptcy Code as required by Section 1129(a)(2) of the Bankruptcy Code, including, without limitation, Sections 1125 and 1126 of the Bankruptcy Code and Rules 3017, 3018 and 3019 of the Bankruptcy Rules. The Disclosure Statement and the procedures by which the Ballots for acceptance and rejection of the Plan were solicited and tabulated were fair,
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properly conducted and in accordance with Rules 3017 and 3018 of the Bankruptcy Rules, Section 1126(c) of the Bankruptcy Code, and the Solicitation Procedures Order.
8. Section 1129(a)(3) — Proposal of Plan in Good Faith. The Trustee proposed the Plan in good faith and not by any means forbidden by law. Consistent with the overriding purpose of Chapter 11 of the Bankruptcy Code, the Plan will maximize the return to the Debtors’ creditors. Moreover, the Plan itself, and the process leading to its formulation, provide independent evidence of the Trustee’s good faith in proposing the Plan.
9. Section 1129(a)(4) — Bankruptcy Court Approval of CertainPayments as Reasonable. Pursuant to Section 1129(a)(4) of the Bankruptcy Code, any payment made or promised by the Trustee or a person acquiring property under the Plan, for services or for costs and expenses in, or in connection with, these Chapter 11 Cases, or in connection with the Plan and incident to these Chapter 11 Cases, has been disclosed to this Court. Any such payment made before confirmation of the Plan is reasonable. Any such payment to be made after confirmation of the Plan, including Fee Claims for professional fees and expenses incurred by the Trustee prior to the Effective Date is subject to approval of this Court as reasonable.
10. Section 1129(a)(5) — Disclosure of Identity of ProposedManagement, Compensation of Insiders and Consistency ofManagement Proposals With the Interests of Creditors and PublicPolicy. Pursuant to Section 1129(a)(5) of the Bankruptcy Code, the Trustee has disclosed the identity and affiliations of the proposed Liquidation Trustee for the Liquidating Trust. The appointment of the Liquidation Trustee is consistent with the interests of the Holders of Claims and Interests and with public policy.
11. Section 1129(a)(6) — Governmental Regulatory Control OverRate Changes. With respect to the requirements of Section 1129(a)(6) of the Bankruptcy Code, the Plan provides for
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the dissolution of the Debtors. Therefore, no changes in rates over which any governmental regulatory commission has jurisdiction will occur and Section 1129(a)(6) is inapplicable.
12. Section 1129(a)(7) — Best Interests of Creditors andHolders of Interests. With respect to each impaired Class of Claims or Interests, each Holder of a Claim or equity Interest in such Class (i) has accepted the Plan or (ii) will receive or retain under the Plan on account of such Claim or equity Interest property of a value, as of the Effective Date, that is not less than the amount such Holder would receive or retain if the Debtors were liquidated on the Effective Date under Chapter 7 of the Bankruptcy Code.
13. Section 1129(a)(8) — Acceptance of the Plan by EachImpaired Class. The Plan was accepted by the necessary classes of claims, as follows:
a. Pursuant to Sections 1126 and 1129(a)(8) of the Bankruptcy Code, as indicated in the Voting Certification, each impaired Class entitled to vote (Classes 2, 3, 4, and 5) accepted the Plan pursuant to Section 1126(c) of the Bankruptcy Code. Because the Plan provides that Holders of Interests in Class 6 (Interests) will not receive or retain any property on account of such Interests, Holders of such Interests in Class 6 are deemed to have rejected the Plan pursuant to Section 1126(g) of the Bankruptcy Code. The Plan does not discriminate unfairly and is not unfair or inequitable with respect to Class 6 pursuant to Section 1129(b)(2)(C)(ii) of the Bankruptcy Code in that no Holder of any Interest junior to Class 6 will receive or retain any property under the Plan. Therefore, notwithstanding the non-compliance with Section 1129(a)(8) of the Bankruptcy Code as to Class 6, the Plan is confirmable because, as more fully set forth in section I.B.12 of this Confirmation Order, the Plan satisfies Section 1129(b)(1) of the Bankruptcy Code with respect to Class 6.
b. Class 1 is unimpaired and is deemed to have accepted the Plan pursuant to Section 1126(f) of the Bankruptcy Code. The provisions of the Plan with respect to Holders of the Unimpaired Claims in Class 1 are fair and appropriate.
14. Section 1129(a)(9) — Treatment of Claims Entitled toPriority Pursuant to Section 507(a) of the Bankruptcy Code. The Plan provides for treatment of Administrative Expense Claims, Priority Tax Claims, Fee Claims and Claims entitled to priority pursuant to
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Sections 507(a)(3) — (7) and 507(a)(9) of the Bankruptcy Code in the manner required by Section 1129(a)(9) of the Bankruptcy Code.
15. Section 1129(a)(10) — Acceptance By at Least One ImpairedClass. As indicated in the Voting Certification, Impaired Classes 2, 3, 4, and 5 accepted the Plan pursuant to Section 1126(c) of the Bankruptcy Code. Accordingly, as required by Section 1129(a)(10) of the Bankruptcy Code, at least one Class of Claims or Interests that is impaired under the Plan has accepted the Plan, excluding votes cast by insiders.
16. Section 1129(a)(11) — Feasibility of the Plan. The Plan is feasible. The Plan is premised upon the creation of the Liquidation Trust. The Estates will have sufficient Cash on the Effective Date to allow the Trustee to substantially consummate the Plan. The Plan, therefore, complies with Section 1129(a)(11) of the Bankruptcy Code.
17. Section 1129(a)(12) — Payment of Bankruptcy Fees. In accordance with Section 1129(a)(12) of the Bankruptcy Code, Section 11.7 of the Plan provides for payment of all fees payable under 28 U.S.C. § 1930 on the Effective Date.
18. Section 1129(a)(13) — Retiree Benefits. The evidence adduced or proffered at the Confirmation Hearing established that the Debtors’ Estates are not obligated now, nor will they become obligated in the future, to pay retiree benefits as described in Section 1129(a)(13) of the Bankruptcy Code. Thus, Section 1129(a)(13) is inapplicable to the Plan.
19. Section 1129(b) — Confirmation of the Plan OverNonacceptance of Impaired Classes. All requirements of Section 1129(b) of the Bankruptcy Code have been satisfied. Pursuant to Section 1129(b)(1) of the Bankruptcy Code, the Plan is confirmed notwithstanding that, contrary to Section 1129(a)(8) of the Bankruptcy Code, the Holders of Interests in Class 6 are impaired and such Holders have rejected or are deemed to have rejected the Plan. The Plan
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does not discriminate unfairly and is fair and equitable with respect to the Holders of Interests in Class 6. The Holders of Interests in Class 6 would not receive or retain more property on account of their Interests in a liquidation under Chapter 7 of the Bankruptcy Code, and no Holder of any Claim or Equity Interest junior to Class 6 will receive or retain any property under the Plan on account of such junior Claim or Equity Interest. Furthermore, the Holders of Interests in Class 6 have agreed previously pursuant to the terms of those certain Mutual Releases approved by the Court on or about April 14, 2003, to release the Debtors’ Estates and to forego any participation in any distributions under the Plan to which they might otherwise be entitled.
20. Section 1129(d) — Principal Purpose of the Plan. The principal purpose of the Plan is not the avoidance of taxes or the avoidance of the application of section 5 of the Securities Act of 1933 (the “Securities Act”), and no governmental entity has filed any objection asserting that such avoidance is the principal purpose of the Plan.
21. Section 1125(e) — Good Faith Solicitation. Based on the record before the Court in these Chapter 11 Cases, the Trustee, and his employees, agents, financial advisors, investment bankers, attorneys, and other professionals have acted in “good faith” within the meaning of Section 1125(e) of the Bankruptcy Code in compliance with the applicable provisions of the Bankruptcy Code and Bankruptcy Rules in connection with all of their respective activities relating to the solicitation of acceptances of the Plan and their participation in the activities described in Section 1125 of the Bankruptcy Code, and are entitled to the protections afforded by Section 1125 of the Bankruptcy Code and the releases and exculpation set forth in Article VII of the Plan.
C. Other Findings.
22. The transfers of the assets of the Estates by the Trustee to the Liquidation Trust, as contemplated by the Plan:
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a. Constitute legal, valid, and effective transfers of such property;
b. Vest the Liquidation Trust with good title to such property, free and clear of all (i) Liens, conditional sale or other title retention agreements, Interests, judgments, demands, easements, charges, encumbrances, defects, options, rights of first refusal, and restrictions of all kinds and (ii) all Claims and other debts arising under or out of, in connection with, or in any way relating to, any acts of the Debtors, all rights, including rights of setoff or recoupment, all defenses, all causes of action (whether at law or in equity), obligations, demands, guaranties, and other matters of any kind or nature whatsoever that arose prior to the Effective Date, subject to the terms of the Holders of such Liens or Claims rights as beneficiaries of the Liquidation Trust;
c. Do not constitute avoidable transfers under the Bankruptcy Code or under applicable bankruptcy or non-bankruptcy law; and
d. Do not subject the Liquidation Trust to any liability by reason of such transfer under the Bankruptcy Code or under applicable non-bankruptcy law, including any laws affecting successor or transferee liability or fraudulent conveyance or transfer laws.
23. Creditors often dealt with the Debtors as a single economic unit and did not rely on their separate identities in extending credit. Further, given the substantial amount of intercompany debt that exists between the various Debtors, the time and expense associated with reviewing each of the hundreds or thousands of inter-company transactions and the avoidability of each such transaction, and the analysis of the remaining debt at each of the Debtors, the separation of the Debtors assets and liabilities would be cost prohibitive, if not impossible. Accordingly, substantive consolidation of the Estates will foster similarity and fairness of treatment of Holders of Claims and is in the best interests of the Debtors’ Creditors and the Estates. No creditor of any of the Debtors will be prejudiced by the Substantive Consolidation of the Chapter 11 Cases and such Substantive Consolidation will benefit all creditors of the Debtors.
24. The only objection to confirmation of the Plan was the Limited Objection [Docket Item 2105] (the “CI Objection”) filed by Commerce and Industry Insurance Company
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(“CI”). CI also commenced an adversary proceeding against the Trustee captioned Commerce and Industry Insurance Company v.Phillips, Adv. Pro. No. 05-03009-DOT (the “CI AdversaryProceeding”). By motion made in the Adversary Proceeding, CI requested entry of a preliminary injunction compelling the Trustee to escrow certain funds pending resolution of the Adversary Proceeding (the “Motion for Preliminary Injunction”). By agreement of the Trustee and CI, the CI Objection has been withdrawn, subject to entry of an agreed order in the Adversary Proceeding providing for the escrow of $250,000 pending a hearing on the Motion for Preliminary Injunction (the “CI AgreedOrder”).
II. CONCLUSIONS OF LAW. A. Jurisdiction and Venue.
25. This Court has subject matter jurisdiction over this proceeding pursuant to 28 U.S.C. § 1334. This is a core proceeding pursuant to 28 U.S.C. § 157(b)(2)(L). The Court can exercise its subject matter jurisdiction pursuant to 28 U.S.C. § 157(b)(1). The Debtors are and were qualified to be debtors under Section 109 of the Bankruptcy Code.
26. Venue in the Eastern District of Virginia, Richmond Division was proper as of the Petition Date and continues to be proper under 28 U.S.C. §§ 1408 and 1409.
B. Exemption From Securities Laws.
27. The Trustee, the Debtors and each of their respective affiliates, directors, officers, employees, agents, financial advisors, investment bankers, attorneys, and other professionals have acted in “good faith” within the meaning of Section 1125(e) of the Bankruptcy Code in compliance with the applicable provisions of the Bankruptcy Code and Bankruptcy Rules in connections with all their respective activities described in Section 1125 of the Bankruptcy Code. Accordingly, pursuant to Section 1125(e) of the Bankruptcy Code, none of these parties that participated in (i) the transmittal of Solicitation Package, as described above, or (ii) the
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solicitation of acceptances of the Plan shall be liable, on account of such actions or such participation, for any violation of any applicable law, rule or regulation governing the solicitation of acceptance or rejection of the Plan or the offer, issuance, sale or purchase of securities.
C. Compliance With Section 1129 of the Bankruptcy Code.
28. As set forth in Section I.B of this Confirmation Order, the Plan complies with the applicable requirements of Section 1129 of the Bankruptcy Code.
D. Approval of the Releases, Compromises, Settlements andInjunctions and Retention of Litigation Claims.
29. Pursuant to Section 1123(b)(3)(A) of the Bankruptcy Code and Bankruptcy Rule 9019(a), the settlements, compromises, releases, and injunctions set forth in the Plan, and implemented by this Confirmation Order, hereby are approved as fair, equitable, reasonable and in the best interests of the Debtors and their Estates, Holders of Claims and Interests, and the settlement or compromise of all claims or controversies as set forth in the Plan.
30. Pursuant to Section 1123(b)(3)(B), the prosecution and settlement of Litigation Claims retained by the Estates and transferred to the Liquidation Trust pursuant to the terms of the Plan and the Liquidation Trust Agreement shall be the sole responsibility of the Liquidation Trustee.
31. Pursuant to Section 1142(b) of the Bankruptcy Code, no action of the directors or stockholders of the Debtors will be required (i) to authorize the Trustee to effectuate and carry out the Plan or any order of this Court relating thereto, (ii) to consummate the transactions contemplated by the Plan, the Disclosure Statement, or such orders, or (iii) to take any other action or thing contemplated by the Plan, the Disclosure Statement, or such orders as may be entered in connection therewith, and all such actions and things hereby are or will be deemed to
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have been taken or done with like effect as if they had been authorized or approved by unanimous actions of the directors and the stockholders of the Debtors.
E. Assumption and Rejection.
32. Article VIII of the Plan governing the assumption and rejection of Executory Contracts and unexpired leases satisfies the requirements of Section 365 of the Bankruptcy Code. Pursuant to Section 8.1 of the Plan, the Trustee is authorized to reject all executory contracts, effective as of the Effective Date, except for any executory contract or unexpired lease that is the subject of a separate pending motion filed prior to the Effective Date under Section 365 of the Bankruptcy Code.
F. Plan Modification.
33. To the extent any of the provisions of this Confirmation Order constitute modifications of the Plan, the Plan, as modified, satisfies the requirements of Sections 1122 and 1123 of the Bankruptcy Code and is hereby approved. Because any modification of the Plan effected by this Confirmation Order does not adversely affect the treatment of any creditor or the interest of any equity security holder under the Plan, all creditors and equity security holders that previously voted to accept the Plan prior to its modification shall be and hereby are deemed to have voted to accept the Plan as modified hereby pursuant to Bankruptcy Rule 3019.
III. ORDER. A. Confirmation of the Plan and Notice of the ConfirmationHearing.
34. The Plan (as modified hereby), which is incorporated herein by reference, is hereby APPROVED and CONFIRMED in all respects pursuant to Section 1129 of the Bankruptcy Code.
35. If there is any direct conflict between the terms of the Plan and the terms of this Confirmation Order, the terms of this Confirmation Order shall control.
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36. The provisions of the Confirmation Order are integrated with each other and are non-severable and mutually dependent.
37. All objections and responses to, and statements and comments regarding, the Plan, to the extent they have not been withdrawn prior to entry of this Confirmation Order or are not cured by the relief granted herein, are hereby expressly overruled. The CI Objection is addressed by the CI Agreed Order to be entered in the CI Adversary Proceeding, and CI’s withdrawal of the CI Objection is conditioned on entry of that agreed order. The claims asserted by CI against the Estates shall be deemed to be Disputed Claims, as defined in the Plan,provided, however, that nothing herein shall be a deemed admission by CI that the funds sought are property of the Estates, and CI reserves the right to argue that such funds are not property of the Estates pursuant to Section 541 of the Bankruptcy Code.
38. The Trustee, the Debtors, and each other appropriate party are hereby authorized and directed to take all actions necessary or appropriate to enter into, implement and consummate the Liquidating Trust Agreement, the contracts, instruments, releases, and other agreements created in connection with the Plan or referred to therein (collectively, the “PlanDocuments”), all of which Plan Documents are hereby approved, and to take such other steps to perform such other acts as may be necessary to implement and effectuate the Plan or the other Plan Documents, and are further authorized and directed to execute and deliver any instrument and perform any other act that is necessary for the consummation of the Plan in accordance with Section 1142(b) of the Bankruptcy Code.
39. As established through the Affidavits of Service, the Trustee provided good and sufficient notice of the Confirmation Hearing and the deadline for filing and serving objections to the Plan, which notice is hereby approved.
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B. Effects of Confirmation.
40. Unimpaired Claims. No Administrative Claims, Priority Tax Claims, Fee Claims, or Claims in Class 1 are impaired by the Plan with the meaning of Section 1124 of the Bankruptcy Code. Neither the Plan nor this Confirmation Order shall be construed as altering in any way the legal, equitable or contractual rights of Holders of such Unimpaired Claims. Except as otherwise provided in the Plan, nothing under the Plan or this Confirmation Order shall affect the Trustee’s or the Liquidating Trust’s rights and legal and equitable defenses with respect to any Unimpaired Claims, including, but not limited to, all rights with respect to legal and equitable defenses to setoffs or recoupments against Unimpaired Claims.
41. Injunctions and Stays Remain in Effect Until the EffectiveDate. All injunctions and stays in effect on the Confirmation Date pursuant to Sections 105 and 362 of the Bankruptcy Code or otherwise shall remain in full force and effect until the Effective Date of the Plan, except that nothing herein shall bar the taking of any actions that are necessary to effectuate the transactions contemplated by the Plan or this Confirmation Order.
C. Matters Relating to Implementation of the Plan.
42. Binding Effect. Immediately upon the entry of this Confirmation Order, the terms of the Plan hereby are deemed binding upon the Trustee, the Debtors, the Liquidation Trust, and all Holders of Claims or Interests (irrespective of whether such Claims or Interests are impaired under the Plan or whether the Holders of such Claims or Interests accepted or are deemed to have accepted the Plan), any and all non-debtor parties to executory contracts and unexpired leases with the Debtors and their respective heirs, executors, administrators, successors, or assigns, if any, of any of the foregoing.
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43. Continued Corporate Existence; Vesting of Assets.
a. Subject to the Substantive Consolidation provided for in the Plan and this Confirmation Order, the Debtors shall continue to exist after the Effective Date as separate corporate entities, limited liability companies, limited partnerships and partnerships, and without prejudice to any right to alter or terminate such existence (whether by merger or otherwise). Except as otherwise provided in the Plan or this Confirmation Order, on the Effective Date, all property of the Debtors’ Estates shall vest in the Liquidation Trust, free and clear of all Claims, Liens, encumbrances, rights of setoff or recoupment, defenses, causes of action (whether at law or in equity), obligations, demands, guaranties, and matters of any kind or nature whatsoever, subject only to the rights of Holders of Liens or Claims as beneficiaries of the Liquidation Trust.
b. On and after the Effective Date, the Trustee or the Liquidation Trust may use, acquire and dispose of property and compromise or settle any Claims or Interests without supervision or approval by this Court and free of any restrictions of the Bankruptcy Code or Bankruptcy Rules, subject only to the terms of the Liquidation Trust Agreement. Without limiting the foregoing, administrative expenses incurred by the Estates or the Liquidation Trust after the Effective Date, including, without limitation, claims for professional fees and expenses, shall not be subject to application and may be paid by the Trustee or Liquidation Trust, as the case may be, in the ordinary course of business and without further Court approval, subject only to the terms of the Liquidation Trust Agreement.
44. Substantive Consolidation. The Debtors respective Chapter 11 cases shall be, and hereby are, substantively consolidated for all purposes, including actions associated with confirmation and consummation of the Plan. On and after the Effective Date, each and every Claim filed or to be filed in these Chapter 11 Cases against any of the Debtors shall be deemed filed against the consolidated Debtors under the lead case, In re Fas MartConvenience Stores, Inc., Case No. 01-60386, and shall be deemed a single consolidated Claim against, and obligation of, all of the consolidated Debtors after the Effective Date. In connection with, and as a result of, the substantive consolidation of the Debtors’ Estates and Chapter 11 Cases, on the occurrence of the Effective Date all inter-company claims between the Debtors shall be (i) released, (ii) contributed to capital, (iii) distributed as a dividend, or (iv) remain Unimpaired, depending on the tax consequences, and Holders of such inter-company claims shall not be
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entitled to, and shall not, receive or retain any property or interest in property on account of such Claims, except to the extent potential tax consequences otherwise dictate. In addition, the substantive consolidation of the Estates shall result in Debtor Fas Mart Convenience Stores, Inc. being the sole entity from and after the Effective Date responsible for filing and paying any fees to the United States Trustee for any disbursements made from and after the Effective Date pursuant to 28 U.S.C. section 1930 or otherwise.
45. Waiver, Release, Exculpation, Injunction and RelatedProvisions.
a. As of the Confirmation Date, but subject to the occurrence of the Effective Date, and except as otherwise expressly provided in the Plan or herein, all Persons who, directly or indirectly, have held, hold or may hold Claims against or Interests in the Debtors shall be deemed, by virtue of the receipt of Distributions and/or other treatment contemplated under the Plan, to have forever covenanted with the Debtors and with each of the Released Parties to waive, release and not to sue, assert or otherwise seek any recovery from the Debtors or any Released Party, any obligation, right, cause of action or liability, whether based in or upon tort, contract, violations of federal or state laws, or otherwise, whether known or unknown, foreseen or unforeseen, existing or hereafter arising, based in whole or in part upon any act or omission, transactions or occurrence taking place prior to the Effective Date that gives rise to the Claims or Interests or that relates in any way to the Debtors, the Cases, or the Plan, provided, however, that the waivers and releases provided for in the Plan shall only relate to actions, omissions, transactions or occurrences taken by such Released Parties in their capacity as Released Parties.
b. The Debtors, by and through the Trustee, are hereby deemed to have waived, released and discharged all Released Parties from any claim (as such term “claim” is defined in section 101(5) of the Bankruptcy Code), except for claims based upon willful misconduct, arising from the Petition Date through the Effective Date related to such party’s acts or omissions to act (including, but not limited to, any claims arising out of any alleged fiduciary or other duty) as an employee, agent, representative, attorney, accountant, financial advisor or other professional of the Trustee or the Creditors’ Committee, in that capacity. Any such release shall additionally act as an injunction against any claimant or equity interest holder of the Debtors from commencing or continuing any action, employment of process or act to collect, offset or recover any claim that is so released.
c. The Trustee, the Liquidation Trustee, the Creditors’ Committee, and its respective members thereof (in their capacity as such, and specifically excluding any member of the Creditors’ Committee as a vendor of, or in similar relationship or capacity to, the Debtors) and any property of or professionals retained by suchPage 18
parties, or direct or indirect predecessor in interest to any of the foregoing Persons, shall not have or incur any liability to any Person for any act taken or omission in connection with, related to or arising out of the Cases, including but not limited to (i) formulating, preparing, disseminating, implementing, confirming, consummating or administrating the Plan (including soliciting acceptances or rejections thereof if necessary); (ii) the Disclosure Statement, or any contract, instrument, release or other agreement or document entered into or any action taken or not taken in connection with the Plan; or (iii) any Distributions made pursuant to the Plan, except for acts constituting willful misconduct, and in all respects such parties shall be entitled to rely upon the advice of counsel with respect to their duties and responsibilities under the Plan.
d. All Persons who have held, hold or may hold Claims against or Interests in the Debtors are, with respect to any such Claims or Interests, permanently enjoined from and after the Confirmation Date from taking any of the following actions (other than actions to enforce any rights or obligations under the Plan): (i) commencing, conducting or continuing in any manner, directly or indirectly, any suit, action or other proceeding of any kind (including any proceeding in a judicial, arbitral, administrative or other forum) against or affecting the Debtors, the Trustee, the Liquidation Trustee or any of their property; (ii) enforcing, levying, attaching (including any pre-judgment attachment), collecting or otherwise recovering by any manner or means, whether directly or indirectly, any judgment, award, decree or order against the Debtors, the Trustee, the Liquidation Trustee or any of their property; (iii) creating, perfecting or otherwise enforcing in any manner, directly or indirectly, any encumbrance of any kind against the Debtors, the Trustee, the Liquidation Trustee or any of their property; (iv) asserting any right of setoff, directly or indirectly, against any obligation due the Debtors, the Trustee, the Liquidation Trustee or any of their property, except as contemplated or allowed by the Plan; (v) acting or proceeding in any manner, in any place whatsoever, that does not conform to or comply with the provisions of the Plan; and (vi) prosecuting or otherwise asserting any right, claim or cause of action released pursuant to the Plan. The injunction provided for in this section shall be limited in all respects to the breadth of the releases granted in the Plan.
46. Corporate Actions. The creation of the Liquidation Trust, the appointment of the Liquidation Trustee, the execution, entry into, and consummation of the Plan Documents hereby are and will be deemed to have occurred and be effective as provided in the Plan, and hereby are authorized and approved in all respect and for all purposes without any requirement of further action by stockholders or directors of the Debtors or the Liquidation Trust.
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D. Assumption and Rejection of Executory Contract andUnexpired Leases.
47. Subject only to the occurrence of the Effective Date, the rejection of the executory contracts of the Debtors rejected in accordance with Section 8.1 of the Plan shall be, and hereby is, approved in all respects pursuant to Section 365(a) of the Bankruptcy Code. Proof of any Claim arising out of rejection of an Executory Contract solely pursuant to Section 8.1 of the Plan shall be, and hereby is, required to be filed no later than thirty (30) days after entry of the order of this Court rejecting the Executory Contract, which may include, if applicable, this Confirmation Order (the “Rejection Claim Bar Date”). Failure to properly file and serve a Proof of Claim arising out of the rejection of an Executory Contract on or before the Rejection Claim Bar Date shall result in such Claim being forever barred and any such Claim shall be unenforceable against the Debtors, the Liquidation Trust, their successors or properties.
E. Substantial Consummation.
48. Substantial consummation of the Plan, within the meaning of Section 1127 of the Bankruptcy Code, shall be deemed to occur on the Effective Date.
F. Payment of Statutory Fees.
49. On or prior to the Effective Date, the Debtors shall pay all fees payable pursuant to 28 U.S.C. § 1930. After the Effective Date, the Trustee shall continue to pay such fees until a final decree is entered in these Chapter 11 Cases, provided,however, that the Liquidation Trust shall not be liable for the payment of any statutory fees on disbursements made by such Liquidation Trust.
G. Creditors’ Committee.
50. From the Confirmation Date up to and including the Effective Date, the members of the Creditors’ Committee appointed pursuant to Section 1102 of the Bankruptcy Code shall continue to serve. On the Effective Date, the Creditors’ Committee shall automatically be
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dissolved and the members thereof and the professionals retained by the Creditors’ Committee in accordance with Section 1103 of the Bankruptcy Code shall be released and discharged from their respective fiduciary obligations, duties and responsibilities.
51. Section 6.10 of the Plan is hereby amended to read as follows:
The Creditors’ Committee shall continue in existence until the Effective Date to exercise those powers and perform those duties specified in section 1103 of the Bankruptcy Code and shall perform such other duties as it may have been assigned by the Bankruptcy Court prior to the Effective Date. On the Effective Date, the Creditors’ Committee shall be dissolved and its members shall be deemed released of any continuing duties, responsibilities and obligations in connection with the Chapter 11 Cases or the Plan and its implementation, and the retention and employment of the Creditors’ Committee’s attorneys, accountants and other agents shall terminate, except with respect to (i) all Fee Claims, (ii) any appeals of the Confirmation Order, (iii) any litigation that was commenced by the Creditors’ Committee pending on the Effective Date not resolved by the Plan or, (iv) any pending litigation not resolved by the Plan in which the Creditors’ Committee was a participant and for which the Liquidation Trustee requests assistance.
H. Retention of Jurisdiction.
52. This Court shall retain jurisdiction, to the maximum extent permitted by the Bankruptcy Code and other applicable law and notwithstanding the prior closure of any of the Debtors’ Chapter 11 Cases, of all matters arising out of, and related to, these Chapter 11 Cases and the Plan pursuant to, and for the purposes of, Section 105(a) and 1142 of the Bankruptcy Code, including, without limitation:
a. To hear and determine any and all matters relating to the assumption or rejection of executory contracts or unexpired leases and the allowance of Claims resulting therefrom.
b. To hear and determine any and all adversary proceedings, applications and contested matters.
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c. To hear and determine any and all matters relating to the implementation or interpretation of any order, stipulation and/or agreed order entered by this Court in these Chapter 11 Cases.
d. To ensure that distributions to Holders of Allowed Claims and Allowed Interests are accomplished as provided herein.
e. To hear and determine any timely objections to Administrative Claims or to Claims and Interests, including, without limitation, any objections to the classification of any Claim or Interest, and to allow or disallow any Disputed Claim or Disputed Interest, in whole or in part.
f. To enter and implement such orders as may be appropriate in the event the Confirmation Order is for any reason stayed, revoked, modified or vacated.
g. To issue such orders in aid of execution of the Plan, to the extent authorized by Section 1142 of the Bankruptcy Code.
h. To consider any amendments to or modifications of the Plan, or to cure any defect or omission, or reconcile any inconsistency, in any order of the Bankruptcy Court, including, without limitation, the Confirmation Order.
i. To hear and determine all applications under Sections 330, 331 and 503(b) of the Bankruptcy Code for awards of compensation for services rendered and reimbursement of expenses incurred prior to the Effective Date.
j. To hear and determine disputes arising in connection with the interpretation, implementation or enforcement of the Plan, the Confirmation Order, any transactions or payments contemplated hereby or any agreement, instrument or other document governing or relating to any of the foregoing, including without limitation, to hear and determine disputes arising under the Liquidation Trust Agreement.
k. To hear and determine matters concerning state, local and federal taxes in accordance with Sections 346, 505 and 1146 of the Bankruptcy Code.
l. To hear and determine any other matter not inconsistent with the Bankruptcy Code.
m. To hear and determine all disputes involving the existence, scope and nature of the releases granted under Article VII of the Plan.
n. To issue injunctions and effect any other actions that may be necessary or desirable to restrain interference by any Person with the consummation or implementation of the Plan.
o. To recover all assets of the Debtors and property of the Debtors’ estates, wherever located.
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p. To enter final decrees closing these Chapter 11 Cases.
q. To consider requests of the Liquidation Trustee to extend the term of the Liquidation Trust.
I. Exemption From Certain Taxes.
53. Pursuant to Section 1146(c) of the Bankruptcy Code (a) the issuance, transfer, or exchange of notes or equity securities under the Plan; (b) the creation of any mortgage, deed of trust, lien, pledge, or other security interests; and (c) the making or delivery of any deed or other instrument of transfer under, in furtherance of, or in connection with, the Plan, including, without limitation, agreements of consolidation, restructuring, disposition, liquidation, or dissolution, deeds, bills of sale, and transfers of tangible property, will not be subject to any stamp tax, recording tax, personal property transfer tax, sales or use tax, or other similar tax. All recording and filing officers and clerks wherever located are hereby directed to accept for filing or recording, and to file or record immediately upon presentation thereof, any mortgage, deed of trust or other instrument of transfer described in (a), (b) or (c) above without payment of any stamp tax, recording tax, personal property transfer tax, sales or use tax, or similar tax. Furthermore, the transfer of the assets from the Estates to the Liquidation Trust shall not be subject to any personal property tax, transfer tax, sales or use tax or any other similar tax. The Trustee is hereby authorized to deliver a notice or short form of this Confirmation Order to any state recording officer to the effect that such officer must accept for filing such documents described in this paragraph without charging any stamp tax, recording tax, personal property transfer tax, real estate transfer tax, sales or use tax or other similar tax.
J. Notice of Entry of the Confirmation Order.
54. Pursuant to Rules 2002(f)(7) and 3020(c) of the Bankruptcy Rules, the Trustee hereby is directed to serve a notice of the entry of this Confirmation Order, substantially in the
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form attached hereto as Exhibit A (the “Confirmation Notice”) no later than five (5) Business Days after the entry of this Confirmation Order, on all Holders of Claims against or Interests in the Debtors and other persons on whom the notice of the Confirmation Hearing was served.
55. The Trustee is hereby directed to serve a copy of this Confirmation Order on each party that has filed a notice of appearance in these Chapter 11 Cases and on each party that filed an objection or response to, or statement or comments regarding, the Plan, no later than ten (10) Business Days after the Confirmation Date.
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56. This Confirmation Order shall supersede any orders of the Court issued prior to the date hereof to the extent that those prior orders are inconsistent with this Confirmation Order.
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EXHIBIT A Notice of Confirmation of Plan
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UNITED STATES BANKRUPTCY COURT EASTERN DISTRICT OF VIRGINIA Richmond DivisionIn re: ) )FAS MART CONVENIENCE STORES, ) Case No. 01-60386-DOTINC., et al.,[1] ) Chapter 11 ) Procedurally Consolidated Debtrors. )
NOTICE OF (i) ENTRY OF ORDER CONFIRMING THE JOINT PLAN OF LIQUIDATION OF FAS MART CONVENIENCE STORES, INC. AND ITS AFFILIATED DEBTORS AS PROPOSED BY KEITH L. PHILLIPS, CHAPTER 11 TRUSTEE (ii) THE BAR DATE FOR PROFESSIONAL FEE CLAIMS, AND (iii) THE ANTICIPATED EFFECTIVE DATE
PLEASE TAKE NOTICE THAT:
1. Confirmation of the Plan. On February __, 2005, the United States Bankruptcy Court for the Eastern District of Virginia, Richmond Division (the “Bankruptcy Court”) entered an order (the “Confirmation Order”) confirming the Joint Plan of Liquidation of Fas Mart Convenience Stores, Inc. and Its Affiliated Debtors as Proposed by Keith L. Phillips, Chapter 11 Trustee, dated November 3, 2004 (as amended, the “Plan”), in the jointly administered Chapter 11 cases of the above-captioned debtors (collectively, the “Debtors”). A copy of the Plan or the Confirmation Order is available upon reasonable written request to the undersigned counsel for the Trustee. Unless otherwise defined in this notice, capitalized terms used herein shall have the meanings ascribed to them in the Plan and the Confirmation Order.
2. Fee Claims Bar Date. All final applications for payment of Fee Claims shall be filed with the Bankruptcy Court and served on or before the first Business Day that is forty-five (45) days after the Effective Date or such other date as other wise agreed to by the
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Liquidation Trust. Any Holder of a Fee Claim that does not assert such Claim in accordance with Section 2.4 of the Plan shall have its Claim deemed Disallowed under the Plan and be forever barred from asserting such Claim against any of the Debtors, the Liquidation Trust, the Estates or any of their property. Any such Claim shall be discharged and the Holder thereof shall be enjoined from commencing or continuing any action, employment of process or act to collect, offset, recoup or recover such Claim.
3. Effective Date. The Trustee anticipates that the Effective Date of the Plan will occur on February __, 2004.
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