IN RE | : | Jointly Administered | ||
: | Case No. 02-10429 (JKF) | |||
Kaiser Aluminum Corporation, | : | |||
a Delaware corporation, et al., Debtors. | : | Chapter 11 | ||
: | ||||
: | ||||
: | ||||
(Kaiser Aluminum Corporation) | : | (Case No. 02-10429 (JKF)) | ||
(Kaiser Aluminum & Chemical Corporation) | : | (Case No. 02-10430 (JKF)) | ||
(Akron Holding Corporation) | : | (Case No. 02-10431 (JKF)) | ||
(Kaiser Aluminum & Chemical Investment, Inc.) | : | (Case No. 02-10433 (JKF)) | ||
(Kaiser Aluminium International, Inc.) | : | (Case No. 02-10434 (JKF)) | ||
(Kaiser Aluminum Properties, Inc.) | : | (Case No. 02-10435 (JKF)) | ||
(Kaiser Aluminum Technical Services, Inc.) | : | (Case No. 02-10436 (JKF)) | ||
(Kaiser Bellwood Corporation) | : | (Case No. 02-10437 (JKF)) | ||
(Kaiser Micromill Holdings, LLC) | : | (Case No. 02-10439 (JKF)) | ||
(Kaiser Texas Micromill Holdings, LLC) | : | (Case No. 02-10440 (JKF)) | ||
(Kaiser Sierra Micromills, LLC) | : | (Case No. 02-10441 (JKF)) | ||
(Kaiser Texas Sierra Micromills, LLC) | : | (Case No. 02-10442 (JKF)) | ||
(Oxnard Forge Die Company, Inc.) | : | (Case No. 02-10443 (JKF)) | ||
(Alwis Leasing, LLC) | : | (Case No. 02-10818 (JKF)) | ||
(Kaiser Center, Inc.) | : | (Case No. 02-10819 (JKF)) | ||
(KAE Trading, Inc.) | : | (Case No. 03-10145 (JKF)) | ||
(Kaiser Aluminum & Chemical Investment Limited (Canada)) | : | (Case No. 03-10146 (JKF)) | ||
(Kaiser Aluminum & Chemical Of Canada Limited (Canada)) | : | (Case No. 03-10147 (JKF)) | ||
(Kaiser Center Properties) | : | (Case No. 03-10149 (JKF)) | ||
(Kaiser Export Company) | : | (Case No. 03-10150 (JKF)) | ||
(Texada Mines Ltd. (Canada)) | : | (Case No. 03-10152 (JKF)) |
PURSUANT TO SECTION 1125 OF THE BANKRUPTCY CODE FOR THE
FIRST AMENDED JOINT PLAN OF REORGANIZATION OF
KAISER ALUMINUM CORPORATION, KAISER ALUMINUM & CHEMICAL CORPORATION
AND CERTAIN OF THEIR DEBTOR AFFILIATES
Gregory M. Gordon (TX 08435300) | Daniel J. DeFranceschi (DE 2732) | |
Henry L. Gompf (TX 08116400) | RICHARDS, LAYTON & FINGER, P.A. | |
Troy B. Lewis (TX 12308650) | One Rodney Square | |
Daniel P. Winikka (TX 00794873) | P.O. Box 551 | |
JONES DAY | Wilmington, Delaware 19899 | |
2727 North Harwood | Telephone: (302) 651-7700 | |
Dallas, Texas 75201 | Facsimile: (302) 651-7701 | |
Telephone: (214) 220-3939 | ||
Facsimile: (214) 969-5100 | ATTORNEYS FOR DEBTORS AND | |
DEBTORS IN POSSESSION | ||
Dated: August 24, 2005 |
WITH RESPECT TO THE
FIRST AMENDED JOINT PLAN OF REORGANIZATION OF
KAISER ALUMINUM CORPORATION, KAISER ALUMINUM & CHEMICAL CORPORATION
AND CERTAIN OF THEIR DEBTOR AFFILIATES
Page | ||||
INTRODUCTION | 1 | |||
ANSWERS TO CERTAIN QUESTIONS ABOUT THE PLAN AND DISCLOSURE STATEMENT | 5 | |||
OVERVIEW OF THE PLAN | 13 | |||
Introduction | 13 | |||
Classes and Treatment of Claims and Interests | 13 | |||
Sources and Uses of Cash | 19 | |||
Distributions of New Common Stock | 20 | |||
Establishment of the Funding Vehicle Trust and the PI Trusts and Entry of the PI Channeling Injunctions | 20 | |||
Agreements with Labor Regarding Pension and Retiree Medical Benefits | 22 | |||
PBGC Settlement Agreement | 22 | |||
Intercompany Claims Settlement | 23 | |||
Payment of Administrative Claims | 24 | |||
Payment of Priority Tax Claims | 26 | |||
CERTAIN EVENTS PRECEDING THE DEBTORS’ CHAPTER 11 FILINGS | 27 | |||
Historical Business Strategy and Operations | 27 | |||
Capital Structure as of the Petition Date | 27 | |||
Events Leading up to the Debtors’ Chapter 11 Filings | 29 | |||
The Debtors’ Prepetition Attempts to Resolve Their Financial Issues | 30 | |||
OPERATIONS DURING THE REORGANIZATION CASES | 31 | |||
Introduction | 31 | |||
First Day Relief | 31 | |||
The Additional Debtors and the Canadian Proceeding | 34 | |||
Postpetition Financing | 35 | |||
Stipulation and Agreed Order with MAXXAM | 35 | |||
Key Employee Retention Program | 36 | |||
Appointment of the Committees and Future Claimants’ Representatives | 37 | |||
Rejection of Certain Executory Contracts and Unexpired Leases | 40 | |||
Claims Process and Bar Dates | 42 | |||
Exclusivity | 42 | |||
Curtailment and Sale of Washington Smelters | 43 | |||
Strategic Plan to Sell Commodities Assets | 43 | |||
Additional Asset Sales | 46 | |||
Agreements with Labor Regarding Pension and Retiree Medical Benefits | 47 | |||
PBGC Settlement Agreement | 49 |
i
(continued)
Page | ||||
Certain Asbestos-Related Insurance Coverage Litigation | 51 | |||
Certain Other Litigation and Settlements During the Reorganization Cases | 53 | |||
Guaranty Subordination Dispute | 58 | |||
7-3/4% SWD Revenue Bond Dispute | 60 | |||
Intercompany Claims Settlement | 62 | |||
PI TRUSTS AND DISTRIBUTION PROCEDURES | 66 | |||
Background | 66 | |||
Funding Vehicle Trust | 71 | |||
Asbestos PI Trust | 75 | |||
Silica PI Trust | 79 | |||
CTPV PI Trust | 83 | |||
NIHL PI Trust | 86 | |||
PI Trust Funding Agreement | 90 | |||
Insurance Neutrality | 91 | |||
PI Trust Distribution Procedures | 92 | |||
Certain Risks Associated with the PI Trusts | 110 | |||
PI Channeling Injunctions | 111 | |||
Channeled PI Insurance Entity Injunction | 115 | |||
REORGANIZED KAISER | 118 | |||
�� | ||||
Restructuring Transactions | 118 | |||
Description of Business | 119 | |||
Strategic Plan | 123 | |||
Liquidity and Capital Resources | 123 | |||
Exit Financing Facility | 124 | |||
Selected Historical Financial Information | 125 | |||
Projected Financial Information | 125 | |||
Projections | 130 | |||
Board of Directors | 137 | |||
Management | 142 | |||
Certain Corporate Governance Matters | 151 | |||
NEW COMMON STOCK | 156 | |||
Estimated Reorganization Value | 156 | |||
General Description of New Common Stock | 158 | |||
Restrictions on Transfer | 159 | |||
Risk Factors | 160 |
ii
(continued)
Page | ||||
GENERAL INFORMATION CONCERNING THE PLAN | 168 | |||
Substantive Consolidation | 168 | |||
Discharge, Termination and Injunction | 168 | |||
Preservation of Rights of Action Held by the Debtors and the Reorganized Debtors | 169 | |||
Limitation of Liability | 170 | |||
Releases | 170 | |||
Executory Contracts and Unexpired Leases | 171 | |||
Collective Bargaining Agreements | 172 | |||
Insurance Policies and Agreements | 172 | |||
Continued Corporate Existence and Vesting of Assets in the Reorganized Debtors | 173 | |||
Restructuring Transactions | 173 | |||
Certificates of Incorporation and Bylaws | 173 | |||
Directors and Officers of the Reorganized Debtors | 174 | |||
New Employment, Retirement, Indemnification and Other Related Agreements and Incentive Compensation Programs | 174 | |||
Transfers of Funds Among the Debtors | 175 | |||
Corporate Action | 175 | |||
Registration Rights Agreement and Stock Transfer Restriction Agreement | 175 | |||
Cancellation of KAC Old Stock | 175 | |||
Release of Liens | 175 | |||
Effectuating Documents; Further Transactions; Exemption from Certain Transfer Taxes | 176 | |||
Dissolution of Committees | 176 | |||
Canadian Proceeding | 176 | |||
Certain Provisions Relating to KAC Old Stock Interests | 176 | |||
Modification or Revocation of the Plan | 177 | |||
DISTRIBUTIONS UNDER THE PLAN | 178 | |||
Distributions for Claims Allowed as of the Effective Date | 178 | |||
Method of Distributions to Holders of Claims | 178 | |||
Compensation and Reimbursement for Services Related to Distributions | 178 | |||
Unsecured Claims Reserve | 178 | |||
Delivery of Distributions and Undeliverable or Unclaimed Distributions | 179 | |||
Distribution Record Date | 181 | |||
Means of Cash Payments | 181 | |||
Timing and Calculation of Amounts To Be Distributed | 181 | |||
Application of Distributions | 183 |
iii
(continued)
Page | ||||
Setoffs | 183 | |||
Surrender of Cancelled Securities | 183 | |||
Special Provision Relating to Environmental Settlement Agreement | 184 | |||
Prosecution of Objections to Claims | 184 | |||
Liquidation and Payment of Tort Claims | 185 | |||
Treatment of Disputed Claims | 185 | |||
Distributions on Account of Disputed Claims Once They Are Allowed | 185 | |||
Tax Requirements for Income Generated by Unsecured Claims Reserve | 185 | |||
VOTING AND CONFIRMATION OF THE PLAN | 187 | |||
General | 187 | |||
Voting Procedures and Requirements | 187 | |||
Confirmation Hearing | 189 | |||
Confirmation | 189 | |||
Alternatives to Confirmation and Consummation of the Plan | 191 | |||
CERTAIN FEDERAL INCOME TAX CONSEQUENCES OF CONSUMMATION OF THE PLAN | 193 | |||
General | 193 | |||
U.S. Federal Income Tax Consequences to the Debtors | 193 | |||
U.S. Federal Income Tax Consequences to Holders of Claims | 196 | |||
Certain Other Tax Considerations for Holders of Claims | 197 | |||
Importance of Obtaining Professional Tax Assistance | 199 | |||
APPLICABILITY OF CERTAIN FEDERAL AND STATE SECURITIES LAWS | 200 | |||
General | 200 | |||
Bankruptcy Code Exemptions from Registration Requirements | 200 | |||
Certain Transactions by Stockbrokers | 202 | |||
Registration Rights Agreement | 202 | |||
RECOMMENDATION AND CONCLUSION | 204 |
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Exhibit I | - | First Amended Joint Plan of Reorganization of the Debtors | ||
Exhibit II | - | Liquidation Analysis | ||
Exhibit III | - | Voting Procedures |
v
vi
• | alter the Debtors’ debt and capital structures to permit them to emerge from their Reorganization Cases with viable capital structures; | ||
• | maximize the value of the ultimate recoveries to all creditor groups on a fair and equitable basis; and | ||
• | settle, compromise or otherwise dispose of certain claims and interests on terms that the Debtors believe to be fair and reasonable and in the best interests of their respective Estates and creditors, including holders of claims relating to asbestos and certain other personal injuries. |
• | the classification and treatment of Claims and Interests; | ||
• | the creation of the PI Trusts and the related Funding Vehicle Trust and the entry of the PI Channeling Injunctions; | ||
• | the cancellation of the currently outstanding common stock of KAC; | ||
• | the contribution of New Common Stock and Cash to the Union VEBA Trust and the Retired Salaried Employee VEBA Trust; and | ||
• | the distribution of New Common Stock to the PBGC and other holders of Allowed General Unsecured Claims. |
• | The PI Trusts will be established for the benefit of the holders of Channeled Personal Injury Claims (i.e., Asbestos Personal Injury Claims (Class 5), CTPV Personal Injury Claims (Class 6), NIHL Personal Injury Claims (Class 7) and Silica Personal Injury Claims (Class 8)) and certain of the PI Trust Assets (i.e., the common stock of Reorganized Kaiser Trading and the 75% of the KFC Claim) will be transferred to the Asbestos PI Trust and the Silica PI Trust. The Funding Vehicle Trust will be established to hold and manage the remaining PI Trust Assets (i.e., the PI Insurance Assets (including rights to proceeds of insurance) and $13 million of Cash) and make payments to the PI Trusts in accordance with the PI Trust Funding Agreement. In exchange for the PI Trust Assets to be transferred to the Asbestos PI Trust and the Silica PI Trust pursuant to the Plan and the PI Trust Funding Agreement, the PI Trusts will assume all liability and responsibility for Channeled Personal Injury Claims. Channeled Personal Injury Claims will be determined and paid in accordance with the terms, provisions and procedures of the applicable PI Trust Agreement and PI Trust Distribution Procedures. Holders of Channeled Personal Injury Claims will be permanently enjoined from pursuing their claims against the Reorganized Debtors and other Protected Parties. See “Overview of the Plan — Establishment of the Funding Vehicle Trust and the PI Trusts and Entry of the PI Channeling Injunctions” and “PI Trusts and Distribution Procedures.” |
• | The Union VEBA Trust will receive 11,439,900 shares of New Common Stock (i.e., 57.2% of the New Common Stock to be issued pursuant to the Plan) and Cash in an amount equal to the Initial VEBA Contribution payable to the Union VEBA Trust, if any, and the Retired Salaried Employee VEBA Trust will receive 1,940,100 shares of New Common Stock (i.e., 9.7% of the New Common Stock to be issued pursuant to the Plan) and Cash in an amount equal to the Initial VEBA Contribution payable to the Retiree Salaried Employee VEBA Trust, if any; it is currently estimated that, assuming the Effective Date occurs on December 31, 2005, the Debtors will not be required to make either Initial VEBA Contribution. Following the Effective Date, depending on the financial performance of Reorganized KAC, the Union VEBA Trust and the Retired Salaried Employee VEBA Trust may receive additional Cash contributions (i.e., Variable VEBA Contributions). See “Overview of the Plan — Agreements with Labor Regarding Pension and Retiree Medical Benefits” and “Operations During the Reorganization Cases — Agreements with Labor Regarding Pension and Retiree Medical Benefits.” | ||
• | Unless otherwise agreed by the holder of a General Unsecured Claim and the applicable Debtor and except as otherwise provided in the Environmental Settlement Agreement with respect to Additional Sites (as such term is defined therein) (see “Operations During the Reorganization Cases — Certain Other Litigation and Settlements During the Reorganization Cases — Environmental Settlement Agreement”), each Holder of an Allowed General Unsecured Claim (Class 9) will receive its Pro Rata Share of 4,460,000 shares of New Common Stock. Notwithstanding the foregoing, in accordance with the contractual subordination provisions of the Senior Subordinated Note Indenture and paragraph 4 of the 7-3/4% SWD Revenue Bond Settlement, the aggregate amount of consideration that would otherwise be payable to the holders of Senior Subordinated Note Claims in the absence of the contractual subordination provisions of the Senior Subordinated Note Indenture will be distributed to holders of Allowed Senior Note Claims and holders of Allowed 7-3/4% SWD Revenue Bond Claims on a pro rata basis. It is anticipated that the Asbestos PI Trust and the Silica PI Trust will together receive an aggregate of 1,275,714 shares of New Common Stock (i.e., 6.4% of the New Common Stock to be issued pursuant to the Plan) on account of their 75% of the KFC Claim (which is an Allowed General Unsecured Claim in Class 9), with the Asbestos PI Trust receiving 1,199,171 of such shares and the Silica PI Trust receiving 76,543 of such shares. See “Overview of the Plan — Distributions of New Common Stock,” Operations During the Reorganization Cases — Bankruptcy Subordination Dispute” and “Operations During the Reorganization Cases — 7-3/4% SWD Revenue Bond Dispute.” | ||
• | In addition to the 947,366 shares of New Common Stock the PBGC is expected to receive as the holder of an Allowed General Unsecured Claim (Class 9) and the 136,067 shares of New Common Stock the PBGC, as the holder of an allowed general unsecured claim against KFC, is expected to receive pursuant to the Alumina Subsidiary Plan for KAAC and KFC as the PBGC’s proportionate share of the New Common Stock to be distributed on account of KFC’s 25% of the KFC Claim (which is an Allowed General Unsecured Claim in Class 9) (see “Overview of the Plan — Distributions of New Common Stock,” “Overview of the Plan — PBGC Settlement Agreement” and “Operations During the Reorganization Cases — PBGC Settlement Agreement”), the PBGC, as the holder of the Canadian Debtor PBGC Claims (Class 4), will receive (a) 2,160,000 shares of New Common Stock and (b) $2.5 million in Cash. Accordingly, it is anticipated that the PBGC will receive an aggregate of 3,243,433 shares of New Common Stock (i.e., 16.2% of the New Common Stock to be issued pursuant to the Plan) on account of its Class 9 Claim, its Claims 4 Claims and its general unsecured claim against KFC. | ||
• | Except as otherwise provided in the Plan, each holder of a Senior Note Claim or a 7-3/4% SWD Revenue Bond Claim that would otherwise be a General Unsecured Claim (Class 9) except that the stated principal amount of the securities underlying the allowed amount of such Claim is either equal to or less than $15,000 (i.e., a Subclass 2A Convenience Claim) will receive Cash equal to 5.8% of the allowed amount of such Claim. | ||
• | Except as otherwise provided in the Plan, each holder of a 7.60% SWD Revenue Bond Claim that would otherwise be a General Unsecured Claim (Class 9) except that the stated principal amount |
2
of the securities underlying the allowed amount of such Claim is either equal to or less than $30,000 or an Unsecured Claim other than a Public Note Claim that would otherwise be a General Unsecured Claim (Class 9) except that the allowed amount of such Claim is equal to or less than $30,000 (i.e., a Subclass 2B Convenience Claim) will receive Cash equal to 2.9% of the allowed amount of such Claim. |
3
4
• | Subclass 2A (Senior Note and 7-3/4% SWD Revenue Bond Convenience Claims) | ||
• | Subclass 2B (Other Convenience Claims) | ||
• | Class 4 (Canadian Debtor PBGC Claims) | ||
• | Class 5 (Asbestos Personal Injury Claims) | ||
• | Class 6 (CTPV Personal Injury Claims) | ||
• | Class 7 (NIHL Personal Injury Claims) | ||
• | Class 8 (Silica Personal Injury Claims) | ||
• | Subclass 9B (Other Unsecured Claims) |
5
6
7
8
9
• | The Confirmation Order must have been entered on the docket of the Clerk of the Bankruptcy Court in form and substance satisfactory to the Debtors, the Creditors’ Committee, the Asbestos Claimants’ Committee, the Retirees’ Committee, the Future Asbestos Claimants’ Representative and the Future Silica and CTPV Claimants’ Representative and certain findings, most of which are related to the statutory requirements of section 524(g) of the Bankruptcy Code, must be contained in all substantial respects in the Confirmation Order, as set forth in further detail in Section 10.1.a of the Plan; |
10
• | The Debtors must have received a commitment for the Exit Financing Facility from the Exit Financing Facility Agent Bank on terms and conditions satisfactory to (a) the Debtors and (b) the Creditors’ Committee, the Asbestos Claimants’ Committee, the Retirees’ Committee, the Future Asbestos Claimants’ Representative and the Future Silica and CTPV Claimants’ Representative and such commitment must then be in effect, except that a person in clause (b) may object to such terms and conditions only to the extent (x) they differ materially from those contained in the Commitment Letter, dated January 14, 2005, with J.P. Morgan Securities Inc. and The CIT Group/Business Credit, Inc. (see “Reorganized Kaiser — Exit Financing Facility”) and (y) they conflict with the terms of the Plan or are materially less favorable to the Debtors than those then generally available to companies that are comparable to the Debtors.; and | ||
• | All Exhibits to the Plan must be in form and substance reasonably satisfactory to the Debtors, the Creditors’ Committee and the Asbestos Claimants’ Committee, the Retirees’ Committee, the Future Asbestos Claimants’ Representative and the Future Silica and CTPV Claimants’ Representative. |
• | The Confirmation Order must have become a Final Order; | ||
• | The documents effectuating the Exit Financing Facility must have been executed and delivered by Reorganized KAC, the Exit Financing Facility Agent Bank and the financial institutions named therein; | ||
• | The shares of New Common Stock to be issued pursuant to the Plan must have been registered under the Exchange Act; | ||
• | The New Common Stock must have been designated as NASDAQ National Market or NASDAQ SmallCap Market securities by The Nasdaq Stock Market, Inc. or authorized for listing on or accepted for quotation through any exchange registered pursuant to Section 6(a) of the Exchange Act, subject to official notice of issuance; | ||
• | The Bankruptcy Court must have entered an order (contemplated to be part of the Confirmation Order), in form and substance acceptable to the Debtors, approving and authorizing the Debtors and the Reorganized Debtors to take all actions necessary, appropriate or desirable to implement the Plan, including completion of the Restructuring Transactions and the other transactions contemplated by the Plan and the implementation and consummation of the contracts, instruments, releases and other agreements or documents to be entered into or delivered in connection with the Plan; |
11
• | The Bankruptcy Court and/or the District Court, as required, must have entered each of the PI Channeling Injunctions (which may be included in the Confirmation Order), with each containing terms satisfactory to the Debtors, the Creditors’ Committee, the Asbestos Claimants’ Committee, the Future Asbestos Claimants’ Representative and the Future Silica and CTPV Claimants’ Representative; | ||
• | The PI Channeling Injunctions must be in full force and effect; | ||
• | The Funding Vehicle Trust Agreement and each PI Trust Agreement must have been executed by the parties thereto; | ||
• | Concurrently with the Effective Date, 70.5% of the KFC Claim must have been transferred to the Asbestos PI Trust and 4.5% of the KFC Claim must have been transferred to the Silica PI Trust; | ||
• | The Canadian Proceeding must have been dismissed or terminated; and | ||
• | All other actions, documents, consents and agreements necessary to implement the Plan must have been effected, obtained and/or executed. |
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Description and Amount of Claims or Interests | Treatment |
Class 1 (Unsecured Priority Claims): | Unimpaired; on the later of the Effective Date and the | ||
date on which the Claim is allowed, each holder of an | |||
Priority Claims that are entitled to priority in | Allowed Claim in Class 1 will be entitled to receive in | ||
payment under section 507(a)(3) or 507(a)(4) of the | satisfaction of its Allowed Class 1 Claim Cash equal to | ||
Bankruptcy Code. | the allowed amount of such Claim against the applicable | ||
Debtor. | |||
Estimated Aggregate Claims Amount: $0 |
14
Description and Amount of Claims or Interests | Treatment |
Class 2 (Convenience Claims): | Impaired; on the later of the Effective Date and the | ||
date on which the Claim is allowed, (a) each holder of | |||
• Subclass 2A (Senior Note and 7-3/4% SWD Revenue | an Allowed Claim in Subclass 2A will be entitled to | ||
Bond Convenience Claims): | receive in satisfaction of its Allowed Subclass 2A | ||
Claim Cash equal to 5.8% of the allowed amount of such | |||
Subject to the provisions of Section 7.5.a(ii) of the | Claim against the applicable Debtor and (b) each holder | ||
Plan (see “Distributions Under the Plan — Delivery of | of an Allowed Claim in Subclass 2B will be entitled to | ||
Distributions and Undeliverable or Unclaimed | receive in satisfaction of its Allowed Subclass 2A | ||
Distributions”), Senior Note Claims and 7-3/4% SWD | Claim Cash equal to 2.9% of the allowed amount of such | ||
Revenue Bond Claims that otherwise would be included | Claim. | ||
in Class 9 except that the stated principal amount of the securities underlying the allowed amount of each such Claim is either equal to or less than $15,000. | |||
• Subclass 2B (Other Convenience Class Claims): | |||
Subject to the provisions of Section 7.5.a(ii) of the Plan (see “Distributions Under the Plan — Delivery of Distributions and Undeliverable or Unclaimed Distributions”), Unsecured Claims other than Senior Note Claims, 7-3/4% SWD Revenue Bond Claims, 6-1/2% RPC Revenue Bond Claims and Senior Subordinated Note Claims that otherwise would be included in Class 9 except that (i) as to any 7.60% SWD Revenue Bond Claim, the stated principal amount of the securities underlying the allowed amount of such Claim is either equal to or less than $30,000 and (ii) as to any such Claim other than a 7.60% SWD Revenue Bond Claim, the allowed amount of such Claim is equal to or less than $30,000. | |||
For purposes of determining eligibility for treatment under Class 2, multiple Claims of a holder in respect of the same series of Public Notes or, as to Claims other than Public Note Claims, arising in a series of similar or related transactions between a Debtor and the original holder of such Claims will be treated as a single Claim and no splitting of Claims will be recognized. | |||
Estimated Aggregate Claims Amount: $20 million | Percentage Recovery: 5.8% in the case of Subclass 2A and 2.9% in the case of Subclass 2B | ||
Class 3 (Secured Claims): | Unimpaired; except as otherwise agreed by the holder of | ||
a Class 3 Claim and the applicable Debtor or | |||
Secured Claims. | Reorganized Debtor, on the later of the Effective Date | ||
and the date on which the Claim is allowed, each holder | |||
of an Allowed Claim in Class 3 will be treated in | |||
accordance with Option A or B below, at the election of | |||
the applicable Debtor. The applicable Debtor will be | |||
deemed to have elected Option B, except with respect to | |||
any Allowed Claims as to which the applicable Debtor | |||
elects Option A in a certification Filed no later than | |||
15 days prior to the commencement of the Confirmation | |||
Hearing. | |||
Option A: Each holder of an Allowed Claim in Class | |||
3 with respect to which the applicable Debtor or | |||
Reorganized Debtor elects Option A will receive in | |||
satisfaction of its Allowed Class 3 Claim Cash | |||
equal to the allowed amount of such Claim. | |||
Option B: Each Allowed Claim in Class 3 with | |||
respect to which the applicable Debtor or | |||
Reorganized Debtor elects or is deemed to have | |||
elected Option B will be Reinstated. | |||
Estimated Aggregate Claims Amount: $5 million |
15
Description and Amount of Claims or Interests | Treatment |
Class 4 (Canadian Debtor PBGC Claims): | Impaired; on the Effective Date, the PBGC, as the | ||
holder of the Allowed Claims in Class 4, will be | |||
Unsecured PBGC Claims against the Canadian Debtors. | entitled to receive in satisfaction of all of its | ||
Allowed Class 4 Claims against the Canadian Debtors | |||
(a) 2,160,000 shares of New Common Stock and (b) $2.5 | |||
million in Cash. | |||
Aggregate Allowed Claims Amount: $616 million | Estimated Percentage Recovery: 7.1%* | ||
Class 5 (Asbestos Personal Injury Claims): | Impaired; each Asbestos Personal Injury Claim will be | ||
determined and paid in accordance with the terms, | |||
Asbestos Personal Injury Claims. A detailed definition | provisions and procedures of the Asbestos PI Trust | ||
of “Asbestos Personal Injury Claims” is set forth in | Agreement and the Asbestos Distribution Procedures. | ||
Section 1.1(35) of the Plan. | See “PI Trusts and Distribution Procedures — PI Trust | ||
Distribution Procedures.” | |||
Class 6 (CTPV Personal Injury Claims): | Impaired; each CTPV Personal Injury Claim will be | ||
determined and paid in accordance with the terms, | |||
CTPV Personal Injury Claims. A detailed definition of | provisions and procedures of the CTPV PI Trust | ||
“CTPV Personal Injury Claims” is set forth in Section | Agreement and the CTPV Trust Distribution Procedures. | ||
1.1(67) of the Plan. | See “PI Trusts and Distribution Procedures — PI Trust | ||
Distribution Procedures.” | |||
Class 7 (NIHL Personal Injury Claims): | Impaired; each NIHL Personal Injury Claim will be | ||
determined and paid in accordance with the terms, | |||
NIHL Personal Injury Claims. A detailed definition of | provisions and procedures of the NIHL PI Trust | ||
“NIHL Personal Injury Claims” is set forth in Section | Agreement and the NIHL Distribution Procedures. See | ||
1.1(130) of the Plan. | “PI Trusts and Distribution Procedures — PI Trust | ||
Distribution Procedures.” | |||
Class 8 (Silica Personal Injury Claims): | Impaired; each Silica Personal Injury Claim will be | ||
determined and paid in accordance with the terms, | |||
Silica Personal Injury Claims. A detailed definition | provisions and procedures of the Silica PI Trust | ||
of “Silica Personal Injury Claims” is set forth in | Agreement and the Silica Distribution Procedures. See | ||
Section 1.1(187) of the Plan. | “PI Trusts and Distribution Procedures — PI Trust | ||
Distribution Procedures.” | |||
Class 9 (General Unsecured Claims): | Impaired; unless otherwise agreed by the holder of an | ||
Allowed Claim in Class 9 and the applicable Debtor and | |||
Unsecured Claims not otherwise classified under the | except as otherwise provided in the Environmental | ||
Plan, subclassified as follows: | Settlement Agreement with respect to Additional Sites | ||
(as such term is defined therein) (see “Operations | |||
• Subclass 9A (Senior Subordinated Note Claims): | During the Reorganization Cases — Certain Other | ||
Litigation and Settlements During the Reorganization | |||
Claims against KACC and the Debtor Guarantors under | Cases — Environmental Settlement Agreement”), on the | ||
or in respect of the Senior Subordinated Notes | later of the Effective Date and the date on which such | ||
Claim is allowed, each holder of an Allowed Claim in | |||
• Subclass 9B (Other Unsecured Claims): | Class 9 will be entitled to receive in satisfaction of | ||
its Allowed Class 9 Claim a Pro Rata Share of 4,460,000 | |||
Unsecured Claims (i.e., Claims that are not | shares of New Common Stock (i.e., the Reserved Shares), | ||
Administrative Claims, Cure Amount Claims, Channeled | together with any Cash or other property pursuant to | ||
Personal Injury Claims, Equity Claims, Priority | Section 7.8.c(i) of the Plan (which is described below | ||
Claims, Priority Tax Claims, Secured Claims or | under “Distributions Under the Plan — Timing and | ||
Intercompany Claims) that are not classified in Class | Calculation of Amounts To Be Distributed — | ||
4, Subclass 9A or Class 10 (including (a) Claims | Distributions of New Common Stock), if applicable. | ||
against KACC and the Debtor Guarantors under or in respect of the 9-7/8% Senior Notes and the 10-7/8% | |||
Senior Notes, (b) Claims against KACC under or in | Notwithstanding the foregoing, in accordance with the contractual | ||
respect of the 6-1/2% RPC Revenue Bonds or | subordination provisions of the Senior Subordinated Note | ||
appurtenant coupons, the 7-3/4% SWD Revenue Bonds | Indenture and paragraph 4 of the 7-3/4% SWD Revenue Bond | ||
and the 7.60% SWD Revenue Bonds, (c) the unsecured | Settlement, the aggregate amount of consideration that would | ||
portion of any other Claims, which, if such Claims | otherwise be payable to the holders of Senior Subordinated | ||
were fully secured, would have been classified in | Note Claims in the absence of the contractual subordination | ||
Class 3 and as to which the applicable Debtor will | provisions of the Senior Subordinated Note Indenture will be | ||
have elected Option A treatment under Section 3.2.b | distributed to holders of Allowed Senior Note Claims | ||
of the Plan (which is described above in the summary | and holders of Allowed 7-3/4% SWD Revenue Bond Claims | ||
of the treatment of Class 3 Claims), (d) Tort Claims, | on a pro rata basis, based upon the relative allowed | ||
(e) Unsecured PBGC Claims against the Substantively | amounts of such Claims against KACC, as set forth in | ||
Consolidated Debtors, and (f) the prepetition Claims | the table below (see “ — Allowed Amount of Certain | ||
of KFC against KACC in the amount of $1.106 billion). | Claims"). |
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Description and Amount of Claims or Interests | Treatment |
Estimated Aggregate Claims Amount: $2.9 billion (with the | Estimated Percentage Recovery: 2.9% (subject, in the | ||
Estimated Aggregate Claims Amount being $427.0 million for | case of the Senior Notes, the 7-3/4% SWD Revenue Bonds | ||
Subclass 9A and being $2.473 billion for Subclass 9B). | and the Senior Subordinated Notes, to the application | ||
For computational purposes, the aggregate allowed amount | of the contractual subordination provisions of the | ||
of Senior Subordinated Note Claims included in Class 9 | Senior Subordinated Note Indenture and the terms of the | ||
will be reduced by the aggregate amount of such Claims | 7-3/4% SWD Revenue Bond Settlement; after giving effect | ||
allocable to Senior Note Claims and 7-3/4% SWD Revenue | to both in accordance with the Plan, the Estimated | ||
Bond Claims included in Subclass 2A in order to make | Percentage Recovery for the holders of Senior Notes is | ||
distributions in respect thereof in accordance with the | 5.8%, for the holders of 7-3/4% SWD Revenue Bonds is | ||
contractual subordination provisions of the Senior | 5.8% and for the holders of the Senior Subordinated | ||
Subordinated Note Indenture and paragraph 4 of the 7-3/4% | Notes is 0%)* | ||
SWD Revenue Bond Settlement. | |||
Class 10 (Canadian Debtor Claims): | Unimpaired; except as otherwise agreed by the holder of | ||
a Class 10 Claim and the applicable Debtor, each | |||
Claims (excluding Channeled Personal Injury Claims, | Allowed Class 10 Claim, to the extent not paid prior to | ||
PBGC Claims and Intercompany Claims) against a Canadian | the Effective Date, will be paid in full in accordance | ||
Debtor. | with its terms. | ||
Estimated Aggregate Claims Amount: $0 | |||
Class 11 (Intercompany Claims): | Impaired; on or before the Effective Date, each holder | ||
of an Intercompany Claim will receive the treatment as | |||
Claims by a Debtor or Other Debtor against any Debtor. | set forth in the Intercompany Claims Settlement. In | ||
accordance with the Intercompany Settlement Agreement, | |||
the KFC Claim will be included in Class 9. | |||
Class 12 (KAC Old Stock Interests): | Impaired; no property will be distributed to or | ||
retained by the holders of Allowed Interests in Class | |||
Interests and Claims in respect of the KAC Old Stock. | 12. | ||
Class 13 (Kaiser Trading Old Stock Interests): | Impaired; no property will be distributed to or | ||
retained by the holder of Allowed Class 13 Interests | |||
Interests and Claims in respect of the Old Stock of | and Claims. On the Effective Date, 100 shares of | ||
Kaiser Trading. | common stock of Reorganized Kaiser Trading, | ||
constituting 100% of the issued and outstanding shares | |||
of common stock of such company, will be issued to the | |||
Asbestos PI Trust and Silica PI Trust in accordance | |||
with Sections 5.2.d and 5.3.d of the Plan (which are | |||
described below under “PI Trusts and Distribution | |||
Procedures — Asbestos PI Trust — Transfer of Certain | |||
Property to the Asbestos Trust” and “PI Trusts and | |||
Distribution Procedures — Silica PI Trust — Transfer of | |||
Certain Property to the Silica PI Trust,” respectively). | |||
Class 14 (KACC Old Stock Interests): | Impaired; subject to the Restructuring Transactions, no | ||
property will be distributed to or retained by the | |||
Interests and Claims in respect of the Old Stock of | holders of Allowed Class 14 Interests and Claims. | ||
KACC, including Claims relating to the shares of the Series 1985 A and Series 1985 B Cumulative Preference Stock of KACC noticed for redemption in 2001 but not tendered for payment prior to the Petition Date. | |||
Class 15 (Other Old Stock Interests): | Unimpaired; on the Effective Date, subject to the | ||
Restructuring Transactions, Allowed Interests in Class | |||
Interests in any Debtor other than Interests in Class | 15 will be Reinstated. | ||
12, 13 or 14. |
* | As indicated above, the Estimated Percentage Recovery for Classes 4 and 9 has been calculated assuming that the New Common Stock to be distributed under the Plan will have an aggregate value of approximately $380 million, or approximately $19.00 per share, as of the Effective Date, based upon the midpoint of the range for the estimated reorganization equity value of Reorganized KAC excluding the theoretical value of certain anticipated tax attributes of the Reorganized Debtors. If such value were included in the calculation of the reorganization equity value of Reorganized KAC, such equity value could be higher by as much as $65 to $85 million, or $3.25 to $4.25 per share of New Common Stock. The incremental value represents the theoretical present value of estimated tax savings as a result of the anticipated tax attributes of the Reorganized Debtors as of the Effective Date. See “New Common Stock — Estimated Reorganization |
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Value” for a description of the manner in which the New Common Stock was valued for purposes of the Plan, including the reasons no value was included in respect of the anticipated tax attributes of the Reorganized Debtors. |
Aggregate | ||||
Claim | Allowed Amount | |||
Claims Against KACC and the Debtor Guarantors: | ||||
9-7/8% Senior Note Claims | $ | 181,168,828.96 | ||
10-7/8% Senior Note Claims (Series B) | 181,185,156.27 | |||
10-7/8% Senior Note Claims (Series D) | 51,767,187.50 | |||
Senior Subordinated Note Claims | 427,200,000.00 | |||
Claims Against KACC: | ||||
6-1/2% RPC Revenue Bond Claims | $ | 12,760,461.11 | ||
7-3/4% SWD Revenue Bond Claims | 20,051,666.67 | |||
7.60% SWD Revenue Bond Claims | 18,045,788.89 | |||
KFC Claim | 1,106,000,000.00 | |||
PBGC Claims Against Each Debtor: | ||||
PBGC Claims | $ | 616,000,000.00 |
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(Rounded to the Nearest Million)
Sources of Cash | ||||
Cash on hand as of the Effective Date(1) | $ | 29 | ||
Cash borrowed under the term loan component of the Exit Financing Facility | $ | 50 | ||
Receipts from KAAC and AJI/KJC pursuant to the Intercompany Settlement Agreement(2) | $ | 26 | ||
Total Sources | $ | 105 | ||
Uses of Cash(3) | ||||
Cash distributions on account of Priority Tax Claims | $ | 3 | ||
Cash distributions on account of Convenience Class (Class 2) | $ | 1 | ||
Cash distributions on account of Secured Claims (Class 3) | $ | 5 | ||
Cash distributions on account of Canadian Debtor PBGC Claims (Class 4) | $ | 3 | ||
Cash to pay Administrative Claims, costs associated with the Exit Financing Facility and other reorganization expenses(4) | $ | 56 | ||
Minimum Cash utilized by operations in the ordinary course of business | $ | 5 | ||
Excess Cash | $ | 32 | ||
Total Uses | $ | 105 | ||
(1) | Assumes $4 million currently held in escrow in connection with a prepetition settlement agreement relating to certain asbestos claims is released or turned over to the Debtors (see “PI Trusts and Distribution Procedures — Background — Asbestos Personal Injury Claim Settlement Processing Agreements”). | |
(2) | Assumes the receipt of $25 million from KAAC and $1 million from AJI and KJC on the Effective Date pursuant to the Intercompany Claim Settlement, in addition to approximately $43 million already received pursuant thereto (see “— Intercompany Claims Settlement” and “Operations During the Reorganization Cases — Intercompany Claims Settlement”). | |
(3) | Assumes (a) that each of the aggregate amount of cure payments in connection with the assumption of Executory Contracts and Unexpired Leases and the aggregate distributions on account of Unsecured Priority Tax Claims in Class 1 is negligible and (b) that the Debtors will not be required to make an Initial VEBA Contribution to either the Union VEBA Trust or the Retired Salaried Employee VEBA Trust (see “Operations During the Reorganization Cases — Agreements with Labor Regarding Pension and Retiree Medical Benefits”). | |
(4) | Includes, among other things, (a) legal, accounting, financial advisory and other professional fees associated with the implementation of the Plan to be paid after the Effective Date, (b) the payment of Cash to the Funding Vehicle Trust on the Effective Date, (c) the Administrative Claims of the PBGC allowed pursuant to the PBGC Settlement Agreement, (d) Claims of Indenture Trustees to be satisfied after the Effective Date, (e) payments to be made under the Debtors’ Key Employee Retention Program after the Effective Date, and (f) fees associated with the Exit Financing Facility, reduced by an assumed amount of reimbursements from AJI, KJC and KAAC in respect of professional fees incurred in connection with their chapter 11 cases. |
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Name of Beneficial Owner | Number of Shares | Percent | ||||||
Union VEBA Trust(1) | 11,439,900 | 57.2 | % | |||||
PBGC(2) | 3,243,442 | 16.2 | % | |||||
Retired Salaried Employee VEBA Trust(1) | 1,940,100 | 9.7 | % | |||||
Asbestos PI Trust(3) | 1,199,171 | 6.0 | % |
(1) | Reflects the number of shares to be issued in accordance with the Legacy Liability Agreements. See “— Agreements with Labor Regarding Pension and Retiree Medical Benefits.” | |
(2) | Reflects the number of shares currently expected to be issued to the PBGC on account of both its Class 4 and Class 9 Claims and the shares the PBGC, as the holder of an allowed general unsecured claim against KFC, is currently expected to receive pursuant to the Alumina Subsidiary Plan for KAAC and KFC as the PBGC’s proportionate share of the New Common Stock to be distributed on account of KFC’s 25% of the KFC Claim (which is an Allowed Class 9 Claim). See “— PBGC Settlement Agreement.” | |
(3) | Reflects the aggregate number of shares currently expected to be issued on account of the 70.5% of the KFC Claim that is to be transferred to the Asbestos PI Trusts on the Effective Date. See “— Establishment of the Funding Vehicle Trust and the PI Trusts and Entry of the PI Channeling Injunctions” and “— Intercompany Claims Settlement.” Pursuant to the Plan, 4.5% of the KFC Claim will be transferred to the Silica PI Trust; accordingly, it is anticipated that the Silica PI Trust will receive 76,543 shares of New Common Stock (i.e., 0.4% of the New Common Stock to be issued pursuant the Plan). |
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• | the PI Insurance Assets (i.e., (a) rights to receive proceeds from the insurance policies described in Exhibit 1.1(107) to the Plan in respect of Channeled Personal Injury Claims and (b) the Cash paid or to be paid pursuant to settlement agreements with any PI Insurance Company entered into prior to the Effective Date in respect of such insurance policies and allocable to payment of Channeled Personal Injury Claims, including but not limited to the Insurance Settlement Escrow Funds (i.e., an aggregate of approximately $14 million, as of June 30, 2005, held in accordance with escrow agreements created to hold funds paid after the Petition Date in respect of insurance settlements for the benefit of holders of any Channeled Personal Injury Claims, including (i) the settlement agreement, dated as of April 9, 2003, between KACC and Employers Surplus Lines Insurance Company, (ii) the settlement agreement, dated as of March 14, 2003, between KACC and Kingscroft Insurance Company Limited, Walbrook Insurance Company Limited, El Paso Insurance Company Limited, Lime Street Insurance Company Limited, Mutual Reinsurance Company Limited, The Bermuda Fire & Marine Insurance Company Limited, In Liquidation, Bryanston Insurance Company Limited and Southern American Insurance Company, (iii) the settlement agreement, dated as of April 8, 2003, between KACC and National Casualty Company and (iv) the settlement agreement, dated as of November 11, 2004, between KACC and Insurance Company of the West)) (see “Operations During the Reorganization Cases — Certain Asbestos-Related Insurance Coverage Litigation”); | ||
• | 100 shares of common stock of Reorganized Kaiser Trading, constituting 100% of the outstanding equity interests of such company, the assets of which will be approximately 145 acres of real property located in Louisiana and the rights as a lessor under a lease agreement pursuant to which such real property is leased to the Defense National Stockpile Center for the storage of bauxite in return for $50,800 per year, which lease agreement has an initial term which expires in 2008, is renewable for an additional year at the option of the lessee and is terminable by either party prior to the end of the term in certain circumstances; | ||
• | Cash in an amount equal to $13 million; and | ||
• | the 75% of the KFC Claim (i.e., the prepetition Claim of KFC against KACC in the amount of $1.106 billion) that is to be transferred on the Effective Date to the PI Trusts in accordance with Section 4.2.f of the Intercompany Claims Settlement (see “— Intercompany Claims Settlement). |
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• | Contributions of New Common Stock. On the Effective Date, Reorganized KAC will contribute to the Union VEBA Trust and the Retired Salaried Employee VEBA Trust an aggregate of 13,380,000 shares of New Common Stock (representing 75% of KACC’s remaining value after taking into account (a) the satisfaction of Administrative Claims, Priority Tax Claims, Unsecured Priority Claims (Class 1) and Secured Claims (Class 3), (b) contributions to the PI Trusts and related Funding Vehicle Trust, (c) the Equity Incentive Plan, and (d) the satisfaction of the Canadian Debtor PBGC Claims), with 85.5%, or 11,439,900, of such shares being contributed to the Union VEBA Trust and 14.5%, or 1,940,100, of such shares being contributed to the Retired Salaried Employee VEBA Trust. | ||
• | Initial Contributions of Cash. On the Effective Date, Reorganized KAC will contribute to the Union VEBA Trust and the Retired Salaried Employee VEBA Trust Cash in the aggregate equal to (a) the excess of the Initial Availability Amount above $50 million, but in no event more than $36 million less (b) the aggregate of all amounts contributed to the Union VEBA Trust and the Retired Salaried Employee VEBA Trust prior to the Effective Date other than the $1 million contributed to the Union VEBA Trust on March 31, 2005 (i.e., the Initial VEBA Contributions). For purposes of the Plan, the term “Initial Availability Amount” means, as calculated as of the Effective Date, the sum of (a) the consolidated cash balance of Reorganized KAC plus (b) the available liquidity under the revolving credit facility component of the Exit Financing Facility, in each case after giving effect to (i) the Initial VEBA Contributions and all other Cash payments (including accruals or reserves in respect thereof) required in connection with the Plan, (ii) the initial availability amount required under the revolving credit facility component of the Exit Financing Facility, and (iii) any availability blocks required under the revolving credit facility component of the Exit Financing Facility. The Debtors currently estimate that, assuming the Effective Date occurs on December 31, 2005, the aggregate amount of such Cash contributions will be zero. | ||
• | Variable Contributions of Cash. Following the Effective Date, Reorganized KAC will periodically contribute to the Union VEBA Trust and the Retired Salaried Employee VEBA Trust Cash in accordance with agreements entered into pursuant to section 1114 of the Bankruptcy Code, as such agreements have been or may be modified, amended or supplemented (i.e., the Variable VEBA Contributions). For additional information regarding projected Cash contributions to the Union VEBA Trust and the Retired Salaried Employee VEBA Trust, see “Reorganized KAC — Projected Financial Information.” |
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• | Allowed Unsecured Claims. The PBGC will have an Allowed Canadian Debtor PBGC Claim (Class 4) against each of the Canadian Debtors and an Allowed General Unsecured Claim (Class 9) against each of the Debtors other than the Canadian Debtors in the aggregate amount of $616 million. | ||
• | Administrative Claims. To the extent not previously paid in accordance with the Intercompany Claims Settlement and the PBGC Settlement Agreement, the Administrative Claims of the PBGC allowed in an aggregate amount of $14 million will be paid in Cash on the Effective Date. (For purposes of this Disclosure Statement, it is assumed that KACC will pay such Claims in full on the Effective Date.) |
• | KFC Claim. Subject to certain limitations not applicable if the Plan is consummated, KFC or its successor would have an Allowed General Unsecured Claim (Class 9) against KACC in the aggregate amount of $1.106 billion (i.e., the KFC Claim), of which 75% would be assigned by KFC to the PI Trusts on the Effective Date (with KFC or its successor retaining the remaining 25% of such Claim). See “— Establishment of the Funding Vehicle Trust and the PI Trusts of the PI Channeling Injunction.” | ||
• | Standalone Plan for AJI and KJC. AJI and KJC would file a standalone plan under chapter 11 of the Bankruptcy Code and such plan would provide for certain payments to KACC upon its effectiveness. On February 25, 2005, AJI and KJC filed their third amended joint plan of liquidation (i.e., one of the Alumina Subsidiary Plans), together with a corresponding disclosure statement, which proposes to distribute to the creditors of AJI and KJC the proceeds of the sale of the interests of AJI and KJC in and related to Alumina Partners of Jamaica (“Alpart”) and the proceeds allocable to KBC from the sale of its interests in and related to Kaiser Jamaica Bauxite Company (“KJBC”) and KACC’s alumina refinery located on the Mississippi River in Gramercy, Louisiana (“Gramercy”) received by AJI and KJC pursuant to the Intercompany Claims Settlement. The Bankruptcy Court approved that disclosure statement on February 28, 2005. For information regarding the status of confirmation of the joint plan of liquidation for AJI and KJC, see “Operations During the Reorganization Cases — Strategic Plan to Sell Commodities Assets — The Sale of Alpart and Liquidation of AJI and KJC.” For purposes of this Disclosure Statement, it is assumed that the Alumina Subsidiary Plan for AJI and KJC will be confirmed and become effective immediately prior to the effectiveness of the Plan and that, on the Effective Date, KACC will receive $1 million pursuant to such Alumina Subsidiary Plan, which will be in addition to the |
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approximately $43 million already received by KACC upon the sale of Alpart pursuant to the Intercompany Claims Settlement. | |||
• | Standalone Plan for KAAC and KFC. KAAC and KFC would file a standalone plan under chapter 11 of the Bankruptcy Code and such plan would provide for certain payments to KACC upon its effectiveness. On February 25, 2005, KAAC and KFC filed their third amended joint plan of liquidation (i.e., the other Alumina Subsidiary Plan), together with a corresponding disclosure statement, which proposes to distribute to the creditors of KAAC and KFC the proceeds of the sale of KAAC’s interests in and related to Queensland Alumina Limited (“QAL”) and any property received in respect of the 25% of the KFC Claim retained by the distribution trust established in connection with such plan. For information regarding the confirmation of the joint plan of liquidation for KAAC and KFC, see “Operations During the Reorganization Cases — Strategic Plan to Sell Commodities Assets — The Sale of the QAL Interests and Liquidation of KAAC and KFC.” For purposes of this Disclosure Statement, it is assumed that the Alumina Subsidiary Plan for KAAC will be confirmed and become effective immediately prior to the effectiveness of the Plan and that, on the Effective Date, KACC will receive $25 million pursuant to such Alumina Subsidiary Plan. | ||
• | PBGC Administrative Claims. KACC would pay the Allowed Administrative Claims of the PBGC on the earlier of the Effective Date or the effective date of a plan of liquidation for KAAC (which, for purposes of this Disclosure Statement, is assumed to be the same day). |
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• | Industrial Revenue Bonds. KACC issued and sold three series of industrial revenue bonds through state or municipal development board or authorities — the 6-1/2% RPC Revenue Bonds, issued and sold on March 1, 1978 in the aggregate principal amount of $14 million, the 7-3/4% SWD Revenue Bonds, issued and sold on December 1, 1992 in the aggregate principal amount of $20 million, and the 7.60% SWD Revenue Bonds, issued and sold on March 1, 1997 in the aggregate principal amount of $19 million (collectively, the “Industrial Revenue Bonds”). As of the Petition Date, the aggregate principal amount outstanding under the Industrial Revenue Bonds was approximately $51.4 million. On June 6, 2005, the secured portion of the Claims in respect of the 7.60% SWD Revenue Bonds, in the amount of $1.6 million, was satisfied. All of KACC’s |
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remaining obligations in respect of the Industrial Revenue Bonds are unsecured and are not guaranteed. | |||
• | 9-7/8% Senior Notes Due 2002. On February 17, 1994, KACC issued and sold, and each of the Debtor Guarantors and the Alumina Subsidiary Debtors (i.e., AJI, KJC, KAAC and KFC), guaranteed, $225 million in principal amount of 9-7/8% Senior Notes. Prior to the Petition Date, KACC purchased approximately $52 million of the 9-7/8% Senior Notes, leaving approximately $173 million in principal amount of the 9-7/8% Senior Notes outstanding as of the Petition Date. The 9-7/8% Senior Notes are unsecured obligations of KACC and rankpari passuwith the 10-7/8% Senior Notes. | ||
• | 10-7/8% Senior Notes Due 2006. Two series of 10-7/8% Senior Notes were issued by KACC and guaranteed by each of the Debtor Guarantors and the Alumina Subsidiary Debtors: (a) on October 23, 1996, KACC issued and sold $175 million in principal amount of 10-7/8% Series B Senior Notes; and (b) on December 23, 1996, KACC issued and sold $50 million in principal amount of 10-7/8% Series D Senior Notes, all of which remained outstanding as of the Petition Date. The 10-7/8% Senior Notes are unsecured obligations of KACC and rankpari passuwith the 9-7/8% Senior Notes. | ||
• | Senior Subordinated Notes Due 2003. On February 1, 1993, KACC issued and sold, and each of the Debtor Guarantors and the Alumina Subsidiary Debtors guaranteed, $400 million in principal amount of Senior Subordinated Notes, all of which remained outstanding as of the Petition Date. The Senior Subordinated Notes are unsecured obligations of KACC and are subordinate to all obligations of KACC under the Prepetition Credit Facility and the Senior Notes. |
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• | motions relating to administration of the cases; | ||
• | motions relating to payment of prepetition wages and other benefits to the Original Debtors’ employees; | ||
• | motions relating to honoring prepetition obligations to customers and payment of certain vendors and service providers vital to the Original Debtors’ uninterrupted operations; | ||
• | a motion relating to the continued use of the Original Debtors’ cash management system, bank accounts, business forms and investment and deposit guidelines; | ||
• | a motion to continue funding transactions with certain joint venture affiliates; | ||
• | a motion to obtain debtor-in-possession financing in an aggregate amount of $300 million; and | ||
• | a motion for an injunction to protect the assets of certain non-Debtor subsidiaries that were critical to the Original Debtors’ operations. |
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Committee Members: | Counsel: | |
Law Debenture Trust Company of New York, | Lisa G. Beckerman, Esq. | |
as Indenture Trustee | Akin, Gump, Strauss, Hauer & Feld, LLP | |
767 Third Avenue, 31st Floor | 590 Madison Avenue | |
New York, NY 10017 | New York, NY 10022 | |
U.S. Bank National Association, as Indenture Trustee | William P. Bowden, Esq. | |
180 East 5th Street | Ashby & Geddes | |
St. Paul, MN 55101 | 222 Delaware Avenue | |
P.O. Box 1150 | ||
United Steel, Paper and Forestry, Rubber, | Wilmington, DE 19899 | |
Manufacturing, Energy, Allied Industrial Service | ||
Workers International Union | Financial Advisors: | |
Five Gateway Center | Andrew B. Miller | |
Pittsburgh, PA 15222 | Amit R. Patel | |
Pension Benefit Guaranty Corporation | Houlihan Lokey Howard & Zukin | |
1200 K Street, N.W. | 1930 Century Park West | |
Washington, DC 20005 | Los Angeles, CA 90067 | |
J.P. Morgan Trust Company, N.A., as Indenture Trustee | Asbestos Claims Evaluation Consultants: | |
6525 West Campus Oval Road | Charles E. Bates | |
New Albany, OH 43054 | Bates White & Ballantine | |
Deutsche Bank National Trust Company (ex officio) | 2001 K Street, N.W., Suite 700 | |
222 South Riverside Plaza | Washington, DC 20006 | |
Chicago, IL 60606 | ||
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Committee Members: | Counsel: | |
Lawson Bergeron | Elihu Inselbuch, Esq. | |
c/o Silber Pearlman, LLP | Caplin & Drysdale, Chartered | |
Attn: Steven T. Baron/J. Todd Kale | 399 Park Avenue, 27th Floor | |
2711 North Haskell Avenue, 5th Floor, LB 32 | New York, NY 10022 | |
Dallas, TX 75204 | ||
Marla Eskin, Esq. | ||
Estate of Robert Carder | Campbell & Levine LLC | |
c/o Kelly & Ferraro, LLP | 800 North King Street, Suite 300 | |
Attn: Michael V. Kelley, Esq. | Wilmington, DE 19801 | |
1300 East Ninth Street 1901 Penton Media Building | ||
Cleveland, OH 44114 | Financial Advisors: | |
Loretto Tersigni | ||
Thomas Craig | L. Tersigni Consulting, P.C. | |
c/o Cooney & Conway | 1010 Summer Street, Suite 201 | |
Attn: John D. Cooney, Esq. | Stamford, CT 06905 | |
120 North LaSalle, 30th Floor | ||
Chicago, IL 60602 | Asbestos Claims Evaluation Consultants: | |
Joseph Gaitor, Jr. | Mark A. Peterson | |
c/o Brayton & Purcell | Legal Analysis Systems, Inc. | |
Attn: Christina C. Skubic, Esq. | 970 Calle Arroyo | |
222 Rush Landing Road | Thousand Oaks, CA 91360 | |
Novato, CA 94948 | ||
John and Linda Henderson c/o Waters & Kraus, LLP Attn: Michelle Norton, Esq. 3219 McKinney Avenue, Suite 3000 Dallas, TX 75204 | ||
Dick Holt, Personal Representative of the Estate of Travis Baldwin c/o Bergman, Senn, Pageler & Frockt Attn: Matthew P. Bergman P.O. Box 94 Creswell, OR 97426 | ||
Alvin Nelson c/o Kazan, McClain, Edises, Abrams, Fernandez, Lyons & Farrise Attn: Steven Kazan, Esq. 171 Twelfth Street, Third Floor Oakland, CA 94607 | ||
Daniel J. Stipek c/o Law Offices of Peter G. Angelos Attn: Paul Matheny, Esq. 5905 Harford Road Baltimore, MD 21214 | ||
Maria Wagner, as the Administratrix for the Estate of Thomas Wagner c/o Weitz & Luxenberg, P.C. Attn: Sanders McNew 180 Maiden Lane New York, NY 10038 |
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Counsel: | Financial Advisors: | |
James Patton, Esq. | David Abell | |
Young Conaway Stargatt & Taylor, LLP | PricewaterhouseCoopers Corporate Finance, LLC | |
The Brandywine Building | 1177 Avenue of the Americas | |
1000 West Street, 17th Floor | New York, NY 10036 | |
P.O. Box 391 | ||
Wilmington, DE 19899 | Counsel for Insurance Matters: | |
Donald W. Brown, Esq. | ||
Covington & Burling | ||
One Front Street | ||
San Francisco, CA 94111 | ||
Asbestos Claims Evaluation Consultants: | ||
B. Thomas Florence | ||
Analysis, Research & Planning Corporation | ||
1220 19th Street, N.W., Suite 700 | ||
Washington, DC 20036 |
Committee Members: | Counsel: | |
John E. Daniel | Frederick Holden, Esq. | |
Jesse D. Erickson | Orrick, Herrington & Sutcliff LLP | |
Timothy F. Preece | The Orrick Building | |
James B. Hobby | 405 Howard Street | |
David L. Perry | San Francisco, CA 94105 | |
Frederick Rosner, Esq. | ||
Jaspan Schlesinger Hoffman LLP | ||
913 Market Street, 12th Floor | ||
Wilmington, DE 19801 |
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Counsel: | Silica-Related Claims Evaluation Consultant: | |
Sander Esserman, Esq. | Dr. James N. Dertouzos | |
Stutzman, Bromberg, Esserman & Plifka | P.O. Box 2138 | |
2323 Bryan Street, Suite 2200 | Santa Monica, CA 90407 | |
Dallas, TX 75201 | ||
Counsel for Corporate, Financial and | ||
Documentation Matters: | ||
Daniel K. Hogan, Esq. | ||
The Hogan Firm | ||
1311 Delaware Avenue | Steven A. Buxbaum, Esq. | |
Wilmington, DE 19806 | Haynes & Boone, LLP | |
1 Houston Center | ||
Insurance Coverage Consultant: | 1221 McKinney St., Suite 2100 | |
Houston, TX 77010 | ||
David P. Anderson | ||
Risk International Services, Inc. | ||
4199 Kinross Lakes Parkway, Suite 220 Richfield, OH 44286 |
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• | In 2002, with Bankruptcy Court approval, KACC sold: (a) its Oxnard, California aluminum forging facility which resulted in net proceeds of approximately $7 million; and (b) certain equipment from a facility in Trentwood, Washington previously associated with the lid and tab stock product lines for total proceeds of approximately $16 million. | ||
• | In 2003, with Bankruptcy Court approval, KACC sold: (a) its interest in a 28-story office building located in Oakland, California, known as the Kaiser Center California and related assets, which resulted in net cash proceeds of approximately $61 million; (b) a reduction facility in Tacoma, Washington, which resulted in gross proceeds of $12 million; and (c) certain surplus real properties located in Mead, Washington, which resulted in approximately $4 million in proceeds. | ||
• | In 2004, with Bankruptcy Court approval, KACC sold: (a) additional surplus real properties located in Mead, Washington, which resulted in approximately $9 million in proceeds; (b) its primary aluminum reduction smelter in Mead, Washington, which has been in curtailment since January 2001, which resulted in net proceeds of approximately $6 million; and (c) certain real property and pipeline assets located in East Baton Rouge, Louisiana, for approximately $2 million. |
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• | On January 21, 2005, the PBGC issued a letter indicating that it would not challenge the replacement pension plans; | ||
• | On March 29, 2005, KACC paid the approximately $4 million necessary to satisfy the minimum funding requirements under applicable law for the retained pension plans for 2004; | ||
• | The administrative claims of the PBGC against the Debtors, KAAC and KFC were allowed in the aggregate amount of $14 million. In accordance with the Intercompany Claims Settlement, such claims are expected to be paid in full by KACC on the earlier of the Effective Date or the effective date of the plan of liquidation for KAAC and KFC. (For purposes of this Disclosure Statement it is assumed that the Alumina Subsidiary Plans will be confirmed and become effective immediately prior to the effectiveness of the Plan and, therefore that KACC will pay $14 million in full satisfaction of such claims on the Effective Date.) | ||
• | The unsecured claims of the PBGC against each Debtor and Other Debtor in respect of the unfunded benefit liabilities under the terminated plans and statutory premiums are or were allowed, as the case may be, in the amount of $616 million, although the PBGC’s recovery from the estates of each of the Other Debtors on account of such claims was limited to approximately 32% of the net distributable proceeds payable in the aggregate to the PBGC, holders of Senior Subordinated Notes and holders of Senior Notes under each Alumina Subsidiary Plan. The $616 million Claim against the Canadian Debtors is subject to treatment in Class 4 and against the Substantively Consolidated Debtors (i.e., all of the Debtors other than the Canadian Debtors) is subject to treatment in Class 9. See “Overview of the Plan — Classes and Treatment of Claims and Interests.” |
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• | All claims of the Debtors and the Other Debtors against another Debtor or Other Debtor, whether incurred prior to, on or after the Petition Date, except as otherwise described below, were satisfied and resolved, including but not limited to claims: (a) under the Cash Management Order, the Joint Venture Order and the AJI and KJC Stipulation; (b) under or related to intercompany transfers; (c) related to the allocation among the Debtors and the Other Debtors of professional fees and expenses, overhead expenses or costs relating to the DIP Financing Facility and the prior postpetition financing facility of the Debtors and the Other Debtors; (d) for contribution, reimbursement or subrogation against a Debtor or Other Debtor related to or arising out of claims of third parties existing (whether or not affirmatively asserted) against any of the Debtors or the Other Debtors who are or are alleged to be co-obligors as to such claims, whether as a result of equity, contract (including guarantees) or statute, including but not limited to claims arising as a result of being within the same “controlled group” under ERISA; and (e) based upon, relating to or arising from the negotiation, documentation and execution of the terms and conditions contained in the Intercompany Claims Settlement, or any of the documents contemplated by the Intercompany Claims Settlement. | ||
• | Upon the closing of the sale of Alpart, KACC received Cash proceeds of approximately $43 million. See “Operations During the Reorganization Cases — Strategic Plan to Sell Commodities Assets — The Sale of the Alpart Interests and Liquidation of AJI and KJC.” | ||
• | Following the consummation of the joint plan of liquidation for AJI and KJC, it is anticipated that KACC will be entitled to receive $1 million on account of its allowed administrative claims against AJI and KJC. For purposes of this Disclosure Statement, it is assumed that the Alumina Subsidiary Plans will be confirmed and become effective immediately prior to the effectiveness of the Plan. See “Operations During the Reorganization Cases — Strategic Plan to Sell Commodities Assets — The Sale of the Alpart Interests and Liquidation of AJI and KJC.” | ||
• | Following the consummation of the joint plan of liquidation for KAAC and KFC, it is anticipated that KACC will be entitled to receive $25 million on account of its allowed administrative claim against KAAC. For purposes of this Disclosure Statement, it is assumed that the Alumina Subsidiary Plans will be confirmed and become effective immediately prior to the effectiveness of the Plan. See “Operations During the Reorganization Cases — Strategic Plan to Sell Commodities Assets — The Sale of the QAL Interests and Liquidation of KAAC and KFC.” | ||
• | Of the $12.5 million net proceeds realized from KACC and KBC’s sale of the Combined KJBC/Gramercy Assets, $8.5 million was retained by KACC, and $4 million was paid to AJI and KJC in satisfaction of their administrative claims against KBC. See “Operations During the Reorganization — Strategic Plan to Sell Commodities Assets — The Sale of the KJBC Interests and Gramercy Facility.” | ||
• | All the proceeds realized from the sale of KACC’s interests in and related to Valco were retained by KACC. See “Operations During the Reorganization Cases — Strategic Plan to Sell Commodities Assets — The Sale of the Valco Interests.” | ||
• | The KFC Claim will be allowed as a valid, enforceable Unsecured Claim in the amount of $1.106 billion and will receive the same treatment as an Allowed General Unsecured Claim under the Plan, and 75% of the KFC Claim will be assigned to the PI Trusts on the Effective Date. See “Overview of the Plan — Intercompany Claims Settlement.” |
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• | KACC is responsible for all costs relating to the administration of all the Debtors’ and the Other Debtors’ bankruptcy cases, including professional fees and expenses, the fees and expenses associated with the DIP Financing Facility and the prior postpetition financing facility of the Debtors and the Other Debtors and all corporate overhead. Notwithstanding the foregoing, the Other Debtors must pay (or reimburse KACC for the payment of) all third-party costs incurred solely in connection with the administration of their chapter 11 cases that are incurred after June 30, 2004 (excluding any success fees of any financial advisors or any monthly fees creditable against the success fees of the financial advisors of the Debtors and the Creditors’ Committee). AJI and KJC remained responsible for payment of all foreign taxes, transfer taxes and recording fees payable by them as a result of the sale of Alpart, and KAAC remained responsible for payment of all foreign taxes, transfer taxes and recording fees payable by it as a result of the sale of the QAL Interests, as well as any alternative minimum tax due from KACC as a result of the sale of AJI’s and KJC’s interests in and related to Alpart and the sale of the QAL Interests. The Other Debtors must also each pay all foreign taxes payable by such entity, whether for current or prior tax years. On April 7, 2005, the ATO sent a letter to KAAC’s Australian tax advisor indicating that (a) with respect to taxable periods through December 31, 2004, KAAC’s Australian tax liability has been fully satisfied, and (b) with respect to the taxable period beginning January 1, 2005, no capital gains tax is due on the sale of KAAC’s interests in and related to QAL. | ||
• | KAAC must also pay portions of the success fees payable to the financial advisors of the Debtors and the Creditors’ Committee, if any, in excess of certain threshold amounts. | ||
• | On the earlier of the Effective Date or the consummation of the joint plan of liquidation of KAAC and KFC, KACC will pay the allowed administrative claims of the PBGC in the amount of $14 million. See “Overview of the Plan — Payment of Administrative Claims — PBGC Administrative Claims” and “Operations During the Reorganization Cases — PBGC Settlement Agreement.” For purposes of this Disclosure Statement, it is assumed that the Alumina Subsidiary Plans will be confirmed and become effective immediately prior to the effectiveness of the Plan and, therefore, that KACC will pay $14 million in full satisfaction of such claims on the Effective Date. | ||
• | The past, present or future directors and officers of the Debtors and the Other Debtors were released from those claims arising at any time prior to the effective date of the Intercompany Claims Settlement: (a) under the Cash Management Order, the Joint Venture Order and the AJI and KJC Stipulation; (b) under or related to intercompany transfers; (c) related to the allocation among the Debtors and the Other Debtors of professional fees and expenses, overhead expenses or costs relating to the DIP Financing Facility and the prior postpetition financing facility of the Debtors and the Other Debtors; (d) based upon, relating to or arising from the negotiation, documentation and execution of the terms and conditions contained in the Intercompany Claims Settlement or any of the documents delivered to implement the Intercompany Claims Settlement; and (e) for contribution, reimbursement or subrogation related to or arising out of claims of third parties based upon items (a) through (d) against any of the Debtors or the Other Debtors who are alleged to be co-obligors, whether as a result of equity, contract (including guarantees) or statute, including but not limited to claims arising as a result of being within the same “controlled group” under ERISA. |
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• | “Product Claims” that arise almost exclusively from asbestos-containing products sold by KACC’s former division, Kaiser Refractories (“Kaiser Refractories”); | ||
• | “Premises Claims” of employees or outside contractors who allege exposure to asbestos-containing materials at premises owned by KACC or its subsidiaries; and | ||
• | “Ships Claims” that arise from workers’ alleged exposure to asbestos-containing materials during the building, repair or management of ships by KACC or its subsidiaries. |
• | Kaiser Refractories’ Products: Products made or sold by Kaiser Refractories, a former division of KACC, are the source of nearly all the Asbestos-Related Product Claims. KACC entered the refractories business in 1943, making bricks, mortars and aggregates, the primary function of which was to line the interior of melting and processing furnaces, vessels and kilns of basic industries. The company’s early refractories were magnesium-based and did not contain asbestos. In 1959, KACC acquired Mexico Refractories Company by merger. Kaiser Refractories functioned as an unincorporated operating division of KACC until KACC left the refractories business. Neither Mexico Refractories Company nor Kaiser Refractories mined, processed or sold raw asbestos, manufactured asbestos-containing insulation products, or designed, developed or first marketed any asbestos-containing product. Rather, Kaiser Refractories inherited rebranding arrangements from Mexico Refractories Company through which other companies made and supplied to Kaiser Refractories a handful of insulation products that contained a small percentage of asbestos, which Kaiser Refractories sold under its brand name. In later years, Kaiser Refractories made and sold one refractory plastic ramming product containing one percent asbestos and refractory bricks that, in certain applications, utilized asbestos expansion allowances. Kaiser Refractories did not sell any asbestos-containing products after 1978, and KACC sold off its refractories business in December 1984. | ||
• | Mirawal Products: Fewer than ten historical Asbestos-Related Product Claims asserted against KACC alleged injury from products once sold by KACC’s former Mirawal operation, which KACC began in 1966 when it purchased certain assets of Birdsboro Corporation. The Mirawal operation sold architectural building panels and siding manufactured between 1968 and 1977, |
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some of which were offered for sale with an optional asbestos cement core sandwiched between the decorative panels that formed the outer surfaces of the product. KACC has never settled any of the handful Asbestos-Related Product Claims attributed to its former Mirawal operation. KACC ceased those operations and sold off the related assets in 1977. | |||
• | Kaiser Trading Company Commodities Sales: KACC once had a wholly owned subsidiary known as Kaiser Trading Company, which engaged in international commodities trading. KACC has determined that, in 1978, Kaiser Trading Company imported and sold an aggregate of less than $75,000 worth of chrysotile asbestos fiber to five customers in the United States of America. A later series of internal mergers ultimately resulted in merging what had been Kaiser Trading Company into Kaiser Aluminium International, Inc. (which is a Debtor). After diligent research, KACC has found no evidence of any other transactions involving asbestos to which Kaiser Trading Company or any successor thereto is a party. To the best of the Debtors’ knowledge, no Asbestos Personal Injury Claim has ever been filed alleging liability for any sale of asbestos fiber by Kaiser Trading Company or any successor thereto, including Kaiser Aluminium International, Inc. |
• | Richmond, California Shipyards: Most of the Asbestos-Related Ships Claims were filed in the San Francisco Bay area and alleged asbestos exposure of persons who built, repaired or served on Liberty or Victory Ships built at Richmond, California Shipyard Nos. 1 and 2. These shipyards were operated by KACC from 1940, when it was originally incorporated under the name Todd-California Shipbuilding Corporation, until 1946, when the company exited the shipbuilding and repair business and entered the aluminum business. | ||
• | Hendy International Corporation: A relatively small number of Asbestos-Related Ships Claims also have been asserted against KACC in connection with the ship management operations of Hendy International Company, which became a wholly owned subsidiary of KACC in 1972. Substantially all of the Hendy International assets were sold to West Coast Shipping in 1977. |
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• | assent to the agreement; | ||
• | deliver to KACC claims submission materials, including documentation and medical and exposure criteria, for settlement evaluation by KACC; and | ||
• | deliver to KACC a release of claim releasing KACC and related parties of all liability for asbestos or other pneumoconiosis-related claims. |
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• | the date on which the Asbestos PI Trustees determine to terminate the Asbestos PI Trust because (a) the Asbestos PI Trustees deem it unlikely that any new Asbestos Personal Injury Claim will be filed against the Asbestos PI Trust, (b) all Asbestos Personal Injury Claims duly filed with the Asbestos PI Trust have been liquidated and, to the extent possible based upon the funds available to such trust through the Plan and in accordance with the PI Trust Funding Agreement, paid to the extent provided in the Asbestos PI Trust Agreement and the Asbestos Distribution Procedures or disallowed by a final, non-appealable order, and (c) 12 consecutive months have elapsed during which no new Asbestos Personal Injury Claim has been filed with the Asbestos PI Trust; and | ||
• | if the Asbestos PI Trustees have procured and have in place irrevocable insurance policies and have established claims handling agreements and other necessary arrangements with suitable third parties adequate to discharge all expected remaining obligations and expenses (including but not limited to Trust Expenses) of the Asbestos PI Trust in a manner consistent with the Asbestos PI Trust Agreement and the Asbestos Distribution Procedures, the date on which the Bankruptcy Court enters an order approving such insurance and other arrangements and such order becomes a Final Order. |
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• | the date on which the Silica PI Trustee determines to terminate the Silica PI Trust because (a) the Silica PI Trustee deems it unlikely that any new Silica Personal Injury Claim will be filed against the Silica PI Trust, (b) all Silica Personal Injury Claims duly filed with the Silica PI Trust have been liquidated and, to the extent possible based upon the funds available to such trust through the Plan and in accordance with the PI Trust Funding Agreement, paid to the extent provided in the Silica PI Trust Agreement and the Silica Distribution Procedures or disallowed by a final, |
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non-appealable order, and (c) 12 consecutive months have elapsed during which no new Silica Personal Injury Claim has been filed with the Silica PI Trust; and | |||
• | if the Silica PI Trustee has procured and has in place irrevocable insurance policies and has established claims handling agreements and other necessary arrangements with suitable third parties adequate to discharge all expected remaining obligations and expenses (including but not limited to Trust Expenses) of the Silica PI Trust in a manner consistent with the Silica PI Trust Agreement and the Silica Distribution Procedures, the date on which the Bankruptcy Court enters an order approving such insurance and other arrangements and such order becomes a Final Order. |
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• | the date on which the CTPV PI Trustee determines to terminate the CTPV PI Trust because (a) the CTPV PI Trustee deems it unlikely that any new CTPV Personal Injury Claim will be filed against the CTPV PI Trust, (b) all CTPV Personal Injury Claims duly filed with the CTPV PI Trust have been liquidated and, to the extent possible based upon the funds available to such trust through the Plan and in accordance with the PI Trust Funding Agreement, paid to the extent provided in the CTPV PI Trust Agreement and the CTPV Distribution Procedures or disallowed by a final, non-appealable order, and (c) 12 consecutive months have elapsed during which no new CTPV Personal Injury Claim has been filed with the CTPV PI Trust; and | ||
• | if the CTPV PI Trustee has procured and has in place irrevocable insurance policies and has established claims handling agreements and other necessary arrangements with suitable third parties adequate to discharge all expected remaining obligations and expenses (including but not limited to Trust Expenses) of the CTPV PI Trust in a manner consistent with the CTPV PI Trust Agreement and the CTPV Distribution Procedures, the date on which the Bankruptcy Court enters an order approving such insurance and other arrangements and such order becomes a Final Order. |
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• | the date on which the NIHL PI Trustee determines to terminate the NIHL PI Trust because (a) the NIHL PI Trustee deems it unlikely that any new NIHL Personal Injury Claim will be filed against the NIHL PI Trust, (b) all NIHL Personal Injury Claims duly filed with the NIHL PI Trust have been liquidated and, to the extent possible based upon the funds available to such trust through the Plan and in accordance with the PI Trust Funding Agreement, paid to the extent provided in the NIHL PI Trust Agreement and the NIHL Distribution Procedures or disallowed by a final, non-appealable order, and (c) 12 consecutive months have elapsed during which no new NIHL Personal Injury Claim has been filed with the NIHL PI Trust; and | ||
• | if the NIHL PI Trustee has procured and has in place irrevocable insurance policies and has established claims handling agreements and other necessary arrangements with suitable third parties adequate to discharge all expected remaining obligations and expenses (including but not limited to Trust Expenses) of the NIHL PI Trust in a manner consistent with the NIHL PI Trust Agreement and the NIHL Distribution Procedures, the date on which the Bankruptcy Court enters an order approving such insurance and other arrangements and such order becomes a Final Order. |
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(A) | $5,000,000 to the Asbestos PI Trust as a credit against the Asbestos PI Trust Assets; | ||
(B) | $4,000,000 to the Silica PI Trust as a credit against the Silica PI Trust Assets; | ||
(C) | $500,000 to the CTPV PI Trust as a credit against the CTPV Present Claims Settlement Amount; and | ||
(D) | $500,000 to the NIHL PI Trust as a credit against the NIHL Claims Settlement Amount. |
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Asbestos | ||||||
Asbestos Disease Level | Scheduled Value | Asbestos Medical/Exposure Criteria | ||||
Level VIII (Mesothelioma) | $ | 70,000 | (a) Diagnosis1 of mesothelioma and (b) credible evidence of Kaiser Exposure (as defined in the Asbestos Distribution Procedures). | |||
Level VII (Lung Cancer 1) | $ | 27,500 | (a) Diagnosis of a primary lung cancer, plus evidence of an underlying Bilateral Asbestos-Related Nonmalignant Disease,2 (b) six months of Kaiser Exposure prior to December 31, 1982, (c) Significant Occupational Exposure (as defined in the Asbestos Distribution Procedures) to asbestos, and (d) supporting medical documentation establishing asbestos exposure as a contributing factor in causing the lung cancer in question. | |||
Level VI (Lung Cancer 2) | None | (a) Diagnosis of a primary lung cancer, (b) Kaiser Exposure prior to December 31, 1982, and (c) supporting medical documentation establishing asbestos exposure as a contributing factor in causing the lung cancer in question. | ||||
Asbestos Disease Level VI (Lung Cancer 2) Claims are Claims that do not meet the more stringent medical and/or exposure requirements of Asbestos Disease Level VII (Lung Cancer 1) Claims. All Claims in Asbestos Disease Level VI will be individually evaluated. The estimated likely average of the individual evaluation awards for such Claims is $7,000, with such awards capped at $20,000, unless the Claim qualifies for Extraordinary Asbestos Claim (as defined below) treatment. | ||||||
Asbestos Disease Level VI Claims that show no evidence of either an underlying Bilateral Asbestos-Related Non-malignant Disease or Significant Occupational Exposure may be individually evaluated, although it is not expected that such Claims will be treated as having any significant value, especially if the claimant is also a smoker.3 | ||||||
Level V (Other Cancer) | $ | 13,800 | (a) Diagnosis of a primary colo-rectal, laryngeal, esophageal, pharyngeal or stomach cancer, plus evidence of an underlying Bilateral Asbestos-Related Nonmalignant Disease, (b) six months of Kaiser Exposure prior to December 31, 1982, (c) Significant Occupational Exposure to asbestos, and (d) supporting medical documentation establishing asbestos exposure as a contributing factor in causing the other cancer in question. | |||
Level IV (Severe Asbestosis) | $ | 20,750 | (a) Diagnosis of asbestosis with ILO of 2/1 (i.e., 2/1 on the International Labour Organization scale) or greater or asbestosis determined by pathological evidence of asbestos, plus (i) TLC (i.e., total lung capacity) less than 65% or (ii) FVC (i.e., forced vital capacity) less than 65% and FEV1/FVC ratio (i.e., ratio of forced expiratory volume in the first second of forced expiration to FVC) greater than 65%, (b) six months of Kaiser Exposure prior to December 31, 1982, (c) Significant Occupational Exposure to asbestos, and (d) supporting medical documentation establishing asbestos exposure as a contributing factor in causing the pulmonary disease in question. | |||
Level III (Asbestosis/Pleural Disease) | $ | 4,850 | (a) Diagnosis of Bilateral Asbestos-Related Nonmalignant Disease, plus (i) TLC less than 80% or (ii) FVC less than 80% and FEV1/FVC ratio greater than or equal to 65%, (b) six months of Kaiser Exposure prior to December 31, 1982, (c) Significant Occupational Exposure to asbestos, and (d) supporting medical documentation establishing asbestos exposure as a contributing factor in causing the pulmonary disease in question. |
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Asbestos | ||||||
Asbestos Disease Level | Scheduled Value | Asbestos Medical/Exposure Criteria | ||||
Level II (Asbestosis/Pleural Disease) | $ | 700 | (a) Diagnosis of a Bilateral Asbestos-Related Nonmalignant Disease, (b) six months of Kaiser Exposure prior to December 31, 1982, and (c) five years cumulative occupational exposure to asbestos. | |||
Level I (Other Asbestos Disease — Cash Discount Payment) | $ | 200 | (a) Diagnosis of a Bilateral Asbestos-Related Nonmalignant Disease or an asbestos-related malignancy other than mesothelioma, and (b) Kaiser Exposure prior to December 31, 1982. |
1 | The requirements for a diagnosis of an asbestos-related disease that may be compensated are set forth in the Asbestos Distribution Procedures. | |
2 | Evidence of “ Bilateral Asbestos-Related Nonmalignant Disease,” for purposes of meeting the criteria for establishing Asbestos Disease Level I, II, III, V and VII, is described in the Asbestos Distribution Procedures as either (a) a chest X-ray read by a qualified B reader of 1/0 or higher on the ILO (i.e., International Labour Organization) scale or (b) (i) a chest X-ray read by a qualified B reader, (ii) a CT scan read by a qualified physician, or (iii) pathology, in each case showing bilateral interstitial fibrosis, bilateral pleural plaques, bilateral pleural thickening, or bilateral pleural calcification. Solely for claims filed against a Debtor or another asbestos defendant in the tort system prior to the Petition Date, if an ILO reading is not available, either (A) a chest X-ray or a CT scan read by a qualified physician or (B) pathology, showing bilateral interstitial fibrosis, bilateral pleural plaques, bilateral pleural thickening or bilateral pleural calcification consistent with, or compatible with, a diagnosis of asbestos-related disease will be evidence of Bilateral Asbestos-Related Nonmalignant Disease for purposes of meeting the presumptive medical requirements of Asbestos Disease Level I, II, III, V or VII. Pathological proof of asbestosis may be based on the pathological grading system for asbestosis described in the Special Issue of the Archives of Pathology and Laboratory Medicine, “Asbestos-associated Diseases,” Vol. 106, No. 11, App. 3 (October 8, 1982). | |
3 | There is no distinction between non-smokers and smokers for either Asbestos Disease Level VII (Lung Cancer 1) or Asbestos Disease Level VI (Lung Cancer 2), although a claimant who meets the more stringent requirements of Asbestos Disease Level VII (Lung Cancer 1) (i.e., evidence of an underlying Bilateral Asbestos-Related Nonmalignant Disease plus Significant Occupational Exposure) and who is also a non-smoker may wish to have his or her Claim individually evaluated by the Asbestos PI Trust. In such case, absent circumstances that would otherwise reduce the value of the Claim, it is anticipated that the liquidated value of the Claim might well exceed the $27,500 Scheduled Value for Asbestos Disease Level VII (Lung Cancer 1) shown above. For purposes of the Asbestos Distribution Procedures, “non-smoker” means a claimant who either (a) never smoked or (b) has not smoked during any portion of the 12 years immediately prior to the diagnosis of the lung cancer. |
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Asbestos | Asbestos | Asbestos | ||||||||||
Asbestos Disease Level | Scheduled Value | Average Value | Maximum Value | |||||||||
Level VIII (Mesothelioma) | $ | 70,000 | $ | 104,000 | $ | 380,000 | ||||||
Level VII (Lung Cancer 1) | $ | 27,500 | $ | 33,000 | $ | 85,000 | ||||||
Level VI (Lung Cancer 2) | None | $ | 7,000 | $ | 20,000 | |||||||
Level V (Other Cancer) | $ | 13,800 | $ | 17,300 | $ | 40,000 | ||||||
Level IV (Severe Asbestosis) | $ | 20,750 | $ | 22,000 | $ | 55,000 | ||||||
Level III (Asbestosis/Pleural Disease) | $ | 4,850 | None | None | ||||||||
Level II (Asbestosis/Pleural Disease) | $ | 700 | None | None | ||||||||
Level I (Other Asbestos Disease — Cash Discount Payment) | $ | 200 | None | None |
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Silica Disease Level | Silica Scheduled Value | Silica Maximum Value | ||||||
Level IV (Complex Silicosis) | $ | 75,000 | $ | 300,000 | ||||
Level III (Lung Cancer) | $ | 27,500 | $ | 85,000 | ||||
Level II (Severe Silicosis) | $ | 20,000 | $ | 60,000 | ||||
Level I (Simple Silicosis) | $ | 5,000 | $ | 20,000 |
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NIHL Decile | NIHL Scheduled Value | |||
1 | $ | 74,500.00 | ||
2 | $ | 66,708.33 | ||
3 | $ | 58,916.67 | ||
4 | $ | 51,125.00 | ||
5 | $ | 43,333.33 | ||
6 | $ | 35,541.67 | ||
7 | $ | 27,750.00 | ||
8 | $ | 19,958.33 | ||
9 | $ | 12,166.67 | ||
10 | $ | 5,000.00 |
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A Protected Party is: | |||
• | the Debtors; | ||
• | the Reorganized Debtors; | ||
• | any entity that, pursuant to the Plan or after the Effective Date, becomes a direct or indirect transferee of, or successor to, any assets of the Debtors, the Other Debtors, the Reorganized Debtors, other Kaiser Companies, the Funding Vehicle Trust or a PI Trust (but only to the extent that liability is asserted to exist as a result of its becoming such a transferee or successor); |
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• | any entity that, pursuant to the Plan or after the Effective Date, makes a loan to any of the Debtors, the Reorganized Debtors, the Other Debtors, other Kaiser Companies, the Funding Vehicle Trust or a PI Trust or to a successor to, or transferee of any of the respective assets of, the Debtors, the Other Debtors, the Reorganized Debtors, other Kaiser Companies, the Funding Vehicle Trust or a PI Trust (but only to the extent that liability is asserted to exist by reason of such entity’s becoming such a lender or to the extent any pledge of assets made in connection with such a loan is sought to be upset or impaired); | ||
• | each entity to the extent he, she or it is alleged to be directly or indirectly liable for the conduct of, Claims against or Demands on any Debtor, Other Debtor, Reorganized Debtor or PI Trust on account of Channeled Personal Injury Claims by reason of one or more of the following: |
• | such entity’s ownership of a financial interest in any Debtor, Other Debtor, Reorganized Debtor, past or present affiliate of any Debtor, Other Debtor or Reorganized Debtor or predecessor in interest of any Debtor, Other Debtor or Reorganized Debtor; | ||
• | such entity’s involvement in the management of any Debtor, Other Debtor, Reorganized Debtor, past or present affiliate of any Debtor, Other Debtor or Reorganized Debtor or any predecessor in interest of any Debtor, Other Debtor or Reorganized Debtor; | ||
• | such entity’s service as a director, officer, employee, accountant (including an independent certified public accountant), advisor, attorney, investment banker, underwriter, consultant or other agent of any Debtor, Other Debtor, Reorganized Debtor, past or present affiliate of any Debtor, Other Debtor or Reorganized Debtor, any predecessor in interest of any Debtor, Other Debtor or Reorganized Debtor or any entity that owns or at any time has owned a financial interest in any Debtor, Other Debtor or Reorganized Debtor, past or present affiliate of any Debtor, Other Debtor or Reorganized Debtor or predecessor in interest of any Debtor, Other Debtor or Reorganized Debtor; | ||
• | such entity’s involvement in a transaction changing the corporate structure, or in a loan or other financial transaction affecting the financial condition, of any Debtor, Other Debtor, Reorganized Debtor, past or present affiliate of any Debtor, Other Debtor or Reorganized Debtor, predecessor in interest of any Debtor, Other Debtor or Reorganized Debtor or any entity that owns or at any time has owned a financial interest in any Debtor, Other Debtor or Reorganized Debtor, past or present affiliate of a Debtor, Other Debtor or Reorganized Debtor or any predecessor in interest of a Debtor, Other Debtor or Reorganized Debtor; | ||
• | other Kaiser Companies, including the Other Debtors; or | ||
• | as to Channeled Personal Injury Claims, each Settling Insurance Company. |
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• | commencing, conducting or continuing in any manner, directly or indirectly, any suit, action or other proceeding (including a judicial, arbitral, administrative or other proceeding) in any forum against or affecting any Protected Party or any property or interests in property of any Protected Party; | ||
• | enforcing, levying, attaching (including through any prejudgment attachment), collecting or otherwise recovering by any means or in any manner, whether directly or indirectly, any judgment, award, decree or other order against any Protected Party or any property or interests in property of any Protected Party; | ||
• | creating, perfecting or otherwise enforcing in any manner, directly or indirectly, any encumbrance against any Protected Party or any property or interests in property of any Protected Party; | ||
• | setting off, seeking reimbursement of, contribution from or subrogation against or otherwise recouping in any manner, directly or indirectly, any amount against any liability owed to any Protected Party or any property or interests in property of any Protected Party; and | ||
• | proceeding in any manner in any place with regard to any matter that is subject to resolution pursuant to the Asbestos PI Trust, except in conformity and compliance therewith. |
• | commencing, conducting or continuing in any manner, directly or indirectly, any suit, action or other proceeding (including a judicial, arbitral, administrative or other proceeding) in any forum against or affecting any Protected Party or any property or interests in property of any Protected Party; | ||
• | enforcing, levying, attaching (including through any prejudgment attachment), collecting or otherwise recovering by any means or in any manner, whether directly or indirectly, any judgment, award, decree or other order against any Protected Party or any property or interests in property of any Protected Party; |
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• | creating, perfecting or otherwise enforcing in any manner, directly or indirectly, any encumbrance against any Protected Party or any property or interests in property of any Protected Party; | ||
• | setting off, seeking reimbursement of, contribution from or subrogation against or otherwise recouping in any manner, directly or indirectly, any amount against any liability owed to any Protected Party or any property or interests in property of any Protected Party; and | ||
• | proceeding in any manner in any place with regard to any matter that is subject to resolution pursuant to the Silica PI Trust, except in conformity and compliance therewith. |
• | commencing, conducting or continuing in any manner, directly or indirectly, any suit, action or other proceeding (including a judicial, arbitral, administrative or other proceeding) in any forum against or affecting any Protected Party or any property or interests in property of any Protected Party; | ||
• | enforcing, levying, attaching (including through any prejudgment attachment), collecting or otherwise recovering by any means or in any manner, whether directly or indirectly, any judgment, award, decree or other order against any Protected Party or any property or interests in property of any Protected Party; | ||
• | creating, perfecting or otherwise enforcing in any manner, directly or indirectly, any encumbrance against any Protected Party or any property or interests in property of any Protected Party; | ||
• | setting off, seeking reimbursement of, contribution from or subrogation against or otherwise recouping in any manner, directly or indirectly, any amount against any liability owed to any Protected Party or any property or interests in property of any Protected Party; and | ||
• | proceeding in any manner in any place with regard to any matter that is subject to resolution pursuant to the CTPV PI Trust, except in conformity and compliance therewith. |
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• | commencing, conducting or continuing in any manner, directly or indirectly, any suit, action or other proceeding (including a judicial, arbitral, administrative or other proceeding) in any forum against or affecting any Protected Party or any property or interests in property of any Protected Party; | ||
• | enforcing, levying, attaching (including through any prejudgment attachment), collecting or otherwise recovering by any means or in any manner, whether directly or indirectly, any judgment, award, decree or other order against any Protected Party or any property or interests in property of any Protected Party; | ||
• | creating, perfecting or otherwise enforcing in any manner, directly or indirectly, any encumbrance against any Protected Party or any property or interests in property of any Protected Party; | ||
• | setting off, seeking reimbursement of, contribution from or subrogation against or otherwise recouping in any manner, directly or indirectly, any amount against any liability owed to any Protected Party or any property or interests in property of any Protected Party; and | ||
• | proceeding in any manner in any place with regard to any matter that is subject to resolution pursuant to the NIHL PI Trust, except in conformity and compliance therewith. |
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• | commencing, conducting or continuing, in any manner, directly or indirectly, any suit, action or other proceeding of any kind (including a judicial, arbitration, administrative or other proceeding) in any forum with respect to any such Claim, Demand or cause of action against any PI Insurance Company, or against the property of any PI Insurance Company, with respect to any such claim, demand, or cause of action; | ||
• | enforcing, levying, attaching, collecting or otherwise recovering, by any means or in any manner, whether directly or indirectly, any judgment, award, decree or other order against any PI Insurance Company, with respect to any such claim, demand or cause of action; | ||
• | creating, perfecting or enforcing in any manner, directly or indirectly, any encumbrance against any PI Insurance Company, or the property of any PI Insurance Company, with respect to any such claim, demand or cause of action; and | ||
• | except as otherwise specifically provided in the Plan, asserting or accomplishing any setoff, right of subrogation, indemnity, contribution or recoupment of any kind, directly or indirectly, against any obligation of any PI Insurance Company, or against the property of any PI Insurance Company, with respect to any such claim, demand or cause of action, |
• | the rights of entities to the treatment accorded them under the Plan, as applicable, including the rights of holders of Channeled Personal Injury Claims to assert such Claims, as applicable, in accordance with the applicable PI Trust Distribution Procedures; | ||
• | the rights of entities to assert any claim, debt, obligation, cause of action or liability for payment of Trust Expenses against the Funding Vehicle Trust or a PI Trust; |
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• | the rights of the Funding Vehicle Trust and the Reorganized Debtors (to the extent permitted or required under the Plan) to prosecute any action based on or arising from the Included PI Trust Insurance Policies; | ||
• | the rights of the Funding Vehicle Trust and the Reorganized Debtors to assert any claim, debt, obligation, cause of action or liability for payment against a PI Insurance Company based on or arising from the Included PI Trust Insurance Policies; and | ||
• | The rights of any PI Insurance Company to assert any claim, debt, obligation, cause of action or liability for payment against any other PI Insurance Company that is not a Protected Party. |
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• | On or prior to the Effective Date, the following new entities will be formed: (a) a new Delaware corporation, owned by KAC, to function as an intermediate holding company (“New Kaiser Intermediate Holdco”), (b) a new Delaware limited liability company, initially owned by KACC, to hold the assets associated with its flat-rolled products and engineered products units (“New Kaiser FP LLC”), and (c) a new Delaware limited liability company, owned by New Kaiser Intermediate Holdco, to succeed to the remaining assets and liabilities of KACC (“New Kaiser Remainder LLC”); | ||
• | On the Effective Date, Texada Mines Ltd. (Canada), Kaiser Aluminum & Chemical Investment Limited (Canada) and KACOCL will be amalgamated to form a new Ontario corporation (“New Kaiser Canada”), 100% of the issued and outstanding shares of capital stock of which will be held by KACC; | ||
• | On the Effective Date, (a) KACC will transfer the assets associated with the flat-rolled products and engineered products units and all ownership interest in Kaiser Bellwood Corporation to New Kaiser FP LLC in exchange for 100% of the issued and outstanding membership interests of New Kaiser FP LLC, and (b) Kaiser Bellwood Corporation will be merged with and into New Kaiser FP LLC; | ||
• | On the Effective Date following the transactions described above, KACC will transfer all direct and indirect ownership interests in Anglesey, Trochus, Kaiser Aluminium International, Inc., New Kaiser Canada and New Kaiser FP LLC to New Kaiser Intermediate Holdco; and | ||
• | On the Effective Date following the transactions described above, KACC will merge with and into New Kaiser Remainder LLC, with New Kaiser Remainder LLC as the surviving entity. |
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Location | Manufacturing Process | Types of Products | ||
Chandler, Arizona | Drawing | Aero/HS | ||
Greenwood, South Carolina | Forging | Auto | ||
Jackson, Tennessee | Extrusion and Drawing | Aero/HS and GE | ||
London, Ontario | Extrusion and Rod Rolling | Auto and CI | ||
Los Angeles, California | Extrusion | GE and CI | ||
Newark, Ohio | Extrusion and Rod Rolling | Aero/HS, GE and Conversion Products(1) | ||
Richland, Washington | Extrusion | Aero/HS and GE | ||
Richmond, Virginia | Extrusion and Drawing | GE, Auto and CI | ||
Sherman, Texas | Extrusion | Auto and CI | ||
Spokane, Washington | Flat Rolling | Aero/HS and GE | ||
Tulsa, Oklahoma | Extrusion | GE |
(1) | Conversion products can undergo one or two additional processing steps before being identified to an end-use application. |
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Location | Union | Contract Expiration Date | ||
Chandler, Arizona | Non-union | N/A | ||
Greenwood, South Carolina | Non-union | N/A | ||
Jackson, Tennessee | Non-union | N/A | ||
London, Ontario | USW Canada | February 2006 | ||
Los Angeles, California | Teamsters | September 2006 | ||
Newark, Ohio | USW | September 2010 | ||
Richland, Washington | Non-union | N/A | ||
Richmond, Virginia | USW | November 2010 | ||
IAM | August 2010 | |||
Sherman, Texas | IAM | December 2007 | ||
Spokane, Washington | USW | September 2010 | ||
Tulsa, Oklahoma | USW | November 2010 |
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Six Months Ended June 30, | Year Ended December 31 | |||||||||||||||||||
2005 | 2004 | 2004 | 2003 | 2002 | ||||||||||||||||
(Dollars in Millions) | ||||||||||||||||||||
Income Statement Information: | ||||||||||||||||||||
Net sales | $ | 544.3 | $ | 440.3 | $ | 942.4 | $ | 1,365.3 | $ | 1,469.6 | ||||||||||
Total costs and expenses | 527.2 | 454.9 | 1,760.0 | 2,104.2 | 1,875.5 | |||||||||||||||
Operating income (loss) | 17.1 | (14.6 | ) | (817.6 | ) | (738.9 | ) | (405.9 | ) | |||||||||||
Net income (loss) | 370.1 | (39.7 | ) | (746.8 | ) | (788.1 | ) | (768.4 | ) | |||||||||||
Balance Sheet Information: | ||||||||||||||||||||
Total assets | $ | 2,208.7 | $ | 1,625.2 | $ | 1,882.4 | $ | 1,628.7 | $ | 2,230.4 | ||||||||||
Total long-term debt | 1.2 | 2.2 | 2.8 | 24.2 | 42.7 | |||||||||||||||
Liabilities subject to compromise | 3,950.4 | 2,833.4 | 3,954.9 | 2,820.0 | 2,726.0 | |||||||||||||||
Shareholders’ equity (deficit) | (2,015.5 | ) | (1,769.3 | ) | (2,384.2 | ) | (1,731.2 | ) | (1,078.3 | ) |
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(a) | Effective Date; Plan Terms. For purposes of these Projections, Confirmation of the Plan is assumed to occur during the fourth quarter of fiscal 2005 and the Effective Date is assumed to occur on December 31, 2005. The Projections also assume that: |
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(i) | the total amount of Allowed Claims in each Class is the actual or estimated aggregate amount thereof set forth in “Overview of the Plan — Classes and Treatment of Claims and Interests”; | ||
(ii) | there are no material cure payments for the assumption of Executory Contracts and Unexpired Leases; and | ||
(iii) | the total amount of Priority Tax Claims, Administrative Claims, costs associated with the Exit Financing Facility, other reorganization expenses is $61 million and includes, among other things: |
(A) | legal, accounting, financial advisory and other professional fees associated with implementation of the Plan to be paid after the Effective Date (net of reimbursements from AJI, KJC and KAAC); | ||
(B) | the payment of Cash to the Funding Vehicle Trust on the Effective Date (net of amounts released or turned over from escrow); | ||
(C) | the Administrative Claims of the PBGC allowed pursuant to the PBGC Settlement Agreement; | ||
(D) | Claims of Indenture Trustees to be satisfied after the Effective Date; | ||
(E) | payments to be made under the KERP after the Effective Date; and | ||
(F) | fees associated with the Exit Financing Facility. |
(b) | General Economic Conditions. The Projections were prepared based on assumptions that the overall economy will grow throughout the Projection Period and that there will be no significant downturn in the markets in which the Debtors operate. | ||
(c) | General Reorganization Assumptions. |
(i) | Intercompany Claims Settlement. The Projections assume that the Alumina Subsidiary Plans will be confirmed and become effective immediately prior to the effectiveness of the Plan and that, pursuant to the Intercompany Claims Settlement, the Debtors receive $25 million from KAAC and $1 million from AJI and KJC on the Effective Date, in addition to the approximately $43 million already received upon the sale of Alpart pursuant thereto. See “Overview of the Plan — Intercompany Claims Settlement” and “Operations During the Reorganization Cases — Intercompany Claims Settlement.” In addition, the Projections assume that the Debtors receive $9 million from AJI, KJC and KAAC as reimbursement for professional fees incurred in connection with their chapter 11 cases, though the actual amount of such reimbursements remains the subject of discussions among the Debtors and the Creditors’ Committee. | ||
(ii) | Funding of the Funding Vehicle Trust and PI Trusts. The Projections assume that, on the Effective Date (a) the Debtors contribute (1) the PI Insurance Assets and $13 million in Cash (including $4 million currently held in escrow that is expected to be released to the Debtors) to the Funding Vehicle Trust and (2) all of the issued and outstanding shares of Reorganized Kaiser Trading to the Asbestos PI Trust and the Silica PI Trust and (b) KFC or its successor transfers 75% of the KFC Claim to the Asbestos PI Trust and the Silica PI Trust in accordance with the Intercompany Claims Settlement. See “Overview of the Plan — Establishment of the Funding Vehicle Trust and the PI Trusts and Entry of the PI Channeling Injunctions” and “PI Trusts and Distribution Procedures.” |
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(iii) | VEBA Contributions. The Projections assume that (A) there will be no Initial VEBA Contributions as a result of the amount of aggregate advances projected to be made to the Union VEBA Trust and Salaried Employee VEBA Trust through the Effective Date, (B) on the Effective Date, the Debtors contribute an aggregate of 13,380,000 shares of New Common Stock to the Union VEBA Trust and the Retired Salaried Employee VEBA Trust, and (C) after the Effective Date, Reorganized KAC makes Variable VEBA Contributions to the Union VEBA Trust and the Retired Salaried Employee VEBA Trust in Cash according to the terms of the Legacy Liability Agreements. See “Overview of the Plan — Agreements with Labor Regarding Pension and Retiree Medical Benefits” and “Operations During the Reorganization Cases — Agreement with Labor Regarding Pension and Retiree Medical Benefits.” |
(d) | Principal Operating and Financial Assumptions. |
(i) | Operating Segments. |
(A) | Fabricated Products. The Projections assume that the revenues and profitability of the fabricated products business unit generally continue to grow due to volume growth resulting from a general expansion in served markets, notably in the aerospace and, to a lesser extent, automotive sectors. Profit margins are assumed to remain stable or, for a few product lines, decline throughout the Projection Period, and product mix is expected to improve in later years as sales shift to Aero/HS and Auto products, which have higher margins. | ||
The Projections also reflect modest gains in market share in key product categories by the fabricated products business unit, resulting from product quality and customer service capabilities. | |||
The Projections assume substantial one-time capital expenditures in 2005, 2006 and 2007 related to new business opportunities. The Projections assume that modest benefits of these expenditures will be realized in 2008 and that a material portion of the benefits from the expenditures will occur in the years beyond the Projection Period. | |||
The principal elements of cost of goods sold for the fabricated products business unit include aluminum, labor (including pension expenses) and energy. The Projections assume that aluminum and energy expenses will increase in line with the higher production volume assumed in the Projections. Labor and other costs are also assumed to increase, but at a lower rate as further efficiency benefits are assumed to be realized. | |||
(B) | Primary Aluminum. The Projections assume declining revenues and profitability for the primary aluminum business unit over the Projection Period as aluminum prices revert to assumed long-term trend levels of $0.67/lb. In addition, the Projections assume that increasing power and raw material costs will reduce the profitability of the primary aluminum business unit over the Projection Period. Expenses of the primary aluminum business unit also include hedging-related gains and losses for the Projection Period. |
(ii) | Operating Expenses. |
(A) | Selling, General and Administrative (“SG&A”). SG&A expense includes (1) unallocated operating expenses of the fabricated products business unit, (2) incentive-based compensation, and (3) corporate general and administrative costs. Corporate general and administrative costs include expenses for senior management, accounting, legal, human resources, insurance, tax, treasury, information technology and employee benefit functions and other related items, |
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as well as public company costs. The Projections assume that the costs associated with operating the Reorganized Debtors will be reduced substantially as a result of the sale of the Joint Ventures other than Anglesey and the simplification of the corporate structure to be effected through the Restructuring Transactions. See “Reorganized Kaiser — Restructuring Transactions.” |
(B) | VEBA Profit Sharing. The Legacy Liability Agreements require Reorganized KAC to contribute a percentage of profits to the Union VEBA Trust and the Retired Salaried Employee VEBA Trust in the future. The Projections assume profit sharing expenses (i.e., Variable VEBA Contributions) for the Projection Period based on levels of profitability, capital spending and other items forecast in the Projections. See “Overview of the Plan — Agreements with Labor Regarding Pension and Retiree Medical Benefits” and “Operations During the Reorganization Cases — Agreement with Labor Regarding Pension and Retiree Medical Benefits.” | ||
(C) | Depreciation and Amortization. The Projections assume that depreciation and amortization do not change materially during the Projection Period. | ||
(D) | Other. Other costs include research and development and costs related to discontinued operations (primarily workers’ compensation and COBRA expenses), as well as one-time gains and losses. |
(iii) | Income Taxes. The Projections assume that the Reorganized Debtors will have substantial net operating loss carryforwards, which will shelter the Reorganized Debtors from cash tax exposure in the United States of America throughout the Projection Period, except for modest alternative minimum tax payments. Other cash taxes of the Reorganized Debtors assumed in the Projections relate to the Reorganized Debtors’ operations in Canada. See “Certain Federal Income Tax Consequences of Consummation of the Plan — U.S. Federal Income Tax Consequences to the Debtors.” | ||
(iv) | Post-Reorganization Debt and Interest Expense. The Projections assume that, immediately after the Effective Date, Reorganized KAC’s debt will include the term loan component of the Exit Financing Facility, with an outstanding principal amount of $50.0 million, and capital leases, with an outstanding principal amount of approximately $3.0 million. The term loan component of the Exit Financing Facility is assumed to remain outstanding throughout the Projection Period and to accrue interest at the adjusted London Interbank Offered Rate plus 5.50%. The Projections assume that the revolving credit facility component of the Exit Financing Facility is used only for letter of credit support and otherwise remains undrawn throughout the Projection Period. See “ — Exit Financing Facility.” | ||
(v) | Fresh-Start Reporting. The foregoing assumptions and resulting computations were made solely for purposes of preparing the Projections. The AICPA has issued a Statement of Position on Financial Reporting by Entities in Reorganization Under the Bankruptcy Code (the “Reorganization SOP”). Reorganized KAC will be required to determine the amount by which its reorganization value as of the Effective Date exceeds, or is less than, the fair value of its assets as of the Effective Date. Such determination will be based upon the fair values as of that time, which could be materially higher or lower than the values assumed in the foregoing computations, and may be based on a different methodology with respect to the valuation of Reorganized KAC’s reorganization value. In all events, such valuation, as well as the determination of the fair value of Reorganized KAC’s assets and the determination of its actual liabilities, will be made as of the Effective Date, and the differences between the amounts of any or all of the foregoing items as assumed in the Projections and the actual amounts thereof as of the Effective Date may be material. |
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(a) | A Reorganized KAC Projected Pro Forma Balance Sheet as of December 31, 2005, representing: (i) the projected consolidated financial position of KAC as of December 31, 2005, but prior to the consummation of the transactions which the Plan contemplates will occur on the Effective Date; (ii) the projected adjustments to such projected consolidated financial position required to reflect Confirmation and the consummation of the transactions which the Plan contemplates will occur on the Effective Date (collectively, the “Emergence Adjustments”); and (iii) the projected consolidated financial position of Reorganized KAC as of December 31, 2005, after giving effect to the Emergence Adjustments. The Emergence Adjustments set forth in the columns captioned “Discharge of Liabilities” and “Fresh Start” reflect the assumed effects of the consummation of the transactions contemplated by the Plan. The various Emergence Adjustments are described in greater detail in the notes to the Reorganized KAC Projected Pro Forma Balance Sheet. | ||
(b) | KAC and Reorganized KAC Historical and Projected Pro Forma Consolidated Balance Sheets representing: (i) the historical consolidated financial position of KAC as of each of December 31, 2003 and 2004; (ii) the projected consolidated financial position of KAC as of December 31, 2005, but prior to the consummation of the transactions which the Plan contemplates will occur on the Effective Date; and (iii) the projected consolidated financial position of Reorganized KAC as of December 31, 2005, after giving effect to the consummation of the transactions which the Plan contemplates will occur on the Effective Date, and as of each of December 31, 2006, 2007 and 2008. | ||
(c) | KAC and Reorganized KAC Historical and Projected Pro Forma Consolidated Statements of Operations, representing: (i) the historical consolidated results of operations of KAC for the fiscal years ended December 31, 2003 and 2004; (ii) the projected consolidated results of operations of KAC for the fiscal year ending December 31, 2005, and (iii) the projected consolidated results of operations of Reorganized KAC for the fiscal years ending December 31, 2006, 2007 and 2008. | ||
(d) | Reorganized KAC Projected Pro Forma Consolidated Statements of Cash Flows, representing the projected consolidated cash flows of Reorganized KAC for the fiscal years ending December 31, 2006, 2007 and 2008. |
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DECEMBER 31, 2005
(Unaudited)
(Dollars in Millions)
December 31, | Emergence Adjustments | December 31, | ||||||||||||||
2005 | Discharge of | Fresh | 2005 | |||||||||||||
Projected | Liabilities | Start | Pro Forma | |||||||||||||
ASSETS | ||||||||||||||||
Current Assets: | ||||||||||||||||
Cash | $ | 25 | $ | 12 | (a) | $ | 0 | $ | 37 | |||||||
Restricted Cash | 675 | (675 | ) (b) | 0 | 0 | |||||||||||
Trade Receivables (net of allowances) | 73 | 0 | 0 | 73 | ||||||||||||
Other Receivables | 3 | 0 | 0 | 3 | ||||||||||||
Inventory | 104 | 0 | 0 | 104 | ||||||||||||
Prepaid Expenses and Other Current Assets | 8 | 0 | 0 | 8 | ||||||||||||
Current Assets of Disc. Operations | 0 | 0 | 0 | 0 | ||||||||||||
Total Current Assets | $ | 887 | ($ | 663 | ) | $ | 0 | $ | 224 | |||||||
PP&E, Net | $ | 224 | $ | 0 | $ | 0 | $ | 224 | ||||||||
Investments and Advances | 12 | 0 | 0 | 12 | ||||||||||||
Other Assets | 1,001 | (965) | (c) | 59 | (d) | 96 | ||||||||||
Long-Term Assets of Disc. Operations | 0 | 0 | 0 | 0 | ||||||||||||
Total Assets | $ | 2,125 | ($ | 1,627 | ) | $ | 59 | $ | 557 | |||||||
LIABILITIES | ||||||||||||||||
Current Liabilities: | ||||||||||||||||
Accounts Payable | $ | 35 | ($ | 8) | (e) | $ | 0 | $ | 26 | |||||||
Accrued Interest | 1 | 0 | 0 | 1 | ||||||||||||
Accrued Salaries and Wages | 46 | (15) | (f) | 0 | 31 | |||||||||||
Other Accrued Liabilities | 42 | (20) | (g) | 0 | 21 | |||||||||||
Payable to Affiliates | 12 | 0 | 0 | 12 | ||||||||||||
Current Liabilities of Disc. Operations | 0 | 0 | 0 | 0 | ||||||||||||
Total Current Liabilities | $ | 135 | ($ | 43 | ) | $ | 0 | $ | 92 | |||||||
Credit Facility | $ | 0 | $ | 0 | $ | 0 | $ | 0 | ||||||||
New Term Loan | 0 | 50 | (h) | 0 | 50 | |||||||||||
Other Debt | 2 | 0 | 0 | 2 | ||||||||||||
Long-Term Liabilities of Disc. Operations | 26 | (26) | (i) | 0 | 0 | |||||||||||
Other Long-Term Liabilities | 52 | (19) | (j) | 0 | 33 | |||||||||||
Liabilities Subject to Compromise | 3,922 | (3,922) | (k) | 0 | 0 | |||||||||||
Total Liabilities | $ | 4,137 | ($ | 3,960 | ) | $ | 0 | $ | 177 | |||||||
Minority Interest | $ | 0 | $ | 0 | $ | 0 | $ | 0 | ||||||||
Commitments and Contingencies | 0 | 0 | 0 | 0 | ||||||||||||
SHAREHOLDERS’ EQUITY | ||||||||||||||||
Common Stock and Paid-in Capital | $ | 539 | ($ | 218) | (l) | $ | 59 | (l) | $ | 380 | (m) | |||||
Retained Earnings | (2,551 | ) | 2,551 | (l) | 0 | 0 | ||||||||||
Total Equity | ($ | 2,012 | ) | $ | 2,333 | $ | 59 | $ | 380 | |||||||
Total Liabilities & Equity | $ | 2,125 | ($ | 1,627 | ) | $ | 59 | $ | 557 | |||||||
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(a) | Cash adjustments include: |
(i) | the following payments: |
(A) | the payment of $3 million on account of Priority Tax Claims; | ||
(B) | the payment of $1 million on account of Convenience Claims; | ||
(C) | the payment of $5 million on account of Secured Claims; | ||
(D) | the payment of $3 million on account of Canadian Debtor PBGC Claims; | ||
(E) | the payment of $1 million of costs associated with the Exit Financing Facility; | ||
(F) | the payment of $17 million of legal, accounting, financial advisory and other professional fees associated with implementation of the Plan (reflecting $25 million of such fees less $9 million of reimbursements assumed to be paid to KACC by AJI, KJC and KAAC in respect of professional fees incurred in connection with their chapter 11 cases (see paragraph (c)(i) under “ — Principal Assumptions”)); | ||
(G) | the payment of $9 million to the Funding Vehicle Trust (reflecting $13 million to be paid in accordance with the Plan less the expected release of $4 million currently held in escrow to the Debtors); | ||
(H) | the payment of $14 million on account of the Administrative Claims of the PBGC allowed pursuant to the PBGC Settlement Agreement; and | ||
(I) | payments of $11 million in the aggregate for other items including (1) Claims of Indenture Trustees and (2) payments under the KERP (see “Overview of the Plan — Sources and Uses of Cash”); |
(ii) | receipt of $50 million of proceeds under the term loan component of the Exit Financing Facility (see “ — Exit Financing Facility); and | ||
(iii) | receipt of $25 million from KAAC and $1 million from AJI and KJC pursuant to the Intercompany Settlement Agreement (see “Operations During the Reorganization Cases — Intercompany Claims Settlement”). |
(b) | Reflects the distribution under the Alumina Subsidiary Plans of amounts held in escrow at AJI, KJC and KAAC; of such amounts, $26 million is assumed to be paid to Reorganized KAC in accordance with the Intercompany Claims Settlement. | ||
(c) | Reflects the contribution of the PI Insurance Assets to the Funding Vehicle Trust, offset by $1 million of costs associated with the Exit Financing Facility. See “PI Trusts and Distribution Procedures — Funding Vehicle Trust.” | ||
(d) | Represents adjustments to goodwill to reflect the carrying value of assets and liabilities based on the midpoint of the estimated reorganization equity value (approximately $380 million). See “New Common Stock — Estimated Reorganization Value.” | ||
(e) | Reflects the discharge of Secured Claims and Priority Tax Claims. |
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(f) | Reflects retention payments under the KERP and payment of the Administrative Claims of the PBGC allowed pursuant to the PBGC Settlement Agreement. See “ — Management — Executive Compensation — Existing Plans and Agreements to be Retained after the Executive Date — Key Employee Retention Plan” and “Operations During the Reorganization Cases — PBGC Settlement Agreement.” | ||
(g) | Reflects the payment of Indenture Trustee costs, as well as legal, accounting, financial advisory and other professional fees associated with implementation of the Plan. See “Overview of the Plan — Sources and Uses of Cash.” | ||
(h) | Reflects the drawdown of the term loan component of the Exit Financing Facility (see “ — Exit Financing Facility). | ||
(i) | Reflects the discharge of liabilities subject to compromise related to assets sold by the Debtors prior to the Effective Date. | ||
(j) | Reflects the payment of Cash to the Funding Vehicle Trust, certain payments under the KERP and the payment of Cash to the PBGC in respect of its Class 4 Claim. See “PI Trusts and Distribution Procedures — Funding Vehicle Trust” and “ — Management — Executive Compensation — Existing Plans and Agreements to be Retained after the Executive Date — Key Employee Retention Plan.” | ||
(k) | Reflects cancellation of prepetition liabilities in exchange for the payment of Cash and the issuance of New Common Stock. | ||
(l) | Reflects cancellation of prepetition equity and the issuance of New Common Stock, based on the midpoint of the estimated reorganization equity value excluding the theoretical value of certain anticipated tax attributes of the Reorganized Debtors (approximately $380 million). See “New Common Stock — Estimated Reorganization Value.” See note (m) below for additional information regarding estimated reorganization equity value. | ||
(m) | Reflects estimated reorganization equity value, which takes into account estimated debt balances and other obligations as of the assumed Effective Date, of approximately $380 million based upon the midpoint of the range for the estimated reorganization equity value of Reorganized KAC excluding the theoretical value of certain anticipated tax attributes of the Reorganized Debtors. If such value were included in the calculation of the reorganization equity value of Reorganized KAC, such equity value could be higher by as much as $65 to $85 million. The incremental value represents the theoretical present value of estimated tax savings as a result of the anticipated tax attributes of the Reorganized Debtors as of the Effective Date. See “New Common Stock — Estimated Reorganization Value” for a description of the manner in which the estimated reorganization equity value was calculated for purposes of the Plan, including the reasons no value was included in respect of the anticipated tax attributes of the Reorganized Debtors. |
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(Unaudited)
(Dollars in Millions)
Existing KAC | Reorganized KAC | |||||||||||||||||||||||||||
December 31, | December 31, 2005 | December 31, | ||||||||||||||||||||||||||
2003 | 2004 | Projected | Pro Forma | 2006 | 2007 | 2008 | ||||||||||||||||||||||
ASSETS | ||||||||||||||||||||||||||||
Current Assets: | ||||||||||||||||||||||||||||
Cash | $ | 36 | $ | 55 | $ | 25 | $ | 37 | $ | 28 | $ | 56 | $ | 119 | ||||||||||||||
Restricted Cash related to Commodity Sales | 0 | 281 | 675 | 0 | 0 | 0 | 0 | |||||||||||||||||||||
Trade Receivables (net of allowances) | 61 | 97 | 73 | 73 | 87 | 94 | 98 | |||||||||||||||||||||
Other Receivables | 19 | 14 | 3 | 3 | 3 | 3 | 3 | |||||||||||||||||||||
Inventory | 93 | 105 | 104 | 104 | 96 | 94 | 94 | |||||||||||||||||||||
Prepaid Expenses and Other Current Assets | 24 | 20 | 8 | 8 | 6 | 4 | 5 | |||||||||||||||||||||
Current Assets of Disc. Operations | 194 | 31 | 0 | 0 | 0 | 0 | 0 | |||||||||||||||||||||
Total Current Assets | $ | 426 | $ | 603 | $ | 887 | $ | 224 | $ | 220 | $ | 251 | $ | 319 | ||||||||||||||
PP&E, Net | $ | 230 | $ | 215 | $ | 224 | $ | 224 | $ | 258 | $ | 274 | $ | 265 | ||||||||||||||
Investments and Advances | 13 | 17 | 12 | 12 | 13 | 11 | 8 | |||||||||||||||||||||
Other Assets | 521 | 1,010 | 1,001 | 96 | 93 | 94 | 94 | |||||||||||||||||||||
Long-Term Assets of Disc. Operations | 434 | 39 | 0 | 0 | 0 | 0 | 0 | |||||||||||||||||||||
Total Assets | $ | 1,624 | $ | 1,882 | $ | 2,125 | $ | 557 | $ | 584 | $ | 630 | $ | 686 | ||||||||||||||
LIABILITIES | ||||||||||||||||||||||||||||
Current Liabilities: | ||||||||||||||||||||||||||||
Accounts Payable | $ | 36 | $ | 52 | $ | 35 | $ | 26 | $ | 27 | $ | 30 | $ | 32 | ||||||||||||||
Accrued Interest | 1 | 1 | 1 | 1 | 1 | 1 | 2 | |||||||||||||||||||||
Accrued Salaries and Wages | 64 | 49 | 46 | 31 | 27 | 28 | 28 | |||||||||||||||||||||
Other Accrued Liabilities | 30 | 74 | 42 | 21 | 21 | 24 | 32 | |||||||||||||||||||||
Payable to Affiliates | 11 | 15 | 12 | 12 | 12 | 11 | 11 | |||||||||||||||||||||
Current Liabilities of Disc. Operations | 178 | 58 | 0 | 0 | 0 | 0 | 0 | |||||||||||||||||||||
Total Current Liabilities | $ | 320 | $ | 248 | $ | 135 | $ | 92 | $ | 88 | $ | 94 | $ | 104 | ||||||||||||||
Credit Facility | $ | 0 | $ | 0 | $ | 0 | $ | 0 | $ | 0 | $ | 0 | $ | 0 | ||||||||||||||
New Term Loan | 0 | 0 | 0 | 50 | 50 | 50 | 50 | |||||||||||||||||||||
Other Debt | 4 | 4 | 2 | 2 | 2 | 2 | 2 | |||||||||||||||||||||
Long-Term Liabilities of Disc. Operations | 209 | 26 | 26 | 0 | 0 | 0 | 0 | |||||||||||||||||||||
Other Long-Term Liabilities | 59 | 33 | 52 | 33 | 35 | 37 | 39 | |||||||||||||||||||||
Liabilities Subject to Compromise | 2,770 | 3,955 | 3,922 | 0 | 0 | 0 | 0 | |||||||||||||||||||||
Total Liabilities | $ | 3,362 | $ | 4,266 | $ | 4,137 | $ | 177 | $ | 175 | $ | 184 | $ | 195 | ||||||||||||||
Minority Interest | $ | 1 | $ | 1 | $ | 0 | $ | 0 | $ | 0 | $ | 0 | $ | 0 | ||||||||||||||
Commitments and Contingencies | 0 | 0 | 0 | 0 | 0 | 0 | 0 | |||||||||||||||||||||
SHAREHOLDERS’ EQUITY | ||||||||||||||||||||||||||||
Common Stock and Paid-in Capital | $ | 540 | $ | 539 | $ | 539 | $ | 380 | $ | 380 | $ | 380 | $ | 380 | ||||||||||||||
Retained Earnings | (2,279 | ) | (2,923 | ) | (2,551 | ) | 0 | 29 | 66 | 110 | ||||||||||||||||||
Total Equity | $ | (1,739 | ) | $ | (2,384 | ) | $ | (2,012 | ) | $ | 380 | $ | 409 | $ | 446 | $ | 490 | |||||||||||
Total Liabilities & Equity | $ | 1,624 | $ | 1,882 | $ | 2,125 | $ | 557 | $ | 584 | $ | 630 | $ | 686 | ||||||||||||||
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(Unaudited)
(Dollars in Millions)
Existing KAC | Reorganized KAC | |||||||||||||||||||||||||||||||
Fiscal Year Ended | Fiscal Year Ended December 31, 2005 | Fiscal Year Ended | ||||||||||||||||||||||||||||||
December 31, | Emergence | December 31, | ||||||||||||||||||||||||||||||
2003 | 2004 | Projected | Adjustments | Pro Forma | 2006 | 2007 | 2008 | |||||||||||||||||||||||||
Revenues: | ||||||||||||||||||||||||||||||||
Fabricated Products | $ | 598 | $ | 809 | $ | 884 | $ | 0 | $ | 884 | $ | 878 | $ | 902 | $ | 951 | ||||||||||||||||
Primary Aluminum | 112 | 133 | 139 | 0 | 139 | 128 | 119 | 118 | ||||||||||||||||||||||||
Other | (0 | ) | (0 | ) | (1 | ) | 0 | (1 | ) | (0 | ) | (0 | ) | 0 | ||||||||||||||||||
Total | $ | 710 | $ | 942 | $ | 1,022 | $ | 0 | $ | 1,022 | $ | 1,006 | $ | 1,021 | $ | 1,069 | ||||||||||||||||
Cost of Sales: | ||||||||||||||||||||||||||||||||
Fabricated Products | $ | 577 | $ | 708 | $ | 781 | $ | 0 | $ | 781 | $ | 784 | $ | 794 | $ | 830 | ||||||||||||||||
Primary Aluminum | 111 | 118 | 122 | 0 | 122 | 116 | 110 | 110 | ||||||||||||||||||||||||
VEBA profit sharing | 0 | 0 | 0 | 0 | 0 | 0 | 4 | 12 | ||||||||||||||||||||||||
Other | (6 | ) | 26 | 5 | 0 | 5 | 0 | 2 | (0 | ) | ||||||||||||||||||||||
Total | $ | 681 | $ | 852 | $ | 907 | $ | 0 | $ | 907 | $ | 901 | $ | 910 | $ | 951 | ||||||||||||||||
Gross Profit | $ | 29 | $ | 90 | $ | 116 | $ | 0 | $ | 116 | $ | 105 | $ | 111 | $ | 117 | ||||||||||||||||
Other Operating Expenses: | ||||||||||||||||||||||||||||||||
Depreciation and Amortization | $ | 26 | $ | 22 | $ | 20 | $ | 0 | $ | 20 | $ | 20 | $ | 20 | $ | 21 | ||||||||||||||||
Selling, General and Administrative | 92 | 92 | 44 | 0 | 44 | 36 | 37 | 38 | ||||||||||||||||||||||||
Other | 142 | 793 | 27 | 0 | 27 | 6 | 5 | 5 | ||||||||||||||||||||||||
Total | $ | 260 | $ | 908 | $ | 90 | $ | 0 | $ | 90 | $ | 62 | $ | 62 | $ | 63 | ||||||||||||||||
Operating Income | ($ | 231 | ) | ($ | 818 | ) | $ | 25 | $ | 0 | $ | 25 | $ | 44 | $ | 49 | $ | 54 | ||||||||||||||
Interest Expense (Income) & Def Fin | $ | 9 | $ | 10 | $ | 7 | $ | 0 | $ | 7 | $ | 6 | $ | 6 | $ | 6 | ||||||||||||||||
Other Expense (Income) & Reorg Items (a) | 32 | 35 | 40 | (2,392 | ) | (2,352 | ) | 2 | (0 | ) | (1 | ) | ||||||||||||||||||||
Provision for Income Taxes | (1 | ) | (6 | ) | 5 | 0 | 5 | (6 | ) | (6 | ) | (5 | ) | |||||||||||||||||||
Minority Interest | (0 | ) | 0 | 0 | 0 | 0 | 0 | 0 | 0 | |||||||||||||||||||||||
Net Income from Cont. Operations | ($ | 274 | ) | ($ | 868 | ) | ($ | 17 | ) | $ | 2,392 | $ | 2,375 | $ | 29 | $ | 37 | $ | 44 | |||||||||||||
Net Income from Disc. Operations | (515 | ) | 121 | 388 | 0 | 388 | 0 | 0 | 0 | |||||||||||||||||||||||
Net Income (Loss) | ($ | 788 | ) | ($ | 747 | ) | $ | 371 | $ | 2,392 | $ | 2,763 | $ | 29 | $ | 37 | $ | 44 | ||||||||||||||
PROJECTED PRO FORMA CONSOLIDATED STATEMENTS OF OPERATIONS
(a) | Reorganization adjustments reflect $2.3 billion gain on discharge of liabilities, $4 million of reorganization costs and $59 million related to “fresh-start” adjustments. |
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(Unaudited)
(Dollars in Millions)
Fiscal Year Ended December 31, | ||||||||||||
2006 | 2007 | 2008 | ||||||||||
Cash from Operations: | ||||||||||||
Net Income to Common | $ | 29 | $ | 37 | $ | 44 | ||||||
Dividends | 0 | 0 | 0 | |||||||||
Depreciation and Amortization | 20 | 20 | 21 | |||||||||
Change in Receivables | (14 | ) | (6 | ) | (5 | ) | ||||||
Change in Inventory | 7 | 2 | 1 | |||||||||
Change in Other Receivables and Prepaid and Other Current Assets | 2 | 1 | (0 | ) | ||||||||
Change in Trade Payables | 1 | 3 | 2 | |||||||||
Change in Accrued and Other Liabilities | (4 | ) | 3 | 8 | ||||||||
Change in Long-Term Assets & Long-TermLiabilities | 5 | 1 | 2 | |||||||||
Change in Restricted Cash | 0 | 0 | 0 | |||||||||
Cash Provided (Used) by Disc. Operations | 0 | 0 | 0 | |||||||||
Equity in (income) loss of Unconsolidated | 0 | 0 | 0 | |||||||||
Affiliates, net of Distributions | (0 | ) | 2 | 3 | ||||||||
Change in Liabilities Subject to Compromise | 0 | 0 | 0 | |||||||||
Minority Interest | 0 | 0 | 0 | |||||||||
Other | 0 | 0 | 0 | |||||||||
Cash Provided by (Used in) Operations | $ | 46 | $ | 64 | $ | 75 | ||||||
Cash from Investment | ||||||||||||
Capital Expenditures | $ | (54 | ) | $ | (36 | ) | $ | (12 | ) | |||
Asset Disposition Proceeds | 0 | 0 | 0 | |||||||||
Discontinued Operations | 0 | 0 | 0 | |||||||||
Cash Provided by (Used in) Investment | $ | (54 | ) | $ | (36 | ) | $ | (12 | ) | |||
Cash From Financing | ||||||||||||
Issuance (Repayment) of Debt | $ | (0 | ) | $ | (0 | ) | $ | (0 | ) | |||
Issuance of Common Equity | 0 | 0 | 0 | |||||||||
Financing Fees, net | 0 | 0 | 0 | |||||||||
Discontinued Operations | 0 | 0 | 0 | |||||||||
Cash Provided by (Used in) Financing | $ | (0 | ) | $ | (0 | ) | $ | (0 | ) | |||
Net Cash Provided (Used) | $ | (8 | ) | $ | 28 | $ | 63 | |||||
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• | Executive Committee. The Executive Committee will manage the business and affairs of Reorganized KAC that require attention prior to the next regular meeting of Reorganized KAC’s Board of Directors. However, the Executive Committee will not have the power to (a) approve or adopt, or recommend to the stockholders of Reorganized KAC, any action or matter expressly required by law to be submitted to the stockholders of Reorganized KAC for approval, (b) adopt, amend or repeal any bylaw of Reorganized KAC, or (c) take any other action reserved for action by Reorganized KAC’s Board of Directors pursuant to a resolution of Reorganized KAC’s Board of Directors or otherwise prohibited to be taken by the Executive Committee by law or pursuant to Reorganized KAC’s Certificate of Incorporation or Bylaws. It is anticipated that the members of the Executive Committee will include the Chairman of Reorganized KAC’s Board of Directors and at least one of the directors nominated by the USW in accordance with the Director Designation Agreement (so long as at least one such director is qualified to serve thereon). A majority of the members of the Executive Committee must satisfy the general independence criteria contained in the Marketplace Rules or other applicable criteria of the NASD, as interpreted by Reorganized KAC’s Board of Directors reasonably and in good faith (the “General Independence Criteria”). |
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• | Audit Committee. The Audit Committee will oversee the accounting and financial reporting practices and processes of Reorganized KAC and the audits of the financial statements of Reorganized KAC on behalf of Reorganized KAC’s Board of Directors, including appointing, compensating, retaining and overseeing the work of Reorganized KAC’s independent auditors. Other duties and responsibilities of the Audit Committee will include (a) establishing hiring policies for employees or former employees of the independent auditors, (b) reviewing Reorganized KAC’s systems of internal accounting controls, (c) discussing risk management policies, (d) approving related party transactions, (e) establishing procedures for complaints regarding financial statements or accounting policies, and (f) performing other duties delegated to the Audit Committee by Reorganized KAC’s Board of Directors from time to time. It is anticipated that the members of the Audit Committee will include at least one of the directors nominated by the USW in accordance with the Director Designation Agreement (so long as at least one such director is qualified to serve thereon). Each member of the Audit Committee (a) must satisfy the General Independence Criteria, (b) may not, other than as a member of Reorganized KAC’s Board of Directors or a committee thereof, accept any consulting, advisory or other compensatory fee from Reorganized KAC or its subsidiaries (other than fixed amounts of compensation under a retirement plan for prior service, provided such compensation is not contingent on continued service), (c) may not be an affiliated person of Reorganized KAC or any of its subsidiaries, (d) must not have participated in the preparation of the financial statements of Reorganized KAC or its predecessor or any then-current subsidiary thereof at any time during the three years prior to the Effective Date, and (e) must be able to read and understand fundamental financial statements. At least one member of the Audit Committee must have past employment experience in finance or accounting, the requisite professional certification in accounting, or any comparable experience or background that results in such member’s financial sophistication. | ||
• | Compensation Committee. The Compensation Committee will establish and administer Reorganized KAC’s policies, programs and procedures for compensating its senior management, including determining and approving the compensation of Reorganized KAC’s executive officers. Other duties and responsibilities of the Compensation Committee will include (a) administering plans adopted by Reorganized KAC’s Board of Directors that contemplate administration by the Compensation Committee, including the Equity Incentive Plan, (b) overseeing regulatory compliance with respect to compensation matters, (c) reviewing director compensation, and (d) performing other duties delegated to the Compensation Committee by Reorganized KAC’s Board of Directors from time to time. Each member of the Compensation Committee must satisfy the General Independence Criteria, as well as qualify as an “outside director” within the meaning of Section 162(m) of the IRC and as a “non-employee director” within the meaning of Rule 16b-3 of the Exchange Act. | ||
• | Nominating and Corporate Governance Committee. The Nominating and Corporate Governance Committee will identify individuals qualified to become members of Reorganized KAC’s Board of Directors, recommend candidates to fill vacancies and newly-created positions on Reorganized KAC’s Board of Directors, recommend director nominees for the election by stockholders at the annual meetings of stockholders and develop and recommend to Reorganized KAC’s Board of Directors corporate governance principles applicable to Reorganized KAC. Other duties and responsibilities of the Nominating and Corporate Governance Committee will include (a) evaluating stockholder recommendations for director nominations, (b) assisting in succession planning, (c) considering possible conflicts of interest of members of Reorganized KAC’s Board of Directors and management and making recommendations to prevent, minimize or eliminate such conflicts of interests, (d) making recommendations to Reorganized KAC’s Board of Directors regarding the appropriate size of Reorganized KAC’s Board of Directors, and (e) performing other duties delegated to the Nominating and Corporate Governance Committee by Reorganized KAC’s Board of Directors from time to time. It is anticipated that the members of the Nominating and Corporate Governance Committee will include at least one of the directors nominated by the USW in accordance with the Director Designation Agreement (so long as at least one such director is qualified to serve thereon). Each member of the Nominating and Governance Committee must satisfy the General Independence Criteria. |
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Name | Age | Anticipated Position with Reorganized KAC | ||
Jack A. Hockema | 58 | President and Chief Executive Officer | ||
John Barneson | 54 | Senior Vice President and Chief Administrative Officer | ||
John M. Donnan | 44 | Vice President, Secretary and General Counsel | ||
Daniel J. Rinkenberger | 46 | Vice President and Treasurer | ||
Kerry A. Shiba | 50 | Vice President and Chief Financial Officer |
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Annual Compensation | ||||||||||||||||||||
Other Annual | Total Annual | All Other | ||||||||||||||||||
Name and Principal Position | Salary | Bonus(1) | Compensation(2) | Compensation(3) | Compensation(4) | |||||||||||||||
Jack A. Hockema | ||||||||||||||||||||
President and Chief Executive Officer | $ | 730,000 | 378,500 | — | $ | 1,108,500 | $ | 199,193 | (5)(6) | |||||||||||
John Barneson | ||||||||||||||||||||
Senior Vice President and Chief Administrative Officer | $ | 275,000 | 94,625 | — | $ | 369,625 | $ | 81,200 | (5) | |||||||||||
John M. Donnan | ||||||||||||||||||||
Vice President and General Counsel | $ | 200,000 | 45,420 | — | $ | 245,420 | $ | 109,000 | (5) | |||||||||||
Daniel J. Rinkenberger | ||||||||||||||||||||
Vice President and Treasurer | $ | 180,000 | 41,635 | — | $ | 221,135 | $ | 108,000 | (5) | |||||||||||
Kerry A. Shiba | ||||||||||||||||||||
Vice President and Chief Financial Officer | $ | 242,500 | 68,130 | — | $ | 310,630 | $ | 115,500 | (5) |
(1) | Represents amounts paid under the Short-Term Incentive Plan (as defined below). | |
(2) | Excludes perquisites and other personal benefits which, in the aggregate amount, do not exceed the lesser of $50,000 or 10% of the total of annual salary and bonus reported for the executive. | |
(3) | Represents total base salary and amounts paid under the Short-Term Incentive Plan (as defined below). | |
(4) | Includes contributions to the Salaried Savings Plan (as defined below) in the amount of $16,400 for Mr. Hockema, $18,700 for Mr. Barneson, $9,000 for Mr. Donnan, $18,000 for Mr. Rinkenberger and $20,500 for Mr. Shiba. KACC did not contribute amounts to the Kaiser Supplemental Benefits Plan (as defined below) for the executives or any other salaried employees. See “— Existing Plans and Agreements to Be Retained after the Effective Date — The Salaried Plan and Kaiser Supplemental Benefits Plan.” | |
(5) | Includes retention payments made under the KERP in the amount of $182,500 for Mr. Hockema, $62,500 for Mr. Barneson, $100,000 for Mr. Donnan, $90,000 for Mr. Rinkenberger and $95,000 for Mr. Shiba. In addition to such retention amounts, pursuant to the terms of the KERP, KACC has withheld additional retention payments in 2004 for Mr. Hockema in the amount of $273,500 and for Mr. Barneson in the amount of $93,750, payment of which is generally subject to, among other conditions, KACC’s emergence from chapter 11 protection and the timing thereof. See “— Existing Plans and Arrangements to Be Retained after the Effective Date — Key Employee Retention Program.” | |
(6) | Includes $293 paid to Mr. Hockema for unused allowances for insurance and similar benefits KACC provides to its employees. |
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Years of Service | ||||||||||||||||||||
Average Annual | ||||||||||||||||||||
Remuneration | 15 | 20 | 25 | 30 | 35 | |||||||||||||||
$ 250,000 | $ | 56,250 | $ | 75,000 | $ | 93,750 | $ | 112,500 | $ | 131,250 | ||||||||||
350,000 | 78,750 | 105,000 | 131,250 | 157,500 | 183,750 | |||||||||||||||
450,000 | 101,250 | 135,000 | 168,750 | 202,500 | 236,250 | |||||||||||||||
550,000 | 123,750 | 165,000 | 206,250 | 247,500 | 288,750 | |||||||||||||||
650,000 | 146,250 | 195,000 | 243,750 | 292,500 | 341,250 | |||||||||||||||
750,000 | 168,750 | 225,000 | 281,250 | 337,500 | 393,750 | |||||||||||||||
850,000 | 191,250 | 255,000 | 318,750 | 382,500 | 446,250 | |||||||||||||||
950,000 | 213,750 | 285,000 | 356,250 | 427,500 | 498,750 | |||||||||||||||
1,050,000 | 236,250 | 315,000 | 393,750 | 472,500 | 551,250 |
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• | Kaiser Retention Plan and Agreements. Effective September 3, 2002, KACC adopted the Kaiser Aluminum & Chemical Corporation Key Employee Retention Plan (the “Retention Plan”) and in connection therewith, entered into retention agreements with certain key employees, including each of the Named Executive Officers. | ||
In general, awards payable under the Retention Plan to a Named Executive Officer vested, as applicable, on September 30, 2002, March 31, 2003, September 30, 2003 and March 31, 2004 (the “Vesting Dates”). The retention agreement for each Named Executive Officer further provided that, if his employment terminated within 90 days following the payment of any award for any reason other than death, disability, retirement at or after age 62 or termination without “cause” (as defined in the Retention Plan), he would be required to return such payment. Except with respect to payments of the “Withheld Amounts” (as defined below) to Messrs. Hockema and Barneson, such clawback provisions have expired and no further payments are payable to Messrs. Hockema and Barneson. | |||
For each of Messrs. Hockema and Barneson, the amount vested on each of the Vesting Dates was equal to 62.5% of his base salary at the time of grant. Forty percent of the amount vested on each Vesting Date for each of such persons was paid to him in a lump sum on that date. Except as described below, of the remaining 60% of such amount (the “Withheld Amount”), (a) 33 1/3% of such amount is payable to such participant in a lump sum on the Effective Date if he is employed by KACC on that date, (b) 33 1/3% of such amount is payable to such participant in a lump sum on the first anniversary of the Effective Date if he is employed by Reorganized KAC on that date, (c) 16 2/3% of such amount is payable to such participant on the Effective Date if it occurs on or prior to August 12, 2005 and he is employed by KACC on that date (such amount is forfeited if the Effective Date occurs after August 12, 2005), and (d) 16 2/3% of such amount has been forfeited because the Effective Date did not occur on or prior to August 12, 2004. Notwithstanding the foregoing, if the employment of either of Messrs. Hockema or Barneson is |
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terminated prior to the payment date for any Withheld Amount as a result of his death, disability, retirement at or after age 62 or the termination of his employment without cause, he or his estate, as the case may be, will be entitled to receive his Withheld Amount (reduced for any amounts forfeited based on the date of KACC’s emergence from bankruptcy, as described above). For each of Messrs. Donnan, Rinkenberger and Shiba, the amount that vested on each of the Vesting Dates was equal to 50% of his base salary at the time of grant. One hundred percent of the amount vested by each of Messrs. Donnan, Rinkenberger and Shiba on each such date was paid to him in a lump sum on that date. No further amounts are payable to Messrs. Donnan, Rinkenberger or Shiba under the Retention Plan. | |||
• | Kaiser Severance Plan and Agreements. Effective September 3, 2002, KACC adopted the Kaiser Aluminum & Chemical Corporation Severance Plan (the “Severance Plan”) in order to provide selected executive officers, including the Named Executive Officers, and other key employees with appropriate protection in the event of certain terminations of employment. In connection therewith, KACC entered into Severance Agreements (the “Severance Agreements”) with plan participants. The Severance Plan terminates on the first anniversary of the Effective Date. | ||
The Severance Plan provides for payment of a severance benefit and continuation of welfare benefits in the event of certain terminations of employment. Participants are eligible for the severance payment in amounts ranging from six months’ to three years’ salary and continuation of benefits in the event the participant’s employment is terminated without “cause” or the participant terminates employment with “good reason” (in each case, as defined in the Severance Plan). The severance payment and continuation of benefits are not available if (a) the participant receives severance compensation or benefit continuation pursuant to a Kaiser Aluminum & Chemical Corporation Change in Control Severance Agreement (as described below), (b) the participant’s employment is terminated other than without cause or by the participant for good reason, or (c) the participant declines to sign, or subsequently revokes, a designated form of release. In addition, in consideration for the severance payment and continuation of benefits, a participant will be subject to noncompetition, nonsolicitation and confidentiality restrictions following the participant’s termination of employment. | |||
The severance payment payable under the Severance Plan to each of the Named Executive Officers consists of a lump sum cash payment equal to two times (for Messrs. Hockema and Barneson) or one times (for Messrs. Donnan, Rinkenberger and Shiba) his base salary. Each of the Named Executive Officers also will be entitled to continued medical, dental, vision, life insurance and disability benefits for a period of two years (for Messrs. Hockema and Barneson) or one year (for Messrs. Donnan, Rinkenberger and Shiba) following termination of his employment. Severance payments payable under the Severance Plan are in lieu of any severance or other termination payments provided for under any other plan or agreement. | |||
• | Kaiser Change in Control Severance Program. In 2002, KACC entered into Kaiser Aluminum & Chemical Corporation Change in Control Severance Agreements (the “Change in Control Agreements”) with certain key executives, including the Named Executive Officers, in order to provide them with appropriate protection in the event of a termination of employment in connection with a “change in control” or, except as noted below, a “significant restructuring” of KACC (in each case, as defined in the Change in Control Agreements). The Change in Control Agreements terminate on the second anniversary of a change in control. | ||
The Change in Control Agreements provide for severance payments and continuation of benefits in the event of certain terminations of employment. The participants are eligible for severance benefits if their employment terminates or constructively terminates due to a change in control during a period that commences 90 days prior to the change in control and ends on the second anniversary of the change in control. Certain participants (including the Named Executive Officers other than Messrs. Hockema and Barneson) also are eligible for severance benefits if their employment is terminated due to a significant restructuring outside of the period commencing 90 days prior to a change in control and ending on the second anniversary of such change in control. Severance benefits are not available if (a) the participant voluntarily resigns or retires, other than |
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for “good reason” (as defined in the Change in Control Agreements), (b) the participant is discharged for “cause” (as defined in the Change in Control Agreements), (c) the participant’s employment terminates as the result of death or disability, (d) the participant declines to sign, or subsequently revokes, a designated form of release, (e) the participant receives severance compensation or benefit continuation pursuant to the Severance Plan (as described above) or any other prior agreement, or (f) in the case of benefits payable as a result of a significant restructuring, the participant is offered suitable employment in North America in a substantially similar capacity and at his or her current base salary and short-term incentive target, regardless of whether the participant accepts or rejects such offer. In addition, in consideration for the severance payment and continuation of benefits, a participant will be subject to noncompetition, nonsolicitation and confidentiality restrictions following his or her termination of employment. | |||
Upon a qualifying termination of employment, each of the Named Executive Officers is entitled to receive the following: (a) three times (for Messrs. Hockema and Barneson) or two times (for Messrs. Donnan, Rinkenberger and Shiba) the sum of his base salary and most recent short-term incentive target, (b) a pro-rated portion of his short-term incentive target for the year of termination, and (c) a pro-rated portion of his long-term incentive target in effect for the year of his termination, provided that such target was achieved. Each of the Named Executive Officers also is entitled to continued medical, dental, vision-related and life insurance, disability benefits and perquisites for a period of three years (for Messrs. Hockema and Barneson) or two years (for Messrs. Donnan, Rinkenberger and Shiba) after termination of employment. Each of the Named Executive Officers is also entitled to a payment in an amount sufficient, after the payment of taxes, to pay any excise tax due by him under Section 4999 of the IRC or any similar state or local tax. | |||
Severance payments payable under the Change in Control Agreements are in lieu of any severance or other termination payments provided for under any other agreement or plan. | |||
Counsel to the Debtors and counsel to the Creditors’ Committee have concluded that, as a result of the transfer of New Common Stock to the Union VEBA Trust, a change in control will occur under the Change in Control Agreements on the Effective Date. | |||
• | Long-Term Incentive Plan. During 2002, KACC adopted a long-term incentive plan under which key management employees, including the Named Executive Officers, became eligible to receive a cash award to the extent KACC sustains cost reductions above a stipulated threshold through the Effective Date. Under such plan, 15% of such cost reductions above the stipulated threshold are placed in a pool to be shared by each participant based on his or her individual target’s percentage of the aggregate target for all participants. A participant’s target percentage may be adjusted upward or downward, within certain limitations, at the discretion of KACC’s Chief Executive Officer. | ||
Amounts payable under the plan generally are not determinable until conclusion of the plan. If a participant’s employment is terminated without cause or as a result of death, disability or retirement prior to conclusion of the plan, such participant will be entitled to receive a pro-rated portion of any award earned through the date of his or her termination of employment. Awards earned under the program are forfeited if the participant voluntarily terminates his or her employment (other than in connection with normal retirement) or is terminated for cause prior to the scheduled payment date. | |||
In general, awards payable under the program are payable in two installments — the first on the Effective Date and the second on the first anniversary of the Effective Date. |
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The following table and accompanying footnotes further describe the awards that may be earned under such program by the Named Executive Officers. |
Name and Principal | Estimated Future Payouts Under | |||||||||||
Position | Non-Stock Price-Based Plans | |||||||||||
Threshold(1) | Target(1)(2) | Maximum(1)(2) | ||||||||||
Jack A. Hockema | ||||||||||||
President and Chief Executive Officer | — | $ | 1,500,000 | $ | 4,500,000 | |||||||
John Barneson | ||||||||||||
Senior Vice President and Chief Administrative Officer | — | 350,000 | 1,050,000 | |||||||||
John M. Donnan | ||||||||||||
Vice President and General Counsel | — | 200,000 | (3) | 600,000 | (3) | |||||||
Daniel J. Rinkenberger | ||||||||||||
Vice President and Treasurer | — | 75,000 | (4) | 225,000 | (5) | |||||||
Kerry A. Shiba | ||||||||||||
Vice President and Chief Financial Officer | — | 258,000 | (5) | 774,000 | (5) |
(1) | The amount, if any, that may be paid under the program generally will not be determinable until the end of the performance period. | |
(2) | The target and maximum payout amounts in the table are per year. | |
(3) | The initial target and maximum for Mr. Donnan were $90,000 and $270,000 respectively. These amounts were increased to the current levels indicated in the table effective January 2005 in connection with Mr. Donnan’s promotion to Vice President and General Counsel. | |
(4) | The initial target and maximum for Mr. Rinkenberger were $55,000 and $115,000, respectively. These amounts were increased to the current levels indicated in the table effective January 2005 in connection with Mr. Rinkenberger’s promotion to Treasurer. | |
(5) | The initial target and maximum for Mr. Shiba were $90,000 and $270,000, respectively. These amounts were increased to $250,000 and $750,000, respectively, effective April 2004 in connection with Mr. Shiba’s promotion to Chief Financial Officer and to the current levels indicated in the table effective January 2005. |
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• | indemnify the director or officer to the fullest extent permitted or required by Delaware law; provided that, except with respect to certain actions, suits or proceedings to enforce certain rights with respect to indemnification and the advancement of expenses or recovery under any directors’ and officers’ liability insurance policy, the director or officer will be indemnified with respect to any claim such person initiated against Reorganized KAC or any director or officer of Reorganized KAC only if Reorganized KAC as joined in or consented to the initiation of such claim; | ||
• | advance all expenses, liabilities and losses incurred in connection with any proceeding against the director or officer as to which the individual could be indemnified; and | ||
• | maintain directors’ and officers’ liability insurance for the benefit of its directors of officers providing coverage that is substantially comparable in scope and amount to that provided by the policies in effect at the time the parties enter into such indemnification agreement. |
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• | the transferor or transferee obtains the prior approval of Reorganized KAC’s Board of Directors; | ||
• | in the case of a 5% Transaction by any holder of equity securities other than the Union VEBA Trust or the PBGC, prior to such transaction, Reorganized KAC’s Board of Directors determines in good faith, upon request of the transferor or transferee, that such transfer is a 5% Transaction (x) which, together with any 5% Transactions consummated during the period ending on the date of consummation of such 5% Transaction and beginning on the later of (i) the date three years prior thereto and (ii) the first day after the Effective Date (the “Testing Period”), represent aggregate 5% Transactions involving transfers of less than 45% of the equity securities of Reorganized KAC issued and outstanding at the time of transfer and (y) which, together with any 5% Transactions consummated during such period and all 5% Transactions that the Union VEBA Trust and the PBGC may consummate without breach of the Stock Transfer Restriction Agreement during the three years following the time of transfer, represent, during any period of three consecutive years during the period consisting of the Testing Period and the three years thereafter, aggregate 5% Transactions involving transfers of less than 45% of the equity securities issued and outstanding at the time of transfer; or | ||
�� | |||
• | in the case of a 5% Transaction by the Union VEBA Trust or the PBGC, such 5% Transaction does not result in a breach of the Stock Transfer Restriction Agreement; provided that, contemporaneously with the 5% Transaction, the Union VEBA Trust or the PBGC, as the case may be, delivers to Reorganized KAC’s Board of Directors a written notice addressed to Reorganized KAC setting forth the number and type of equity securities involved in, and the date of, such 5% Transaction. |
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• | the Plan has classified Claims and Interests in a permissible manner; | ||
• | the Plan complies with the applicable provisions of the Bankruptcy Code; | ||
• | the Debtors have complied with the applicable provisions of the Bankruptcy Code; | ||
• | the Debtors, as proponents of the Plan within the meaning of section 1129 of the Bankruptcy Code, have proposed the Plan in good faith and not by any means forbidden by law; | ||
• | the disclosure required by section 1125 of the Bankruptcy Code has been made; | ||
• | the Plan has been accepted by the requisite votes of creditors and equity interest holders, except to the extent that cramdown is available under section 1129(b) of the Bankruptcy Code; | ||
• | the Plan is in the “best interests” of all holders of Claims or Interests in an impaired Class that have not accepted the Plan (that is, that such creditors will receive at least as much pursuant to the Plan as they would receive or retain in a chapter 7 liquidation); | ||
• | the Plan is feasible (that is, there is a reasonable prospect that the Debtors will be able to perform their obligations under the Plan); | ||
• | all fees and expenses payable under 28 U.S.C. § 1930, as determined by the Bankruptcy Court at the Confirmation Hearing, have been paid, or the Plan provides for the payment of such fees on the Effective Date; | ||
• | the Plan provides for the continuation after the Effective Date of all Retiree Benefits, at the level established at any time prior to Confirmation pursuant to section 1114(e)(1)(b) or 1114(g) of the Bankruptcy Code, for the duration of the period that the applicable Debtor has obligated itself to provide such benefits; and | ||
• | the disclosures required under section 1129(a)(5) of the Bankruptcy Code concerning the identity and affiliations of persons who will serve as officers and directors of the Reorganized Debtors have been made. |
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• | is accepted by the requisite holders of claims and equity interests in each impaired class of such debtor or, if not so accepted, has been accepted by the requisite holders of at least one impaired class and is “fair and equitable” and “does not discriminate unfairly” as to each nonaccepting class; | ||
• | is either accepted by, or is in the “best interests” of, each holder of a claim or equity interest in each impaired class of such debtor; | ||
• | is feasible; and | ||
• | complies with the other applicable provisions of the Bankruptcy Code. |
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• | The 6-1/2% RPC Revenue Bonds (originally issued on March 1, 1978 with an original maturity date of March 1, 2008), the 7-3/4% SWD Revenue Bonds (originally issued on December 1, 1992 with an original maturity date of August 1, 2022) and the 7.60% SWD Revenue Bonds (originally issued on March 1, 1997 with an original maturity date of March 1, 2027) all had original maturities of about 30 years and will be tax securities. | ||
• | The Senior Subordinated Notes (originally issued on February 1, 1993 with an original maturity date of February 2, 2003) had an original maturity of ten years and will be tax securities. | ||
• | The 10-7/8% Series B Senior Notes (originally issued on October 23, 1996 with an original maturity date of October 15, 2006) and the 10-7/8% Series D Senior Notes (originally issued on December 23, 1996 with an original maturity date of October 15, 2006) both had original maturities of just under 10 years and are likely to be tax securities. | ||
• | The 9-7/8% Senior Notes (originally issued on February 17, 1994 with an original maturity date of February 15, 2002) had an original maturity of just under eight years and may be tax securities, although it is not entirely free from doubt. |
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• | the securities must be securities of the debtor, an affiliate participating in a joint plan with the debtor or a successor to the debtor under the plan; | ||
• | the recipients of the securities must hold a prepetition or administrative expense claim against the debtor or an interest in the debtor or an affiliate participating in a joint plan with the debtor; and | ||
• | the securities must be issued entirely in exchange for the recipient’s claim against or interest in the debtor or an affiliate participating in a joint plan with the debtor, or principally in such exchange and partly for cash or other property. |
• | persons who purchase a claim against, an interest in or a claim for administrative expense against a debtor with a view to distributing any security received in exchange for such claim or interest (“accumulators”); | ||
• | persons who offer to sell securities offered or sold under a plan for the holders of such securities (“distributors”); | ||
• | persons who offer to buy securities offered or sold under a plan from the holders of such securities, if the offer to buy is both with a view to distributing such securities and under an agreement made in connection with the plan, with the consummation of the plan or with the offer or sale of securities under the plan; and | ||
• | a person who is an “issuer” with respect to the securities, as defined in Section 2(11) of the Securities Act. |
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• | either concerted action by the recipients of securities issued under a plan in connection with the sale of such securities or concerted action by distributors on behalf of one or more such recipients in connection with such sales; | ||
• | the use of informational documents concerning the offering of the securities prepared or used to assist in the resale of such securities, other than a bankruptcy court-approved disclosure statement and supplements thereto and documents filed with the SEC pursuant to the Exchange Act; or | ||
• | the payment of special compensation to brokers and dealers in connection with the sale of such securities designed as a special incentive to the resale of such securities (other than the compensation that would be paid pursuant to arms-length negotiations between a seller and a broker or dealer, each acting unilaterally, and not greater than the compensation that would be paid for a routine similar-sized sale of similar securities of a similar issuer). |
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• | (a) prepare and file a post-effective amendment to such registration statement as promptly as practicable thereafter, (b) use commercially reasonable effects to cause such registration statement, as so amended, to again be declared effective under the Securities Act as promptly as practicable after such amendment is filed with the SEC, and (c) use commercially reasonable efforts to cause such registration statement, as so amended, once effective, to remain continuously effective until there ceases to be any Registrable Securities; or | ||
• | (a) file a separate substitute “shelf” registration statement covering the resale of all Registrable Securities for an offering on a continuous basis under and in accordance with Rule 415 under the Securities Act as promptly as practicable thereafter, (b) use commercially reasonable efforts to cause such substitute shelf registration statement to be declared effective under the Securities Act as promptly as practicable after such substitute shelf registration statement is filed with the SEC, and (c) use commercially reasonable efforts to cause such substitute shelf registration statement, once effective, to remain continuously effective until there ceases to be any Registrable Securities. |
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Dated: August 24, 2005 | Respectfully submitted, | |||
KAISER ALUMINUM CORPORATION | ||||
By: | ||||
Name: | ||||
Title: | ||||
KAISER ALUMINUM & CHEMICAL CORPORATION, | ||||
on its own behalf and on behalf of each direct or | ||||
indirect subsidiary Debtor | ||||
By: | ||||
Name: | ||||
Title: | ||||
COUNSEL: | ||||
Daniel J. DeFranceschi (DE 2732) | ||||
RICHARDS, LAYTON & FINGER, P.A. | ||||
One Rodney Square | ||||
P.O. Box 551 | ||||
Wilmington, Delaware 19899 | ||||
Telephone: (302) 651-7700 | ||||
Facsimile: (302) 651-7701 | ||||
— and — | ||||
Gregory M. Gordon (TX 08435300) | ||||
Henry L. Gompf (TX 08116400) | ||||
Troy B. Lewis (TX 12308650) | ||||
Daniel P. Winikka (TX 00794873) | ||||
JONES DAY | ||||
2727 North Harwood Street | ||||
Dallas, Texas 75201 | ||||
Telephone: (214) 220-3939 | ||||
Facsimile: (214) 969-5100 | ||||
ATTORNEYS FOR DEBTORS AND | ||||
DEBTORS IN POSSESSION |
• | The Debtors, with guidance from Lazard regarding the mechanics of a Chapter 7 liquidation, estimated proceeds from the liquidation of each of the Debtors’ assets. This includes assets of both the Kaiser Debtor Entities as well as KACOCL. | ||
• | Gross cash was reduced by estimated liquidation costs. These include estimated operating costs during the liquidation process, as well as trustee fees and professional fees. | ||
• | The letters of credit outstanding under the DIP Financing Facility (estimated at $18 million) were assumed to be drawn, and the lenders party to the DIP Financing Facility were assumed to receive a superpriority administrative claim against KACC. No other amounts were assumed to be outstanding under the DIP Financing Facility. | ||
• | Recoveries occur at each entity on an absolute priority basis according to the claims outstanding at that entity. No marshalling of claims asserted against multiple entities is assumed. |
2
Estimated Liquidation Proceeds | ||||||||||||||||||||
Book Value (a) | Hypothetical Liquidation Value Range | |||||||||||||||||||
Recovery % | Amount | |||||||||||||||||||
Low | High | Low | High | |||||||||||||||||
Cash and Equivalents (b) | $ | 1.2 | 100.0 | % | 100.0 | % | $ | 1.2 | $ | 1.2 | ||||||||||
Trade Accounts Receivable (c) | 2.3 | 78.5 | % | 88.5 | % | 1.8 | 2.1 | |||||||||||||
Other Accounts Receivable (d) | 0.4 | 40.0 | % | 70.0 | % | 0.2 | 0.3 | |||||||||||||
Inventory (e) | 3.1 | 96.1 | % | 119.9 | % | 3.0 | 3.7 | |||||||||||||
Other Current Assets (f) | 0.2 | 29.0 | % | 47.7 | % | 0.1 | 0.1 | |||||||||||||
PP&E (g) | 28.4 | 9.1 | % | 19.8 | % | 2.6 | 5.6 | |||||||||||||
Intercompany Receivable (h) | 4.2 | 0.0 | % | 0.0 | % | 0.0 | 0.0 | |||||||||||||
Investments (i) | 0.0 | 0.0 | % | 0.0 | % | 0.0 | 0.0 | |||||||||||||
Other Long-Term Assets (j) | 0.0 | 0.0 | % | 10.0 | % | 0.0 | 0.0 | |||||||||||||
Total Liquidation Proceeds | $ | 39.8 | 22.1 | % | 32.6 | % | $ | 8.8 | $ | 13.0 | ||||||||||
Distribution of Liquidation Proceeds | ||||||||||||||||||||
Liquidation Fees and Expenses (k) | ||||||||||||||||||||
Chapter 7 Trustee Fees | 3.0 | % | 3.0 | % | ($ | 0.3 | ) | ($ | 0.4 | ) | ||||||||||
Chapter 7 Professional Fees | 0.7 | % | 0.7 | % | (0.1 | ) | (0.1 | ) | ||||||||||||
Mechanics/Workmen’s Liens and Other Secured Claims | 0.0 | 0.0 | ||||||||||||||||||
Operating Expenses | (0.5 | ) | (0.4 | ) | ||||||||||||||||
Total Fees and Expenses | ($ | 0.9 | ) | ($ | 0.9 | ) | ||||||||||||||
Net Estimated Proceeds Available for Distribution to Stakeholders | $ | 7.9 | $ | 12.1 | ||||||||||||||||
Estimated Liquidation Proceeds | ||||||||||||||||||||
Book Value (a) | Hypothetical Liquidation Value Range | |||||||||||||||||||
Recovery % | Amount | |||||||||||||||||||
Low | High | Low | High | |||||||||||||||||
Cash and Equivalents (b) | $ | 62.0 | 100.0 | % | 100.0 | % | $ | 62.0 | $ | 62.0 | ||||||||||
Trade Accounts Receivable (c) | 90.7 | 77.3 | % | 88.6 | % | 70.2 | 80.4 | |||||||||||||
Other Accounts Receivable (d) | 11.6 | 59.7 | % | 82.3 | % | 6.9 | 9.5 | |||||||||||||
Inventory (e) | 114.3 | 70.4 | % | 89.8 | % | 80.5 | 102.7 | |||||||||||||
Other Current Assets (f) | 13.0 | 62.4 | % | 74.9 | % | 8.1 | 9.8 | |||||||||||||
PP&E (g) | 521.0 | 8.6 | % | 18.5 | % | 45.0 | 96.4 | |||||||||||||
Intercompany Receivable (h) | 8.7 | 0.0 | % | 0.0 | % | 0.0 | 0.0 | |||||||||||||
Investments (i) | 62.0 | 16.1 | % | 32.3 | % | 10.0 | 20.0 | |||||||||||||
Other Long-Term Assets (j) | 1,016.1 | 0.7 | % | 0.9 | % | 7.3 | 8.9 | |||||||||||||
Total Liquidation Proceeds | $ | 1,899.5 | 15.3 | % | 20.5 | % | $ | 290.0 | $ | 389.7 | ||||||||||
Distribution of Liquidation Proceeds | ||||||||||||||||||||
Liquidation Fees and Expenses (k) | ||||||||||||||||||||
Chapter 7 Trustee Fees | ($ | 8.7 | ) | ($ | 11.7 | ) | ||||||||||||||
Chapter 7 Professional Fees | (2.0 | ) | (2.7 | ) | ||||||||||||||||
Mechanics/Workmen’s Liens and Other Secured Claims | 0.0 | 0.0 | ||||||||||||||||||
Operating Expenses | (17.0 | ) | (12.1 | ) | ||||||||||||||||
Total Fees and Expenses | ($ | 27.7 | ) | ($ | 26.5 | ) | ||||||||||||||
Net Estimated Proceeds Available for Distribution to Stakeholders | $ | 262.3 | $ | 363.2 | ||||||||||||||||
3
Net Estimated Proceeds Available for Distribution to Stakeholders | $ | 7.9 | $ | 12.1 | ||||
DIP/ Letter of Credit Balance (l) | $ | 0.0 | $ | 0.0 | ||||
Recovery Amount | NM | NM | ||||||
% of Claim | NM | NM | ||||||
Proceeds Available for Payment of Prepetition Secured Claims | $ | 7.9 | $ | 12.1 | ||||
Secured Claims (m) | $ | 0.0 | $ | 0.0 | ||||
Recovery Amount | NM | NM | ||||||
% of Claim | NM | NM | ||||||
Proceeds Available for Payment of Administrative and Priority Claims and Retiree Medical and Unsecured Claims | $ | 7.9 | $ | 12.1 | ||||
Administrative and Priority Claims (n) | $ | 9.7 | $ | 9.7 | ||||
Recovery Amount | 7.9 | 9.7 | ||||||
% of Claim | 82.0 | % | 100.0 | % | ||||
Proceeds Available for Payment of Unsecured Claims | $ | 0.0 | $ | 2.4 | ||||
Unsecured Claims (o) | $ | 616.0 | $ | 616.0 | ||||
Recovery Amount | 0.0 | 2.4 | ||||||
% of Claim | 0.0 | % | 0.4 | % | ||||
Proceeds Available for Payment of Equity Interests | $ | 0.0 | $ | 0.0 |
Net Estimated Proceeds Available for Distribution to Stakeholders | $ | 262.3 | $ | 363.2 | ||||
DIP/ Letter of Credit Balance (l) | $ | 18.0 | $ | 18.0 | ||||
Recovery Amount | 18.0 | 18.0 | ||||||
% of Claim | 100.0 | % | 100.0 | % | ||||
Proceeds Available for Payment of Prepetition Secured Claims | $ | 244.3 | $ | 345.2 | ||||
Secured Claims (m) | $ | 4.9 | $ | 4.9 | ||||
Recovery Amount | 4.9 | 4.9 | ||||||
% of Claim | 100.0 | % | 100.0 | % | ||||
Proceeds Available for Payment of Administrative and Priority Claims and Retiree Medical and Unsecured Claims | $ | 239.5 | $ | 340.3 | ||||
Administrative and Priority Claims (n) | $ | 366.8 | $ | 366.8 | ||||
Recovery Amount | 239.5 | 340.3 | ||||||
% of Claim | 65.3 | % | 92.8 | % | ||||
Proceeds Available for Payment of Unsecured Claims | $ | 0.0 | $ | 0.0 | ||||
Unsecured Claims (o) | $ | 4,577.8 | $ | 4,577.8 | ||||
Recovery Amount | 0.0 | 0.0 | ||||||
% of Claim | 0.0 | % | 0.0 | % | ||||
Proceeds Available for Payment of Equity Interests | $ | 0.0 | $ | 0.0 |
4
Recovery | Recovery % | |||||||||||||||||||
Amount | Amount | Low | High | Low | High | |||||||||||||||
DIP/ Letter of Credit Claims | $ | 18.0 | $ | 18.0 | $ | 18.0 | 100.0 | % | 100.0 | % | ||||||||||
Secured Claims | 4.9 | 4.9 | 4.9 | 100.0 | % | 100.0 | % | |||||||||||||
Administrative & Priority Claims | 376.5 | 247.4 | 350.0 | 65.7 | % | 93.0 | % | |||||||||||||
Unsecured Claims: | ||||||||||||||||||||
PBGC | 616.0 | 0.0 | 2.4 | 0.0 | % | 0.4 | % | |||||||||||||
Other Unsecured Claims | 3,961.8 | 0.0 | 0.0 | 0.0 | % | 0.0 | % | |||||||||||||
Equity Claims | NA | 0.0 | 0.0 | NM | NM |
5
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FOR THE DISTRICT OF DELAWARE
In re: | : | |||
: | Jointly Administered | |||
KAISER ALUMINUM CORPORATION, a Delaware | : | Case No. 02-10429 (JKF) | ||
corporation, et al., | : | |||
: | Chapter 11 | |||
Debtors. | : |
Daniel J. DeFranceschi (DE 2732) | ||
Kimberly D. Newmarch (DE 4340) | ||
RICHARDS, LAYTON & FINGER | ||
One Rodney Square | ||
P.O. Box 551 | ||
Wilmington, Delaware 19899 | ||
Telephone: (302) 651-7700 | ||
Facsimile: (302) 651-7701 | ||
- and - | ||
Gregory M. Gordon (TX 08435300) | ||
Daniel P. Winikka (TX 00794873) | ||
Debra K. Simpson (TX 24027986) | ||
JONES DAY | ||
2727 North Harwood Street | ||
Dallas, Texas 75201 | ||
Telephone: (214) 220-3939 | ||
Facsimile: (214) 969-5100 | ||
ATTORNEYS FOR DEBTORS AND DEBTORS IN POSSESSION |
Page | ||||||
1. | Definitions | 1 | ||||
a. “Bankruptcy Court” | 1 | |||||
b. “Beneficial Owners” | 1 | |||||
c. “Certified Plan Solicitation Directive” | 1 | |||||
d. “Channeled Personal Injury Claims” | 1 | |||||
e. “Confirmation Hearing” | 1 | |||||
f. “Confirmation Objection Deadline” | 1 | |||||
g. “Debtors” | 1 | |||||
h. “Direct Channeled Personal Injury Claims” | 1 | |||||
i. “Disclosure Statement” | 1 | |||||
j. “Disclosure Statement Hearing” | 1 | |||||
k. “Disclosure Statement Notice” | 1 | |||||
l. “Disclosure Statement Order” | 1 | |||||
m. “Indenture Trustees” | 2 | |||||
n. “Individual Record Holders” | 2 | |||||
o. “KAC” | 2 | |||||
p. “KACC” | 2 | |||||
q. “Master Ballot” | 2 | |||||
r. “Master Ballot Agent Register” | 2 | |||||
s. “Master Ballot Agents” | 2 | |||||
t. “Nominee Register” | 2 | |||||
u. “Nominees” | 2 | |||||
v. “Personal Injury Claims Solicitation Procedures Notice” | 2 | |||||
w. “Plan” | 2 | |||||
x. “Publication Notice” | 2 | |||||
y. “Record Amount” | 3 | |||||
z. “Record Holder Register” | 3 | |||||
aa. “Rule 3018 Motion” | 3 | |||||
bb. “Solicitation Package” | 3 | |||||
cc. “Solicitation and Tabulation Agent” | 3 | |||||
dd. “Transfer Agent” | 3 | |||||
ee. “Voting Deadline” | 3 | |||||
ff. “Voting Debt Securities” | 3 | |||||
gg. “Voting Record Date” | 3 | |||||
2. | Publication Notice | 4 |
-i-
(continued)
Page | ||||||
3. | Availability of Plan-Related Documents on the Internet | 4 | ||||
4. | Distribution of Certain Documents on CD-ROM | 4 | ||||
5. | Distribution of Solicitation Packages | 4 | ||||
a. Determination of Holders of Record | 4 | |||||
b. Distribution of Solicitation Packages | 4 | |||||
6. | Special Procedures Relating to Channeled Personal Injury Claims | 6 | ||||
a. Procedures Relating to Indirect Channeled Personal Injury Claims | 6 | |||||
b. Procedures Relating to Direct Channeled Personal Injury Claims | 6 | |||||
7. | Special Procedures Relating to Claims in Respect of Voting Debt Securities and Senior Subordinated Notes and Interests in KAC and KACC | 14 | ||||
a. Distribution of Solicitation Packages and Return of Ballots | 14 | |||||
b. Tabulation of Votes to Accept or Reject the Plan in Connection with Voting Debt Securities | 16 | |||||
c. Reimbursement of Expenses | 17 | |||||
8. | Return of Ballots | 17 | ||||
a. Authority to Complete and Execute Ballots | 17 | |||||
b. Method for Transmitting, and Place to Send, Completed Ballots | 17 | |||||
c. Deadline for Receiving Completed Ballots | 17 | |||||
9. | Tabulation of Ballots | 18 | ||||
a. Claimants That Are Entitled to Vote | 18 | |||||
b. General Tabulation Rules | 18 |
-ii-
1. | Definitions |
a. | “Bankruptcy Court”means the United States Bankruptcy Court for the District of Delaware. | ||
b. | “Beneficial Owners”means, as of the Voting Record Date, the beneficial owners of, as applicable, (i) the Voting Debt Securities (for whom a Master Ballot Agent provides services) or (ii) the Senior Subordinated Notes or the Interests in KAC or KACC (for whom a Nominee provides services). | ||
c. | “Certified Plan Solicitation Directive”means the directive, pursuant to which, among other things, each attorney representing one or more holders of Direct Channeled Personal Injury Claims will direct the Debtors and the Solicitation and Tabulation Agent as to the preferred method for the solicitation of votes on the Plan by such attorney’s clients. | ||
d. | “Channeled Personal Injury Claims”means, collectively, Asbestos Personal Injury Claims, CTPV Personal Injury Claims, NIHL Personal Injury Claims and Silica Personal Injury Claims. | ||
e. | “Confirmation Hearing”means the hearing on the confirmation of the Plan, as such hearing may be adjourned from time to time. | ||
f. | “Confirmation Objection Deadline”means the date that is established by the Bankruptcy Court as the deadline for filing objections to confirmation of the Plan. | ||
g. | “Debtors”means, collectively, KAC, KACC, Akron Holding Corporation, Kaiser Aluminum & Chemical Investment, Inc., Kaiser Aluminium International, Inc., Kaiser Aluminum Properties, Inc., Kaiser Aluminum Technical Services, Inc., Kaiser Bellwood Corporation, Kaiser Micromill Holdings, LLC, Kaiser Texas Micromill Holdings, LLC, Kaiser Sierra Micromills, LLC, Kaiser Texas Sierra Micromills, LLC, Oxnard Forge Die Company, Inc., Alwis Leasing LLC, Kaiser Center, Inc., KAE Trading, Inc., Kaiser Aluminum & Chemical Investment Limited (Canada), Kaiser Aluminum & Chemical of Canada Limited (Canada), Kaiser Center Properties, Kaiser Export Company and Texada Mines Ltd. (Canada). | ||
h. | “Direct Channeled Personal Injury Claims”means Channeled Personal Injury Claims other than Indirect Channeled Personal Injury Claims. | ||
i. | “Disclosure Statement”means the disclosure statement in connection with the Plan, as approved by the Bankruptcy Court in the Disclosure Statement Order. | ||
j. | “Disclosure Statement Hearing”means the hearing scheduled for September 1, 2005 at 9:00 a.m. at which the Bankruptcy Court will consider approval of the Disclosure Statement. | ||
k. | “Disclosure Statement Notice”means the notice of the date, time and place of the Disclosure Statement Hearing and the deadline and procedures for filing objections to the Disclosure Statement. | ||
l. | “Disclosure Statement Order”means the order of the Bankruptcy Court approving the Disclosure Statement and these Voting Procedures. |
m. | “Indenture Trustees”means, collectively, the indenture trustees for the Voting Debt Securities and the Senior Subordinated Notes. | ||
n. | “Individual Record Holders”means the holders of record of, as applicable, the Voting Debt Securities, the Senior Subordinated Notes or the Interests in KAC or KACC that, as of the Voting Record Date, hold such instruments in their own name (rather than in street name as a Master Ballot Agent or a Nominee for Beneficial Owners). | ||
o. | “KAC”means Kaiser Aluminum Corporation. | ||
p. | “KACC”means Kaiser Aluminum & Chemical Corporation. | ||
q. | “Master Ballot”means a Ballot (i) submitted on behalf of one or more beneficial owners of Voting Debt Securities in accordance with the procedures set forth in section 7 of these Voting Procedures or (ii) submitted on behalf of one or more holders of Direct Channeled Personal Injury Claims pursuant to section 6 of the Voting Procedures. | ||
r. | “Master Ballot Agent Register”means a list, as of the Voting Record Date, provided by an Indenture Trustee containing the names and addresses of the Master Ballot Agents and, for each Master Ballot Agent, the aggregate holdings in the applicable Voting Debt Security held by the Beneficial Owners for whom such Master Ballot Agent provides services. | ||
s. | “Master Ballot Agents”means brokers, banks, dealers or other agents or nominees that hold Voting Debt Securities in “street name” on behalf of Beneficial Owners or otherwise represent such Beneficial Owners. | ||
t. | “Nominee Register”means a list, as of the Voting Record Date, provided by, as applicable, the Transfer Agent or the Indenture Trustee of the Senior Subordinated Notes containing the names and addresses of the Nominees for, as applicable, the Interests in KAC and KACC or the Senior Subordinated Notes. | ||
u. | “Nominees”means brokers, banks, dealers or other agents or nominees that hold, as applicable, Senior Subordinated Notes or Interests in KAC or KACC in “street name” on behalf of Beneficial Owners or otherwise represent such Beneficial Owners. | ||
v. | “Personal Injury Claims Solicitation Procedures Notice”means the notice to be sent to all known attorneys representing holders of Direct Channeled Personal Injury Claims that, among other things, will (i) notify such attorneys of the process for soliciting votes on the Plan in respect of Direct Channeled Personal Injury Claims and (ii) request that, if they have not already done so, such attorneys complete and return to the Solicitation and Tabulation Agent the Certified Plan Solicitation Directive, pursuant to which such attorneys will notify the Debtors and the Solicitation and Tabulation Agent of the preferred method for soliciting the votes of the holders of Direct Channeled Personal Injury Claims. | ||
w. | “Plan”means the Joint Plan of Reorganization of Kaiser Aluminum Corporation, Kaiser Aluminum & Chemical Corporation and Certain of Their Debtor Affiliates, dated June 29, 2005, as it may be amended. | ||
x. | “Publication Notice”means a published notice of (i) the approval of the Disclosure Statement and the scheduling of the Confirmation Hearing, (ii) the deadlines for voting on, and filing objections to confirmation of, the Plan and (iii) the procedure for holders of Claims to obtain a Solicitation Package, in a form approved by the Bankruptcy Court in the Disclosure Statement Order. |
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y. | “Record Amount”means the amount shown on the records of the Indenture Trustees (as confirmed by the Record Holder Register and Master Ballot Agent Register) as of the Voting Record Date. | ||
z. | “Record Holder Register”means a list provided by an Indenture Trustee or the Transfer Agent that contains the names, addresses and holdings of the Individual Record Holders for, as applicable, the Voting Debt Securities, the Senior Subordinated Notes or the Interests in KAC or KACC as of the Voting Record Date. | ||
aa. | “Rule 3018 Motion”means a motion, pursuant to Bankruptcy Rule 3018(a), seeking an order temporarily allowing a Claim, solely for purposes of voting to accept or reject the Plan, in an amount or classification different from the amount of classification allowed in accordance with these Voting Procedures. | ||
bb. | “Solicitation Package”means, and will consist of, all of the following: |
i. | A notice, substantially in the form approved by the Bankruptcy Court, setting forth, among other things, the time fixed for voting to accept or reject the Plan, the time fixed for filing objections to confirmation of the Plan, and the date and time of the Confirmation Hearing; | ||
ii. | A CD-ROM containing the Disclosure Statement (together with the exhibits thereto, including the Plan, that have been filed with the Court before the date of the mailing); | ||
iii. | For classes entitled to vote on the Plan, an appropriate form of Ballot, voting instructions and a Ballot-return envelope; | ||
iv. | Letters recommending acceptance of the Plan from the Debtors and, if applicable, the Creditors’ Committee and the Asbestos Claimants’ Committee; | ||
v. | Letters or other communications from attorneys representing holders of Direct Channeled Personal Injury Claims to their clients; and | ||
vi. | Any other materials authorized by the Bankruptcy Court to be included as part of the Solicitation Package. |
cc. | “Solicitation and Tabulation Agent”means Logan & Company, Inc. or such other firm that may be retained by the Debtors to act as the solicitation and tabulation agent with respect to the Plan. | ||
dd. | “Transfer Agent”means the transfer agent for the Interests in KAC or KACC. | ||
ee. | “Voting Deadline”means the date that is established by the Bankruptcy Court as the deadline for the return of Ballots on the Plan. | ||
ff. | “Voting Debt Securities”means, collectively, the 9-7/8% Senior Notes, the 10-7/8% Senior Notes, the 6-1/2% RPC Revenue Bonds, the 7-3/4% SWD Revenue Bonds and the 7.60% SWD Revenue Bonds. | ||
gg. | “Voting Record Date”means the date set forth in the Disclosure Statement Order that will be used for purposes of determining which creditors and interest holders are entitled to receive Solicitation Packages and, where applicable, vote on the Plan. |
Any capitalized term not otherwise defined herein shall have the meaning given to such term in the Plan. |
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2. | Publication Notice | |
The Debtors will, on a date not less than forty-five calendar days prior to the Confirmation Objection Deadline, cause the Publication Notice to be published once in the national editions ofUSA Today,The Wall Street JournalandThe New York Times, once in the newspaper supplementsParademagazine andUSA Weekendmagazine, once inThe Bond Buyerand once in the following regional newspapers:The Ascension Citizen(Gonzales),Baton Rouge Advocate,The Charleston Gazette,Coeur d’Alene Press(ID),The Daily Gleaner(local Jamaican edition),The L’Observateur(La Place),The London Free Press(London, Ontario edition),New Orleans Times Picayune,The News Examiner(St. James),Oakland Tribune,Parkersburg Times,San Francisco Chronicle,Seattle Times,Spokane Spokesman Review,St. Bernard News(Chalmette),St. Bernard Voice(Chalmette) andTacoma News Tribune. The Debtors will also cause the Publication Notice to be published once in the monthly magazinesAmerican Legion,Field & Stream,Popular Mechanics, Reader’s DigestandVFW Magazineon a date not less than thirty calendar days prior to the Confirmation Objection Deadline. | ||
3. | Availability of Plan-Related Documents on the Internet | |
All Plan-related documents, including the Disclosure Statement, are or will be available via the Internet on the Bankruptcy Court’s docket atwww.deb.uscorts.gov, on the Debtors’ website atwww.kaiseraluminum.com and on the Solicitation and Tabulation Agent’s website atwww.loganandco.com. | ||
4. | Distribution of Certain Documents on CD-ROM | |
The Solicitation Packages will include a CD-ROM containing the Disclosure Statement and the exhibits thereto, including the Plan, that have been filed with the Bankruptcy Court before the date of the mailing. If service by CD-ROM imposes a hardship for any creditor (e.g., the creditor does not own or have access to a computer or the Internet), such creditor may obtain a paper copy of the applicable documents by sending a request,in writing, to the Solicitation and Tabulation Agent, Logan & Company, Inc., 546 Valley Road, Upper Montclair, NJ 07043 (Attn: Kaiser Aluminum Voting Department). Any such request must be received by the Solicitation and Tabulation Agent at least ten Business Days prior to the Voting Deadline. Upon receipt of such a written request, the Solicitation and Tabulation Agent will cause a paper copy of the applicable documents to be served on the requestor. In addition, attorneys representing holders of Direct Channeled Personal Injury Claims may elect on the Certified Plan Solicitation Directive to obtain a paper copy for their clients or have the Solicitation and Tabulation Agent serve their clients with paper copies. | ||
5. | Distribution of Solicitation Packages |
a. | Determination of Holders of Record | ||
Except with respect to Direct Channeled Personal Injury Claims, the Solicitation and Tabulation Agent will cause a Solicitation Package to be served upon all holders of Claims against the Debtors and all holders of Interests in KAC or KACC as of the Voting Record Date, and the Debtors will have no obligation to cause a Solicitation Package to be served upon any subsequent holder of a Claim against the Debtors (as evidenced by any notice of assignment of such Claim entered on the Bankruptcy Court’s docket or that becomes effective after the Voting Record Date or otherwise) or an Interest in KAC or KACC. | |||
b. | Distribution of Solicitation Packages |
(i) | Scheduled Claims | ||
The Solicitation and Tabulation Agent will cause a Solicitation Package to be served upon all persons or entities listed in the Schedules as holding liquidated, noncontingent, undisputed claims as of the Voting Record Date. |
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(ii) | Filed Claims | ||
The Solicitation and Tabulation Agent will cause a Solicitation Package to be served upon each person or entity that has filed a proof of claim against a Debtor, which claim has not been withdrawn, disallowed or expunged on or before the Voting Record Date, other than a proof of claim asserting (a) claims in respect of Voting Debt Securities or (b) Direct Channeled Personal Injury Claims, the holders of which will be served with a Solicitation Package according to the procedures set forth below. If the relevant proof of claim does not indicate the classification of the Claim, and such classification cannot be determined from the Schedules, such Claim shall be treated as an Unsecured Claim. | |||
(iii) | Parties to Executory Contracts and Unexpired Leases | ||
The Solicitation and Tabulation Agent will cause a Solicitation Package to be served on (A) each person or entity that is listed on the Schedules as a party to an executory contract or an unexpired lease with one or more of the Debtors, irrespective of whether, pursuant to section 365(a) of the Bankruptcy Code, such contract is, in fact, an “executory contract” or such lease is, in fact, an “unexpired lease,” and (B) any other person or entity listed as a party to any contract listed on Exhibit 6.1.a of the Plan. | |||
(iv) | Channeled Personal Injury Claims | ||
The Solicitation and Tabulation Agent will cause Solicitation Packages to be served in connection with Channeled Personal Injury Claims in the manner described in section 6 hereof. | |||
(v) | Claims in Respect of Voting Debt Securities and Senior Subordinated Notes and Interests in KAC or KACC | ||
The Solicitation and Tabulation Agent will cause Solicitation Packages to be served in connection with (A) Claims under, or evidenced by, Voting Debt Securities or Senior Subordinated Notes and (B) Interests in KAC or KACC, in the manner described in section 7.a hereof. | |||
(vi) | Other Parties | ||
The Solicitation and Tabulation Agent will cause a Solicitation Package to be served upon the Securities and Exchange Commission, the Office of the United States Trustee for the District of Delaware, counsel to the Debtors’ postpetition lenders, counsel to the Creditors’ Committee, counsel to the Asbestos Claimants’ Committee, counsel to the Future Asbestos Claimants’ Representative, counsel to the Future Silica and CTPV Claimants’ Representative, counsel to the Retirees’ Committee and each party that filed a notice of appearance with the Bankruptcy Court and has not withdrawn such notice of appearance as of the Voting Record Date. | |||
(vii) | Distribution of Solicitation Packages to Undeliverable Addresses Not Required; Procedures for Returned Solicitation Packages | ||
To the extent that Disclosure Statement Notices are returned by the United States Postal Service as undeliverable as a result of incomplete or inaccurate addresses, the Solicitation and Tabulation Agent will not mail Solicitation Packages to such addresses unless the Debtors or the Solicitation and Tabulation Agent are provided with accurate addresses for such entities, in writing, on or before the date of the Disclosure Statement Hearing. If a Solicitation Package is returned as undeliverable, the Solicitation and Tabulation Agent shall resend such Solicitation Package only once, provided that the United State Post |
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Office has included a forwarding address at least five Business Days before the Voting Deadline. |
6. | Special Procedures Relating to Channeled Personal Injury Claims |
a. | Procedures Relating to Indirect Channeled Personal Injury Claims |
(i) | Service on Holders of Indirect Channeled Personal Injury Claims | ||
The Solicitation and Tabulation Agent will cause a Solicitation Package to be served upon each holder of an Indirect Channeled Personal Injury Claim that has not been withdrawn, disallowed or expunged on or before the Voting Record Date. | |||
(ii) | Tabulation of Votes | ||
Each holder of an Indirect Channeled Personal Injury Claim will have a single vote in the amount, for voting purposes only, of $1.00. |
b. | Procedures Relating to Direct Channeled Personal Injury Claims |
(i) | Initial Distribution of Solicitation Packages and Mailing of Personal Injury Claims Solicitation Procedures Notice and Certified Plan Solicitation Directives. | ||
As soon as practicable after entry of the Disclosure Statement Order, the Solicitation and Tabulation Agent will serve a Personal Injury Claims Solicitation Procedures Notice, a Certified Plan Solicitation Directive and one Solicitation Package that includes one Master Ballot for voting Direct Channeled Personal Injury Claims on all known attorneys representing holders of Direct Channeled Personal Injury Claims. | |||
(ii) | Certified Plan Solicitation Directive |
(A) | The Certified Plan Solicitation Directive must be returned by each attorney representing one or more holders of Direct Channeled Personal Injury Claims to the Solicitation and Tabulation Agent, Logan & Company, Inc., 546 Valley Road, Upper Montclair, New Jersey 07043 (Attn: Kaiser Aluminum Voting Department); fax: 973-509-1131. | ||
(B) | Attorneys representing one or more holders of Direct Channeled Personal Injury Claims must return a Certified Plan Solicitation Directive so it is actually received by the Solicitation and Tabulation Agent no later than the deadline set forth in the Personal Injury Claims Solicitation Procedures Notice, which will be approximately 20 days after the Solicitation and Tabulation Agent completes the mailing of initial Solicitation Packages and Certified Plan Solicitation Directives to the attorneys representing holders of Direct Channeled Personal Injury Claims. | ||
(C) | Pursuant to the Certified Plan Solicitation Directive, each attorney representing holders of Direct Channeled Personal Injury Claims will direct the Solicitation and Tabulation Agent to solicit votes on the Plan from his or her clients that hold Direct Channeled Personal Injury Claims (collectively, the “Clients”), according to one of the following procedures: |
(1) | Master Ballot Solicitation Method. If the attorney certifies that he or she has the authority under applicable bankruptcy and/or non-bankruptcy law to vote on behalf of the Clients, such attorney may |
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inform the Solicitation and Tabulation Agent that no additional Solicitation Packages need to be served and that such attorney will submit a Master Ballot on which that attorney will record the votes on the Plan for each of the Clients. If the attorney elects this procedure, the attorney may also request that, for informational purposes, the Solicitation and Tabulation Agent serve Solicitation Packages (without a Ballot) on the Clients. | |||
(2) | Direct Solicitation Method. If the attorney does not have the authority to vote on behalf of the Clients or the attorney prefers to have the Clients cast their own votes on the Plan, the attorney may direct the Solicitation and Tabulation Agent to solicit votes on the Plan directly from the Clients. If the attorney selects this method: (I) the attorney must include an address for each Client on the list required pursuant to section 6.b(ii)(D) below and (II) the Solicitation and Tabulation Agent will cause a Solicitation Package, including an appropriate Ballot, to be served directly on each of the Clients. | ||
(3) | Indirect Solicitation Method. If the attorney does not have the authority to vote on behalf of the Clients or the attorney prefers to have the Clients cast their own votes on the Plan, the attorney may direct the Solicitation and Tabulation Agent to deliver the Solicitation Packages to the attorney, who will, in turn, deliver the Solicitation Packages to the Clients. If the attorney selects this method: (I) the Solicitation and Tabulation Agent will cause the requested number of Solicitation Packages, including appropriate Ballots, to be served on the attorney; (II) the attorney must deliver the Solicitation Packages to the Clients within ten days after receipt; and (III) the attorney must file an affidavit of service with the Bankruptcy Court, and send a copy of such affidavit to Logan, within five days of such service. The names and addresses of the Clients served, however, do not need to be listed on the affidavit of service. The affidavit of service only needs to state that service was completed, the date(s) that service was completed and that the attorney has provided or will provide the Solicitation and Tabulation Agent with the required lists of clients, as described in subsection (D) below. | ||
(4) | Hybrid Solicitation Method. If the attorney certifies that he or she has the authority under applicable bankruptcy and/or non-bankruptcy law to vote, and intends to exercise that authority, only for certain of the Clients (collectively, the “Master Ballot Clients”), the attorney may inform the Solicitation and Tabulation Agent that no additional Solicitation Packages need to be served and that such attorney will submit a Master Ballot on which that attorney will record the votes on the Plan for the Master Ballot Clients. The attorney may also request that, for informational purposes, the Solicitation and Tabulation Agent serve Solicitation Packages (without a Ballot) on the Master Ballot Clients. With respect to the other Clients represented by such attorney (collectively, the “Individual Ballot Clients”), the attorney must elect the procedure under either the Direct Solicitation Method (subsection (2) above) or the Indirect Solicitation Method (subsection (3) above). | ||
(5) | If an attorney certifies that her or she does not represent any holders of Direct Channeled Personal Injury Claims, such attorney may direct the Solicitation and Tabulation Agent to omit such attorney from the Reorganizing Debtors’ solicitation of votes on the Plan and may request |
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that he or she be removed from the service list in the above-captioned cases. |
(D) | Lists of Clients | ||
To facilitate the solicitation of votes on the Plan from the holders of Direct Channeled Personal Injury Claims, each attorney representing such holders should submit, as applicable, one or two lists of Clients to the Solicitation and Tabulation Agent, which lists are subject to the following requirements: |
(1) | The list(s) must be in Excel™ or a comparable electronic format on either a 3.5” floppy disc or CD-ROM. If an attorney returning the Certified Plan Solicitation Directive either (a) certifies that he or she does not have access to Excel™ or a comparable application or (b) has fewer than 1,000 Clients, then such attorney may provide the list in hard copy. Attorneys may contact the Solicitation and Tabulation Agent, Logan & Company, Inc., at 973-509-3190 with any technical questions or to arrange for special delivery of the list of Clients. | ||
(2) | The list(s) must contain the name and social security number for each of the Clients. If the attorney is returning his or her Client list as an Exhibit to a Master Ballot, such list must also indicate (1) whether each Client voted to accept or reject the Plan and (2) if the Clients hold Asbestos Personal Injury Claims, the appropriate Disease Category. If the attorney is requesting that the Solicitation and Tabulation Agent directly serve Solicitation Packages on some or all of the Clients, the list submitted for such Clients must also include an address for each of those Clients. If an attorney selects the solicitation method described in section 6.b(ii)(C)(4), the attorney must return two lists of Clients: one for the Master Ballot Clients and one for the Individual Ballot Clients. | ||
(3) | Attorneys representing holders of Direct Channeled Personal Injury Claims are required to submit their lists of Clients as follows: |
i. | List(s) of Clients must be submitted to the Solicitation and Tabulation Agent, Logan & Company, Inc., 546 Valley Road, Upper Montclair, NJ 07043 (Attn: Kaiser Aluminum Voting Department). | ||
ii. | If an attorney selects the Master Ballot Solicitation Method described in section 6.b(ii)(C)(1), the list of Clients must be submitted as the exhibit to the Master Ballot on or before the Voting Deadline. | ||
iii. | If an attorney selects the Direct Solicitation Method described in section 6.b(ii)(C)(2), the list of Clients (which must include addresses) must be submitted on or before the deadline set forth in the Personal Injury Claims Solicitation Procedures Notice, which will be approximately 20 days after the Solicitation and Tabulation Agent completes the mailing of initial Solicitation Packages and Certified Plan Directives to the attorneys representing holders of Direct Channeled Personal Injury Claims. To the extent that the list of Clients is not submitted by the deadline, the Debtors and the Solicitation and Tabulation Agent will distribute Solicitation Packages for |
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the affected Clients as soon as practicable after the receipt of such list. | |||
iv. | If an attorney selects the Indirect Solicitation Method described in section 6.b(ii)(C)(3), the list of Clients must be submitted on or before the deadline set forth in the Personal Injury Claims Solicitation Procedures Notice, which will be approximately 25 days before the Voting Deadline. | ||
v. | If an attorney selects the Hybrid Solicitation Method described in section 6.b(ii)(C)(4), the list of Master Ballot Clients must be submitted as the exhibit to the Master Ballot on or before the Voting Deadline and the list of Individual Ballot Clients must be submitted on or before the applicable deadline set forth in the Personal Injury Claims Solicitation Procedures Notice, depending upon whether the Direct Solicitation Method or Indirect Solicitation Method is elected. |
(iii) | Distribution of Solicitation Packages Pursuant to Certified Plan Solicitation Directives |
(A) | The Solicitation and Tabulation Agent will serve the Solicitation Packages in accordance with the instructions set forth on the Certified Plan Solicitation Directives within seven days after receipt thereof. If a directive instructs the Solicitation and Tabulation Agent to serve the Solicitation Packages directly on the attorney’s Clients, the seven-day period will not begin until the Solicitation and Tabulation Agent receives the list of Clients required in section 6.b(ii)(D). | ||
(B) | An attorney electing to vote his or her clients’ Direct Channeled Personal Injury Claims on a Master Ballot may, via the Certified Plan Solicitation Directive, request that the Solicitation and Tabulation Agent serve non-voting Solicitation Packages on such attorney’s Clients for informational purposes only. | ||
(C) | An attorney representing holders of Direct Channeled Personal Injury Claims may elect to include a letter or other communication from the attorney to his or her Clients with the Solicitation Packages. If the Solicitation and Tabulation Agent is to serve Solicitation Packages (either for voting or for informational purposes) directly on an attorney’s Clients, such attorney must so notify the Solicitation and Tabulation Agent via the Certified Plan Solicitation Directive if the attorney desires to include a letter or other communication and provide the letter or other communication to the Solicitation and Tabulation Agent on or before the deadline for submitting the Certified Plan Solicitation Directives. | ||
(D) | If an attorney chooses to transmit the Solicitation Packages to the Clients directly: |
(1) | The attorney must serve the Solicitation Packages on his or her Clients within ten days after receipt of such packages and, within five days thereafter, file an affidavit of service with the Bankruptcy Court and provide a copy of such affidavit to the Solicitation and Tabulation Agent. The affidavit of service does not need to list the names and addresses of the Clients served, but should state that service was completed, the date(s) service was completed and that, for the Clients served, the attorney has provided or will provide the Solicitation and Tabulation Agent with the required list of Clients. |
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(2) | The Debtors will reimburse such attorney for the actual postage incurred by the attorney in transmitting such Solicitation Packages by regular, first-class mail. Attorneys seeking reimbursement shall submit reasonable evidence of postage expenses incurred in order to obtain such reimbursement. |
(E) | Solicitation Packages will not be served upon the individual holders of Direct Channeled Personal Injury Claims, except to the extent: (i) an individual holder of a Direct Channeled Personal Injury Claim requests a Solicitation Package; (ii) a proof of claim in respect of a Direct Channeled Personal Injury Claim is signed and filed by an individual holder of such Claim prior to the Voting Record Date and such proof of claim does not list counsel for the claimant; or (iii) an attorney requests service on the individual holders of Direct Channeled Personal Injury Claims by indicating such on the Certified Plan Solicitation Directive in accordance with section6(b)(ii). |
(iv) | Completion and Return of Master Ballots by Attorneys for Holders of Direct Channeled Personal Injury Claims | ||
Attorneys who represent individual holders of Direct Channeled Personal Injury Claims shall be permitted to cast Ballots for such holders, but only to the extent that those attorneys (i) have the authority under applicable bankruptcy and/or non-bankruptcy law to do so and (ii) indicate such on the Certified Plan Solicitation Directive returned to the Solicitation and Tabulation Agent. Each attorney voting on behalf of individual holders of Direct Channeled Personal Injury Claims shall complete a Master Ballot, which will set forth the votes cast by such attorney on behalf of any such clients. The following procedures will govern the completion and return of a Master Ballot: |
(A) | Summarizing Votes on the Master Ballot | ||
Each attorney completing a Master Ballot must indicate one of the following: (A) all of the Clients listed on the exhibit described below voted to accept the Plan; (B) all of the Clients listed on the exhibit reject the Plan; or (C) some of the Clients voted to accept the Plan, while other of the Clients voted to reject the Plan. For Master Ballots completed in respect of Asbestos Personal Injury Claims, the attorneys completing such ballots must also summarize the votes cast by the Clients listed on the exhibit, according to such Clients’ Disease Category. | |||
(B) | Exhibit to the Master Ballot |
(1) | Each attorney shall prepare an exhibit to the Master Ballot that lists the name, the social security number and, for votes cast in respect of Asbestos Personal Injury Claims, the Disease Category for each Client on whose behalf the attorney is submitting a vote and indicates whether each Client voted to accept or reject the Plan. | ||
(2) | The exhibit must be in ExcelTM or a comparable electronic format on either a 3.5” floppy disc or CD-ROM. If the attorney completing the Master Ballot has less than 1,000 Client or certifies that he or she does not have access to ExcelTM or a comparable application, then such attorney may provide the exhibit to the Master Ballot in hard copy. |
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(3) | The exhibit and the completed Master Ballot must be submitted to the Solicitation and Tabulation Agent in accordance with section 8 of these Voting Procedures. |
(C) | Certification by Attorney of Authority to Vote |
(1) | The Master Ballot will contain certain certifications, under penalty of perjury pursuant to 28 U.S.C. § 1746, that the attorney preparing and signing the Master Ballot has the authority, under applicable bankruptcy and/or non-bankruptcy law, to cast a Ballot on the Plan on behalf of the holders of each of the Direct Channeled Personal Injury Claims listed on the exhibit to the Master Ballot. | ||
(2) | For Master Ballots completed on behalf of holders of Asbestos Personal Injury Claims, the Master Ballot will also contain certifications, under penalty of perjury pursuant to 28 U.S.C. § 1746, that (a) each of the individuals set forth on the Exhibit to the Master Ballot has been exposed to an asbestos-containing product and (b) the disease category for each individual as set forth on the Exhibit to the Master Ballot is true and correct based on medical records or similar documentation in such individual’s file. | ||
(3) | If the attorney is unable to make the above certifications on behalf of any Client, the attorney may not cast a vote on behalf of such Client. Such attorney must, via the Certified Plan Solicitation Directive in accordance with the section 6.b(ii) above, select either the Direct Solicitation Method described in section 6.b(ii)(C)(2) or the Indirect Solicitation Method described in section 6.b(ii)(C)(3) with respect to the attorney’s affected Clients. |
(v) | Tabulation of Votes with Respect to Asbestos Personal Injury Claims |
(A) | Each holder of an Asbestos Personal Injury Claim will have a single vote in the amount, for voting purposes only, that corresponds to such holder’s Disease Category, as indicated on a Ballot cast by such holder or on a Master Ballot cast on behalf of such holder by his or her attorney. | ||
(B) | The Disease Categories applicable to Asbestos Personal Injury Claims, along with the corresponding medical and exposure criteria and the allowed amount for such Claims for voting purposes, are as follows: |
(1) | Other Asbestos Disease (Level I). Requires: (1) Diagnosis of a Bilateral Asbestos-Related Nonmalignant Disease* or an asbestos-related malignancy other than mesothelioma; and (2) Kaiser Exposure* prior to December 31, 1982. Claim amount for voting purposes only: $200. | ||
(2) | Asbestosis/Pleural Disease (Level II).Requires: (1) Diagnosis of a Bilateral Asbestos-Related Nonmalignant Disease; (2) six months’ Kaiser Exposure prior to December 31, 1982; and (3) five years cumulative occupational exposure to asbestos. Claim amount for voting purposes only: $700. |
* | As such capitalized terms are defined in the Voting Information and Instructions for Completing the Ballot accompanying the ballots to be used for submitting votes in respect of Asbestos Personal Injury Claims. |
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(3) | Asbestosis/Pleural Disease (Level III).Requires: (1) Diagnosis of Bilateral Asbestos-Related Nonmalignant Disease, plus (a) TLC less than 80% or (b) FVC less than 80% and FEV1/FVC ratio greater than or equal to 65%; (2) six months’ Kaiser Exposure prior to December 31, 1982; (3) Significant Occupational Exposure* to asbestos; and (4) supporting medical documentation establishing asbestos exposure as a contributing factor in causing the pulmonary disease in question. Claim amount for voting purposes only: $4,850. | ||
(4) | Severe Asbestosis (Level IV). Requires: (1) Diagnosis of asbestosis with ILO of 2/1 or greater, or asbestosis determined by pathological evidence of asbestos, plus (a) TLC less than 65% or (b) FVC less than 65% and FEV1/FVC ratio greater than 65%; (2) six months’ Kaiser Exposure prior to December 31, 1982; (3) Significant Occupational Exposure to asbestos; and (4) supporting medical documentation establishing asbestos exposure as a contributing factor in causing the pulmonary disease in question. Claim amount for voting purposes only: $20,750. | ||
(5) | Other Cancer (Level V). Requires: (1) Diagnosis of a primary colorectal, laryngeal, esophageal, pharyngeal or stomach cancer, plus evidence of an underlying Bilateral Asbestos-Related Nonmalignant Disease; (2) six months’ Kaiser Exposure prior to December 31, 1982; (3) Significant Occupational Exposure to asbestos; and (4) supporting medical documentation establishing asbestos exposure as a contributing factor in causing the other cancer in question. Claim amount for voting purposes only: $13,800. | ||
(6) | Lung Cancer 2 (Level VI). Requires: (1) Diagnosis of a primary lung cancer; (2) Kaiser Exposure prior to December 31, 1982; and (3) supporting medical documentation establishing asbestos exposure as a contributing factor in causing the lung cancer in question. Claim amount for voting purposes only: None. | ||
(7) | Lung Cancer 1 (Level VII). Requires: (1) Diagnosis of a primary lung cancer plus evidence of an underlying Bilateral Asbestos-Related Nonmalignant Disease; (2) six months’ Kaiser Exposure prior to December 31, 1982; (3) Significant Occupational Exposure to asbestos; and (4) supporting medical documentation establishing asbestos exposure as a contributing factor in causing the lung cancer in question. Claim amount for voting purposes only: $27,500. | ||
(8) | Mesothelioma (Level VIII). Requires: (1) Diagnosis of mesothelioma; and (2) credible evidence of Kaiser Exposure. Claim amount for voting purposes only: $70,000. |
(C) | For purposes of computing votes, each holder of an Asbestos Personal Injury Claim shall be deemed to have voted the full amount of such Asbestos Personal Injury Claim according to the disease category specified for such Claim. | ||
(D) | The temporary allowance of Asbestos Personal Injury Claims in the amount corresponding to the Disease Category designated by, or on behalf of, the holders of such Claims is solely for voting purposes and does not constitute an allowance of such Claims for purposes of distribution under the Asbestos PI Trust and is without prejudice to the rights of the holders of Asbestos Personal Injury Claims or the Debtors and the Asbestos PI Trust in any other context. |
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(E) | If no disease category is selected for an Asbestos Personal Injury Claim, the Voting Agent shall treat the vote cast in respect of such Claim as Other Asbestos Disease (Level I). | ||
(F) | If more than one disease category is selected for any Asbestos Personal Injury Claim, the Voting Agent shall count the vote cast in respect of such Claim in the amount corresponding to the disease category with the highest allowed amount. | ||
(G) | Multiple Master Ballots may be completed and delivered to the Solicitation and Tabulation Agent. Votes reflected by multiple Master Ballots will be counted except to the extent that they are duplicative of other Master Ballots. If two or more Master Ballots are inconsistent, the latest dated Master Ballot received prior to the Voting Deadline will, to the extent of such inconsistency, govern unless otherwise ordered by the Bankruptcy Court. If more than one Master Ballot is submitted and the later Master Ballot(s) supplement(s), rather than supersede(s), earlier Master Ballot(s), the attorney submitting such Master Ballot should mark the subsequent Master Ballot(s) as “Supplement” and clearly mark which of those votes reflected thereon are additional votes. | ||
(H) | If two or more Master Ballots are received from separate counsel, each of whom purports to represent the same holder of an Asbestos Personal Injury Claim, the vote by such holder will be counted only once, and only if such votes are consistent. In the event that the votes are not consistent, none of the votes will be counted. |
(vi) | Tabulation of Votes with Respect to CTPV, NIHL and Silica Personal Injury Claims |
(A) | Each holder of a CTPV, NIHL or Silica Personal Injury Claim will have a single vote in the amount, for voting purposes only, of $1.00. | ||
(B) | The temporary allowance of CTPV, NIHL and Silica Personal Injury Claims in the amount of $1.00 is solely for voting purposes and does not constitute an allowance of such Claims for purposes of distribution under, as applicable, the CTPV PI Trust, the NIHL PI Trust or the Silica PI Trust and is without prejudice to the rights of the holders of CTPV, NIHL or Silica Personal Injury Claims or the Debtors, the CTPV PI Trust, the NIHL PI Trust and the Silica PI Trust in any other context. | ||
(C) | Multiple Master Ballots may be completed and delivered to the Solicitation and Tabulation Agent. Votes reflected by multiple Master Ballots will be counted except to the extent that they are duplicative of other Master Ballots. If two or more Master Ballots are inconsistent, the latest dated Master Ballot received prior to the Voting Deadline will, to the extent of such inconsistency, govern unless otherwise ordered by the Bankruptcy Court. If more than one Master Ballot is submitted and the later Master Ballot(s) supplement(s), rather than supersede(s), earlier Master Ballot(s), the attorney submitting such Master Ballot should mark the subsequent Master Ballot(s) as “Supplement” and clearly mark which of those votes reflected thereon are additional votes. | ||
(D) | If two or more Master Ballots are received from separate counsel, each of whom purports to represent the same holder of a CTPV, NIHL or Silica Personal Injury Claim, the vote by such holder will be counted only once, and only if such votes are consistent. In the event that the votes are not consistent, none of the votes will be counted. |
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7. | Special Procedures Relating to Claims in Respect of Voting Debt Securities and Senior Subordinated Notes and Interests in KAC and KACC |
a. | Distribution of Solicitation Packages and Return of Ballots | ||
For voting on Claims in respect of Voting Debt Securities and distribution of non-voting Solicitation Packages to holders of Senior Subordinated Notes and Interests in KAC and KACC, the Solicitation and Tabulation Agent will cause a Solicitation Package or Packages to be mailed by first class mail, postage prepaid, to each Individual Record Holder and each Nominee or Master Ballot Agent for distribution to Beneficial Owners, in the manner described below. |
(i) | Lists of Individual Record Holders, Nominees and Master Ballot Agents | ||
Pursuant to Bankruptcy Rules 1007(i) and 3017(e), to facilitate the transmittal of Solicitation Packages to Individual Record Holders and Beneficial Owners of Voting Debt Securities, Senior Subordinated Notes and Interests in KAC or KACC, the respective Indenture Trustee or the Transfer Agent will be required to provide the following documents to the Debtors or the Solicitation and Tabulation Agent within three Business Days after the Voting Record Date: (i) a Record Holder Register in appropriate electronic or other format agreed to by the Debtors; and (ii) a Nominee Register or a Master Ballot Agent Register, as applicable, in appropriate electronic or other format agreed to by the Debtors. | |||
(ii) | Procedures for Solicitation of Votes from Individual Record Holders and Beneficial Owners of Voting Debt Securities |
(A) | Procedures for Individual Record Holders of Voting Debt Securities | ||
The Solicitation and Tabulation Agent will send directly to each Individual Record Holder a Solicitation Package containing an appropriate Ballot, and such Ballot must be completed and returned to the Solicitation and Tabulation Agent so that it is received prior to the Voting Deadline in accordance with the procedures for the Return of Ballots set forth below. | |||
(B) | Procedures for Beneficial Holders of Voting Debt Securities |
(1) | Upon receipt of the Master Ballot Agent Register, the Solicitation and Tabulation Agent will (i) contact each Master Ballot Agent to determine the number of Solicitation Packages needed by the Master Ballot Agent for distribution to the applicable Beneficial Owners for whom the Master Ballot Agent performs services and (ii) deliver to each Master Ballot Agent a Master Ballot and the requisite number of Solicitation Packages with appropriate Ballots on which the Beneficial Owners may vote their Claims. | ||
(2) | The Master Ballot Agents will be required to distribute the Solicitation Packages as promptly as possible to the Beneficial Owners for whom the Master Ballot Agents provide services. In particular, to obtain the votes of the Beneficial Owners, the Master Ballot Agents will include, as part of each Solicitation Package sent to a Beneficial Owner, an appropriate Ballot and a return envelope provided by, and addressed to, the Master Ballot Agent. The Beneficial Owners then must return the Ballots to the Master Ballot Agent in the manner and by the deadline set forth in the instructions accompanying such Ballots. The deadline for Beneficial Owners to return their Ballots to the applicable Master |
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Ballot Agent will be two Business Days prior to the Voting Deadline to allow the Master Ballot Agents sufficient time to complete their Master Ballots and return them to the Solicitation and Tabulation Agent prior to the Voting Deadline. Upon receipt of the completed Ballots from the Beneficial Owners, the Master Ballot Agent will summarize the votes of its respective Beneficial Owners on a Master Ballot in accordance with the procedures set forth below and the instructions attached to the Master Ballot. The Master Ballot Agent must return the Master Ballot to the Solicitation and Tabulation Agent so that it is received prior to the Voting Deadline in accordance with the procedures for the Return of Ballots set forth below. |
(C) | Procedures for Holders of 6-1/2% RPC Revenue Bonds in Bearer Form (i.e., not registered in the holders’ name with the Indenture Trustee for the 6-1/2% RPC Revenue Bonds) |
(1) | If any holder of 6-1/2% RPC Revenue Bonds not registered in the holders’ name with the Indenture Trustee for the 6-1/2% RPC Revenue Bonds wishes to cast a vote on the Plan, such holder must contact the Indenture Trustee for the 6-1/2% RPC Revenue Bonds or the Solicitation and Tabulation Agent to obtain a Solicitation Package and an appropriate Ballot. The Publication Notice will include a paragraph directed at such holders and notifying them of this requirement. | ||
(2) | Each Ballot submitted by a holder of 6-1/2% RPC Revenue Bonds not registered in the holders’ name with the Indenture Trustee for the 6-1/2% RPC Revenue Bonds must be accompanied by one of the following: (a) a certificate or affidavit in a form satisfactory to the Debtors and the Indenture Trustee for the 6-1/2% RPC Revenue Bonds that has been executed, as depositary, by any trust company, bank, or other depositary, indicating the serial number of the bond(s) held by the holder and the amount of such bond(s) and stating that, as of the date that the Ballot was executed, the holder held the bond(s) covered by the certificate; or (b) a copy of the front and back of the bond(s) held by such holder. |
(iii) | Procedures for Distribution of Solicitation Packages to Individual Record Holders and Beneficial Owners of Senior Subordinated Notes or Interests in KAC or KACC |
(A) | Solicitation Packages Will Not Contain Ballots | ||
Because neither holders of Senior Subordinated Notes nor holders of Interests in KAC or KACC will receive anything under the Plan, such holders are deemed to have rejected the Plan, pursuant to section 1126(g) of the Bankruptcy Code. Accordingly, Solicitation Packages that are distributed to holders of Senior Subordinated Notes and holders of Interests in KAC or KACC will not include Ballots. | |||
(B) | Procedures for Individual Record Holders of Senior Subordinated Notes or Interests in KAC or KACC | ||
The Solicitation and Tabulation Agent will send a Solicitation Package directly to each Individual Record Holder of Senior Subordinated Notes and each Individual Record Holder of Interests in KAC or KACC. |
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(C) | Procedures for Beneficial Holders of Senior Subordinated Notes or Interests in KAC or KACC | ||
Upon receipt of the Nominee Register, the Solicitation and Tabulation Agent will (i) contact each Nominee to determine the number of Solicitation Packages needed by the Nominee for distribution to the applicable Beneficial Owners for whom the Nominee performs services and (ii) deliver to each Nominee the requisite number of Solicitation Packages for distribution as promptly as possible to the Beneficial Owners. |
b. | Tabulation of Votes to Accept or Reject the Plan in Connection with Voting Debt Securities | ||
With respect to the tabulation of Ballots cast by Individual Record Holders and Beneficial Owners of the Voting Debt Securities, the following procedures will apply: |
(i) | All Master Ballot Agents will be required to retain the Ballots cast by their respective Beneficial Owners for inspection for a period of one year following the Voting Deadline. | ||
(ii) | The Solicitation and Tabulation Agent will compare (A) the votes cast by Individual Record Holders and Beneficial Owners to (B) the Record Holder Register and the Master Ballot Agent Register, respectively. Votes submitted by an Individual Record Holder will not be counted in excess of the record position in the applicable Voting Debt Security for that particular Individual Record Holder, as identified on the Record Holder Register. Votes submitted by a Master Ballot Agent on a Master Ballot will not be counted in excess of the aggregate position in the applicable Voting Debt Security of the Beneficial Owners for whom the Master Ballot Agent provides services, as identified in the Master Ballot Agent Register. The submission of a Master Ballot or a Ballot by an Individual Record Holder that reflects an aggregate amount of voting claims that exceeds the record position, as identified on the Record Holder Register or the aggregate position identified on the Master Ballot Agent Register, respectively, is referred to herein as an “overvote.” | ||
(iii) | To the extent that a Ballot submitted by an Individual Record Holder contains an overvote or otherwise conflicts with the Record Holder Register, the Solicitation and Tabulation Agent will tabulate the Individual Record Holder’s vote to accept or reject the Plan based upon the information contained in the Record Holder Register. | ||
(iv) | To the extent that a Master Ballot contains an overvote or votes that otherwise conflict with the Master Ballot Agent Register, the Solicitation and Tabulation Agent will attempt to resolve the overvote or conflicting vote prior to the Voting Deadline. | ||
(v) | To the extent that an overvote or a conflicting vote on a Master Ballot is not reconciled prior to the Voting Deadline, the Solicitation and Tabulation Agent (A) will calculate the respective percentage of the total stated amount of the Master Ballot voted by each respective Beneficial Owner, (B) will multiply such percentage for each Beneficial Owner by the amount of aggregate holdings for the applicable Master Ballot Agent identified on the Master Ballot Agent Register and (C) will tabulate votes to accept or reject the Plan based on the result of this calculation. The Debtors reserve the right to challenge the appropriateness of this calculation in any given case by seeking a determination of the Court within three Business Days after the final voting results are certified by the Solicitation and Tabulation Agent. | ||
(vi) | A single Master Ballot Agent may complete and deliver to the Solicitation and Tabulation Agent multiple Master Ballots summarizing the votes of Beneficial Owners of each Voting Debt Security. Votes reflected on multiple Master Ballots will be counted, |
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except to the extent that they are duplicative of other Master Ballots. If two or more Master Ballots are inconsistent, the latest dated Master Ballot received prior to the Voting Deadline will, to the extent of such inconsistency, supersede and revoke any prior Master Ballot. | |||
(vii) | The tabulation of votes by the Individual Record Holders and the Beneficial Owners of Voting Debt Securities will also be subject to the General Tabulation Rules set forth below. |
c. | Reimbursement of Expenses | ||
The Debtors will serve a copy of the Disclosure Statement Order, including a copy of these Voting Procedures, on (i) the Indenture Trustees; (ii) the Transfer Agent; (iii) each known entity that is serving as a Master Ballot Agent with respect to Voting Debt Securities; (iv) each known entity that is serving as a Nominee with respect to Senior Subordinated Notes or Interests in KAC or KACC; and (v) ADP Proxy Services, which is an intermediary that processes voting materials for many brokerage firms and banks. Upon written request, the Debtors will reimburse such entities (or their agents) in accordance with customary procedures for their reasonable, actual and necessary out-of-pocket expenses incurred in performing the tasks described above. No other fees, commissions or other remuneration will be payable to any Master Ballot Agent (or their agents or intermediaries) in connection with the distribution of Solicitation Packages to Beneficial Owners or the completion of Master Ballots. |
8. | Return of Ballots |
a. | Authority to Complete and Execute Ballots | ||
If a Ballot is signed by a trustee, executor, administrator, guardian, attorney-in-fact, officer of a corporation, or any other entity acting in a fiduciary or representative capacity, such person must indicate such capacity when signing. The authority of the signatory of each Ballot to complete and execute the Ballot shall be presumed, but each such signatory shall certify, by executing the Ballot, that he or she has such authority and shall provide evidence of such authority upon request of the Solicitation and Tabulation Agent. | |||
b. | Method for Transmitting, and Place to Send, Completed Ballots | ||
Except for Ballots voted by Beneficial Owners of Voting Debt Securities, which should be returned to the applicable Master Ballot Agent, all Ballots should be returned by mail, overnight or hand-delivery service to the Debtors’ Solicitation and Tabulation Agent,Logan & Company, Inc., Attn: Kaiser Aluminum Voting Department, 546 Valley Road, Upper Montclair, New Jersey 07043. The Solicitation and Tabulation Agent willnot accept Ballots submitted by facsimile or electronic transmission. Notwithstanding the preceding sentence, Master Ballots for Voting Debt Securities may be submitted by facsimile, provided that the original Master Ballots are transmitted to the Solicitation and Tabulation Agent within two Business Days after the Voting Deadline. | |||
c. | Deadline for Receiving Completed Ballots | ||
All Ballots must beactually receivedby the Solicitation and Tabulation Agent by 5:00 p.m., Eastern Time on the Voting Deadline. The Solicitation and Tabulation Agent will date and time-stamp all Ballots when received. In addition, the Solicitation and Tabulation Agent will make a photocopy of all Ballots received and will retain a copy of all Ballots for a period of one year after the Effective Date of the Plan, unless otherwise instructed by the Debtors in writing or otherwise ordered by the Bankruptcy Court. |
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9. | Tabulation of Ballots |
a. | Claimants That Are Entitled to Vote | ||
Except as otherwise provided in section 9.b, each claimant that holds a Claim in Subclass 9B or Classes 2, 4, 5, 6, 7 or 8 under the Plan is entitled to vote to accept or reject the Plan. Holders of Claims or Interests in Subclass 9A or Classes 1, 3, 10, 11, 12, 13, 14 or 15 under the Plan or whose Claims are deemed temporarily disallowed pursuant to section 9.b are not entitled to vote to accept or reject the Plan. The assignee of a transferred and assigned Claim (whether a filed or scheduled Claim) shall be permitted to vote such Claimonlyif the transfer and assignment has been noted on the Bankruptcy Court’s docket and is effective pursuant to Bankruptcy Rule 3001(e) as of the close of business on the Voting Record Date. | |||
b. | General Tabulation Rules |
(i) | Temporary Allowance of Claims for Voting Purposes | ||
Solely for purposes of voting to accept or reject the Plan — and not for the purpose of the allowance of, or distribution on account of, a claim and without prejudice to the rights of the Debtors in any other context — the Debtors propose that each claim within a class of claims entitled to vote to accept or reject the Plan be temporarily allowed in accordance with the following rules: |
(A) | Unless otherwise provided in these tabulation rules, a Claim will be deemed temporarily allowed for voting purposes in an amount equal to the amount of such Claim as set forth in a timely filed proof of claim; | ||
(B) | if a Claim is deemed allowed in accordance with the Plan, such Claim will be temporarily allowed for voting purposes in the deemed allowed amount set forth in the Plan; | ||
(C) | if a Claim for which a proof of claim has been timely filed is marked as contingent, unliquidated or disputed on its face, either in whole or in part, such claim will be temporarily allowed for voting purposes in an amount equal to (a) the amount marked on the claim as noncontingent, liquidated and undisputed or (b) if no such amount is clearly marked, $1.00; | ||
(D) | if a Claim for which a proof of claim has been timely filed is marked as a priority Claim, either in whole or in part, but is listed in the Schedules as a nonpriority Claim or as a priority Claim only in part, such Claim will be temporarily allowed for voting purposes as a nonpriority Claim in an amount equal to the lesser of (i) the entire amount of such Claim as set forth in the proof of claim or (ii) the nonpriority Claim set forth in the Schedules, provided that such Claim is not marked on the proof of claim as contingent, unliquidated or disputed; | ||
(E) | if a Claim has been estimated or otherwise allowed for voting purposes by order of the Court, such Claim will be temporarily allowed for voting purposes in the amount so estimated or allowed by the Court; | ||
(F) | if a Claim is listed in the Schedules as contingent, unliquidated or disputed, and a proof of claim was not timely filed, such Claim will be disallowed for voting purposes; |
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(G) | if the Debtors have filed and served an objection to a Claim at least 30 days before the Voting Deadline, such Claim will be temporarily allowed or disallowed for voting purposes in accordance with the relief sought in the objection, unless such Claim is estimated or otherwise allowed for voting purposes by order of the Court prior to the Voting Deadline; | ||
(H) | Channeled Personal Injury Claims will be temporarily allowed for voting purposes in accordance with the procedures set forth in, as applicable, section 6.a(ii), 6.b(v) or 6.b(vi); | ||
(I) | with respect to Claims asserted by holders of Voting Debt Securities, the amounts of such Claims for voting purposes will be the lesser of (i) the amounts provided to the Debtors by the corresponding Indenture Trustee on the Record Holder Register or the Master Ballot Agent Register, as applicable, or (ii) the amounts identified by an Individual Record Holder on an appropriate Ballot or by a Master Ballot Agent on a Master Ballot, in each case calculated in accordance with the terms of section 7.b above; and | ||
(J) | if a Claim holder identifies a Claim amount on its Ballot that is less than the amount otherwise calculated in accordance with these tabulation rules, the Debtors reserve the right to request that the Bankruptcy Court temporarily allow the Claim for voting purposes in the lesser amount identified on such Ballot. |
(ii) | Additional Rules for the Tabulation of Ballots |
(A) | Only Ballots cast by claimants that are entitled to vote, pursuant to section 9.a of these Voting Procedures, will be counted as votes to accept or votes to reject the Plan. | ||
(B) | Only those Ballots that areactually received by the Solicitation and Tabulation Agent in the manner set forth in section 8.b by the Voting Deadline will be counted as votes to accept or reject the Plan. | ||
(C) | Any Ballot that (i) is incomplete (including, without limitation, a Master Ballot with respect to a Direct Channeled Personal Injury Claim on which the attorney fails to make the required certification or fails to include the required exhibit), (ii) is unsigned, (iii) is illegible or (iv) contains insufficient information to identify the claimant, will not be counted as a vote to accept or reject the Plan. | ||
(D) | Any Ballot that is properly completed, executed and timely returned to the Solicitation and Tabulation Agent but does not indicate an acceptance or rejection of the Plan will not be counted as either a vote to accept or a vote to reject the Plan; | ||
(E) | Creditors will be required to vote all of their claims within a particular class under the Plan either to accept or reject the Plan and may not split their votes; thus, a Ballot (or a group of Ballots within a Plan class received from a single creditor) that partially rejects and partially accepts the Plan will not be counted; | ||
(F) | If a creditor casts more than one Ballot voting the same claim before the Voting Deadline, the last-dated Ballot received before the Voting Deadline will be deemed to reflect the voter’s intent and thus will supersede any prior Ballots; | ||
(G) | If multiple Ballots are received from different holders purporting to hold the same Claim, in the absence of contrary information establishing which claimant |
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held such Claim as of the Voting Deadline or, in the case of Voting Debt Securities, the Voting Record Date, the latest-dated Ballot that is received prior to the Voting Deadline will be the Ballot that is counted; | |||
(H) | If multiple Ballots are received from a holder of a Claim and someone purporting to be such holder’s attorney or agent, the Ballot received from the holder of the Claim will be the Ballot that is counted, and the vote of the purported attorney or agent will not be counted; and | ||
(I) | The tabulation of Ballots in connection with Claims in respect of Voting Debt Securities are also subject to the special provisions for such Claims set forth in section 7 above. |
(iii) | Additional Procedures and Standard Assumptions |
(A) | The Solicitation and Tabulation Agent, in its discretion, may contact voters to cure any defects in the Ballots or Master Ballots. | ||
(B) | Any voter that delivers a valid Ballot or Master Ballot may withdraw such Ballot or Master Ballot by delivering a written notice of withdrawal to the Solicitation and Tabulation Agent before the Voting Deadline. To be valid, the notice of withdrawal must (I) be signed by the party who signed the Ballot or Master Ballot to be revoked and (II) be received by the Solicitation and Tabulation Agent before the Voting Deadline. The Debtors may contest the validity of any withdrawals. | ||
(C) | There shall be a rebuttable presumption that any claimant who submits a properly completed superseding Ballot or withdrawal of Ballot on or before the Voting Deadline has sufficient cause, within the meaning of Bankruptcy Rule 3018(a), to change or withdraw such claimant’s acceptance or rejection of the Plan. | ||
(D) | If any claimant seeks to challenge the allowance of its Claim for voting purposes in accordance with the tabulation rules, such claimant must file a Rule 3018 Motion and serve such motion on the Debtors so that it is received on or before the deadline set forth in the Disclosure Statement Order, which will be approximately 14 days before the Voting Deadline. In accordance with Bankruptcy Rule 3018, any Ballot submitted by a creditor that files a Rule 3018 Motion will be counted solely in accordance with these Voting Procedures unless and until the underlying Claim is temporarily allowed by the Court for voting purposes in a different amount, after notice and a hearing. |
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