0000950116-01-500929.txt : 20011010
0000950116-01-500929.hdr.sgml : 20011010
ACCESSION NUMBER: 0000950116-01-500929
CONFORMED SUBMISSION TYPE: 8-K
PUBLIC DOCUMENT COUNT: 4
CONFORMED PERIOD OF REPORT: 20010920
ITEM INFORMATION: Bankruptcy or receivership
ITEM INFORMATION: Financial statements and exhibits
FILED AS OF DATE: 20011004
FILER:
COMPANY DATA:
COMPANY CONFORMED NAME: GENESIS HEALTH VENTURES INC /PA
CENTRAL INDEX KEY: 0000874265
STANDARD INDUSTRIAL CLASSIFICATION: SERVICES-SKILLED NURSING CARE FACILITIES [8051]
IRS NUMBER: 061132947
STATE OF INCORPORATION: PA
FISCAL YEAR END: 0930
FILING VALUES:
FORM TYPE: 8-K
SEC ACT: 1934 Act
SEC FILE NUMBER: 001-11666
FILM NUMBER: 1752161
BUSINESS ADDRESS:
STREET 1: 101 EAST STATE STREET
CITY: KENNETT SQUARE
STATE: PA
ZIP: 19348
BUSINESS PHONE: 6104446350
MAIL ADDRESS:
STREET 1: 101 EAST STATE STREET
CITY: KENNETT SQUARE
STATE: PA
ZIP: 19348
8-K
1
eight-k.txt
8-K
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): September 20, 2001
GENESIS HEALTH VENTURES, INC.
--------------------------------------------------------------------------------
(Exact name of Registrant as specified in its charter)
Pennsylvania 1-11666
--------------------------------------------------------------------------------
(State or other jurisdiction of (Commission File Number)
incorporation or
organization)
101 East State Street
Kennett Square, Pennsylvania 19348
--------------------------------------------------------------------------------
(Address of principal executive offices, including zip code)
Registrant's telephone number, including area code: 610-444-6350
Item 1. Not applicable
Item 2. Not applicable
Item 3. Bankruptcy or Receivership
On September 20, 2001, the U.S. Bankruptcy Court for the District of Delaware
entered an order approving the joint plan of reorganization, subject to certain
minor modifications, (the "Plan"), proposed by Genesis Health Ventures, Inc., et
al., and The Multicare Companies, Inc., et al. On October 2, 2001 (the
"Effective Date"), the Company and its subsidiaries emerged from the proceedings
under Chapter 11 of the Bankruptcy Code pursuant to the terms of the Plan.
The Plan is referenced as an Exhibit to this Form. The principal provisions of
the Plan are as follows:
o Multicare becomes a wholly-owned subsidiary of Genesis. Prior to the
Effective Date, Genesis owned 43.6% of Multicare and managed its skilled
nursing and assisted living facilities under the Genesis Eldercare brand
name;
o New senior notes, new convertible preferred stock, new common stock and new
warrants are to be issued to the companies' creditors. Approximately 93% of
the New Common Stock (later defined), $242.6 million in senior notes and
preferred stock with a liquidation preference of $42.6 million are to be
issued to the Genesis and Multicare senior secured creditors. Approximately
7% of the new common stock are to be issued to the Genesis and Multicare
unsecured creditors as well as warrants to purchase an additional 11% of
the New Common Stock;
1
o Holders of Genesis and Multicare pre-chapter 11 preferred and common stock
are to receive no distribution and those instruments will be canceled;
o Claims between Genesis and Multicare are to be set-off against one another
and any remaining claims will be waived and released; and
o The board of directors of the reorganized Company are to consist of:
Michael R. Walker, the current Chief Executive Officer and Chairman of the
Genesis Board of Directors; James H. Bloem of Humana Inc.; Mac Crawford of
Caremark Rx; James E. Dalton, Jr. of Quorum Health Group, Inc.; James
Dondero of HCMLP; Robert H. Fish of Sonoma-Seacrest, LLC; Dr. Philip P.
Gerbino of the University of the Sciences in Philadelphia and a current
member of the Genesis Board of Directors; and Joseph A. LaNasa III of
Goldman Sachs & Co.
The Plan requires that certain administrative claims and any amounts outstanding
under the Genesis debtor-in-possession financing facility and the Multicare
debtor-in-possession financing facility be paid on the Effective Date of
emergence. The Company entered into a $515,000,000 financing facility with a
lending group which consists of the following facilities: (1) a $150,000,000
revolving line of credit; (2) a $285,000,000 term loan; and (3) an $80,000,000
delayed draw term loan, (collectively the "Exit Financing Facility"). The Exit
Financing Facility is available to fund the Company's obligations under the Plan
and its ongoing operations following emergence from bankruptcy.
As of the date of this filing, there were 48,653,556 and 100 shares of Genesis
and Multicare pre-Chapter 11 common stock issued, respectively. In addition,
approximately 589,714 outstanding shares of Genesis Series G Cumulative
Convertible Preferred Stock, 24,369 of Genesis Series H Convertible
Participating Cumulative Preferred Stock and 17,631 shares of Genesis Series I
Senior Convertible Exchangeable Participating Cumulative Preferred Stock were
outstanding. Under the provisions of the Plan, the outstanding pre-Chapter 11
common stock and preferred stock will be canceled. Upon implementation of the
Plan, the Company will issue 41,000,000 shares of new common stock (the "New
Common Stock"), par value $0.02 to its creditors in accordance with the Plan
provisions. An additional 750,000 shares of the New Common Stock will be issued
to certain key employees following the Effective Date of the Plan in accordance
with a new management incentive plan and new employment agreements for four
senior executives. The new management incentive plan will also include grants of
options to purchase a number of shares of New Common Stock equal to 3,480,000
shares of New Common Stock, less the number of shares of New Common Stock
allocated to the four senior executives under their new employment agreements.
Following the Effective Date, Genesis will issue warrants to purchase 4,559,475
shares of New Common Stock. This represents approximately 11% of the New Common
Stock to be issued under the provisions of the Plan, before dilution for stock
issuances or the exercise of options under the new management incentive plan
previously described.
As of June 30, 2001, the assets and liabilities (including redeemable preferred
stock) of the Company on a historical cost basis were $3.1 billion and $3.4
billion, respectively. On or near the Effective Date of the Plan, the Company
will adopt the provisions of "fresh start accounting", which require the Company
to restate all assets and liabilities to their fair values based upon the
provisions of the Plan and certain valuation studies currently underway. The
Company has not yet determined the impact of fresh start accounting on the
historical consolidated financial statements.
Cautionary Statements Regarding Forward Looking Statements.
Statements made in this, and in our other public filings and releases, which are
not historical facts contain "forward-looking" statements (as defined in the
Private Securities Litigation Reform Act of 1995) that involve risks and
uncertainties and are subject to change at any time. These forward-looking
2
statements may include, but are not limited to statements containing words such
as "anticipate," "believe," "plan," "estimate," "expect," "intend," "may" and
similar expressions. Factors that could cause actual results to differ
materially include, but are not limited to, the following: our bankruptcy cases
and our ability to continue as a going concern; risks associated with operating
a business in Chapter 11; the delays or the inability to complete and/or
consummate our plan of reorganization; our ability to comply with the provisions
of our debtor-in-possession financing; our substantial indebtedness and
significant debt service obligations; our default under our senior credit
agreement and our senior subordinated and other notes; adverse actions which may
be taken by creditors; adverse developments with respect to our liquidity or
results of operations; the effect of planned dispositions of assets; our ability
to consummate or complete development projects or to profitably operate or
successfully integrate enterprises into our other operations; our ability or
inability to secure the capital and the related cost of the capital necessary to
fund future growth; our ability to attract customers given our current financial
position; our ability to attract and retain key executives and other personnel;
the impact of health care reform, including the Medicare Prospective Payment
System ("PPS"), the Balanced Budget Refinement Act ("BBRA") and the Benefit
Improvement and Protection Act of 2000 ("BIPA") and the adoption of cost
containment measures by the federal and state governments; the impact of
government regulation, including our ability to operate in a heavily regulated
environment and to satisfy regulatory authorities; the occurrence of changes in
the mix of payment sources utilized by customers to pay for services; the
adoption of cost containment measures by other third party payors; competition
in our industry; and changes in general economic conditions.
The forward-looking statements involve known and unknown risks, uncertainties
and other factors that are, in some cases, beyond our control. We caution
investors that any forward-looking statements made by us are not guarantees of
future performance. We disclaim any obligation to update any such factors or to
announce publicly the results of any revisions to any of the forward-looking
statements to reflect future events or developments.
3
Item 4. Not applicable
Item 5. Not applicable
Item 6. Not applicable
Item 7. Financial Statements and Exhibits.
(a) Financial Statements
None.
(b) Pro Forma Financial Information
None.
4
(c) Exhibits
2.1 Findings of Fact, Conclusions of Law and Order Confirming the
Joint Plan of Reorganization dated September 20, 2001.
2.2(1) Disclosure Statement for Debtors' Joint Plan of Reorganization
dated July 6, 2001.
2.3(1) Debtors' Joint Plan of Reorganization under Chapter 11 of the
Bankruptcy Code dated July 6, 2001.
2.4(1) Amendments to Debtors' Joint Plan of Reorganization to Comply
With Opinion On Confirmation dated September 13, 2001.
2.5(1) Erratum To Disclosure Statement for Debtors' Joint Plan of
Reorganization.
2.6(1) Technical Amendments To Debtors' Joint Plan Of Reorganization
dated August 27, 2001.
99.1 Press release, dated September 12, 2001, re: Genesis and
Multicare gain court approval for reorganization plan
99.2 Press release, dated October 2, 2001, re: Genesis Health
Ventures Emerges from Bankruptcy.
(1) Incorporated by reference to the Form T-3 filed by the Registrant dated
September 18, 2001.
5
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
GENESIS HEALTH VENTURES, INC.
By: /s/ George V. Hager, Jr.
------------------------
George V. Hager, Jr.
Executive Vice President and
Chief Financial Officer
Date: October 4, 2001
6
EX-2
3
ex2-1.txt
EXHIBIT 2.1
Exhibit 2.1
UNITED STATES BANKRUPTCY COURT
DISTRICT OF DELAWARE
------------------------------------------------ x
:
In re : Chapter 11 Case No.
:
GENESIS HEALTH VENTURES INC., et al., : 00-2692 (JHW)
:
--------- Debtors. :
: (Jointly Administered)
------------------------------------------------ x
:
In re : Chapter 11 Case No.
:
MULTICARE AMC, INC., et al., : 00-2494 (JHW)
:
--------- Debtors. :
: (Jointly Administered)
------------------------------------------------ x
FINDINGS OF FACT, CONCLUSIONS OF LAW, AND ORDER
UNDER 11 U.S.C.ss.1129(a) AND (b) AND FED. R. BANKR. P. 3020
CONFIRMING DEBTORS' JOINT PLAN OF REORGANIZATION
-------------------------------------------------
UNITED STATES BANKRUPTCY COURT
DISTRICT OF DELAWARE
------------------------------------------------- x
:
In re : Chapter 11 Case No.
:
GENESIS HEALTH VENTURES, INC., et al., : 00-2692 (JHW)
:
--------- Debtors. :
: (Jointly Administered)
------------------------------------------------- x
:
In re : Chapter 11 Case No.
:
MULTICARE AMC, INC., et al., : 00-2494 (JHW)
:
--------- Debtors. :
: (Jointly Administered)
------------------------------------------------- x
FINDINGS OF FACT, CONCLUSIONS OF LAW, AND ORDER
UNDER 11 U.S.C.ss.1129(a) AND (b) AND FED. R. BANKR. P. 3020
CONFIRMING DEBTORS' JOINT PLAN OF REORGANIZATION
-------------------------------------------------
WHEREAS, Genesis Health Ventures, Inc. ("Genesis"), The
Multicare Companies, Inc. ("Multicare"), and the other above-captioned debtors
and debtors in possession (collectively with Genesis and Multicare, the
"Debtors"),(1) as "proponents of the plan" within the meaning of section 1129 of
title 11, United States Code (the "Bankruptcy Code"), filed the Debtors' Joint
Plan of Reorganization Under Chapter 11 of the Bankruptcy Code, dated July 6,
2001 (such plan, as transmitted to parties in interest being the "Original Plan"
and, as subsequently modified by (i) the Technical Amendments to Debtors' Joint
Plan of Reorganization, dated August 27, 2001, and (ii) the Amendments to
----------
(1) This Confirmation Order shall not apply to Norristown Nursing and
Rehabilitation Associates, L.P. ("Norristown"), a Genesis Debtor, to the
extent necessary to preserve the rights set forth in P. 30 hereof, and the
Plan is not confirmed as to Norristown.
Debtors' Joint Plan of Reorganization to Comply with Opinion on Confirmation,
dated September 13, 2001, the "Plan")(2) and the Disclosure Statement for
Debtors' Joint Plan of Reorganization, dated July 6, 2001 (as transmitted to
parties in interest, the "Disclosure Statement"); and
WHEREAS, on July 6, 2001, the Bankruptcy Court entered an
order (the "Solicitation Order") that, among other things, (a) approved the
Disclosure Statement under section 1125 of the Bankruptcy Code and Bankruptcy
Rule 3017, (b) established August 28, 2001, as the date for the commencement of
the hearing to consider confirmation of the Plan (the "Confirmation Hearing"),
(c) approved the form and method of notice of the Confirmation Hearing (the
"Confirmation Hearing Notice"), and (d) established certain procedures for
soliciting and tabulating votes with respect to the Original Plan; and
WHEREAS, the Confirmation Hearing Notice and, (i) as to
Subclasses G1-13 through G1-17, Classes G2, G4, G5, Subclass M1-7, and Classes
M2, M4, and M5, the Disclosure Statement and erratum sheet, the Original Plan,
the Solicitation Order, the Letter from the Official Committee of Unsecured
----------
(2) Unless otherwise defined herein, capitalized terms used herein shall have
the meanings ascribed to such terms in the Plan, a copy of which is annexed
hereto as Exhibit "A." A copy of the Technical Amendments to the Plan is
annexed hereto as Exhibit "B," and a copy of the Amendments to the Plan to
Comply with the Opinion on Confirmation is annexed hereto as Exhibit "C."
Any term used in the Plan or this Confirmation Order that is not defined in
the Plan or this Confirmation Order, but that is used in the Bankruptcy
Code or the Federal Rules of Bankruptcy Procedure (the "Bankruptcy Rules"),
shall have the meaning ascribed to that term in the Bankruptcy Code or the
Bankruptcy Rules.
2
Creditors appointed in the Genesis Reorganization Cases (the "Genesis Creditors'
Committee"), the Notice of Supplemental Disclosure Statement Hearing (if
applicable), and a ballot and return envelope (such ballot and envelope being
referred to as a "Ballot"), and (ii) as to Subclasses G1-1 through G1-12, G3,
G6, G7, G8, G9, G10, G11, Subclasses M1-1 through M1-6, and Classes M3, M6, M7,
and M8, a Notice of Non-Voting Status, the Solicitation Order, and the Notice of
Supplemental Disclosure Statement Hearing (if applicable) were transmitted as
set forth in the Certificates of Service of Debrah Reyes of Poorman-Douglas
Corporation, sworn to on August 27, 2001 (the "Reyes Certificate") and of Frank
Gebhartdt of Burrups Packard, sworn to on August 24, 2001, and such service is
adequate as provided by Bankruptcy Rule 3017(d); and
WHEREAS, upon the Debtors' learning that, because of a
computer error, certain creditors of the Genesis Debtors did not receive notice
of the July 6, 2001 hearing to consider the Disclosure Statement, the Debtors
requested that the Bankruptcy Court schedule a supplemental hearing to consider
the Disclosure Statement (the "Supplemental Disclosure Statement Hearing") so
that those creditors which did not receive notice of the July 6, 2001 hearing
would have the opportunity to file objections to the Disclosure Statement and
the Debtors could make any necessary revisions to the Disclosure Statement; and
WHEREAS, the Bankruptcy Court held the Supplemental Disclosure
Statement Hearing on August 9, 2001, and ruled that (i) it is not necessary for
the Debtors to provide any additional information to the Disclosure Statement,
and (ii) the form and manner of supplemental notice of the Supplemental
Disclosure Statement Hearing and the time set for filing objections to the
Disclosure Statement were adequate; and
3
WHEREAS, the Debtors filed the certificates of publication of
Janice Frazier, Advertising Clerk of the Publisher of The Wall Street Journal,
sworn to on July 27, 2001; Cathy Zike, Principal Clerk of the Publisher of The
New York Times, sworn to on July 23, 2001; Cheryl Rothlein, Principal Clerk of
USA Today, sworn to on July 24, 2001; J. Rosenthal, Classified Billing Manager
of The Tampa Tribune, sworn to on July 23, 2001; The Baltimore Sun Company by J.
Pendelton, publisher of The Baltimore Sun, sworn to on July 24, 2001; Anna
Dickerson, employee of the publisher of The Philadelphia Inquirer, sworn to on
July 23, 2001; and Susan M. Boulanger-Smith, Classified Sales Representative of
the Globe Newspaper Co., publishers of The Boston Globe, sworn to on July 23,
2001, attesting to the fact that the Confirmation Hearing Notice was published
in accordance with the Solicitation Order; and
WHEREAS, on August 10, 2001, the Debtors filed the Plan
Supplement with respect to the Plan; and
WHEREAS, the Debtors filed the Declaration of Laura DiBiase
Certifying the Acceptances and Rejections of the Debtors' Joint Plan of
Reorganization, sworn to on August 27, 2001, attesting and certifying the method
and results of the ballot tabulation for the Classes of Claims (Subclasses G1-13
through G1-17, Classes G2, G4, G5, Subclass M1-7, and Classes M2, M4, and M5),
entitled to vote to accept or reject the Plan (the "Voting Report"); and
WHEREAS, as set forth on the annexed Exhibit "D," 18
objections or purported objections to confirmation of the Plan were timely filed
and served (the "Objections"); and
4
WHEREAS, as set forth on the annexed Exhibit "E," 9 Objections
have been withdrawn or partially resolved on the terms and conditions described
on the record of the Confirmation Hearing (collectively, the "Resolved
Objections"), and the remaining Objections either are overruled on the merits
pursuant to this Confirmation Order or, with respect to the Objection of THCI
Company LLC, f/k/a New Meditrust Company LLC and THCI Mortgage Holding Company
LLC (collectively, "THCI"), the hearing on such Objection is continued, by
agreement with these parties, to a mutually convenient date; and
WHEREAS, on August 24, 2001, the Debtors filed (i) an omnibus
response to the Objections (the "Response"), (ii) a memorandum of law in support
of confirmation of the Plan (the "Confirmation Memorandum"), (iii) the
Declaration of William C. McGahan in Support of Confirmation of Joint Plan of
Reorganization (the "McGahan Affidavit"), and (iv) the Affidavit of Stephen B.
Darr in Support of Confirmation of the Joint Plan of Reorganization (the "Darr
Affidavit"); and
WHEREAS, on August 27, 2001, the Debtors filed the Affidavit
of J. Halisey Kennedy in Support of Confirmation of the Joint Plan of
Reorganization (the "Kennedy Affidavit"); and
WHEREAS, on August 24, 2001, (i) the holders of the Genesis
Senior Lender Claims and the Multicare Senior Lender Claims filed the Affidavit
of David M. Schulte in Support of Confirmation of Joint Plan of Reorganization
(the "Schulte Affidavit"), and the Response of Mellon Bank, N.A., as Agent, to
the Objections of the GMS Group LLC and Charles L. Grimes to Confirmation of the
Debtors' Joint Plan of Reorganization, and (ii) the Genesis Creditors' Committee
5
filed the Declaration of Patrick M. Hurst in Support of Confirmation of the
Debtors' Joint Plan of Reorganization (the "Hurst Affidavit," and collectively
with the McGahan Affidavit, the Kennedy Affidavit, the Darr Affidavit, and the
Schulte Affidavit, the "Confirmation Affidavits"), and the Reply of the Official
Committee of Unsecured Creditors of Genesis Health Ventures, Inc., et al., to
the Objections to the Confirmation of Debtors' Joint Plan of Reorganization; and
WHEREAS, on August 27, 2001, the Debtors filed the Technical
Amendments to Debtors' Joint Plan of Reorganization (the "Technical
Amendments"); and
WHEREAS, the Confirmation Hearing was held on August 28 and
29, 2001; and
WHEREAS, on September 12, 2001, this Court issued its opinion
on confirmation of the Plan, determining that the Plan is confirmable if
modified in accordance with such opinion; and
WHEREAS, on September 13, 2001, the Debtors filed the
Amendments to Debtors' Joint Plan of Reorganization to Comply with the Opinion
on Confirmation (the "Amendments to Comply with Confirmation Opinion").
NOW, THEREFORE, based upon the Bankruptcy Court's review of
the Voting Report, Confirmation Affidavits, Response, and Confirmation
Memorandum; and upon (a) all the evidence proffered or adduced at, memoranda and
Objections filed in connection with, and arguments of counsel made at, the
Confirmation Hearing, and (b) the entire record of these Reorganization Cases;
and after due deliberation thereon and good cause appearing therefor:
6
FINDINGS OF FACT AND CONCLUSIONS OF LAW
---------------------------------------
IT IS HEREBY FOUND AND DETERMINED THAT:(3)
1. Exclusive Jurisdiction; Venue; Core Proceeding (28 U.S.C.
ss.ss. 157(b)(2), 1334(a)). This Bankruptcy Court has jurisdiction over the
Reorganization Cases pursuant to sections 157 and 1334 of title 28 of the United
States Code. Venue is proper pursuant to sections 1408 and 1409 of title 28 of
the United States Code. Confirmation of the Plan is a core proceeding pursuant
to 28 U.S.C. ss. 157(b)(2)(L), and this Bankruptcy Court has exclusive
jurisdiction to determine whether the Plan complies with the applicable
provisions of the Bankruptcy Code and should be confirmed.
2. Judicial Notice. This Bankruptcy Court takes judicial
notice of the docket of the Reorganization Cases maintained by the Clerk of the
Bankruptcy Court and/or its duly-appointed agent, including, without limitation,
all pleadings and other documents filed, all orders entered, and evidence and
argument made, proffered, or adduced at the hearings held before the Bankruptcy
Court during the pendency of the Reorganization Cases, including, but not
limited to, the hearings to consider the adequacy of the Disclosure Statement.
3. Burden of Proof. The Debtors have the burden of proving the
elements of sections 1129(a) and (b) of the Bankruptcy Code by a preponderance
of evidence.
4. Transmittal and Mailing of Materials; Notice. The
Disclosure Statement and erratum sheet, the Original Plan, the Ballots, the
----------
(3) Pursuant to Bankruptcy Rule 7052, findings of fact shall be construed as
conclusions of law and conclusions of law shall be construed as findings of
fact when appropriate.
7
Solicitation Order, and the Confirmation Hearing Notice, which were transmitted
and served as set forth in the Reyes Certificate, shall be deemed to have been
transmitted and served in compliance with the Solicitation Order and the
Bankruptcy Rules, and such transmittal and service were adequate and sufficient,
and no other or further notice is or shall be required.
5. Voting. Votes to accept and reject the Plan have been
solicited and tabulated fairly, in good faith, and in a manner consistent with
the Bankruptcy Code, the Bankruptcy Rules, the Solicitation Order, and industry
practice.
6. Plan Compliance with Bankruptcy Code (11 U.S.C. ss.
1129(a)(l)). The Plan complies with the applicable provisions of the Bankruptcy
Code, thereby satisfying section 1129(a)(l) of the Bankruptcy Code.
(a) Proper Classification (11 U.S.C. ss.ss. 1122, 1123(a)(1)).
In addition to Administrative Expense Claims, Priority Tax Claims, and Claims
under the Debtors' Revolving Credit and Guaranty Agreement, which need not be
designated, the Plan designates 19 Classes of Claims and Equity Interests. Each
Genesis Other Secured Claim and Multicare Other Secured Claim shall be deemed to
be separately classified in a subclass of Class G1 and M1, respectively, and
shall have all rights associated with separate classification under the
Bankruptcy Code. The Claims and Equity Interests placed in each Class are
substantially similar to other Claims and Equity Interests, as the case may be,
in each such Class. Valid business, factual, and legal reasons exist for
separately classifying the various Classes of Claims and Equity Interests
created under the Plan, and such Classes do not unfairly discriminate between
holders of Claims and Equity Interests. The Plan satisfies sections 1122 and
1123(a)(1) of the Bankruptcy Code.
8
(b) Specified Unimpaired Classes (11 U.S.C. ss. 1123(a)(2)).
Section 4 of the Plan specifies that Subclasses G1-1 through G1-12, Classes G3
and G6, Subclasses M1-1 through M1-6, and Classes M3 and M6 are unimpaired under
the Plan, thereby satisfying section 1123(a)(2) of the Bankruptcy Code.
(c) Specified Treatment of Impaired Classes (11 U.S.C. ss.
1123(a)(3)). Section 4 of the Plan designates Subclasses G1-13 through G1-17,
Classes G2, G4, G5, G7, G8, G9, G10, and G11, Subclass M1-7, and Classes M2, M4,
M5, M7, and M8 as impaired and specifies the treatment of Claims and Equity
Interests in those Classes, thereby satisfying section 1123(a)(3) of the
Bankruptcy Code.
(d) No Discrimination (11 U.S.C. ss. 1123(a)(4)). The Plan
provides for the same treatment by the Debtors for each Claim or Equity Interest
in each respective Class unless the holder of a particular Claim or Equity
Interest has agreed to a less favorable treatment of such Claim or Equity
Interest, thereby satisfying section 1123(a)(4) of the Bankruptcy Code.
(e) Implementation of Plan (11 U.S.C. ss. 1123(a)(5)). The
Plan and the various documents and agreements set forth in the Plan Supplement
provide adequate and proper means for the Plan's implementation, including (i)
the deemed consolidation of the Genesis Debtors, (ii) the deemed consolidation
of the Multicare Debtors, (iii) the merger of Genesis and Multicare, and (iv)
the Exit Financing Facility (as hereinafter defined), thereby satisfying section
1123(a)(5) of the Bankruptcy Code.
(f) Non-Voting Equity Securities (11 U.S.C. ss. 1123(a)(6)).
Section 5.13 of the Plan provides that the Amended Certificate of Incorporation
for Reorganized Genesis and the amended certificates of incorporation for each
of the other Reorganized Debtors that are corporations shall prohibit the
issuance of nonvoting equity securities. Thus, the requirements of section
1123(a)(6) of the Bankruptcy Code are satisfied.
9
(g) Designation of Directors (11 U.S.C. ss. 1123(a)(7)).
Section 5.12 of the Plan contains provisions with respect to the manner of
selection of directors of Reorganized Genesis that are consistent with the
interests of creditors, equity security holders, and public policy in accordance
with section 1123(a)(7).
(h) Additional Plan Provisions (11 U.S.C. ss. 1123(b)). The
Plan's provisions are appropriate and not inconsistent with the applicable
provisions of the Bankruptcy Code.
(i) Bankruptcy Rule 3016(a). The Plan is dated and identifies
the entities submitting it as proponents, thereby satisfying Bankruptcy Rule
3016(a).
7. Debtors' Compliance with Bankruptcy Code (11 U.S.C.
ss.1129(a)(2)). The Debtors have complied with the applicable provisions of the
Bankruptcy Code, thereby satisfying section 1129(a)(2) of the Bankruptcy Code.
Specifically:
a. The Debtors are proper debtors under section 109 of the
Bankruptcy Code.
b. The Debtors have complied with applicable provisions of the
Bankruptcy Code, except as otherwise provided or permitted
by orders of the Bankruptcy Court.
c. The Debtors have complied with the applicable provisions of
the Bankruptcy Code, the Bankruptcy Rules, and the
Solicitation Order in transmitting the Original Plan, the
Disclosure Statement, the Ballots, and related documents
and notices and in soliciting and tabulating votes on the
Original Plan.
10
8. Plan Proposed in Good Faith (11 U.S.C. ss. 1129(a)(3)). The
Debtors have proposed the Plan in good faith and not by any means forbidden by
law, thereby satisfying section 1129(a)(3) of the Bankruptcy Code. The Debtors'
good faith is evident from the facts and records of these Reorganization Cases,
the Disclosure Statement and the hearings thereon, and the record of the
Confirmation Hearing and other proceedings held in these Reorganization Cases.
The Plan was proposed with the legitimate and honest purpose of maximizing the
value of the Debtors' estates and to effectuate a successful reorganization of
the Debtors.
9. Payments for Services or Costs and Expenses (11 U.S.C. ss.
1129(a)(4)). Any payment made or to be made by any of the Debtors for services
or for costs and expenses in or in connection with the Reorganization Cases, or
in connection with the Plan and incident to the Reorganization Cases, has been
approved by, or is subject to the approval of, the Bankruptcy Court as
reasonable, thereby satisfying section 1129(a)(4) of the Bankruptcy Code.
10. Directors, Officers, and Insiders (11 U.S.C. ss.
1129(a)(5)). The Debtors have complied with section 1129(a)(5) of the Bankruptcy
Code. The identity and affiliations of the persons proposed to serve as initial
directors or officers of Reorganized Genesis after confirmation of the Plan have
been fully disclosed on the Debtors' web site (www.ghv.com), and the appointment
to, or continuance in, such offices of such persons is consistent with the
interests of holders of Claims against and Equity Interests in the Debtors and
with public policy. The identity of any insider that will be employed or
retained by the Reorganized Debtors and the nature of such insider's
compensation have also been fully disclosed.
11. No Rate Changes (11 U.S.C. ss. 1129(a)(6)). After
confirmation of the Plan, the Debtors' businesses will not involve rates
established or approved by, or otherwise subject to, any governmental regulatory
commission. Thus, section 1129(a)(6) of the Bankruptcy Code is not applicable in
these Reorganization Cases.
11
12. Best Interests of Creditors (11 U.S.C. ss. 1129(a)(7)).
The Plan satisfies section 1129(a)(7) of the Bankruptcy Code. The liquidation
analyses provided in the Disclosure Statement, Plan Supplement, the Darr
Affidavit, and other evidence proffered or adduced at the Confirmation Hearing
(a) are persuasive and credible, (b) have not been controverted by other
evidence, and (c) establish that each holder of an impaired Claim or Equity
Interest either has accepted the Plan or will receive or retain under the Plan,
on account of such Claim or Equity Interest, property of a value, as of the
Effective Date, that is not less than the amount that such holder would receive
or retain if the Debtors were liquidated under chapter 7 of the Bankruptcy Code
on such date.
13. Acceptance by Certain Classes (11 U.S.C. ss. 1129(a)(8)).
Subclasses G1-1 through G1-12, Classes G3 and G6, Subclasses M1-1 through M1-6,
and Classes M3 and M6 of the Plan are Classes of unimpaired Claims that are
conclusively presumed to have accepted the Plan under section 1126(f) of the
Bankruptcy Code. Subclasses G1-13, G1-14, G1-15, and G1-17 , Classes G2 and G4,
Subclass M1-7, Classes M2, M4 and M5, and certain other holders of Genesis Other
Secured Claims and Multicare Other Secured Claims in Classes G1 and M1,
respectively (each of which is considered to be in a separate subclass of Class
G1 or M1, respectively), have voted to accept the Plan in accordance with
sections 1126(c) and (d) of the Bankruptcy Code. Classes G7, G8, G9, G10, G11,
M7, and M8 are not entitled to receive or retain any property under the Plan
and, therefore, are deemed to have rejected the Plan pursuant to section 1126(g)
of the Bankruptcy Code. Although section 1129(a)(8) has not been satisfied with
respect to Subclass G1-16 and Class G5, as well as the deemed rejecting Classes
identified above, the Plan is confirmable because the Plan satisfies section
1129(b) of the Bankruptcy Code with respect to Class G5 and the deemed rejecting
Classes identified above and the parties have agreed to reserve all rights with
respect to Subclass G1-16 as set forth in P. 31 hereof.
12
14. Treatment of Administrative and Tax Claims (11 U.S.C. ss.
1129(a)(9)). The treatment of Administrative Expense Claims, Genesis Priority
Non-Tax Claims, and Multicare Priority Non-Tax Claims pursuant to Sections 2.1,
4.3, and 4.14 of the Plan satisfies the requirements of sections 1129(a)(9)(A)
and (B) of the Bankruptcy Code, and the treatment of Priority Tax Claims
pursuant to Section 2.3 of the Plan satisfies the requirements of section
1129(a)(9)(C) of the Bankruptcy Code.
15. Acceptance By Impaired Classes (11 U.S.C. ss.
1129(a)(l0)). At least one Class of Claims against (a) the Genesis Debtors and
(b) the Multicare Debtors that is impaired under the Plan has accepted the Plan,
determined without including any acceptance of the Plan by any insider, thus
satisfying the requirements of section 1129(a)(10) of the Bankruptcy Code.
16. Feasibility (11 U.S.C. ss. 1129(a)(11)). The evidence
proffered or adduced at the Confirmation Hearing (a) is persuasive and credible,
(b) has not been controverted by other evidence, and (c) establishes that
confirmation of the Plan is not likely to be followed by the liquidation, or the
need for further financial reorganization, of the Reorganized Debtors, thus
satisfying the requirements of section 1129(a)(11) of the Bankruptcy Code.
13
17. Payment of Fees (11 U.S.C. ss. 1129(a)(12)). All fees
payable under section 1930 of title 28, United States Code, as determined by the
Bankruptcy Court, have been paid or will be paid pursuant to Section 12.1 of the
Plan from the funds deposited by the Debtors into an escrow account pursuant to
an escrow arrangement, the terms of which are satisfactory to the Debtors and
the United States Trustee, thus satisfying the requirements of section
1129(a)(12) of the Bankruptcy Code.
18. Continuation of Retiree Benefits (11 U.S.C. ss.
1129(a)(13)). Section 12.2 of the Plan provides that, on and after the Effective
Date, the Reorganized Debtors will continue to pay all "retiree benefits" (as
defined in section 1114(a) of the Bankruptcy Code), at the level established
pursuant to section 1114(e)(1)(B) or 1114(g) at any time prior to confirmation
of the Plan, for the duration of the period the Debtors have obligated
themselves to provide such benefits. Thus, the requirements of section
1129(a)(13) of the Bankruptcy Code are satisfied.
19. Fair and Equitable; No Unfair Discrimination (11 U.S.C.
ss. 1129(b)). Subclass G1-16 and Class G5 voted to reject the Plan, and Classes
G7, G8, G9, G10, G11, M7, and M8 are deemed to reject the Plan (collectively,
the "Rejecting Classes"). Based upon the Confirmation Affidavits and the
evidence proffered, adduced, or presented by the Debtors at the Confirmation
Hearing, the Plan does not discriminate unfairly and is fair and equitable with
respect to the Rejecting Classes (other than Subclass G1-16, as set forth in P.
31 hereof), as required by section 1129(b)(1) of the Bankruptcy Code. Thus, the
Plan may be confirmed notwithstanding the Debtors' failure to satisfy section
1129(a)(8) of the Bankruptcy Code. Except as provided in P. 31 hereof, upon
confirmation and the occurrence of the Effective Date, the Plan shall be binding
upon the members of the Rejecting Classes.
14
20. Principal Purpose of the Plan (11 U.S.C. ss. 1129(d)). The
principal purpose of the Plan is not the avoidance of taxes or the avoidance of
the application of Section 5 of the Securities Act of 1933.
21. Modifications to the Plan. The modifications to the Plan
set forth in the Technical Amendments constitute technical changes and/or
changes with respect to particular Claims by agreement with holders of such
Claims, and do not materially adversely affect or change the treatment of any
Claims or Equity Interests. Accordingly, pursuant to Bankruptcy Rule 3019, these
modifications do not require additional disclosure under section 1125 of the
Bankruptcy Code or resolicitation of votes under section 1126 of the Bankruptcy
Code, nor do they require that holders of Claims or Equity Interests be afforded
an opportunity to change previously cast acceptances or rejections of the Plan.
22. Good Faith Solicitation (11 U.S.C. ss. 1125(e)). Based on
the record before the Bankruptcy Court in these Reorganization Cases, the
Debtors and their directors, officers, employees, shareholders, members, agents,
advisors, accountants, investment bankers, consultants, attorneys, and other
representatives have acted in "good faith" within the meaning of section 1125(e)
of the Bankruptcy Code in compliance with the applicable provisions of the
Bankruptcy Code and Bankruptcy Rules in connection with all their respective
activities relating to the solicitation of acceptances to the Plan and their
participation in the activities described in section 1125 of the Bankruptcy
Code, and are entitled to the protections afforded by section 1125(e) of the
Bankruptcy Code and the exculpation provisions set forth in Section 10.6 of the
Plan.
15
23. Assumption and Rejection. Section 8 of the Plan governing
the assumption and rejection of executory contracts and unexpired leases
satisfies the requirements of section 365(b) of the Bankruptcy Code. Pursuant to
Section 8.2 of the Plan, except as may otherwise be agreed to by the parties,
within thirty (30) days of the Confirmation Date, the Debtors shall file and
serve a pleading with the Bankruptcy Court listing the cure amounts of all
executory contracts or unexpired leases to be assumed, consistent with section
365 of the Bankruptcy Code. The parties to such executory contracts or unexpired
leases to be assumed by the Debtors shall have fifteen (15) days from service to
object to the cure amounts listed by the Debtors. The Debtors shall retain their
right to reject any of their executory contracts or unexpired leases, including
those that are not listed in Schedule 8.1 to the Plan, and including contracts
or leases that are subject to a dispute concerning amounts necessary to cure any
defaults.
24. Deemed Consolidation. No creditor of any of the Debtors
will be prejudiced by the deemed consolidation of the Genesis Debtors and the
deemed consolidation of the Multicare Debtors; such deemed consolidation will
benefit all creditors of the Debtors.
25. Genesis/Multicare Settlement. The compromise and
settlement between the Genesis Debtors and the Multicare Debtors, incorporated
into the Plan, is hereby approved pursuant to Bankruptcy Rule 9019 as a fair,
prudent, and reasonable compromise of the controversies resolved by such
settlement and is binding upon all entities affected thereby.
16
26. Synthetic Lease. The Genesis Debtors are the actual owners
and hold full legal title in any Collateral securing the transaction described
in Section 1.35(ii) of the Plan. Mellon Financial Services Corporation #4 holds
title for security purposes only in any such Collateral.
27. Satisfaction of Confirmation Requirements. The Plan
satisfies the requirements for confirmation set forth in section 1129 of the
Bankruptcy Code.
28. Retention of Jurisdiction. The Bankruptcy Court may
properly retain jurisdiction over the matters set forth in Section 11 of the
Plan and section 1142 of the Bankruptcy Code.
DECREES
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NOW, THEREFORE, IT IS HEREBY ORDERED, ADJUDGED, AND DECREED
THAT:
29. Technical Amendments. The modifications of the Original
Plan reflected in the Technical Amendments meet the requirements of sections
1127(a) and (c), such modifications do not adversely change the treatment of the
Claim of any creditor or Equity Interest of any equity security holder within
the meaning of Bankruptcy Rule 3019, and no further solicitation or voting is
required.
30. Confirmation. The Plan, which consists of the Original
Plan as modified by the Technical Amendments and the Amendments to Comply with
Confirmation Opinion annexed hereto, is approved and confirmed under section
1129 of the Bankruptcy Code. The terms of the Plan and the Plan Supplement are
incorporated by reference into and are an integral part of the Plan and this
Confirmation Order.
17
31. Objections. Except with respect to the Objection filed by
THCI (the "THCI Objection"), all Objections that have not been withdrawn,
waived, or settled, and all reservations of rights pertaining to confirmation of
the Plan included therein, are overruled on the merits.
(a) THCI Objection. With respect to the THCI Objection, THCI
shall retain any and all rights in connection with issues raised by the THCI
Objection, and the Debtors shall retain any and all rights that they may raise
as a response to the THCI Objection pending resolution of the matter, including
but not limited to, (i) whether or not Norristown Nursing and Rehabilitation
Associates, L.P. ("Norristown"), a Genesis Debtor, should be deemed consolidated
among the Genesis Debtors pursuant to Section 5.1(a) of the Plan for voting and
distribution purposes, (ii) whether the treatment the Plan provides to Subclass
G1-16 satisfies the "cram down" requirements of section 1129(b)(2)(A) and is
"fair and equitable," (iii) whether in connection with the Multicare Debtors'
assumption of that certain lease agreement, dated November 30, 1995, between
THCI and Glenmark Limited Liability Company, I, a Multicare Debtor, the Debtors
would be required to pay in full the Alleged Unsecured Deficiency Claim (as
defined in the THCI Objection), and (iv) whether in connection with the
Multicare Debtors' reinstatement of that certain loan agreement, dated on or
about October 13, 1992, between Meditrust Mortgage Investments, Inc. and three
Multicare Debtors (Glenmark Associates - Dawnview Manor, Inc., Glenmark
Properties, Inc., and The House of Campbell), the Debtors would be required to
pay the Alleged Unsecured Deficiency Claim.
18
(b) Commonwealth of Pennsylvania, Department of Revenue
Objection. With respect to the Objection filed by the Commonwealth of
Pennsylvania, Department of Revenue, (i) the Multicare Debtors shall use their
reasonable best efforts to file the purported delinquent tax returns listed in
paragraph 2 of such objection on or before September 30, 2001, and (ii)
corporate officers of the Multicare Debtors shall not be released under the Plan
from any liability, if any, for the payment of Pennsylvania state trust fund
taxes.
(c) Massachusetts Housing Finance Agency Objection. With
respect to the Objection filed by the Massachusetts Housing Finance Agency
("MHFA") and MHFA's motion to temporarily allow its claim for voting purposes
only, (i) except as provided in Section 5.10 of the Plan, Section 5.14 of the
Plan shall not discharge, release, or extinguish any claim held by MHFA against
or any obligation to MHFA of any entity which is not a Debtor in the
Reorganization Cases, and (ii) MHFA's claim (which shall remain subject to
allowance for purposes of distribution) shall be temporarily allowed for voting
purposes only in the amount of $750,000 in the Multicare Reorganization Cases.
(d) JSM Objection. With respect to the Objection of the JSM
Company ("JSM"), pursuant to section 365 of the Bankruptcy Code, the
construction contract entered into on or about June 18, 1998 (the "JSM
Contract") between the Genesis Debtors and JSM is rejected as of the date
hereof. JSM may file a proof of claim (the "JSM Proof of Claim") for any damages
arising from the rejection of the JSM Contract within thirty (30) days from the
date hereof, and any claims resulting from the rejection of the JSM Contract not
so filed shall be forever barred from participating in the Genesis Debtors'
chapter 11 cases and receiving any dividend or distribution thereon. The Genesis
Debtors may file an objection to the JSM Proof of Claim on or before the
19
sixtieth (60th) day following the date on which the JSM Proof of Claim is filed.
If the Genesis Debtors do not timely file an objection to the JSM Proof of Claim
as set forth in the preceding sentence, JSM's claim shall be deemed an Allowed
Claim against the Genesis Debtors. To the extent that any portion of JSM's claim
is Allowed as a Secured Claim, JSM shall have an Allowed Class G1 Genesis Other
Secured Claim and the Genesis Debtors shall pay the portion of the Claim that is
Allowed as a Secured Claim in Cash in full within ten (10) days from the date on
which that portion of JSM's Claim is Allowed as a Secured Claim. To the extent
that any portion of JSM's Claim is Allowed as an unsecured Claim, JSM shall have
an Allowed Class G4 Genesis General Unsecured Claim and shall be paid in
accordance with Section 4.4 of the Plan. Nothing in the Plan shall be deemed to
(i) affect or discharge JSM's asserted construction lien or (ii) affect or bar
the Genesis Debtors' rights to object to such lien on any grounds. In the event
the Genesis Debtors and JSM are unable to agree upon a settlement resolving
JSM's claims, the Genesis Debtors may, in addition to the Genesis Debtors'
objection to the JSM Proof of Claim as set forth above, object to any claim or
lien asserted by any subcontractor (collectively, the "Subcontractor Claims")
filed against the Genesis Debtors' lease of the Madison Avenue Assisted Living
Facility or against the property underlying such lease. Thereafter, a hearing
shall be held before the Bankruptcy Court to (i) determine the validity and
amount of the JSM Proof of Claim and any Subcontractor Claim the Genesis Debtors
are required to satisfy and (ii) ensure that the Genesis Debtors are not
required to satisfy any Subcontractor Claims that are also included as a portion
of any of JSM's claims, as such payment will be duplicative.
20
32. Plan Classification Controlling. The classifications of
Claims and Equity Interests for purposes of the distributions to be made under
the Plan shall be governed solely by the terms of the Plan. The classifications
set forth on the Ballots tendered to or returned by the Debtors' creditors in
connection with voting on the Plan (a) were set forth on the Ballots solely for
purposes of voting to accept or reject the Plan, (b) do not necessarily
represent, and in no event shall be deemed to modify or otherwise affect, the
actual classification of such Claims and Equity Interests under the Plan for
distribution purposes, and (c) shall not be binding on the Debtors or the
Reorganized Debtors.
33. Binding Effect. The Plan and its provisions shall be
binding upon the Debtors, the Reorganized Debtors, the Disbursing Agent, any
entity acquiring or receiving property or a distribution under the Plan, and any
holder of a Claim against or Equity Interest in the Debtors, including all
governmental entities, whether or not the Claim or Equity Interest of such
holder is impaired under the Plan and whether or not such holder or entity has
accepted the Plan.
34. Service. (i) Service of the Solicitation Package upon
holders of Claims in Subclasses M1-2 and M1-7 and certain holders of Claims in
Class G5, as set forth in the Reyes Certificate, (ii) the extension for such
creditors of (a) the Voting Deadline (as defined in the Solicitation Order), and
(b) the time fixed for filing objections to the Plan through and including
August 24, 2001, and (iii) the notices of such extensions, copies of which are
annexed hereto as Exhibit "F" and "G," are hereby approved.
21
35. Vesting of Assets (11 U.S.C. ss. 1141(b), (c)). Pursuant
to Sections 5.1 and 10.1 of the Plan, except as otherwise provided in the Plan
(including Section 5.2 of the Plan), each Debtor will, as a Reorganized Debtor,
continue to exist after the Effective Date as a separate corporate entity, with
all the powers of a corporation under applicable law and without prejudice to
any right to alter or terminate such existence (whether by merger, dissolution,
or otherwise) under applicable state law. Except as otherwise provided in the
Plan, upon the Effective Date all property of the Debtors' estates shall vest in
the Reorganized Debtors free and clear of all Claims, liens, encumbrances,
charges, and other interests, and all such Claims, liens, encumbrances, charges,
and other interests shall be extinguished. From and after the Effective Date,
each Reorganized Debtor may operate its business and may use, acquire, and
dispose of property, and compromise or settle any Claims and Equity Interests
without supervision or approval by the Bankruptcy Court and free of any
restrictions of the Bankruptcy Code or Bankruptcy Rules, other than those
restrictions expressly imposed by the Plan or this Confirmation Order.
36. Assumption or Rejection of Executory Contracts and
Unexpired Leases (11 U.S.C. ss. 1123(b)(2)). Pursuant to Section 8.1 of the
Plan, as of the Effective Date, all executory contracts and unexpired leases as
to which any of the Debtors are parties are assumed, including the bonds
executed by Liberty Bond Services on behalf of the Debtors, except for an
executory contract or unexpired lease that (i) has been assumed or rejected
pursuant to Final Order of the Bankruptcy Court, (ii) is specifically designated
as a contract or lease to be rejected on Schedule 8.1 to the Plan (Schedule of
Rejected Contracts and Leases), (iii) is the subject of a separate motion to
assume or reject filed under section 365 of the Bankruptcy Code by the Genesis
Debtors or Multicare Debtors prior to the Confirmation Date, or (iv) is an
option or warrant to purchase common stock of any of the Debtors or right to
convert any Equity Interest into common stock of any of the Debtors to the
extent such option, warrant, or conversion right is determined not to be an
Equity Interest.
22
37. Assumption of Cardinal Agreement. Pursuant to Section 8.1
of the Plan, the Debtors' assumption of (i) the prime vendor agreement (the
"Cardinal Agreement"), dated May 5, 1999, between the Genesis Debtors and
Cardinal Distribution, as modified, (ii) the related security agreement (the
"Cardinal Security Agreement"), and (iii) the related guaranty is approved, and
the Collateral (as defined in the Cardinal Security Agreement) shall secure any
and all existing and future obligations of the Genesis Debtors to Cardinal
Distribution under the Cardinal Agreement as provided in the Cardinal Security
Agreement, and the Lien (as defined in the Cardinal Security Agreement) is valid
and fully perfected, and, except as required under applicable state law,
Cardinal Distribution is not required to file any UCC financing statements in
connection with the Lien other than the financing statements filed prior to the
Commencement Date on Cardinal Distribution's behalf in connection with the
Cardinal Agreement.
38. Bar Date for Rejection Damage Claims. Pursuant to Section
8.3 of the Plan, if the rejection of an executory contract or unexpired lease by
any of the Debtors pursuant to Section 8.1 of the Plan results in damages to the
other party or parties to such contract or lease, a Claim for such damages, if
not heretofore evidenced by a filed proof of claim, shall be forever barred and
shall not be enforceable against the Debtors, or their respective properties or
interests in property as agents, successors, or assigns, unless a proof of claim
is filed with the Bankruptcy Court and served upon counsel for the Debtors on or
before the date that is thirty (30) days after the Confirmation Date or such
later rejection date that occurs as a result of a dispute concerning amounts
necessary to cure any defaults.
23
39. General Authorizations. Each of the Debtors or Reorganized
Debtors is authorized to execute, deliver, file, or record such contracts,
instruments, releases, and other agreements or documents and take such actions
as may be necessary or appropriate to effectuate, implement, and further
evidence the terms and conditions of the Plan and any notes or securities issued
pursuant to the Plan. The Debtors and the Reorganized Debtors and their
respective directors, officers, members, agents, and attorneys, are authorized
and empowered to issue, execute, deliver, file, or record any agreement,
document, or security, including, without limitation, the documents contained in
the Plan Supplement, as modified, amended, and supplemented, in substantially
the form included therein, and to take any action necessary or appropriate to
implement, effectuate, and consummate the Plan in accordance with its terms, or
take any or all corporate actions authorized to be taken pursuant to the Plan,
including the merger of Genesis and Multicare, and any release, amendment, or
restatement of any bylaws, certificates of incorporation, or other organization
documents of the Debtors, whether or not specifically referred to in the Plan or
the Plan Supplement, without further order of the Court, and any or all such
documents shall be accepted by each of the respective state filing offices and
recorded in accordance with applicable state law and shall become effective in
accordance with their terms and the provisions of state law.
24
40. Corporate Action. Reorganized Genesis shall file the
Amended Certificate of Incorporation with the Secretary of State of the State of
Pennsylvania on the Effective Date. The Amended Certificate of Incorporation and
the certificates of incorporation for each of the Reorganized Debtors that are
corporations, other than Reorganized Genesis, shall prohibit the issuance of
nonvoting equity securities, subject to further amendment of such certificates
of incorporation as permitted by applicable law. The Amended Bylaws shall be
deemed adopted by the board of directors of Reorganized Genesis as of the
Effective Date.
41. Synthetic Lease Lenders. With respect to the treatment
provided in the Plan for Subclass G1-17 (Synthetic Lease Lenders), Mellon Bank,
N.A., as administrative agent, is authorized to (i) file quitclaim deeds to
transfer the property securing the claims of Subclass G1-17 to Genesis, (ii)
transfer any non-real property subject to the Amended and Restated Synthetic
Lease Financing Facility, dated as of October 7, 1996, among Genesis, Genesis
Eldercare Properties, Inc., Mellon Financial Services Corporation #4, Mellon
Bank, N.A., as administrative agent, certain co-agents named therein, and the
lender parties thereto (the "Synthetic Lease") to Genesis, and (iii) file any
other release and termination documents necessary to terminate the Synthetic
Lease and the parties' obligations thereunder (including those of Mellon Bank,
N.A., as administrative agent). Title in the property subject to the Synthetic
Lease is held by Genesis free and clear of all liens, claims, interests, and
other encumbrances, subject only to the mortgages and security interest to be
held by those Synthetic Lease Lenders refinancing such property and the second
liens in favor of the holders of the New Senior Notes.
25
42. Annual Meeting of Shareholders. For purposes of section
1755 of the Pennsylvania Business Corporation Law, the first annual meeting of
shareholders of Reorganized Genesis shall be deemed to have taken place on the
Effective Date.
43. Issuance of New Securities. Pursuant to Sections 5.2 and
5.3 of the Plan, based upon the record of the Reorganization Cases, including
the instruments included in the Plan Supplement (and any amendments thereto),
the issuance of the Plan Securities by Reorganized Genesis and the New Multicare
Stock by Multicare is hereby authorized without further act or action under
applicable law, regulation, order, or rule.
44. Securities Laws Exemption. The offering, issuance, and
distribution by Reorganized Genesis of the Plan Securities and the offering and
issuance by Multicare of the New Multicare Stock is exempt from the provisions
of section 5 of the Securities Act of 1933, as amended, and any state or local
law requiring registration for the offer, issuance, distribution, or sale of a
security by reason of section 1145(a) of the Bankruptcy Code. The Plan
Securities will be freely tradable by the recipients thereof subject only to the
provisions of section 1145(b)(1) of the Bankruptcy Code relating to the
definition of an underwriter in Section 2(11) of the Securities Act of 1933, as
amended, and compliance with any applicable rules and regulations of the
Securities Exchange Commission.
45. Deemed Consolidation.
(a) Subject to the occurrence of the Effective Date, the
Genesis Debtors shall be deemed consolidated for the following purposes under
the Plan: (i) no distributions shall be made under the Plan on account of the
Genesis Intercompany Claims; (ii) all guaranties by any of the Genesis Debtors
26
of the obligations of any other Genesis Debtor arising prior to the Effective
Date shall be deemed eliminated so that any Claim against any Genesis Debtor and
any guaranty thereof executed by any other Genesis Debtor and any joint and
several liability of any of the Genesis Debtors shall be deemed to be one
obligation of the deemed consolidated Genesis Debtors; and (iii) each and every
Claim filed or to be filed in the Reorganization Case of any of the Genesis
Debtors shall be deemed filed against the deemed consolidated Genesis Debtors
and shall be deemed one Claim against and obligation of the deemed consolidated
Genesis Debtors. Such deemed consolidation, however, shall not (other than for
purposes related to funding distributions under the Plan affect: (i) the legal
and organizational structure of the Reorganized Debtors; (ii) intercompany
Claims by and among the Genesis Debtors or Reorganized Debtors; (iii) pre- and
post-Commencement Date guaranties, liens, and security interests that are
required to be maintained (A) in connection with executory contracts or
unexpired leases that were entered into during the Genesis Reorganization Cases
or that have been or will be assumed, (B) pursuant to the Plan, or (C) in
connection with any financing entered into, or New Senior Notes issued, by the
Reorganized Debtors on the Effective Date; and (iv) distributions out of any
insurance policies or proceeds of such policies. Notwithstanding anything
contained in the Plan to the contrary, the deemed consolidation of the Genesis
Debtors shall not have any effect on the Claims being reinstated and unimpaired
in Class G1 of the Plan, and the legal, equitable, and contractual rights to
which the holders of any such Claims is entitled shall be left unaltered by the
Plan.
27
(b) Subject to the occurrence of the Effective Date, the
Multicare Debtors shall be deemed consolidated for the following purposes under
the Plan: (i) no distributions shall be made under the Plan on account of
Multicare Intercompany Claims; (ii) all guaranties by any of the Multicare
Debtors of the obligations of any other Multicare Debtor arising prior to the
Effective Date shall be deemed eliminated so that any Claim against any
Multicare Debtor and any guaranty thereof executed by any other Multicare Debtor
and any joint and several liability of any of the Multicare Debtors shall be
deemed to be one obligation of the deemed consolidated Multicare Debtors; and
(iii) each and every Claim filed or to be filed in the Reorganization Case of
any of the Multicare Debtors shall be deemed filed against the deemed
consolidated Multicare Debtors and shall be deemed one Claim against and
obligation of the deemed consolidated Multicare Debtors. Such deemed
consolidation, however, shall not (other than for purposes related to funding
distributions under the Plan) affect: (i) the legal and organizational structure
of the Reorganized Debtors; (ii) intercompany Claims by and among the Multicare
Debtors or Reorganized Debtors; (iii) pre- and post-Commencement Date
guaranties, liens, and security interests that are required to be maintained (A)
in connection with executory contracts or unexpired leases that were entered
into during the Multicare Reorganization Cases or that have been or will be
assumed, (B) pursuant to the Plan of Reorganization, or (C) in connection with
any financing entered into by the Reorganized Debtors on the Effective Date; and
(iv) distributions out of any insurance policies or proceeds of policies.
Notwithstanding anything contained in the Plan to the contrary, the deemed
consolidation of the Multicare Debtors shall not have any effect on the Claims
being reinstated and unimpaired in Class M1 of the Plan, and the legal,
equitable, and contractual rights to which the holders of any such Claims is
entitled shall be left unaltered by the Plan.
28
46. DIP Credit Agreements.
(a) Notwithstanding anything that may be contained herein to
the contrary, on the Effective Date, (i) Genesis shall pay or arrange for the
payment of all amounts outstanding under that certain Revolving Credit and
Guaranty Agreement, dated as of June 22, 2000, as amended, among Genesis,
certain other Genesis Debtors named therein, Mellon Bank N.A., as administrative
agent, certain co-agents named therein, and the lenders party thereto (the
"Genesis DIP Credit Agreement"), and (ii) Multicare shall pay or arrange for
payment of all amounts outstanding under that certain Revolving Credit and
Guaranty Agreement, dated as of June 22, 2000, as amended, among Multicare,
certain other Multicare Debtors named therein, Mellon Bank N.A., as
administrative agent, certain co-agents named therein, and the lenders party
thereto (the "Multicare DIP Credit Agreement," and together with the Genesis DIP
Credit Agreement, the "DIP Credit Agreements"). Once such payments have been
made, the DIP Credit Agreements and any agreements or instruments related
thereto shall be deemed terminated, except as otherwise provided in the DIP
Credit Agreements (subject in all respects to any carve-out approved by the
Bankruptcy Court in the Bankruptcy Court orders approving the DIP Credit
Agreements on a final basis), and Mellon Bank, N.A., as administrative agent,
and the lenders thereunder shall take all reasonable action to confirm the
removal of any liens on the properties of the Genesis Debtors and the Multicare
Debtors securing the DIP Credit Agreements. On the Effective Date, any
outstanding letters of credit issued under the DIP Credit Agreements shall be
either replaced or secured by letters of credit issued under the exit facility
described in Section 5.4 of the Plan. The DIP Credit Agreements shall be
continued through the Effective Date.
29
47. Exit Financing Facility.
(a) The Debtors are authorized to enter into new financing
arrangements (the "Exit Financing Facility") for purposes of funding obligations
under the Plan, including the payment of Administrative Expense Claims, the
repayment of obligations under the DIP Credit Agreements, financing the
Reorganized Debtors' working capital requirements, and satisfying the treatment
of Subclass G1-17 Claims as well as any other Genesis Other Secured Claims and
Multicare Other Secured Claims that the Debtors elect to satisfy with Cash
payments.
(b) On the Effective Date, all the liens and security
interests to be created under the Exit Financing Facility shall be deemed
approved. In furtherance of the foregoing, the Reorganized Debtors and the other
persons granting such liens and security interests are authorized to make all
filings and recordings, and to obtain all governmental approvals and consents
necessary to establish and perfect such liens and security interests under the
provisions of state, provincial, federal, or other law (whether domestic or
foreign) that would be applicable in the absence of this Confirmation Order, and
will thereafter cooperate to make all other filings and recordings that
otherwise would be necessary under applicable law to give notice of such liens
and security interests to third parties.
48. Plan Supplement. The documents contained in the Plan
Supplement and any amendments, modifications, and supplements thereto, and all
documents and agreements introduced into evidence by the Debtors at the
Confirmation Hearing (including all exhibits and attachments thereto and
30
documents referred to therein), and the execution, delivery, and performance
thereof by the Reorganized Debtors, is authorized and approved, including, but
not limited to, (a) the Plan of Merger, (b) the Term B Note Indenture, (c) the
Certificate of Designation for the New Convertible Preferred Stock, and (d) the
Registration Rights Agreement. Without need for further order or authorization
of the Bankruptcy Court, the Debtors and Reorganized Debtors are authorized and
empowered to make any and all modifications to any and all documents included as
part of the Plan Supplement that do not materially modify the terms of such
documents and are consistent with the Plan. The Debtors are authorized to
implement the New Management Incentive Plan without the necessity of shareholder
approval required under any applicable law, including, without limitation,
Sections 162(m) and 422(b)(1) of the Internal Revenue Code.
49. Governmental Approvals Not Required. This Confirmation
Order shall constitute all approvals and consents required, if any, by the laws,
rules, or regulations of any state or any other governmental authority with
respect to the implementation or consummation of the Plan and any documents,
instruments, or agreements, and any amendments or modifications thereto, and any
other acts referred to in or contemplated by the Plan, the Disclosure Statement,
and any documents, instruments, or agreements, and any amendments or
modifications thereto.
50. Exemption from Certain Taxes. Pursuant to section 1146(c)
of the Bankruptcy Code: (a) the issuance, transfer, or exchange of notes or
equity securities under the Plan; (b) the creation of any mortgage, deed of
trust, lien, pledge, or other security interest; and (c) the making or delivery
of any deed or other instrument of transfer under, in furtherance of, or in
connection with, the Plan, including, without limitation, the Plan of Merger;
31
agreements of consolidation, restructuring, disposition, liquidation, or
dissolution; deeds; bills of sale; and transfers of tangible property, will not
be subject to any stamp tax, recording tax, personal property transfer tax, real
estate transfer tax, sales or use tax, or other similar tax, including, without
limitation, the Florida intangible and documentary stamp taxes.
51. Distributions on Account of Genesis Senior Lender Claims,
Genesis General Unsecured Claims, Genesis Senior Subordinated Note Claims,
Multicare Senior Lender Claims, Multicare General Unsecured Claims, and
Multicare Senior Subordinated Note Claims. Pursuant to Section 6.3 of the Plan,
on the Effective Date, the Disbursing Agent shall distribute the New Senior
Notes, the New Convertible Preferred Stock, the New Common Stock, and any Cash
allocable to Classes G2 and M2 to the individual holders of the Genesis Senior
Lender Claims and Multicare Senior Lender Claims in such denominations and
registered in the names of the holders as Mellon Bank, N.A. shall have advised
the Debtors in writing. On the Effective Date, the Disbursing Agent shall
distribute the New Common Stock and the New Warrants to holders of Allowed
Claims in Classes G4, G5, M4, and M5. For the purpose of calculating the amount
of New Common Stock and New Warrants to be distributed to holders of Allowed
Claims in Classes G4, G5, M4, and M5 on the Effective Date, all Disputed Claims
in such Classes will be treated as though such Claims will be Allowed Claims in
the amounts asserted, Allowed pursuant to Section 6.12 of the Plan, or as
estimated by the Bankruptcy Court, as applicable. On the Final Distribution
Date, each holder of an Allowed Claim in Classes G4, G5, M4, and M5 shall
receive a Catch-up Distribution of New Common Stock and/or New Warrants, as
applicable. After the Effective Date but prior to the Final Distribution Date,
the Reorganized Debtors, in their sole discretion, may direct the Disbursing
Agent to distribute shares of New Common Stock and/or New Warrants, as
32
applicable, to a holder of a Disputed Claim in Class G4 or M4 which becomes an
Allowed Claim after the Effective Date such that the holder of such Claim
receives the same shares of New Common Stock and/or New Warrants, as applicable,
that such holder would have received had its Claim been an Allowed Claim in such
amount on the Effective Date. Notwithstanding anything in the Plan or this
Confirmation Order to the contrary, any assignment of a portion of the Subclass
G1-17 Claims, the Genesis Senior Lender Claims, or the Multicare Senior Lender
Claims by the holders thereof on account of confirmed trades of such claims or
participations purchased or sold by the holders of such Claims in such claims in
each case in existence as of the Distribution Record Date shall be deemed made
as of the Distribution Record Date if such assignment is received by Mellon
Bank, N.A. no later than nine (9) days after the Distribution Record Date and
such assignment is subsequently duly recorded by Mellon Bank, N.A. prior to the
Effective Date. Pursuant to Section 6.4 of the Plan, each Indenture Trustee
shall be the Disbursing Agent for its respective noteholders in Classes G5 and
M5, and the Care Haven Indenture Trustee shall be the Disbursing Agent for its
respective bondholders in Subclass M1-2.
52. Waiver of Subordination. The distributions to holders of
Claims in Classes G5 and M5 shall not be subject to levy, garnishment,
attachment, or other legal process by any holder of indebtedness senior to the
indebtedness of the holders of the Claims in Classes G5 and M5, in each case by
reason of claimed contractual subordination rights. On the Effective Date, all
creditors shall be deemed to have waived any and all contractual subordination
rights which they may have with respect to such distribution, and, as of the
Effective Date, all holders of senior indebtedness shall be permanently enjoined
from enforcing or attempting to enforce any such rights with respect to the
distributions under the Plan to the holders of Claims in Classes G5 and M5.
33
53. Final Fee Applications. Pursuant to Section 2.2 of the
Plan, all entities seeking an award by the Bankruptcy Court of compensation for
services rendered or reimbursement of expenses incurred through and including
the Confirmation Date under section 503(b)(2), 503(b)(3), 503(b)(4), or
503(b)(5) of the Bankruptcy Code (i) shall file their respective final
applications for allowance of compensation for services rendered and
reimbursement of expenses incurred by the date that is forty-five (45) days
after the Effective Date, and (ii) shall be paid in full in such amounts as are
allowed by the Bankruptcy Court (A) upon the later of (i) the Effective Date,
and (ii) the date upon which the order relating to any such Administrative
Expense Claim is entered, or (B) upon such other terms as may be mutually agreed
upon between the holder of such an Administrative Expense Claim and the Debtors
or, on and after the Effective Date, the Reorganized Debtors. The Reorganized
Debtors are authorized to pay compensation for services rendered or
reimbursement of expenses incurred after the Confirmation Date and until the
Effective Date in the ordinary course and without the need for Bankruptcy Court
approval. Notwithstanding the foregoing, with respect to any personal injury
tort Claims arising on or after the Commencement Date, the Debtors shall remain
obligated to pay such Claims as and when they become due and payable in the
ordinary course of business to the extent the applicable insurance policy does
not provide coverage, without the need for the holder of such pospetition
personal injury tort Claim to file an application with the Court in any event
and such personal injury tort claimant shall not be subject to any bar date,
including any bar date for filing applications for administrative expenses.
Holders of postpetition personal injury tort Claims are authorized to liquidate
such Claims to judgment, settlement, or otherwise without further order of the
Bankruptcy Court and to seek payment as set forth herein.
34
54. Discharge of Claims and Termination of Equity Interests.
Pursuant to Section 10.2 of the Plan, except as otherwise provided in the Plan,
the Final Order approving the DIP Credit Agreement, or this Confirmation Order,
the rights afforded in the Plan and the payments and distributions to be made
under the Plan shall discharge all existing debts and Claims, and terminate all
Equity Interests, of any kind, nature, or description whatsoever against or in
the Debtors or any of their assets or properties to the fullest extent permitted
by section 1141 of the Bankruptcy Code. Except as provided in the Plan, upon the
Effective Date, all existing Claims against the Debtors and Equity Interests in
the Debtors, shall be, and shall be deemed to be, discharged and terminated, and
all holders of Claims and Equity Interests shall be precluded and enjoined from
asserting against the Reorganized Debtors, or any of their assets or properties,
any other or further Claim or Equity Interest based upon any act or omission,
transaction, or other activity of any kind or nature that occurred prior to the
Effective Date, whether or not such holder has filed a proof of claim or proof
of equity interest, such Claim is allowed under section 502 of the Bankruptcy
Code, or such holder has accepted the Plan. Notwithstanding any provision of the
Plan to the contrary, any valid setoff or recoupment rights held against any of
the Debtors, including any such rights that HCR Manor Care, Inc., Manor Care,
Inc., and/or ManorCare Health Services, Inc. may have in connection with the
pending prepetition litigation actions described in section V.D of the
Disclosure Statement, shall not be affected by the Plan and shall be expressly
preserved.
35
55. Discharge of Debtors. Pursuant to Section 10.3 of the
Plan, upon the Effective Date and in consideration of the distributions to be
made under the Plan, except as otherwise expressly provided in the Plan, each
holder (as well as any trustees and agents on behalf of each holder) of a Claim
or Equity Interest and any affiliate of such holder shall be deemed to have
forever waived, released, and discharged the Debtors, to the fullest extent
permitted by section 1141 of the Bankruptcy Code, of and from any and all
Claims, Equity Interests, rights, and liabilities that arose prior to the
Effective Date. Upon the Effective Date, all such persons shall be forever
precluded and enjoined, pursuant to section 524 of the Bankruptcy Code, from
prosecuting or asserting any such discharged Claim against or terminated Equity
Interest in the Debtors. Notwithstanding any provision of the Plan to the
contrary, any valid setoff or recoupment rights held against any of the Debtors,
including any such rights that HCR Manor Care, Inc., Manor Care, Inc., and/or
ManorCare Health Services, Inc. may have in connection with the pending
prepetition litigation actions described in section V.D of the Disclosure
Statement, shall not be affected by the Plan and are expressly preserved.
56. Indenture Trustees' Fees and Expenses.
(a) The reasonable fees and expenses of each trustee under an
Indenture described in Sections 1.37 and 1.50 of the Plan shall be paid in
accordance with the procedures established in Section 2.5 of the Plan.
36
(b) With respect to Allowed Claims in Subclass M1-1 (Rosewood
Center (Taylor County, West Virginia)), (i) all past due trustee fees and
expenses, if any, shall be paid in full within thirty (30) days of the Effective
Date and all trustee fees and expenses thereafter shall be paid in accordance
with the terms of the relevant trust indenture and loan documents, and (ii) all
amounts necessary to cure and reinstate such Allowed Claims shall be paid within
thirty (30) days of the Effective Date.
57. Survival of Corporate Indemnitees. Pursuant to Section 8.5
of the Plan, any obligations of the Debtors pursuant to their corporate charters
and bylaws or agreements entered into any time prior to the Effective Date, to
indemnify current directors, officers, agents, and/or employees with respect to
all present and future actions, suits, and proceedings against the Debtors or
such directors, officers, agents, and/or employees, based upon any act or
omission for or on behalf of the Debtors shall not be discharged or impaired by
confirmation of the Plan. Such obligations shall be deemed and treated as
executory contracts to be assumed by the Debtors pursuant to the Plan of
Reorganization, and shall continue as obligations of the Reorganized Debtors.
58. Releases, Exculpations, and Injunctions.
(a) The release, exculpation, and injunction provisions
contained in the Plan are fair and equitable, are given for valuable
consideration, and are in the best interests of the Debtors and their chapter 11
estates, and such provisions shall be effective and binding upon all persons and
entities.
(b) Notwithstanding anything to the contrary in the Plan,
including Sections 10.2 and 10.3 of the Plan, and this Confirmation Order, with
respect to the collective bargaining agreements between the Debtors and Service
Employees International Union and/or its affiliated local unions (collectively,
37
the "Union"), no grievance that is unresolved or unliquidated under the
applicable dispute resolution procedures as of the Effective Date shall be
released, waived, or discharged. The foregoing shall not require the Debtors to
pay, except under the terms of the Plan, any such grievance ultimately resolved
in the Union's favor arising under a collective bargaining agreement under
negotiation for which no collective bargaining agreement is concluded after the
Effective Date; however, nothing in this Confirmation Order shall prevent the
parties from reaching agreement regarding the disposition and payment of any
such grievance other than under the terms of the Plan.
59. Subsidiary Guaranties. Pursuant to Section 5.14 of the
Plan, Claims based upon guaranties of collection, payment, or performance of any
obligation of the Debtors made by any direct or indirect subsidiary of Genesis
or Multicare which is not a Debtor and all Claims against any such subsidiary
for which any of the Debtors are jointly or severally liable, in each case which
arise at any time prior to the Confirmation Date, shall be discharged, released,
extinguished, and of no further force and effect, unless the appropriate Debtor
otherwise agrees in writing to the beneficiary of such guaranties, including,
without limitation, the Multicare Debtors' agreement to re-execute any guaranty
by any direct or indirect subsidiary of Multicare on the bonds relating to
Subclass M1-1 (Rosewood Center (Taylor County, West Virginia)).
60. Termination of Injunctions and Automatic Stay. Pursuant to
Section 10.4 of the Plan, all injunctions or stays arising under or entered
during the Reorganization Cases under sections 105 or 362 of the Bankruptcy Code
or otherwise, and in existence on the Confirmation Date, shall remain in full
force and effect until the later of the Effective Date and the date indicated in
such order.
38
61. Cancellation of Existing Securities and Agreements.
Pursuant to Section 5.11 of the Plan, except for purposes of evidencing a right
to distributions under the Plan or otherwise provided in the Plan, on the
Effective Date all the agreements and other documents evidencing the Claims or
rights of any holder of a Claim against the Debtors, including all indentures
and notes evidencing such Claims and any options or warrants to purchase Equity
Interests, obligating the Debtors to issue, transfer, or sell Equity Interests
or any other capital stock of the Debtors, shall be canceled; provided, however,
that the indentures relating to the Genesis Senior Subordinated Note Claims and
the Multicare Senior Subordinated Note Claims shall continue in effect solely
for the purposes of (i) allowing the indenture trustees to make any
distributions on account of Classes G5 and M5 pursuant to the Plan and to
perform such other necessary administrative functions with respect thereto, and
(ii) permitting the indenture trustees to maintain any rights or liens they may
have for fees, costs, and expenses under the indentures.
62. Nonoccurrence of Effective Date. In the event that the
Effective Date does not occur, then (i) the Plan, (ii) assumption or rejection
of executory contracts or unexpired leases pursuant to the Plan, (iii) any
document or agreement executed pursuant to the Plan, and (iv) any actions,
releases, waivers, or injunctions authorized by this Confirmation Order or any
order in aid of consummation of the Plan shall be deemed null and void. In such
event, nothing contained in this Confirmation Order, any order in aid of
consummation of the Plan, or the Plan, and no acts taken in preparation for
consummation of the Plan, (a) shall be deemed to constitute a waiver or release
of any Claims or Equity Interests by or against the Debtors or any other persons
or entities, to prejudice in any manner the rights of the Debtors or any person
or entity in any further proceedings involving the Debtors or otherwise, or to
constitute an admission of any sort by the Debtors or any other persons or
entities as to any issue, or (b) shall be construed as a finding of fact or
conclusion of law in respect thereof.
39
63. Notice of Entry of Confirmation Order. On or before the
tenth (10th) Business Day following the date of entry of this Confirmation
Order, the Debtors shall serve notice of entry of this Confirmation Order
pursuant to Bankruptcy Rules 2002(f)(7), 2002(k), and 3020(c) on all creditors
and interest holders, the United States Trustee, and other parties in interest,
by causing notice of entry of the Confirmation Order (the "Notice of
Confirmation"), to be delivered to such parties by first-class mail, postage
prepaid. The notice described herein is adequate under the particular
circumstances and no other or further notice is necessary. The Debtors also
shall cause the Notice of Confirmation to be published as promptly as
practicable after the entry of this Confirmation Order once in each of The New
York Times (National Edition), The Wall Street Journal (National Edition), USA
Today, The Tampa Tribune, The Baltimore Sun, The Philadelphia Inquirer, and The
Boston Globe.
64. Notice of Effective Date. Within five (5) Business Days
following the occurrence of the Effective Date, the Reorganized Debtors shall
file notice of the occurrence of the Effective Date and shall serve a copy of
same on the parties identified in the General Service List as defined in the
Order Pursuant to Sections 102 and 105 of the Bankruptcy Code and Bankruptcy
Rules 2002(m) and 9007 Establishing Notice Procedures, dated July 28, 2000.
40
65. Authorization to File Conformed Plan. The Debtors are
authorized to file a conformed Plan, dated on the date hereof, which
incorporates the Technical Amendments and the Amendments to Comply with
Confirmation Opinion within thirty (30) days of the entry of this Confirmation
Order.
66. Binding Effect. Pursuant to sections 1123(a) and 1142(a)
of the Bankruptcy Code and the provisions of this Confirmation Order, the Plan,
the Plan Supplement, and the Plan Documents shall apply and be enforceable
notwithstanding any otherwise applicable nonbankruptcy law.
67. Severability. Each term and provision of the Plan, as it
may have been altered or interpreted by the Bankruptcy Court in accordance with
Section 12.7 of the Plan, is valid and enforceable pursuant to its terms.
68. Conflicts Between Order and Plan. To the extent of any
inconsistency between the provisions of the Plan and this Confirmation Order,
the terms and conditions contained in this Confirmation Order shall govern. The
provisions of this Confirmation Order are integrated with each other and are
nonseverable and mutually dependent unless expressly stated by further order of
this Bankruptcy Court.
Dated: September 20, 2001
Wilmington, Delaware
------------------------------------
UNITED STATES BANKRUPTCY JUDGE
41
TABLE OF CONTENTS
Page
FINDINGS OF FACT AND CONCLUSIONS OF LAW.................................................................7
1. Exclusive Jurisdiction; Venue; Core Proceeding (28 U.S.C.ss.ss.157(b)(2), 1334(a)).............7
2. Judicial Notice................................................................................7
3. Burden of Proof................................................................................7
4. Transmittal and Mailing of Materials; Notice...................................................7
5. Voting.........................................................................................8
6. Plan Compliance with Bankruptcy Code (11 U.S.C.ss.1129(a)(l))..................................8
(a) Proper Classification (11 U.S.C.ss.ss.1122, 1123(a)(1))...............................8
(b) Specified Unimpaired Classes (11 U.S.C.ss.1123(a)(2)).................................9
(c) Specified Treatment of Impaired Classes (11 U.S.C.ss.1123(a)(3))......................9
(d) No Discrimination (11 U.S.C.ss.1123(a)(4))............................................9
(e) Implementation of Plan (11 U.S.C.ss.1123(a)(5)).......................................9
(f) Non-Voting Equity Securities (11 U.S.C.ss.1123(a)(6)).................................9
(g) Designation of Directors (11 U.S.C.ss.1123(a)(7))....................................10
(h) Additional Plan Provisions (11 U.S.C.ss.1123(b)).....................................10
(i) Bankruptcy Rule 3016(a)..............................................................10
7. Debtors' Compliance with Bankruptcy Code (11 U.S.C.ss. 1129(a)(2))............................10
8. Plan Proposed in Good Faith (11 U.S.C.ss.1129(a)(3))..........................................10
9. Payments for Services or Costs and Expenses (11 U.S.C.ss. 1129(a)(4)).........................11
10. Directors, Officers, and Insiders (11 U.S.C.ss.1129(a)(5))....................................11
11. No Rate Changes (11 U.S.C.ss.1129(a)(6))......................................................11
12. Best Interests of Creditors (11 U.S.C.ss.1129(a)(7))..........................................12
13. Acceptance by Certain Classes (11 U.S.C.ss.1129(a)(8))........................................12
14. Treatment of Administrative and Tax Claims (11 U.S.C.ss. 1129(a)(9))..........................13
15. Acceptance By Impaired Classes (11 U.S.C.ss.1129(a)(l0))......................................13
16. Feasibility (11 U.S.C.ss.1129(a)(11)).........................................................13
17. Payment of Fees (11 U.S.C.ss.1129(a)(12)).....................................................14
18. Continuation of Retiree Benefits (11 U.S.C.ss.1129(a)(13))....................................14
19. Fair and Equitable; No Unfair Discrimination (11 U.S.C.ss. 1129(b))...........................14
i
TABLE OF CONTENTS
(continued)
Page
20. Principal Purpose of the Plan (11 U.S.C.ss.1129(d))...........................................15
21. Modifications to the Plan.....................................................................15
22. Good Faith Solicitation (11 U.S.C.ss.1125(e)).................................................15
23. Assumption and Rejection......................................................................16
24. Deemed Consolidation..........................................................................16
25. Genesis/Multicare Settlement..................................................................16
26. Synthetic Lease...............................................................................17
27. Satisfaction of Confirmation Requirements.....................................................17
28. Retention of Jurisdiction.....................................................................17
DECREES ..............................................................................................17
29. Technical Amendments..........................................................................17
30. Confirmation..................................................................................17
31. Objections....................................................................................18
(a) THCI Objection.......................................................................18
(b) Commonwealth of Pennsylvania, Department of Revenue Objection........................19
(c) Massachusetts Housing Finance Agency Objection.......................................19
(d) JSM Objection........................................................................19
32. Plan Classification Controlling...............................................................21
33. Binding Effect................................................................................21
34. Service.......................................................................................21
35. Vesting of Assets (11 U.S.C.ss.1141(b), (c))..................................................22
36. Assumption or Rejection of Executory Contracts and Unexpired Leases (11 U.S.C.ss.1123(b)(2))..22
37. Assumption of Cardinal Agreement..............................................................23
38. Bar Date for Rejection Damage Claims..........................................................23
39. General Authorizations........................................................................24
40. Corporate Action..............................................................................25
41. Synthetic Lease Lenders.......................................................................25
42. Annual Meeting of Shareholders................................................................26
ii
TABLE OF CONTENTS
(continued)
Page
43. Issuance of New Securities....................................................................26
44. Securities Laws Exemption.....................................................................26
45. Deemed Consolidation..........................................................................26
46. DIP Credit Agreements.........................................................................29
47. Exit Financing Facility.......................................................................30
48. Plan Supplement...............................................................................30
49. Governmental Approvals Not Required...........................................................31
50. Exemption from Certain Taxes..................................................................31
51. Distributions on Account of Genesis Senior Lender Claims, Genesis General Unsecured Claims,
Genesis Senior Subordinated Note Claims, Multicare Senior Lender Claims, Multicare General
Unsecured Claims, and Multicare Senior Subordinated Note Claims...............................32
52. Waiver of Subordination.......................................................................33
53. Final Fee Applications........................................................................34
54. Discharge of Claims and Termination of Equity Interests.......................................35
55. Discharge of Debtors..........................................................................36
56. Indenture Trustees' Fees and Expenses.........................................................36
57. Survival of Corporate Indemnitees.............................................................37
58. Releases, Exculpations, and Injunctions.......................................................37
59. Subsidiary Guaranties.........................................................................38
60. Termination of Injunctions and Automatic Stay.................................................38
61. Cancellation of Existing Securities and Agreements............................................39
62. Nonoccurrence of Effective Date...............................................................39
63. Notice of Entry of Confirmation Order.........................................................40
64. Notice of Effective Date......................................................................40
65. Authorization to File Conformed Plan..........................................................41
66. Binding Effect................................................................................41
67. Severability..................................................................................41
68. Conflicts Between Order and Plan..............................................................41
iii
EX-99.1
4
ex99-1.txt
EXHIBIT 99.1
Exhibit 99.1
FOR IMMEDIATE RELEASE
CONTACT: Lisa Salamon
610-444-8433
Genesis and Multicare Gain Court Approval for Reorganization Plan
KENNETT SQUARE, PA--(Sept. 12)--Genesis Health Ventures, Inc. and the Multicare
Companies, Inc. today announced that federal bankruptcy court overseeing the
companies' chapter 11 cases has issued an opinion approving their joint plan of
reorganization, subject to certain minor modifications. Genesis and Multicare
are in the process of submitting the joint plan, with the required
modifications, to the court for confirmation and anticipate that their joint
chapter 11 plan will become effective by the end of September.
The joint plan provides for the merger of Genesis and Multicare under the
Genesis banner. It also provides for the issuance of new notes, new convertible
preferred stock, new common stock and new warrants to the companies' creditors.
Under the plan, approximately 93% of the new common stock, $242.6 million in
senior notes and preferred stock with a liquidation preference of $42.6 million
will be issued to the Genesis and Multicare senior secured creditors. About 7%
of the new common stock will be issued to the Genesis and Multicare unsecured
creditors as well as warrants to purchase an additional 11% of the new common
stock.
Holders of Genesis and Multicare pre-chapter 11 preferred and common stock will
receive no distribution and those instruments will be canceled.
Genesis and Multicare voluntarily filed for chapter 11 protection on June 22,
2000 after drastic cuts in Medicare reimbursement and continued underpayment by
most State funded Medicaid systems resulted in inadequate earnings to continue
to meet debt obligations under the companies' current capital structures.
Genesis Health Ventures provides eldercare in the eastern US through a network
of Genesis ElderCare skilled nursing and assisted living facilities plus long
term care support services nationwide including pharmacy, medical equipment and
supplies, rehabilitation, group purchasing, consulting and facility management.
Multicare operates skilled nursing and assisted living centers in the eastern
US.
Statements made in this release, and in our other public filings and releases,
which are not historical facts contain "forward-looking" statements (as defined
in the Private Securities Litigation Reform Act of 1995) that involve risks and
uncertainties and are subject to change at any time. These forward-looking
statements may include, but are not limited to statements containing words such
as "anticipate," "believe," "plan," "estimate," "expect," "intend," "may" and
similar expressions. Factors that could cause actual results to differ
materially include, but are not limited to, the following: our bankruptcy cases
and our ability to continue as a going concern; risks associated with operating
a business in Chapter 11; the delays or the inability to complete and/or
consummate our plan of reorganization; our ability to comply with the provisions
of our debtor-in-possession financing; our substantial indebtedness and
significant debt service obligations; our default under our senior credit
agreement and our senior subordinated and other notes; adverse actions which may
be taken by creditors; adverse developments with respect to our liquidity or
results of operations; the effect of planned dispositions of assets; our ability
to consummate or complete development projects or to profitably operate or
successfully integrate enterprises into our other operations; our ability or
inability to secure the capital and the related cost of the capital necessary to
fund future growth; our ability to attract customers given our current financial
position; our ability to attract and retain key executives and other personnel;
the impact of health care reform, including the Medicare Prospective Payment
System ("PPS"), the Balanced Budget Refinement Act ("BBRA") and the Benefit
Improvement and Protection Act of 2000 ("BIPA") and the adoption of cost
containment measures by the federal and state governments; the impact of
government regulation, including our ability to operate in a heavily regulated
environment and to satisfy regulatory authorities; the occurrence of changes in
the mix of payment sources utilized by customers to pay for services; the
adoption of cost containment measures by other third party payors; competition
in our industry; and changes in general economic conditions.
The forward-looking statements involve known and unknown risks, uncertainties
and other factors that are, in some cases, beyond our control. We caution
investors that any forward-looking statements made by us are not guarantees of
future performance. We disclaim any obligation to update any such factors or to
announce publicly the results of any revisions to any of the forward-looking
statements to reflect future events or developments.
# # #
EX-99
5
ex99-2.txt
EX99-2.TXT
Exhibit 99.2
For Immediate Release
Contact: Lisa Salamon
(610) 444-8433
Genesis Health Ventures Emerges from Bankruptcy
Kennett Square, PA--(Oct. 2, 2001)--Genesis Health Ventures, Inc. today
announced that it has emerged from chapter 11 protection following the
completion of its plan of reorganization and merger with the Multicare
Companies, Inc.
In conjunction with emergence, Genesis also announced that it has secured a $515
million senior secured credit facility led by First Union, Goldman Sachs and GE
Capital that will fund obligations under the plan of reorganization as well as
ongoing corporate financing needs.
"We are emerging as a stronger and re-energized Company, ready to take on the
big challenges of meeting this nation's healthcare needs for an aging
population," said Michael R. Walker, founder, chairman and CEO of Genesis.
With the exception of certain secured debt, the plan of reorganization cancels
both companies' pre-petition debt plus preferred and common stock. The plan
provides for Genesis and Multicare bank lenders to receive a combination of
cash, new debt, new convertible preferred stock, and approximately 93% of the
new common stock of Genesis. Unsecured creditors such as vendors and
subordinated bondholders will get approximately 7% of the new common stock and
warrants to purchase additional shares of new common stock. Pre-petition
preferred and common shareholders will not receive a distribution under the
plan.
The company has applied to have the new common stock listed on the Nasdaq
National Market.
Genesis and Multicare voluntarily filed for chapter 11 protection on June 22,
2000 after drastic cuts in Medicare reimbursement and continued underpayment by
most State funded Medicaid systems resulted in an inability to continue to meet
debt obligations under the companies' existing capital structures.
Genesis Health Ventures provides eldercare in the eastern US through a network
of Genesis ElderCare skilled nursing and assisted living facilities plus long
term care support services nationwide including pharmacy, medical equipment and
supplies, rehabilitation, group purchasing, consulting and facility management.
Statements made in this release, and in our other public filings and releases,
which are not historical facts contain "forward-looking" statements (as defined
in the Private Securities Litigation Reform Act of 1995) that involve risks and
uncertainties and are subject to change at any time. These forward-looking
statements may include, but are not limited to statements containing words such
as "anticipate," "believe," "plan," "estimate," "expect," "intend," "may" and
similar expressions. Factors that could cause actual results to differ
materially include, but are not limited to, the following: risks associated with
operating a business, our substantial indebtedness and significant debt service
obligations; our senior subordinated and other notes; adverse actions which may
be taken by creditors; adverse developments with respect to our liquidity or
results of operations; the effect of planned dispositions of assets; our ability
to consummate or complete development projects or to profitably operate or
successfully integrate enterprises into our other operations; our ability or
inability to secure the capital and the related cost of the capital necessary to
fund future growth; our ability to attract customers; our ability to attract and
retain key executives and other personnel; the impact of health care reform,
including the Medicare Prospective Payment System ("PPS"), the Balanced Budget
Refinement Act ("BBRA") and the Benefit Improvement and Protection Act of 2000
("BIPA") and the adoption of cost containment measures by the federal and state
governments; the impact of government regulation, including our ability to
operate in a heavily regulated environment and to satisfy regulatory
authorities; the occurrence of changes in the mix of payment sources utilized by
customers to pay for services; the adoption of cost containment measures by
other third party payors; competition in our industry; and changes in general
economic conditions.
The forward-looking statements involve known and unknown risks, uncertainties
and other factors that are, in some cases, beyond our control. We caution
investors that any forward-looking statements made by us are not guarantees of
future performance. We disclaim any obligation to update any such factors or to
announce publicly the results of any revisions to any of the forward-looking
statements to reflect future events or developments.
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