-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, EvMrK0+L38Sfe8UYQiuJwdCT6zL1P5EUPgSwob2Jz52fKoEoqXwyQ7WNZ9dbvdPC 7oE7akAUxu5EP4pfVw14Og== 0000950133-97-003987.txt : 19971117 0000950133-97-003987.hdr.sgml : 19971117 ACCESSION NUMBER: 0000950133-97-003987 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19970930 FILED AS OF DATE: 19971114 SROS: NONE FILER: COMPANY DATA: COMPANY CONFORMED NAME: AEROSPACE CREDITORS LIQUIDATING TRUST CENTRAL INDEX KEY: 0000908258 STANDARD INDUSTRIAL CLASSIFICATION: AIRCRAFT PART & AUXILIARY EQUIPMENT, NEC [3728] IRS NUMBER: 137020026 STATE OF INCORPORATION: NY FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q SEC ACT: SEC FILE NUMBER: 001-12346 FILM NUMBER: 97721214 BUSINESS ADDRESS: STREET 1: 245 PARK AVE STREET 2: 44TH FL CITY: NEW YORK STATE: NY ZIP: 10167 BUSINESS PHONE: 2128080539 MAIL ADDRESS: STREET 1: 245 PARK AVE 44TH FLOOR CITY: NEW YORK STATE: NY ZIP: 10167 10-Q 1 AEROSPACE CREDITORS LIQUIDATING TRUST FORM 10-Q 1 FORM 10-Q SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For quarterly period ended September 30, 1997 Commission File Number 0-21984 AEROSPACE CREDITORS LIQUIDATING TRUST (Exact name of registrant) New York 13-7020026 (State of organization) (I.R.S. Employer Identification Number) 444 Madison Avenue, 7th Floor, New York, New York 10022 (Address of principal executive offices and zip code) (212) 317-8292 (Registrant's telephone Number) Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes X No ------ ------ Indicate by check mark whether the registrant has filed all documents and reports required to be filed by Sections 12, 13 or 15(d) of the Securities Exchange Act of 1934 subsequent to the distribution of securities under a plan confirmed by a court. Yes X No ------ ------ Number of Units of Beneficial Interest outstanding as of October 30, 1997 was 3,298,284. 2 PART I - FINANCIAL INFORMATION ITEM 1. FINANCIAL STATEMENTS AEROSPACE CREDITORS LIQUIDATING TRUST STATEMENT of NET ASSETS in LIQUIDATION as of September 30, 1997 and 1996 (In thousands) ---------
1997 1996 ------- ------- Assets: Cash and temporary cash investments $3,910 $ 948 Restricted cash (Note 8) 83 Interest receivable 15 13 Assets, at estimated fair value 10,559 ------- ------- Total assets 3,925 11,603 ------- ------- Liabilities: Estimated costs of liquidation (Notes 1, 2 and 3) 178 747 Distributions payable 60 ------- ------- Total liabilities 238 747 ------- ------- Net assets in liquidation $3,687 $10,856 ======= =======
The accompanying notes are an integral part of these financial statements. - 2 - 3 AEROSPACE CREDITORS LIQUIDATING TRUST STATEMENT of CHANGES in NET ASSETS in LIQUIDATION (In thousands) ----------
Three months Nine months ended ended September 30, 1997 September 30, 1997 ------------------ ------------------ Changes in net assets in liquidation before distributions: Increase in interest income $ 76 $ 85 Increase in accrued interest income 7 15 Gain on receipt of proceeds from Thomson Litigation 3,844 Increase in estimated fair value of assets in liquidation 266 Decrease in estimated costs of liquidation, net (26) (118) ------- -------- Net increase in net assets in liquidation before distributions 57 4,092 Distributions (7) (11,209) Net assets in liquidation, beginning of period 3,624 10,804 ------- -------- Net assets in liquidation, end of period $3,687 $ 3,687 ======= ========
The accompanying notes are an integral part of these financial statements. - 3 - 4 AEROSPACE CREDITORS LIQUIDATING TRUST STATEMENT of RECEIPTS and DISBURSEMENTS (In thousands) ----------
Three months Nine months ended ended September 30, 1997 September 30, 1997 ------------------ ------------------ Receipts: Interest income $ 76 $ 85 Proceeds from Thomson litigation 14,669 ------ ------- Total Receipts 76 14,754 ------ ------- Disbursements: Payments of estimated costs of liquidation: Trustee fees 105 240 Professional fees 124 203 Other 58 132 ------ ------- Total Disbursements 287 575 ------ ------- (Decrease)/Increase in cash and temporary cash investments before distributions (211) 14,179 Distributions 67 (11,149) ------ -------- (Decrease)/Increase in cash (144) 3,030 Cash, beginning of period 4,054 880 ------ ------- Cash, end of period $3,910 $ 3,910 ====== =======
The accompanying notes are an integral part of these financial statements. - 4 - 5 AEROSPACE CREDITORS LIQUIDATING TRUST NOTES TO FINANCIAL STATEMENTS 1. Basis of Presentation: The Aerospace Creditors Liquidating Trust (the "Trust") was established on June 28, 1993 in accordance with the LTV Second Modified Joint Plan of Reorganization (the "Plan") confirmed by the United States Bankruptcy Court for the Southern District of New York (the "Bankruptcy Court") by order dated May 26, 1993. The purpose of the Trust is to marshal, liquidate and distribute the Trust assets in an expeditious and orderly manner. The Trust issued certificates of beneficial interest ("CBIs") to holders of allowed claims against the LTV Aerospace and Defense Company ("Aerospace") in exchange for receiving certain assets deemed distributed to the creditors and contributed to the Trust. The Aerospace Creditors Liquidating Trust Agreement (the "Trust Agreement") provides that the Trust will terminate ten years from the date of the transfer of the Initial Trust Assets to the Trust, unless earlier termination is required by action of New York State law or CBI holders or by distribution of all Trust assets, unless extended for one-year renewal terms pursuant to the terms of the Trust Agreement. In accordance with the Trust Agreement, each Trustee shall be indemnified by and receive reimbursement from the Trust against and from any and all loss, liability or damage, including payment of attorney's fees and other costs of defending himself, which such Trustee may inure or sustain, without gross negligence or willful misconduct, in the exercise and performance of any of the powers and duties of such Trustee under the Trust Agreement. Preparation of the financial statements on the liquidating basis required that the Trustees make a number of assumptions regarding the value of the Trust's assets and the projected total cost of liquidating such assets and winding up the affairs of the Trust. There may be differences between the assumptions and the actual results because events and circumstances frequently do not occur as expected. Those differences, if any, could result in a change in the net assets reflected in the statements of net assets in liquidation as of September 30, 1997 and 1996. 2. Significant Accounting Principles: Temporary cash investment alternatives are limited to certain securities that comply with guidelines and regulations of the Internal Revenue Service ("IRS") concerning investments by liquidating trusts. Dividend and interest income is recorded as earned. The present value discount recorded in the estimated costs of liquidation is amortized using the interest method. - 5 - 6 AEROSPACE CREDITORS LIQUIDATING TRUST NOTES TO FINANCIAL STATEMENTS, Continued 3. Estimated Costs of Liquidation: The estimated costs of liquidation represent the projected costs of operating the Trust through its expected economic life, which the Trustees estimate will extend to December 31, 1997, discounted using a 5.5% present value factor. These costs, which include staff, office space, professional fees, trustee fees and transfer agent fees are based on various assumptions regarding the administrative obligations, use of professionals and other matters. Actual costs are likely to differ from estimated costs. 4. Trust Assets: The Trust assets were distributed to the Aerospace Creditors on June 28, 1993, (the "Effective Date") and immediately thereafter were transferred to the Trust which then issued CBIs to the Aerospace Creditors. INITIAL THOMSON LITIGATION PROCEEDS. The Initial Thomson Litigation Proceeds are the first $10 million in proceeds, plus a pro rata portion of any interest actually received by LTV under any judgment or settlement (to be paid without any deduction for legal fees or costs incurred by LTV) actually received pursuant to the contractual claims of Aerospace in the action entitled LTV Aerospace and Defense Co. v. Thomson-CSF S.A., Adv. Proc. No. 920-9531A (Bankr. S.D.N.Y.) (the "Thomson Litigation"). On April 28, 1997, the Trust received a cash payment of $14,669,480 of the proceeds paid by Thomson (the "Thomson Payment"), which consisted of $10,000,000, plus the Trust's pro rata portion of interest on the judgment in the amount of $4,669,480. The Thomson Payment resulted in a gain of $3,844,000 from the estimated fair value of $10,826,000 at March 31, 1997. 5. Taxes: The Trust was formed as a grantor trust, and thus, in its filings with the IRS, the Trust itself is not a taxable entity. Accordingly, each initial holder of a CBI is required to report on his federal tax return his allocable share of any income, gain, loss, deduction or credit recognized or incurred by the Trust. The Trust's tax basis in assets transferred from holders of claims against Aerospace in connection with the Plan generally equals the fair market value of such assets as of June 28, 1993. 6. Certificates of Beneficial Interest: The Trust issued 3,302,250 units of beneficial interest (the "Units") on September 30, 1993 to holders of allowed claims in Classes 4.30, 5.30 and 7.30, the date registration of the Trust's Units became effective on Form 10. During 1997, the Trust canceled 3,966 Units pursuant to the terms of the Plan and the Trust Agreement. As of September 30, 1997, 3,298,284 Units were outstanding. - 6 - 7 AEROSPACE CREDITORS LIQUIDATING TRUST NOTES TO FINANCIAL STATEMENTS, Continued Upon a motion made by the Trust, the Bankruptcy Court entered an order on September 24, 1997 that determined that all undeliverable CBIs or cash distributions, and cash distribution checks that have not been cashed, were to be declared Unclaimed Distributions (as defined in the Plan) as of October 31, 1997. The Trust was ordered to cancel, as of October 31, 1997, the undeliverable CBIs and the CBIs associated with the undeliverable or uncashed distribution checks, to stop payment on and cancel all outstanding checks that evidence such cash Unclaimed Distributions, and to distribute such cash Unclaimed Distributions on a pro rata basis to the identified and located CBI holders as part of the final distribution of cash to CBI holders. The Trust expects to cancel 1,177 Units as a result of this order. The Units were approved by the Pacific Exchange, Inc. on August 3, 1993, with trading activity authorized as of September 22, 1993. The last trade on the Pacific Exchange, Inc. through September 30, 1997 occurred on August 8, 1997 and was for $1.38. 7. Distributions from the Trust: The Trust Agreement provides for distributions to be made as often as, and in the discretion and judgment of the Trustees, there are monies in an amount sufficient to render feasible a distribution of cash or other property to CBI holders, but no less often than annually (subject to there being at least $3 million in cash or other non-cash property designated by the Trustees available for distribution). Such distributions are made to CBI holders based upon the number of Units owned as of the record date determined by the Trustees. Since inception, the Trust has made the following cash distributions, in the aggregate amount of $83,766,291.30 ($25.37 per Unit): (i) $4,590,127.50 ($1.39 per Unit) on March 15, 1994 to holders of record as of March 7, 1994; (ii) $2,245,530 ($0.68 per Unit) on June 3, 1994 to holders of record as of May 23, 1994; (iii) $2,972,025 ($0.90 per Unit) on February 24, 1995 to holders of record as of February 10, 1995; (iv) $42,268,800 ($12.80 per Unit) on June 14, 1995 to holders of record as of May 31, 1995; (v) $20,473,950 ($6.20 per Unit) on December 8, 1995 to holders of record as of November 24, 1995; and (vi) $11,215,858.80 ($3.40 per Unit) on June 13, 1997 to holders of record as of May 30, 1997. - 7 - 8 AEROSPACE CREDITORS LIQUIDATING TRUST NOTES TO FINANCIAL STATEMENTS, Continued --------- The Trust established an Escrow Account for the purpose of holding undistributed Units and distributions allocated to such Units. Pursuant to the terms of the Plan and the Trust Agreement, such funds are no longer required to be segregated for the benefit of the undistributed Units. Therefore, the Escrow Account was closed on December 31, 1996 with the balance of $82,593 transferred to the Trust's custodian account. 8. Subsequent Events The Trustees have declared a record date of December 15, 1997 for the final distribution of cash to CBI holders on or about December 29, 1997. The amount of cash to be distributed to CBI holders is subject to Bankruptcy Court approval. The Trust, by its counsel. will move the Bankruptcy Court on December 11, 1997 for the entry of an order (the "Final Order"): (a) authorizing the establishment of a windup reserve; (b) approving the final distribution to CBI holders on or about December 29, 1997; (c) approving the appointment of an administrator for the windup reserve; (d) approving disposition of the remaining Trust assets; (e) confirming the termination of the Trust as of December 31, 1997; (f) approving the Final Report to CBI holders; and (g) releasing and discharging Trustees from all claims arising from their duties as Trustees. If the Bankruptcy Court enters the Final Order, the Trust will make a final distribution of cash to CBI holders on December 29, 1997, all issued and outstanding Units will be canceled as of that same date, the Trustees will be released from all claims arising from their duties as Trustees and will be discharged from further responsibility to the Trust, and the Trust will terminate as of December 31, 1997. - 8 - 9 ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS The Trust was established for the purpose of liquidating certain assets. The Trust Agreement prohibits the Trustees from engaging in any business. No part of the assets of the Trust or the proceeds, revenue or income therefrom can be used or disposed of by the Trustees in furtherance of any business. As of September 30, 1997, the assets of the Trust consisted of the Cash Reserve in the amount of approximately $3,910,000. The Trust's source of funds as of September 30, 1997 is the Cash Reserve and interest income from temporary cash investments. The Trust had interest income from the Trust's temporary cash investments of $76,000 during the three month period and $85,000 during the nine month period ended September 30, 1997 (and accrued interest of $15,000 as of September 30, 1997), as compared to interest income of $4,000 and $7,000 received during the three and nine month periods ended September 30, 1996 (and accrued interest of $13,000 as of September 30, 1996). The increase in interest income is a result of the earnings on the Thomson Payment prior to the distribution to CBI holders in June of 1997, as compared to lower cash investments during the same period in 1996. The Trust will not receive any further income other than interest income from the Trust's temporary cash investments. The Trust incurred liquidation costs of $287,000 and $575,000 during the three and nine month periods ended September 30, 1997, as compared to $159,000 and $568,000 during the same period in 1996, consisting primarily of professional fees (including fees related to reporting under the securities laws and accounting fees), fees to the Trustees of the Trust, and fees for office space. The increase in liquidation costs for the three months ended September 30, 1997 as compared to the three months ended September 30, 1996 is primarily due to the increase in professional fees associated with the winding up of the Trust, some of which were prepaid during this quarter in anticipation of the winding up of the Trust by the end of December 1997. The increase also reflects the payment of professional fees that had accrued during the previous quarter, but were not paid until the current quarter. The Trustees have declared a record date of December 15, 1997 for the final distribution of cash to CBI holders on or about December 29, 1997. The Trust by its counsel will move the Bankruptcy Court before the Honorable Burton R. Lifland, Bankruptcy Judge for the Southern District of New York, on December 11, 1997 at 10:00 a.m. (the "Hearing Date") or as soon thereafter as counsel can be heard, in a courtroom to be announced on the Hearing Date and located at the United States Bankruptcy Court for the Southern District of New York, Alexander Hamilton Customs House, One Bowling Green, New York, New York 10004, for the entry of an order (the "Final Order"): (a) authorizing the establishment of a windup reserve; (b) approving the final distribution to CBI holders on or about December 29, 1997; (c) approving the appointment of an administrator for the windup reserve; (d) approving disposition of the remaining Trust assets; (e) confirming the termination of the Trust as of December 31, 1997; (f) approving the Final Report to CBI holders; and (g) releasing and discharging Trustees from all claims arising from their duties as Trustees. The Trustees expect to begin mailing the Final Report to CBI holders no later than November 21, 1997. If the Bankruptcy Court enters the Final Order, the Trust will make a final distribution of cash to CBI holders on December 29, 1997, all issued and outstanding Units will be canceled as of that same date, the Trustees will be released from all claims arising from their duties as Trustees and will be discharged from further responsibility to the Trust, and the Trust will terminate as of December 31, 1997. If the Trust incurs all of the current estimated costs of liquidation, the final distribution of cash to CBI holders would consist of approximately $3,705,000 ($1.12 per Unit). While the Trust may not incur all of the - 9 - 10 estimated costs of liquidation, there can be no assurance that the Trust will not incur a greater amount, thereby reducing the actual distribution to CBI holders. The Trust assets consist solely of the Cash Reserve of approximately $3,910,000 as of September 30, 1997. In order to maintain the listing of the Units on the Pacific Exchange, Inc., the Units must trade at no less than $1.00 per Unit. If the trading price falls below $1.00 prior to the date of the final distribution, the Pacific Exchange, Inc. may commence delisting proceedings. There can be no assurance that the Units will continue to trade at $1.00 per Unit or more during the period prior to the final distribution. Subject to certain conditions, the Pacific Exchange, Inc. may suspend trading of the Units prior to the final distribution. Effective as of the date of the final distribution to CBI holders, the Units will be removed from listing on the Pacific Exchange, Inc. and all Units will be canceled as of that same date. PART II - OTHER INFORMATION ITEM 5. OTHER INFORMATION Upon a motion made by the Trust, and after notice of the hearing was provided to all CBI holders of record, the Bankruptcy Court entered an order on September 24, 1997 that determined that all undeliverable CBIs or cash distributions, and cash distribution checks that have not been cashed, were to be declared Unclaimed Distributions (as defined in the Plan) as of October 31, 1997. The Trust was ordered (i) to cancel, as of October 31, 1997, the undeliverable CBIs and the CBIs associated with the undeliverable or uncashed distribution checks, (ii) to stop payment on and cancel all outstanding checks that evidence such cash Unclaimed Distributions, and (iii) to distribute such cash Unclaimed Distributions on a pro rata basis to the identified and located CBI holders as part of the final distribution of cash to CBI holders. The Trust expects to cancel 1,177 Units as a result of this order. ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K (a) Exhibits: 27 Financial Data Schedule (b) Reports on Form 8-K No reports on Form 8-K were filed by the Trust during the third quarter of 1997. - 10 - 11 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 thereunto duly authorized. AEROSPACE CREDITORS LIQUIDATING TRUST (Registrant) BY: /s/ MARK M. FELDMAN --------------------------------------- Mark M. Feldman Trustee BY: /s/ BRADFORD T. WHITMORE --------------------------------------- Bradford T. Whitmore Trustee BY: /s/ PAUL S. WOLANSKY --------------------------------------- Paul S. Wolansky Trustee Dated: November 14, 1997 - 11 - EX-27 2 FINANCIAL DATA SCHEDULE
5 6-MOS DEC-31-1997 JUN-30-1997 3,910 0 0 0 0 0 0 0 3,925 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0
-----END PRIVACY-ENHANCED MESSAGE-----