EX-99.3 5 dex993.txt NOTICE TO STOCKHOLDERS EXHIBIT 99.3 IN THE UNITED STATES BANKRUPTCY COURT FOR THE NORTHERN DISTRICT OF TEXAS FORT WORTH DIVISION IN RE: (S) Chapter (S) KITTY HAWK, INC., et al. (S) Case No. 400-42069-BJH and (S) Case Nos. 400-42141 through Debtors (S) Case No. 400-42149 (S) (S) Jointly Administered Under (S) Case No. 400-42141-BJH Notice to Stockholders of Kitty Hawk, Inc. Regarding the Debtors' Joint Plan of Reorganization Dated May 22, 2002 As you should be aware, Kitty Hawk, Inc. and its subsidiaries (collectively, the "Debtors") are currently debtors-in-possession in Chapter 11 bankruptcy cases. The Debtors have proposed the Debtors' Joint Plan of Reorganization Dated May 22, 2002 (the "Plan") and the Bankruptcy Court has authorized the Debtors to solicit acceptances or rejections of the Plan from holders of claims and equity interests. Because the Debtors have insufficient assets to provide any distribution or value to the stockholders of Kitty Hawk, Inc., your stock is being canceled and you are deemed to have rejected the Plan and are not being asked to vote on it. Immediately before the bankruptcies were filed, Kitty Hawk International suspended operations. The Debtors now seek to reorganize primarily around their scheduled airfreight overnight business. The Plan provides for the post-confirmation merger of most of the Debtors into a single Delaware corporation ("Reorganized Kitty Hawk" or the "Reorganized Debtor") which will be called Kitty Hawk Cargo, Inc./1/ and for the continuation of the Debtors' core business. The Debtors will have reduced the Bank Group's Secured Claims to approximately $6 million/2/ as a result of paydowns required by various cash collateral orders. Reorganized Kitty Hawk hopes to enter into a revolving working capital facility with a new lender on the Effective Date which will have an availability of up to $10 million based on commercially reasonable borrowing base formulas. If Reorganized Kitty Hawk is successful in acquiring a revolver before the Effective Date, the Bank Group's Secured Claims will be repaid on the Effective Date. If not, the Reorganized Debtors will deliver a short term note to the Bank Group in satisfaction of the Bank Group Secured Claims. The Secured Claim of First Source will be paid pursuant to its terms. Administrative and Priority Claims will be paid from cash on hand, asset sales and the proceeds of the working capital facility. As part of a settlement with the holders of the Senior Notes, Noteholders will receive a cash payment of approximately $28 million and 80% of the New Common Stock on account of the Noteholders' Adequate Protection Claim. The claims against the Debtors will be consolidated for distribution purposes. Holders of Allowed Unsecured Claims will receive their pro rata share of 14% of the issued and outstanding stock of Reorganized Kitty Hawk. The remaining 6% of the stock will be distributed to Pegasus and Wren, the holders of large post-petition claims that are being restructured. All of the Old Common Stock in Kitty Hawk will be cancelled and shareholders will receive nothing on account of their interests in the Debtors. Because unsecured creditors are not being paid in full, the priority scheme of the Bankruptcy Code provides that stockholders may not receive a distribution on account of their equity interests in Kitty Hawk. The stock of Kitty Hawk, Inc. is canceled under the Plan. The Bankruptcy Court has scheduled the Confirmation Hearing for July 2, 2002 at 9:00 a.m., Central Time, before the Honorable Barbara Houser, United States Bankruptcy Judge, U.S. Bankruptcy Court, 1100 Commerce Street, Dallas, Texas 75242. The Confirmation Hearing may be adjourned from time to time by oral notice at such hearing. If you object to confirmation of the Plan, you must file a written objection with the Clerk for the Bankruptcy Court in Fort Worth, Texas, 147 U.S. Courthouse, 501 West 10/th/ Street, Fort Worth, Texas 76102-3643 on or before June 25, 2002 at 4:30 p.m. Fort Worth, Texas Time and serve a copy ------------------------------------------------- on the following: ___________________________ /1/Kitty Hawk Aircargo (a Texas corporation), will remain a wholly-owned subsidiary of Reorganized Kitty Hawk. /2/This number is subject to reduction in the event that certain professional fees and interest paid to the Bank Group are determined by the Court to be reductions of principal. The Indenture Trustee and the Unofficial Noteholders' Committee intend to seek such relief.
For the Debtors Indenture Trustee's Counsel --------------- --------------------------- James R. Craig GARDNER, CARTON & DOUGLAS Kitty Hawk, Inc. Jeffrey Schwartz P.O. Box 612787 321 N. Clark Street, 34/th/ Floor DFW Int'l Airport, Texas 75261 Chicago, IL 60610 Telephone: (972) 456-2200 Telephone: (312) 644-3000 Telecopy: (972) 456-2449 Telecopy: (312) 644-3381 Debtors' Counsel Unofficial Noteholders Committee's Counsel ---------------- ----------------------------------------- HAYNES AND BOONE, LLP WACHTELL, LIPTON, ROSEN & KATZ John D. Penn Scott Charles 201 Main Street, Ste. 2200 51 West 52/nd/ Street Fort Worth, Texas 76201 New York, NY 10019-6150 Telephone: (817) 347-6610 Telephone: (212) 403-1000 Telecopy: (817) 348-2300 Telecopy: (212) 403-2000 Office of the United States Trustee Address of Bankruptcy Court Clerk ----------------------------------- --------------------------------- George McElreath Office of the United States Trustee United States Bankruptcy Court, Northern District 1100 Commerce Street, Room 9C60 of Texas, Fort Worth Division Dallas, Texas 75242 147 U.S. Courthouse Telephone: (214) 767-8967 501 West 10th Street Telecopy: (214) 767-8971 Fort Worth, Texas 76102 Official Committee of Unsecured Creditors ----------------------------------------- DIAMOND McCARTHY TAYLOR & FINLEY Kyung S. Lee 909 Fannin, Suite 1500 Houston, Texas 77010 Telephone: (713) 333-5125 Telecopy: (713) 333-5195
Pursuant to an order of the Bankruptcy Court, the Debtors will not provide you with a copy of the Plan or Disclosure Statement for the Plan unless you request a copy in writing. Please direct your requests for copies to: Haynes and Boone, L.L.P. 901 Main Street, Suite 3100 Dallas, Texas 75201-3714 Attn: Ian Peck You may also access the Plan and Disclosure Statement in the EDGAR database of the Securities and Exchange Commission which is accessible at www.sec.gov and ----------- through a number of investment services on the Internet. The Plan and Disclosure Statement will also be posted on the website maintained by counsel for the Debtors at www.haynesboone.com/kittyhawk. ----------------------------- Any questions reqarding this notice should be directed to one of the following attorneys with Haynes and Boone, L.L.P., attorneys for the Debtors: John Penn 817-347-6610 Ian Peck 214-651-5144 Sarah Foster 512-867-8412 Robert D. Albergotti 214-651-5613 NOTICE: IF YOU HOLD EQUITY SECURITIES OF KITTY HAWK, INC. AS NOMINEE OR FOR THE BENEFIT OF ANOTHER PARTY, YOU ARE DIRECTED TO DELIVER A COPY OF THIS NOTICE TO ALL BENEFICIAL HOLDERS OF SUCH EQUITY SECURITIES REGISTERED UNDER YOUR NAME.