Attached files
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| 8-K - Chartwell International, Inc. | v200072_8k.htm |
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UNITED STATES BANKRUPTCY COURT
SOUTHERN DISTRICT OF NEW YORK
-----------------------X In re:
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Chapter
11
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CHARTWELL
INTERNATIONAL INC.
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Case
No. 10-37467
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(CGM)
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Debtor.
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DEBTOR’S PREPETITION PLAN OF
REORGANIZATION
I.
SUMMARY
This Plan
of Reorganization (the “Plan”) under chapter 11 of the Bankruptcy Code (the
“Code”) proposes to pay creditors of Chartwell International, Inc. (the
“Debtor”) from shares in the reorganized Debtor. This Plan provides for one
class of secured claims; one class of unsecured claims; and one class of equity
security holders. Unsecured creditors holding allowed claims will receive stock
distributions, which the Debtor has valued at approximately 8.4 cents on the
dollar. This Plan also provides for the payment of administrative and priority
claims.
All
creditors and equity security holders should refer to Articles III through V of
this Plan for information regarding the precise treatment of their claim. A
disclosure statement that provides more detailed information regarding this Plan
and the rights of creditors and equity security holders has been circulated with
this Plan. Your rights may be
affected. You should read these papers carefully and discuss them with your
attorney, if you have one. (If you do not have an attorney, you may wish to
consult one.)
Definitions
1 "Administrative
Expense Claim" means any cost or expense of administration of the Chapter 11
cases allowed under Section 503(b) of the Bankruptcy Code, including, without
limitation, any actual and necessary expenses to the extent allowed by the
Bankruptcy Court under Section 330 of the Bankruptcy Code.
2 "Allowed
Claim" or "Allowed Interest" means a claim against, or Equity Security interest
in, the Debtors to the extent that:
a. If the claim or interest arose or is
deemed to have arisen on or before the Filing Date, (1) proof of the claim or
interest either is timely filed or is deemed filed under Code Section 1111(a)
and (2) the claim or interest either is not the subject of a timely filed
objection or is allowed by a Final Order; or
b. If the claim arose after the Filing
Date and is not deemed to have arisen on or before such date, (1) the claim is
of a kind that can be voluntarily paid from the
Debtors'estate
without specific Bankruptcy Court approval and is so paid or (2) the claim has
been allowed by a Final Order; and
c. Such
claim is not subject to disallowance pursuant to Section 502(d) of the
Code.
3. "Allowed
Secured Claim" means the Allowed Claim determined to be secured under provisions
of Section 506 of the Bankruptcy Code.
1 "Bankruptcy
Code" means Title 11 of the United States Code and any amendments applicable to
this case.
2 "Bankruptcy
Court" means the United States Bankruptcy Court for the Southern District of New
York or, in the event such court ceases to exercise jurisdiction over this
Chapter 11 case, such court or adjunct thereof which thereafter exercises
jurisdiction over this Chapter 11 case.
3 "Bankruptcy
Rules" means the Federal Rules of Bankruptcy Procedure, as amended, as
applicable to cases pending before the Bankruptcy Court.
8. "Cash"
means cash and cash equivalents including, but not limited to, checks and other
similar forms of payment or exchange.
3"Claimant"
means a holder of an Allowed Claim.
3"Confirmation"
means entry of the Confirmation Order.
11.
"Confirmation Order" means the entered order of the Bankruptcy Court confirming
the Debtors'Plan.
13. "Debtor"
means Chartwell International, Inc., a Nevada corporation.
1 "Disputed
Claim" or "Disputed Interest" means a claim against, or equity security interest
in, a Debtor (a) which has been included in the Debtors'schedules as disputed,
contingent, or unliquidated, unless proof of such claim has been filed which has
not been objected to, or (b) as to which the Debtor or any other party in
interest has interposed an objection in accordance with the Bankruptcy Code and
the Bankruptcy Rules, which objection has not been withdrawn or determined by a
Final Order.
2 "Distribution" means
the Equity Security to be distributed under the Plan to holders of Allowed
Claims, Allowed Interests or other parties in interest under the terms of the
Plan.
3 "Effective
Date" means the date on which merger of Debtor and ERH takes place, which shall
occur as soon as practicable after the order confirming the Plan
becomes a
Final Order, but in no event later than 90 days after the Final
Order.
1 "Equity
Security" means any equity interest in Debtor or in Reorganized Chartwell
including, but not limited to, preferred and common stock, options and
warrants.
2 "Final Order"
means an order of the Bankruptcy Court as to which (a) any appeal that has been
taken, with respect to which there has been a stay pending appeal, has been
finally determined or dismissed, or (b) the time for appeal has expired and a
notice of appeal has not been filed timely, or (c) a notice of appeal has been
timely filed for which there is no stay issued pending appeal.
3 "Plan" means
this Plan of Reorganization together with any amendments or modifications
thereto which may be filed by Debtor.
4 "Priority
Claim" means any claim, other than an Administrative Expense Claim or a Tax
Claim, to the extent entitled to priority in payment under Section 507(a) of the
Bankruptcy Code.
2
24.
"Priority Creditor" means any creditor that holds a Priority Claim.
25.
"Reorganized Chartwell" and “Reorganized Debtor” mean Chartwell subsequent to
the merger of ERH (defined below) with Chartwell or ERH becoming a wholly owned
subsidiary of Chartwell.
1"Tax
Claim" means any claim that is entitled to priority in payment under Section
507(a)(8) of the Bankruptcy Code.
2"Unclaimed
Property" means any distributions that remain unclaimed ninety (90) days
following each distribution under the Plan.
3"Unimpaired
Claims" means any claims that are not impaired under Debtors'Plan in accordance
with Section 1124 of the Bankruptcy Code.
4"Unsecured
Claims" means all Allowed Claims other than Allowed Secured Claims,
Administrative Expense Claims, Priority Claims, Tax Claims, and claims
of
32.
"Unsecured Claimants" means any Claimant that is the holder of an Unsecured
Claim.
B.
Undefined Terms: A term used, but not defined in Debtors'Plan, but defined in
the Bankruptcy Code has the meaning given to that term in the Bankruptcy
Code.
II.
CLASSIFICATION OF CLAIMS AND INTERESTS
A.
Nonclassified Claims: Priority claims pursuant to 11 U.S.C. Section 507(a) are
not
classified under this Plan.
B. Classified
Claims: All Allowed Claims (except Allowed Claims treated under Article III of
this Plan) and Allowed Interests are placed in the following
Classes:
Class 1:
Secured claims;
Class 2:
Unsecured Claims;
Class 3:
Preferred stock shareholders and common stock shareholders;
C.
Specification and Treatment of Claims and Interests: The treatment of the claims
and interests described below applies only to Allowed Claims and Allowed
Interests. Distributions to holders of claims or interests that are not Allowed
Claims or Allowed Interests as of the Effective Date will be made, in accordance
with the Plan provisions for such classes of claims and interests, after each
such claim or interest becomes an Allowed Claim or Allowed
Interest.
III.
TREATMENT OF NONCLASSIFIED CLAIMS
Administrative
Expenses & Priority Claims
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1 Except as
provided in paragraphs 2 and 3, below, the holders of Allowed Claims entitled to
priority under Section 507(a) of the Bankruptcy Code, except professional fees
requiring court approval under Section 330 of the Bankruptcy Code, shall be paid
on the Effective Date or as soon thereafter as such a claim becomes an Allowed
Claim, except to the extent a holder of such claim has agreed to other
treatment. Professional fees shall be paid upon court approval of a duly noticed
fee application. All such Administrative Expense Claims and Priority Claims
shall retain their priority status until paid in full. Such priority status
shall continue in the event such claims are not paid under this Plan, including,
but not limited to, conversion of this case to Chapter 7. Post Confirmation fees
to professionals shall be paid in full, monthly, unless otherwise agreed with
such professionals. The Court shall retain jurisdiction to address
Debtors'objections to any fees.
2 The holders
of Allowed Claims entitled to priority pursuant to 11 U.S.C. Section 507(a)(8)
may be paid monthly by Debtors over a period of up to six years or sooner at the
discretion of Debtors, with interest at the rate allowed by law.
3 Administrative
Expense Claims for goods and services incurred in the ordinary course of
Debtors'business will be paid in accordance with Debtors'agreement with the
holders thereof.
IV.
SPECIFICATION AND TREATMENT OF CLASSIFIED CLAIMS AND INTERESTS
Holders
of Allowed Claims and Interests shall receive the distributions set forth in
this Article on account of, and in complete satisfaction of, all such Allowed
Claims.
All stock
issued pursuant to this Plan shall be issued on the Effective Date or as soon
thereafter as is practicable. No fractional shares will be issued, but will
instead be rounded to the next nearest whole number.
1 Class 1 is
impaired and consists of the Allowed Secured Claims of approximately $3,176,314.
Debtor estimates that the value of the security held for these claims totals
approximately $1,080.000, and the deficiency portion totals $2,096,314. Debtor
shall transfer the security to the respective secured creditors, and all
portions of the Secured Claims not satisfied by such transfer shall be included
in the Class 2 Claims.
2 Class 2 is
impaired and consists of all non-priority Allowed Unsecured Claims. Debtor
estimates the Allowed Unsecured Claims total approximately $2,211,865, the
deficiency portion of Secured Claims totals $2,096,314, and the total Claims
equals $4,308,179. Each Claimant with an Allowed Claim in Class 2, together with
each Claimant with an unsatisfied portion of a Secured Claim, shall receive a
pro rata portion of shares of Common Stock in Reorganized Chartwell, said shares
representing five percent (5%) of the common shares of Reorganized
Chartwell.
3 Class 3 is
impaired and consists of the holders of preferred and common stock of Debtor.
The preferred stock shall be converted into common stock, at the ratios of their
respective agreements. The current shareholders will retain the number of shares
currently owned , but shall be diluted to five percent (5%) of the common shares
of Reorganized Chartwell,
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V. MEANS
FOR IMPLEMENTATION OF THE PLAN
A.
Formation and Capitalization of Reorganized Debtor: Energy Resources Holdings,
LLC (“ERH”) will merge with Debtor and the ERH members will receive sufficient
shares of newly issued common stock of Reorganized Debtor to equal 39% of the
issued common stock of Reorganized Debtor. ERH will provide debtor-in-possession
financing (subject to Bankruptcy Court approval), which will be converted into
51% of the issued common stock of reorganized Debtor. Said shares shall be
issued upon Confirmation of Debtor's Plan and consummation of the
Merger.
Upon the
Effective Date, (a) the Board of Directors of Reorganized Chartwell shall be
authorized to declare, and to take all steps necessary to effectuate, a reverse
stock split of one (1) post-split share of Reorganized Chartwell common stock
for every two (2) pre-split shares of Debtor’s common stock held by current
shareholders; (b) Reorganized Chartwell shall (i) issue common stock to be
issued to holders of Allowed Secured Claims in Class 1 for the deficiency
amount, and (ii) issue common stock to the holders of Allowed Claims in Class 2;
(iii) increase the number of authorized shares of common stock to 500,000,000
and (iv) change the name of the Reorganized Debtor to “Covalent International
Group, Inc.”. Immediately thereafter, the Merger shall be consummated and ERH
shall be merged into Chartwell or become its wholly owned subsidiary ("Chartwell
Subsidiary"). Reorganized Debtor expects to change its domicile to Delaware from
Nevada by merging with a Delaware corporation that it shall establish to
accomplish this result. Concurrently, Chartwell also shall issue the shares for
conversion of the debtor-in-possession financing, to be distributed pursuant to
the terms of the debtor-in-possession financing agreement.
No other
rights to acquire Equity Securities may be issued by Reorganized Chartwell in
connection with this Plan. However, this restriction shall not prohibit
Reorganized Chartwell from issuing additional Equity Securities after
consummation of these transactions contemplated by the Plan as long as such
issuances do not violate the terms of this Plan.
B.
Liquidity and Transferability of Post-Confirmation Equity Interests: No
representations are made to any party concerning the tax attributes and effects
of issuance of shares, options and warrants pursuant to the Plan. You are
advised to consult your own tax adviser.
THE STOCK
OF REORGANIZED DEBTOR IS STOCK WHICH DEBTOR ANTICIPATES WILL BE ACTIVELY TRADED.
REORGANIZED DEBTOR WILL HAVE NO CONTROL OVER MARKET REACTIONS AND MAKES NO
REPRESENTATION THAT IT WILL SUCCEED IN CREATING AN ACTIVE TRADING MARKET OR
ACHIEVING ANY SPECIFIC VALUE.
C. The
Board of Directors of Reorganized Chartwell shall consist initially of Chartwell
shall consist initially of five (5) directors: Robert Papiri, Ernest Stern,
Jonathan Kelafant, Imre Eszenyi, and Herman Hohauser. until their successors are
duly elected and qualified, or until their earlier resignation or removal.
Senior management will include Herman Hohauser (CEO), Paul Biberkraut (Chief
Financial and Administrative Officer) and Oleg Voloshyn, Finance
Director.
The Board
of Directors of Chartwell shall have at least two committees, the Compensation
Committee and the Audit Committee.
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D.
Treatment of Security Interests: All security interests and liens including, but
not limited to judicial liens and attachments, are extinguished at
Confirmation.
VI.
RECOVERY OF AVOIDABLE TRANSFERS
The
Debtor may commence any adversary proceeding to recover transfers avoidable
under the Bankruptcy Code within the time specified in the Bankruptcy
Code.
IX. RETENTION, ENFORCEMENT AND WAIVER
OF CLAIMS
X. TREATMENT OF EXECUTORY CONTRACTS AND
UNEXPIRED LEASES
Debtor
shall retain and may enforce claims held by it or its estate except such claims
which have been waived, relinquished, or released in accordance with this
Plan.
All
executory contracts and unexpired leases to which Debtor is a party at the time
the case is commenced will be rejected. The last date to file claims for
rejected contracts and/or unexpired leases shall be 30 days after the Effective
Date. Any entity with a claim that arises from the rejection of an executory
contract or unexpired lease shall have the rights of a Class 2 unsecured
claimant to the extent such claim becomes an Allowed Claim in that
Class.
XI.
TAXES
No
representations are made to any party concerning the tax attributes and affects
of this Plan. You are advised to consult your own tax adviser.
XII.
REVESTING
Except as
provided in the Plan or in the Confirmation Order, on the Effective Date,
Reorganized Chartwell shall be vested with all the property of Debtor’s estate
free and clear of all claims, liens, security interests, charges and other
interests of the creditors arising prior to Confirmation.
XIII. BAR
DATE AND NOTICE
1 Pre-Petition
Claims: In accordance with Federal Rules of Bankruptcy Procedure, Rule
3003(c)(3), unless otherwise waived, the Court will establish a bar date as the
last day by which creditors would be permitted to file Proofs of Claim in this
case (the "Bar Date"). Pursuant to Bankruptcy Code Section 502 and Federal Rules
of Bankruptcy Procedure, Rule 3003(c)(2), any creditor whose claim is not
scheduled by Debtors or was scheduled as disputed, contingent or unliquidated,
and who fails to file a Proof of Claim on or before the Bar Date, will not be
treated as a creditor with respect to such claim for purposes of voting on, and
receiving a distribution under, the Plan. Debtor intends to file objections to
all late filed claims and to all duplicate, excessive or otherwise defective
claims.
2 Administrative
Claims: Any creditor who has an Administrative Expense Claim (other than for
ordinary business expenses payable in the ordinary course and other than
professionals) shall file a proof of claim or application for payment with the
Court for such administrative expenses on or before 45 days after the Effective
Date and serve a copy thereof on Debtor. Administrative Expense Claims filed
after the deadline set forth herein shall be barred and Debtor shall have no
obligation to pay such late filed claims. This provision specifically excludes
administrative claims of professionals employed in this Bankruptcy
Case.
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XV.
RETENTION OF JURISDICTION
Notwithstanding
Confirmation, the Bankruptcy Court shall retain full jurisdiction as provided in
28 U.S.C. Section 1334 to enforce the provisions, purposes, and intent of this
Plan including, without limitation:
1.
Determination of the allowability and priority of claims and
interests;
2. Determination of requests for
payment of claims entitled to priority under Section 507(a)(1) of the Bankruptcy
Code, including compensation of parties entitled thereto;
3. Resolution of controversies and
disputes regarding interpretation of this Plan;
2Implementation
of the provisions of this Plan and entry of orders in aid of Confirmation of
this Plan, including, without limitation, appropriate orders to protect the
Debtor from creditor action;
3Modification
of this Plan pursuant to Section 1127 of the Bankruptcy Code and amendments to
this Plan after substantial consummation;
6.
Adjudication of any causes of action brought by the Debtor;
7. Any
determination or estimation necessary or appropriate under Section 505 of the
Bankruptcy Code or other determination or estimation relating to tax returns
filed or to be filed by the Debtor for periods through the end of the fiscal
year in which the Effective Date occurs, including the determination of the
amount of taxes, net operating losses, tax attributes, tax benefits, tax
refunds, and related matters of the Debtor; and
8. Entry
of a final decree closing this case.
XVI.
POST-CONFIRMATION NOTICES
In the
event it is necessary to provide notice to creditors after the Plan is
confirmed, notice will be mailed only to the following: (1) parties affected by
the noticed action, (2) committees appointed in the case, (3) Debtor, (4)
Reorganized Chartwell, (5) United States Trustee, and (6) parties requesting
special notice of post-confirmation matters.
XVII.
UTILITIES
All
deposits made to utility companies during the pendency of this case shall be
returned to Debtors within fifteen (15) days after the Effective Date of this
Plan.
Date: May
25, 2010
| Respectfully submitted, | |||
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By:
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/s/ Imre Eszenyi, Chairman | |
| Debtor | |||
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/s/
Brian Guillorn
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Attorney
for Debtor
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