The reorganization plan filed by Baha Mar yesterday, to provide the U.S. Bankruptcy Court in Delaware with the developer's proposal for an alternative to winding up the 15 associate companies, contemplates an entity called "New Baha Mar" and lays out certain transactions that would take place should the plan be approved, including dissolution of BML Properties Ltd., Sarkis Izmirlian's holding company for Baha Mar Ltd. -- which is the developer of the stalled multibillion-dollar megaresort shuttered on the Cable Beach strip.
It is noteworthy, perhaps, that many of the provisions under the plan transactions seem intended in part to free the reorganized company from the need to return to the bankruptcy court, or in at least one instance, equity interest holders, for approval before acting. And one of the most important provisions of the new deal would be the disappearance - for all practical purposes -- of any debts incurred by Baha Mar companies prior to the date the reorganization plan goes into effect.
Once the plan has been confirmed, it provides for Baha Mar -- or the reorganized debtors, possibly called "New Baha Mar" -- to undertake the execution and delivery of appropriate agreements or other documents of merger, amalgamation, consolidation, reorganization, or dissolution containing terms consistent with the terms of the plan and that satisfy the requirements of applicable law.
The plan also provides -- upon approval -- for the execution and delivery of appropriate instruments of transfer, assignment, assumption, or delegation of any property, right, liability, duty, or obligation on terms consistent with the terms of the plan; the filing of appropriate certificates of incorporation, certificates of partnership, merger, amalgamation, consolidation, conversion, reconstitution, or dissolution with the appropriate governmental authorities pursuant to applicable law; and all other actions that the debtors or the reorganized debtors determine are necessary or appropriate. New Baha Mar Common Equity Should the plan be approved, Baha Mar Ltd. would issue or authorize the issuance of the New Baha Mar Common Equity and all related instruments, certificates, and other documents required to be issued or distributed pursuant to the plan without the necessity of any further act or action under applicable law, regulation, order, or rule, or order of the bankruptcy court, but subject to the receipt of all regulatory approvals required in connection with such issuance, if any.
"New Baha Mar Common Equity" means shares of common stock, par value $.001 per share, in Baha Mar Ltd. that shall be issued or authorized on the date the plan becomes effective, at plan equity value. Exit financing The next plan transaction deals with exit financing: documentation evidencing the exit financing -- that is, financing in an amount sufficient to complete construction of the project, open the project, and provide adequate working capital for the project, on terms and conditions acceptable to the debtors, which shall consist of the exit facility and, if necessary, other additional financing, including, without limitation, equity financing using new baha mar common equity -- would be executed and delivered, and the reorganized debtors would be authorized to execute, deliver, enter into, and perform under, the exit financing without the need for any further corporate action or any notice to, or order of, the bankruptcy court.
All liens and security interests granted pursuant to the exit facility are intended to be, and shall be, (i) valid, binding, perfected, and enforceable liens and security interests in the personal and real property described in and subject to such documents, with first-priority liens on the debtors' unencumbered assets and junior liens on the debtors' assets that are already subject to valid, perfected and unavoidable prepetition liens, as set forth in more detail therein, and (ii) not subject to avoidance, recharacterization, or subordination under any applicable law.
Dissolution of BML Properties Ltd. Also, if the plan is approved, BML Properties Ltd. may file all appropriate and necessary documentation to dissolve without the necessity of the approval of the board of directors of BML Properties Ltd. or the holders of equity interests in BML Properties Ltd. To the extent that the foregoing is inconsistent, or in conflict, with any preexisting organizational or related documents of BML Properties Ltd., such documents are deemed amended by the Plan to permit and authorize BML Properties Ltd. to take such contemplated actions. New CEXIM Bank Facility Upon plan approval, documentation evidencing the New CEXIM Bank Facility would be executed and delivered, and the reorganized debtors would be authorized to execute, deliver, enter into, and perform under, the New CEXIM Bank Facility without the need for any further corporate action or any notice to, or order of, the bankruptcy court.
The "New CEXIM Bank Facility" means that certain amended senior secured credit facility and related documents, executed on the date the plan becomes effective by the reorganized debtors and the parties thereto, which would (a) include the existing interest rate and maturity date under the CEXIM Bank Facility, (b) be secured by the Liens securing the CEXIM Bank Facility, and (c) include such other terms as set forth in the plan supplement. All liens and security interests granted pursuant to the New CEXIM Bank Facility are intended to be, and shall be, valid, binding, perfected, and enforceable Liens and security interests in the personal and real property described in and subject to such documents.
New Baha Mar Notes The New Baha Mar Notes would be issued to the holders of allowed U.S. general unsecured claims, who elect to receive such notes as contemplated by the plan, and the reorganized debtors would be authorized to execute and deliver such notes without the need for any further corporate action or any notice to or order of the Bankruptcy Court and without further action by the holders of claims or equity interests or any other person.
Assets and cash Another critical part of the plan is the vesting of assets in reorganized debtors. The plan, if approved, would provide -- with specific exceptions -- that all property in each estate, all retained causes of action, and any property acquired by any of the debtors pursuant to the plan would vest in each respective reorganized debtor, free and clear of all liens, claims, charges, or other encumbrances without further notice to, or action, order, or approval of, the bankruptcy court, any other court, or any other entity, and any and all proceeds of the foregoing should be used by the reorganized debtors for any general corporate purposes, including, without limitation, debt repayment and/or the issuance of dividends on account of equity interests, as determined by the reorganized debtors' boards.
Except as otherwise provided in the plan, each reorganized debtor may operate its business and may use, acquire, or dispose of property and compromise or settle any claims, equity interests, or retained causes of action without further notice to, or action, order, or approval of, the bankruptcy court or any other court, or any other entity and free of any restrictions of the bankruptcy code or bankruptcy rules. And importantly, the plan provides that -- except as otherwise provided in the plan -- after the date the plan is approved, no reorganized debtor and no affiliate of any such reorganized debtor shall have, or be construed to have or maintain, any liability, claim, or obligation that is based in whole or in part on any act, omission, transaction, event, or other occurrence or thing occurring or in existence on or prior to the effective date of the plan -- including, without limitation, any liability, claim, or obligation arising under applicable non-bankruptcy law as a successor to any debtor -- and no such liability, claim, or obligation for any acts shall attach to any of the reorganized debtors or any of their affiliates.
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