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IN THE UNITED STATES BANKRUPTCY COURT
FOR THE EASTERN DISTRICT OF VIRGINIA
ALEXANDRIA DIVISION
)
In re: )
) Case No. 02-83984-SSM ) Jointly Administered
US AIRWAYS GROUP, INC., et al., ) Chapter 11
) Hon. Stephen S. Mitchell
Debtors. )
)
FIRST AMENDED JOINT PLAN OF REORGANIZATION
OF US AIRWAYS GROUP, INC. AND ITS AFFILIATED
DEBTORS AND DEBTORS-IN-POSSESSION, AS MODIFIED
----------------------------------------------
John Wm. Butler, Jr.
John K. Lyons
SKADDEN, ARPS, SLATE, MEAGHER & FLOM (ILLINOIS)
333 West Wacker Drive, Suite
2100 Chicago, Illinois 60606-1285
(312) 407-0700
Alesia Ranney-Marinelli
SKADDEN, ARPS, SLATE,
MEAGHER & FLOM LLP
Four Times Square
New York, NY 10036
(212) 735-3000
Lawrence E. Rifken (VSB No. 29037)
Douglas M. Foley (VSB No. 34364)
McGUIREWOODS LLP
1750 Tysons Boulevard, Suite 1800
McLean, Virginia 22102-4215
(703) 712-5000
Attorneys for Debtors and Debtors-in-Possession
Dated: January 17, 2003
TABLE OF CONTENTS
PAGE
INTRODUCTION............................................A-1
ARTICLE I
DEFINITIONS, RULES OF
INTERPRETATION, AND COMPUTATION OF TIME...........A-2
A. Scope of Definitions.........................A-2
B. Definitions..................................A-2
1.1 "Administrative Claim"..................A-2
1.2 "Administrative Claims Bar Date"........A-2
1.3 "ADR Procedures"........................A-2
1.4 "AFA"...................................A-2
1.5 "AFA Designated Representative".........A-2
1.6 "Affiliate Debtors".....................A-2
1.7 "Affiliates"............................A-2
1.8 "Aircraft Equipment"....................A-2
1.9 "Aircraft Secured Claim"................A-3
1.10 "Aircraft Secured Claimholder"..........A-3
1.11 "Allegheny".............................A-3
1.12 "Allowed Claim" or "Allowed Interest"...A-3
1.13 "Allowed Class...Claim"
or "Allowed Class....Interest"..........A-3
1.14 "ALPA"..................................A-3
1.15 "ALPA Designated Representative"........A-3
1.16 "ATSB"..................................A-3
1.17 "ATSB Agent"............................A-3
1.18 "ATSB Loan".............................A-3
1.19 "ATSB Loan Agreement"...................A-4
1.20 "Avoidance Claims"......................A-4
1.21 "Ballot"................................A-4
1.22 "Bankruptcy Code".......................A-4
1.23 "Bankruptcy Court"......................A-4
1.24 "Bankruptcy Rules"......................A-4
1.25 "Bar Date"..............................A-4
1.26 "Bar Date Order"........................A-4
1.27 "Bilateral Cargo Prorate Agreements"....A-4
1.28 "Bilateral Passenger Prorate Agreements"A-4
1.29 "Business Day"..........................A-4
1.30 "Cargo Multilateral Interline
Traffic Agreements".....................A-4
1.31 "Cash"..................................A-5
1.32 "Causes of Action"......................A-5
1.33 "Certificate"...........................A-5
1.34 "Certificates of Incorporation and
Bylaws".................................A-5
1.35 "Chapter 11 Cases"......................A-5
1.36 "Claim".................................A-5
1.37 "Claimholder"...........................A-5
1.38 "Claims Agent"..........................A-5
1.39 "Claims Objection Deadline".............A-5
1.40 "Class".................................A-5
1.41 "Class A Common Stock"..................A-5
1.42 "Class A Preferred Stock"...............A-5
1.43 "Class A-1 Warrants"....................A-6
1.44 "Class B Common Stock"..................A-6
1.45 "Class B Preferred Stock"...............A-6
1.46 "Class C Preferred Stock"...............A-6
1.47 "Confirmation Date".....................A-6
1.48 "Confirmation Hearing"..................A-6
1.49 "Confirmation Order"....................A-6
1.50 "Continuing Indemnification Rights".....A-6
1.51 "Convenience Class Election"............A-6
1.52 "Creditors' Committee"..................A-6
1.53 "Cure"..................................A-6
1.54 "CWA"...................................A-7
1.55 "CWA Designated Representative".........A-7
1.56 "Debtor" or "Debtors"...................A-7
1.57 "DIP Agent".............................A-7
1.58 "DIP Credit Agreement"..................A-7
1.59 "DIP Facility"..........................A-7
1.60 "DIP Facility Claim"....................A-7
1.61 "DIP Facility Order"....................A-7
1.62 "DIP Lenders"...........................A-7
1.63 "Disallowed Claim" or "Disallowed
Interest"...............................A-7
1.64 "Disbursing Agent"......................A-7
1.65 "Disclosure Statement"..................A-7
1.66 "Disputed Claim" or "Disputed Interest".A-8
1.67 "Distribution Date".....................A-8
1.68 "Distribution Reserve"..................A-8
1.69 "Effective Date"........................A-8
1.70 "Employee-Related Agreements"...........A-8
1.71 "Estates"...............................A-8
1.72 "Exhibit"...............................A-8
1.73 "Exhibit Filing Date"...................A-8
1.74 "Existing Equity Securities"............A-8
1.75 "Face Amount"...........................A-8
1.76 "Final Order"...........................A-8
1.77 "GECC"..................................A-9
1.78 "GECC 2001 Financing Claim".............A-9
1.79 "GECC 2001 Financing Agreement".........A-9
1.80 "GE Global Restructuring Agreement".....A-9
1.81 "General Unsecured Claim"...............A-9
1.82 "General Unsecured Claimholder".........A-9
1.83 "General Unsecured Convenience Claim"...A-9
1.84 "Group".................................A-9
1.85 "Holdback Amount".......................A-9
1.86 "Holdback Escrow Account"...............A-9
1.87 "IAMAW".................................A-9
1.88 "IAMAW Designated Representative".......A-9
1.89 "IATA"..................................A-9
1.90 "Impaired"..............................A-9
1.91 "Indemnification Order".................A-9
1.92 "Indemnification Rights"...............A-10
1.93 "Indemnitee"...........................A-10
1.94 "Independent Directors"................A-10
1.95 "Industry Practice Agreements".........A-10
1.96 "Insurance Coverage"...................A-10
1.97 "Insured Claim"........................A-10
1.98 "Intercompany Claim"...................A-10
1.99 "Intercompany Executory Contract" .....A-10
1.100"Intercompany Interest"................A-10
1.101"Intercompany Unexpired Lease".........A-10
1.102"Interest".............................A-10
1.103"Interestholder".......................A-10
1.104"Interline Agreements".................A-11
1.105"Investment Agreement".................A-11
1.106"Key Ordinary Course Professional".....A-11
1.107"Key Ordinary Course Professional
Claim"................................A-11
1.108"Management Compensation Plan".........A-11
1.109"Material Services"....................A-11
1.110"MidAtlantic"..........................A-11
1.111"Miscellaneous Secured Claim"..........A-11
1.112"New Common Stock".....................A-11
1.113"New Equity"...........................A-11
1.114"Old Common Stock" ....................A-11
1.115"Old Common Stock Options".............A-11
1.116"Old Preferred Stock"..................A-12
1.117"Ordinary Course Professional Order"...A-12
1.118"Other Executory Contracts and
Unexpired Leases".....................A-12
1.119"Other Priority Claim".................A-12
1.120"Passenger Multilateral Interline
Traffic Agreements"...................A-12
1.121"PBGC".................................A-12
1.122"PBGC Claims"..........................A-12
1.123"Periodic Distribution Date"...........A-12
1.124"Person"...............................A-12
1.125"Petition Date"........................A-12
1.126"Piedmont".............................A-12
1.127"Plan".................................A-12
1.128"Plan Sponsor".........................A-12
1.129"Plan Sponsor Claim"...................A-12
1.130"Post-Confirmation Committee"..........A-13
1.131"Postpetition Aircraft Obligations"....A-13
1.132"Priority Tax Claim"...................A-13
1.133"Pro Rata".............................A-13
1.134"Professional".........................A-13
1.135"Professional Claim"...................A-13
1.136"Professional Fee Order"...............A-13
1.137"PSA"..................................A-13
1.138"Registration Rights Agreement"........A-13
1.139"Reinstated" or "Reinstatement"........A-13
1.140"Released Parties".....................A-14
1.141"Reorganized . . ."....................A-14
1.142"Reorganized Debtor" or "Reorganized
Debtors"..............................A-14
1.143"Retained Actions".....................A-14
1.144"RSA"..................................A-14
1.145"Scheduled"............................A-14
1.146"Schedules"............................A-14
1.147"Secured Claim"........................A-14
1.148"Securities Act".......................A-14
1.149"Security".............................A-14
1.150"Series 1 Class C Preferred Share".....A-15
1.151"Series 2 Class C Preferred Share".....A-15
1.152"Series 3 Class C Preferred Shares"....A-15
1.153"Series 4 Class C Preferred Share".....A-15
1.154"Servicer".............................A-15
1.155"Solicitation Procedures Order"........A-15
1.156"Subordinated Securities Claim"........A-15
1.157"Tax Sharing Agreement"................A-15
1.158"TWU"..................................A-15
1.159"TWU Designated Representatives".......A-15
1.160"Unimpaired"...........................A-15
1.161"USAI".................................A-15
1.162"US Airways Leasing"...................A-15
1.163"Voting Deadline"......................A-16
1.164"503 Deadline".........................A-16
C. Rules of Interpretation.....................A-16
D. Computation of Time.........................A-16
E. References to Monetary Figures..............A-16
F. Exhibits....................................A-16
ARTICLE II
ADMINISTRATIVE EXPENSES
AND PRIORITY TAX CLAIMS..........................A-17
2.1 Administrative Claims..................A-17
2.2 Priority Tax Claims....................A-17
ARTICLE III
CLASSIFICATION OF CLAIMS AND INTERESTS...........A-17
3.1 Group Classifications..................A-18
3.2 USAI Classifications...................A-18
3.3 Allegheny Classifications..............A-18
3.4 PSA Classifications....................A-19
3.5 Piedmont Classifications...............A-19
3.6 MidAtlantic Classifications............A-20
3.7 US Airways Leasing Classifications.....A-20
3.8 Material Services Classifications......A-20
ARTICLE IV
IDENTIFICATION OF CLASSES OF CLAIMS AND
INTERESTS IMPAIRED AND NOT IMPAIRED BY THE PLAN..A-21
4.1 Unimpaired Classes of Claims and
Interests..............................A-21
4.2 Impaired Classes of Claims and
Interests..............................A-21
ARTICLE V
PROVISIONS FOR TREATMENT
OF CLAIMS AND INTERESTS..........................A-22
5.1 Treatment of Claims and Interests for
Group...................................A-22
5.2 Treatment of Claims and Interests for
USAI....................................A-23
5.3 Treatment of Claims and Interests for
Allegheny...............................A-25
5.4 Treatment of Claims and Interests
for PSA.................................A-26
5.5 Treatment of Claims and Interests for
Piedmont................................A-28
5.6 Treatment of Claims and Interests for
MidAtlantic.............................A-29
5.7 Treatment of Claims and Interests for
US Airways Leasing......................A-31
5.8 Treatment of Claims and Interests
for Material Services...................A-32
5.9 Special Provision Regarding
Intercompany Claims and Interests.......A-33
ARTICLE VI
ACCEPTANCE OR REJECTION OF THE PLAN;
EFFECT OF REJECTION BY ONE OR MORE
IMPAIRED CLASSES OF CLAIMS OR INTERESTS..........A-34
6.1 Impaired Classes of Claims and
Interests Entitled to Vote..............A-34
6.2 Acceptance by an Impaired Class.........A-34
6.3 Presumed Acceptances by Unimpaired
Classes.................................A-34
6.4 Classes Deemed to Reject Plan...........A-34
6.5 Confirmation Pursuant to Section
1129(b) of the Bankruptcy Code..........A-34
ARTICLE VII
MEANSFOR IMPLEMENTATION OF THE PLAN..............A-34
7.1 Continued
Corporate Existence.........................A-34
7.2 Directors and Officers of Group.........A-35
7.3 Directors and Officers of Debtors
Other Than Group........................A-35
7.4 Employment, Retirement, Indemnification
and Other Agreements and Incentive
Compensation Programs...................A-36
7.5 Continuation of Retiree Benefits.......A-36
7.6 Certificate of Incorporation and BylawsA-36
7.7 Corporate Action.......................A-36
7.8 Post-Effective Date Financing..........A-36
7.9 Plan Sponsor...........................A-37
7.10 Issuance of New Equity.................A-37
7.11 Reinstatement of Common Stock of
Reorganized Debtors Other Than
Reorganized Group......................A-38
7.12 Preservation of Causes of Action.......A-38
7.13 Cancellation of Existing Equity
Securities and Agreements..............A-39
7.14 Exclusivity Period.....................A-39
7.15 Substantive Consolidation..............A-39
7.16 Effectuating Documents; Further
Transactions...........................A-40
7.17 Exemption From Certain Transfer
Taxes and Recording Fees...............A-40
7.18 Postpetition Aircraft Obligations......A-40
ARTICLE VIII
UNEXPIRED LEASES AND EXECUTORY CONTRACTS.........A-40
8.1 Assumed Contracts and Leases...........A-40
8.2 Rejected Contracts and Leases..........A-42
8.3 Payments Related to Assumption of
Executory Contracts and Unexpired
Leases.................................A-43
8.4 Rejection Damages Bar Date.............A-43
ARTICLE IX
PROVISIONS GOVERNING DISTRIBUTIONS...............A-43
9.1 Time of Distributions..................A-43
9.2 No Interest on Claims..................A-43
9.3 Disbursing Agent.......................A-44
9.4 Surrender of Securities or Instruments.A-44
9.5 Services of Indenture Trustees, Agents
and Servicers..........................A-44
9.6 Claims Administration Responsibility...A-44
9.7 Delivery of Distributions..............A-45
9.8 Procedures for Treating and
Resolving Disputed and Contingent
Claims.................................A-45
9.9 Fractional Securities; Fractional
Dollars................................A-46
ARTICLE X
ALLOWANCE AND PAYMENT OF CERTAIN ADMINISTRATIVE
CLAIMS...........................................A-46
10.1 DIP Facility Claim.....................A-46
10.2 Professional Claims....................A-47
10.3 Substantial Contribution Compensation
and Expenses Bar Date..................A-47
10.4 Other Administrative Claims............A-47
ARTICLE XI
EFFECT OF THE PLAN ON CLAIMS AND INTERESTS.......A-48
11.1 Revesting of Assets....................A-48
11.2 Discharge of the Debtors...............A-48
11.3 Compromises and Settlements............A-49
11.4 Release of Certain Parties.............A-49
11.5 Release by Holders of Claims and
Interests..............................A-49
11.6 Setoffs................................A-50
11.7 Satisfaction of Subordination Rights...A-50
11.8 Exculpation and Limitation of
Liability..............................A-50
11.9 Indemnification Obligations............A-50
11.10Injunction.............................A-51
ARTICLE XII
CONDITIONS PRECEDENT.............................A-51
12.1 Conditions to Confirmation.............A-51
12.2 Conditions to Consummation for
All Debtors............................A-51
12.3 Additional Condition to Consummation
Solely with Respect to Allegheny,
Piedmont and PSA.......................A-52
12.4 Waiver of Conditions to Confirmation
or Consummation........................A-52
ARTICLE XIII
RETENTION OF JURISDICTION........................A-52
ARTICLE XIV
MISCELLANEOUS PROVISIONS.........................A-54
14.1 Binding Effect.........................A-54
14.2 Modification and Amendments............A-54
14.3 Withholding and Reporting Requirements.A-54
14.4 Committees.............................A-54
14.5 Revocation, Withdrawal, or
Non-Consummation.......................A-55
14.6 Notices................................A-55
14.7 Term of Injunctions or Stays...........A-57
14.8 Governing Law..........................A-57
14.9 No Waiver or Estoppel..................A-57
EXHIBITS
Exhibit A Summary of Management Compensation Plan
Exhibit B Form of Registration Rights Agreement
Exhibit C Restated Certificates of Incorporation
Exhibit D Form of Restated Bylaws
Exhibit E-1 Schedule of Rejected Interline Agreements
Exhibit E-2 Schedule of Rejected Industry Practice Agreements
Exhibit E-3 Schedule of Assumed Employee-Related Agreements
Exhibit E-4 Schedule of Assumed Other Executory Contracts and Unexpired Leases
Exhibit E-5 Schedule of Rejected Intercompany Executory
Contracts and Intercompany Unexpired Leases
Exhibit F Nonexclusive List of Retained Actions and Exclusive List of
Avoidance Actions
Exhibit G ATSB Loan Documents
Exhibit H Administrative Claim Request Form
Exhibit I Postpetition Aircraft Obligations
Exhibit J Categories of Industry Practice Agreements
Exhibit K Aircraft Equipment Securing Aircraft Secured Claims
Exhibit L Summary of Selected Terms of New Equity
Exhibit M-1 Investment Agreement
Exhibit M-2 First Amendment to Investment Agreement
INTRODUCTION
------------
US Airways Group, Inc., US Airways, Inc., Allegheny Airlines, Inc.,
PSA Airlines, Inc., Piedmont Airlines, Inc., MidAtlantic Airways, Inc., US
Airways Leasing and Sales, Inc., and Material Services Company, Inc., debtors
and debtors-in-possession in the above-captioned jointly administered chapter
11 reorganization cases, hereby propose the following first amended joint plan
of reorganization for the resolution of the outstanding creditor claims
against and equity interests in the Debtors. Capitalized terms used herein
shall have the meanings ascribed to such terms in Article I.B. hereof. The
Debtors are the proponents of this Plan within the meaning of section 1129 of
the Bankruptcy Code.
The sole Group subsidiary incorporated outside of the United States,
Airways Assurance Limited LLC, a corporation organized under the laws of
Bermuda, has not commenced a case under chapter 11 of the Bankruptcy Code or
similar proceedings in any other jurisdiction. This subsidiary continues to
operate its business outside of bankruptcy.
The Plan contemplates the reorganization of the Debtors and the
resolution of the outstanding Claims against and Interests in the Debtors
pursuant to section 1121(a) of the Bankruptcy Code. The obligations owed to
unsecured creditors of the Debtors will be converted into new equity
securities to be issued by Reorganized Group (i.e., New Equity). Existing
holders of Group equity interests and stock options will receive no
distribution on account of their existing equity interests or stock options in
Group.
A complete list of the Debtors is set forth below. The list identifies
each Debtor by its case number in these Chapter 11 Cases. The jurisdiction of
incorporation of each Debtor also is designated.
Debtors
-------
o US Airways Group, Inc. (Delaware), 02-83984
o US Airways, Inc. (Delaware), 02-83985
o Allegheny Airlines, Inc. (Delaware), 02-83986
o PSA Airlines, Inc. (Pennsylvania), 02-83987
o Piedmont Airlines, Inc. (Maryland), 02-83988
o MidAtlantic Airways, Inc. (Delaware), 02-83989
o US Airways Leasing and Sales, Inc. (Delaware), 02-83990
o Material Services Company, Inc. (Delaware), 02-83991
Under section 1125(b) of the Bankruptcy Code, a vote to accept or reject
the Plan cannot be solicited from a Claimholder until such time as the
Disclosure Statement has been approved by the Bankruptcy Court and distributed
to Claimholders. In this case, the Disclosure Statement was approved by the
Bankruptcy Court by order entered on January 17, 2003, and has been
distributed simultaneously with this Plan to all parties whose votes are being
solicited. The Disclosure Statement contains, among other things, a discussion
of the Debtors' history, businesses, properties and operations, projections
for those operations, risk factors associated with the business and Plan, a
summary and analysis of the Plan, and certain related matters including, among
other things, the securities to be issued under the Plan. ALL CLAIMHOLDERS ARE
ENCOURAGED TO READ THIS PLAN AND THE DISCLOSURE STATEMENT IN THEIR ENTIRETY
BEFORE VOTING TO ACCEPT OR REJECT THIS PLAN.
Subject to certain restrictions and requirements set forth in section
1127 of the Bankruptcy Code and Fed. R. Bankr. P. 3019 and those restrictions
on modifications set forth in Article XIV of this Plan, each of the Debtors
expressly reserves its respective rights to alter, amend, modify, revoke or
withdraw this Plan with respect to such Debtor, one or more times, prior to
the Plan's substantial consummation.
ARTICLE I
DEFINITIONS, RULES OF
INTERPRETATION, AND COMPUTATION OF TIME
A. Scope of Definitions
--------------------
For purposes of this Plan, except as expressly provided or unless the
context otherwise requires, all capitalized terms not otherwise defined shall
have the meanings ascribed to them in Article I.B of this Plan. Any term used
in this Plan that is not defined herein, but is defined in the Bankruptcy Code
or the Bankruptcy Rules, shall have the meaning ascribed to that term in the
Bankruptcy Code or the Bankruptcy Rules.
B. Definitions
-----------
1.1 "Administrative Claim" means a Claim for payment of an
administrative expense of a kind specified in section 503(b) of the Bankruptcy
Code and entitled to priority pursuant to section 507(a)(1) of the Bankruptcy
Code, including, but not limited to, DIP Facility Claims, the actual,
necessary costs and expenses, incurred on or after the Petition Date, of
preserving the Estates and operating the business of the Debtors, including
wages, salaries or commissions for services rendered after the commencement of
the Chapter 11 Cases, Professional Claims, all fees and charges assessed
against the Estates under chapter 123 of title 28, United States Code, and all
Allowed Claims that are entitled to be treated as Administrative Claims
pursuant to a Final Order of the Bankruptcy Court under section 546(c)(2)(A)
of the Bankruptcy Code.
1.2 "Administrative Claims Bar Date" means the deadline for filing
proofs or requests for payment of Administrative Claims, which shall be
forty-five (45) days after the Effective Date, unless otherwise ordered by the
Bankruptcy Court and except with respect to Professional Claims and Key
Ordinary Course Professional Claims which shall be subject to the provisions
of Section 10.2 hereof.
1.3 "ADR Procedures" means any alternative dispute resolution procedure
approved by the Bankruptcy Court or as may be set forth in an Exhibit to this
Plan.
1.4 "AFA" means the Association of Flight Attendants, International.
1.5 "AFA Designated Representative" means the designated representative
selected by the Debtors' employees who are subject to the collective
bargaining agreement between Reorganized Group and AFA in effect as of the
Effective Date.
1.6 "Affiliate Debtors" means all of the Debtors, other than US Airways
Group, Inc.
1.7 "Affiliates" has the meaning given such term by section 101(2) of
the Bankruptcy Code.
1.8 "Aircraft Equipment" means an aircraft, aircraft engine, propeller,
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