Order Confirming Plan.pdf - Gordon Silver

__________________________________Hon. Bruce A. MarkellUnited States Bankruptcy Judge___________________________________________________________GORDON & SILVER, LTD.THOMAS H. FELL, ESQ.Nevada Bar No. 3717E-mail: thf gordonsilver.comGREGORY E. GARAN, ESQ.Nevada Bar No. 6654E-mail: geg gordonsilver.com3960 Howard Hughes Pkwy. , 9th FloorLas Vegas, Nevada 89109Telephone (702) 796-5555Facsimile (702) 369-2666Attorneys for Pro-After, Inc.fka PurchasePro.com, Inc.UNITED STATES BANKRUPTCY COURTFOR THE DISTRICT OF NEVADAIn re: Case No. : BK- 02-20472-BAMChapter 11PURCHASEPRO.COM, INC., a NevadacorporationDebtor.Date: September 1 , 2004Time: 1 :30 p.ORDER CONFIRMING DEBTOR'S PLAN OF REORGANIZATIONBack2found and Procedural HistoryPro-After, Inc. , a Nevada corporation, fka PurchasePro.com, Inc. , debtor and debtor-inpossessionin this Chapter 11 case ("Debtor ) fied with this Court on May 7, 2004 its Plan ofReorganization (as amended, modified, and supplemented, the "Plan ), which is incorporatedinto this Order by this reference. Unless otherwise defined below, capitalized tenns used in thisOrder retain the definitions given to them in the Plan.GORDON & SILVER, LTD.ATTORNEYS AT LAWINT . FLOOR3960 HCW RD HUGHES P"wyS VEGAS. NEVAD 89i09(7e2) 796-555544013-001/30385i .doc

On September 1 , 2004, at the hour of 1 :30 p., the Court conducted a hearing(the "Confirmation Hearing ) to consider confirmation of the Plan. There were no objections toDebtor s Plan prior to the Confirmation Hearing, however, the Offcial Committee of UnsecuredCreditors requested certain modifications to the Plan and Liquidation Trust which have beenincorporated by the Debtor.In preparation for the Confirmation Hearing, in order to address the vanousstandards for confirmation of the Plan under Bankruptcy Code 9 Il29(a), the Debtor submitted:(1) Debtors Brief In Support Of Confirmation Of Debtor s Plan Of Reorganization datedAugust 30, 2004 (the "Confirmation Brief' ); (2) the Declaration Of Todd A. Lehtonen InSupport Of Confirmation Of Debtor s Plan Of Reorganization dated August 30, 2004 (theLehtonen Declaration ); and (3) the Certification Of AcceptanceReorganization (the "Ballot Report") dated August 27 2004.DebtorPlanNone of the evidence proffered in the Lehtonen Declaration has been contestedby any party in interest, either before or at the Confirmation Hearing, and no party sought tocross-examine Mr. Lehtonen at the Confirmation Hearing regarding any evidence proffered byway of the Lehtonen Declaration or by counsel at the Confirmation Hearing. Accordingly, theCourt accepts the proffered evidence in lieu oflive testimony pursuant to LR 97l0(c).Based upon the Lehtonen Declaration, counsel' s statements made in support ofconfirmation of the Plan, and the entire record before the Court, the Court now issues itsFindings of Facts, Conclusions of Law and orders confirmation of the Plan as follows:Findin2s of Facts and Conclusions of LawThis matter represents a core proceeding in which the Court may enter a final order inaccordance with 28 U.S. c. 99 1334 and 157(b)(2)(L).In accordance with Banruptcy Code 9 1126(b), the Court finds and concludesthat the solicitation of votes to accept or reject the Plan complied with all applicable nonbankptcylaws, rules and regulations governing the adequacy of disclosure in connection withsuch solicitation, and that such solicitation was conducted after disclosure of adequateinformation as defined in Bankptcy Code 9 1125.GORDON & SILVER, LTD.ATTORNEYS AT LAWNINTH FLOOR3960 HOWARD HUGHES PKW'LAṠ VEGAS, NEVADA 89 '09(702) 796-555544013-001l303851.doc

The Court finds and Concludes that the Plan complies with 11 US. c. 9Il29(a)(1) including the requirements of 11 US. c. 99 1122 and 1123.The Court finds and concludes that the Debtor has complied with the applicableprovisions of 11 US.C. 9 1129(a)(2), specifically including, but not limited to the requirementsset forth in 11 US. c. 99 1125 and 1126.The Court finds and concludes that the Plan complies with the requirements ofUS. c. 9 1129(a)(3) and that the Plan is in the best interests of Creditors and that there is areasonable likelihood that the Plan will achieve results consistent with the objectives andpurposes of the Bankptcy Code, and as such, the Plan has been proposed in good faith and notby any means forbidden by law.The Cour finds and concludes that the Plan complies with the requirements ofU.S. c. 9 lI29(a)(4) in that it discloses all payments made or to be made by the Debtor forservices or for costs and expenses in or connected with this Chapter 11 case, or in connectionwith the Plan, and incident to the Chapter 11 case, have been approved by or are subject toapproval of the Court as reasonably required.The Court finds and concludes that the Plan complies with the requirements ofUS.C. 9 1129(a)(5) in that the Debtor has disclosed the identity and affiiation of any individualproposed to serve, after the confirmation of the Plan, as a voting trustee of the Liquidation Trustand the appointment to or continuing in such offce of such individual is consistent with theinterests of Creditors and Equity Security holders and with public policy; and the identity of anyinsider who wil be employed or retained by the Liquidation Trust, and the nature of anycompensation for such insider has been disclosed;The Court finds and concludes that Debtor is not subject to governentalregulations, and as such, 11 US.C. 9 1 129(a)(6) is inapplicable.The Court finds and concludes that the Plan complies with 11 U.S.C. 9 lI29(a)(7)in that with respect to Classes 5 , 6, 7 and 8, each holder of a Claim or Equity Security willreceive and retain under the Plan on account of such Claim or Equity Security property of avalue, as of the effective date of the Plan, that is not less than the amount that such holder wouldGORDON & SILVER, LT!.ATTORNEYS AT LAWNINTH FLOOR3960 HOWARD HUGHES PKW"LAS VEGAS, NEVADA 89109(702) 796-555544013-00l/303851.doc

1 )so receive or retain if Debtor were liquidated under Chapter 7, Title 11 of the United StatesCode, on such date.In accordance with 11 US. C. 9 lI29(a)(8), the Court finds and concludes thatClasses 5 and 6 under the Plan (the impaired classes of Claims under the Plan entitled to vote)have all voted to accept the Plan in accordance with Bankptcy Code 9 1126(c) and (d). Classes, 2 , 3 , and 4 under the Plan are unimpaired and therefore deemed to have accepted the Planpursuant to 11 US. c. 9 1126(f). With respect to Classes 7 and 8 under the Plan, such classes aredeemed to have rej ected the Plan.10. The Court finds and concludes that the Plan treatment of AllowedAdministrative Claims, Allowed Priority Tax Claims and other unclassified priority claims as setforth in 11 US. c. 9 507(a) satisfies the requirements set forth in 11 US. c. 9 1129(a)(9) andtherefore the Plan satisfies the requirements of 11 US. C. 9 1129(a)(9).11. The Court finds and concludes that the Plan complies with 11 US. C. 91129(a)(10) in that Class 5 (an impaired class under the Plan) voted to accept the Plan withoutincluding acceptance by any insider.12. The Court finds and concludes that the Plan complies with the requirements ofUS.C. 9 1129(a)(11) in that confirmation will not likely be followed by the liquidation or theneed for further financial reorganization of the Debtor or any successor to the Debtor, unlesssuch liquidation or reorganization is proposed in the Plan.13. The Court finds and concludes that the Plan complies with the requirements setforth in 11 US. c. 9 1129(a)(12) in that the Plan provides for the payment of all fees under 28US.C. 9 1930 as of the Effective Date or as they come due after such time.14. The Cour finds and concludes that the requirements of 11 US. c. 9 lI29(a)(13)are satisfied as there are no retiree benefits, as the term is defined in 11 US. C. 9 1114, affectedunder the Plan.15. The Court finds and concludes that all documents necessary to implement thePlan, including the Liquidation Trust as modified (Exhibit "A" to the Plan) are, upon executionon or after the Effective Date, valid, binding and enforceable agreements not in conflict with anyGORDON & SILVER, LTD.ATTORNEYS AT LAWN"ITH FLOOR3960 HOWARD HUGHES PKWYLAS VEGAS, NEVADA 89109(7021 796-555544013-00 l/303851.doc

, Ifederal or state laws.16. The Court finds and concludes that Debtor and its attorneys, accountants andadvisors have acted in good faith with respect to the solicitation of votes to accept or reject thePlan, and the Court finds and concludes that the Debtor and its attorneys, accountants andadvisors are entitled to the protection under 11 US. C. 9 1125(e).17. The Court finds and concludes that the Court' s retention jurisdiction as set forthin 11. 1 of the Plan comports with the parameters contained in 28 US . c. 9 157.18. The Court finds and concludes that notice of all proceedings regarding or relatingto confirmation of the Plan, including without limitation the Confirmation Hearing, was adequateunder the circumstances and complied with applicable provisions of the Bankptcy Code andBankptcy Rules.19. All modifications made to the Plan (and the Liquidation Trust) after solicitation ofvotes on the Plan had commenced, as reflected in this Confirmation Order or as set forth on therecord at the Confirmation Hearing and incorporated by reference, do not materially adverselychange the treatment of any holder of a claim or equity interest who has previously cast a ballotto either accept or reject the Plan. Accordingly, no further disclosure of information, solicitationof votes or voting is required.OrderIn light of the foregoing Findings of Facts and Conclusions of Law, it is hereby orderedas follows:The Plan (attached hereto as Exhibit ") as modified below or in open Court at theConfirmation Hearing, shall be, and hereby is, confirmed pursuant to 11 US. c. 9 1129.Schedule 1.1.52 of the Plan is amended so that it shall now provide:CERTAIN PRESERVED POTENTIAL CAUSES OF ACTIONAll defined terms used herein shall have the meanings set forth in the Plan. Thefollowing is a non-exhaustive list of potential parties against whom Debtor, the Committeeand/or the Liquidation Trust may hold a claim or cause of action. Debtor and the LiquidationTrust reserve their right to modify this list to amend or add parties or causes of action, butGORDON & SILVER, LTD.ATTORNEYS AT LAWNINTH FLOOR3960 HOWARD HUGHES PKWYLAS VEGAS, NEVADA 89 109(702) 796-555544013-00l/303851.doc

disclaim any obligation to do so. In addition to the possible causes of action and claims listedbelow, Debtor and the Liquidation Trust have or may have, in the ordinary course of theirbusiness, numerous causes of action and Claims or rights against contractors, subcontractorssuppliers and others with whom they deal in the ordinary course of their business (the "OrdinaryCourse Claims ). Debtor and the Liquidation Trust reserve their right to enforce, sue on, settleor compromise (or decline to do any of the foregoing) the Ordinary Course Claims, as well as theclaims and causes of action listed below and all other claims and causes of action. Debtor andthe Liquidation Trust also have, or may have, and are retaining, various claims or causes ofaction arsing under or pursuant to its insurance policies, and all rights arising under, relating toor in connection with such policies are expressly reserved and retained.US. Bankptcy Court, District of Nevada:PurchasePro.com, Inc. v. Birch Street Systems, Inc. , Adversary Case No. 03- 1147-PurchasePro.com, Inc. v. Future Media Productions, Adversar No. 02- 1485-PurchasePro.com, Inc. v. Sagence Systems, Inc , Adversar No. 03-01065-PurchasePro.com, Inc. v. Computer Associates International, Inc, Adversary Proceeding No. 03-1066- LKPurchasePro.com, Inc. v. Wilson, Sonsini, Goodrich & Rosati, Professional Corporation,Adversar No. 04-01053-PurchasePro.com, Inc. v. Gateway, Adversary No. 04-01069-PurchasePro.com, Inc. v. Johnson, Adversary No. 04-01098-BAMPurchasePro.com, Inc. v. Time Warer, Inc., Adversar No. 04-0l280-BAMPurchasePro.com, Inc. v. Advanstar Communcations, Inc., Adversary No. 04-01281-BAMThe Offcial Commttee of Unsecured Creditors of Pro-After, Inc., fka PurchasePro.com, Inc. onBehalf of the Banptcy Estate of Pro-After, Inc. fka PurchasePro.com, Inc. v. Richard L.Clemmer, Adversar No. 04-01269-BAMAny and all known or unown claims against Cheyenne Investments, LLC or its corporate parentssubsidiares or affiliates, together with regulatory agents, its principals or corporate offcers.Clark County, Nevada, District Court:PurchasePro.com, Inc. v. Charles E. Johnson, Jr., Chrstopher Carton, James P. Clough, Sean P.McGhee, Scott Miller, Jeff Anderson, R. Todd Bradley, Martha Lavne Collins, Michael D.Brien, Carol C. Harter, and John G. Chiles, Lead case no. A436614 (Consolidated with caseNos. A438116 and A436776)US. District Court, Southern District of Florida:Mark Levy v. Offce Depot, Inc. , Case No. 01-8529-Dimitrouleas/JohnsonPursuant to 11 US.C. 99 1123(a)(5)(B) and 1123(b)(3)(B), the execution of theLiquidation Trust Agreement is hereby approved. The Debtor is authorized and directed to takeall actions necessary to consummate the terms of the Liquidation Trust Agreement and toestablish the Liquidation Trust, including the transfer of the Assets and Litigation Claims to theLiquidation Trust free and clear of all liens, claims, interests and encumbrances. Without furtheraction or order, upon this Confirmation Order being a final order, the Litigation Claimsincluding any and all claims previously assigned to the Offcial Committee of UnsecuredCreditors are hereby transferred and assigned to the Liquidation Trust, subject only to theGORDON & SILVER, LTD.ATTORNEYS AT LAWNINTH FLOOR3960 HOWARD HUGHES PKWYLAS VEGAS, NEVADA 89 109(702) 796-555544013-001/303851.doc

estrictions and limitations therein. The Liquidation Trust is hereby deemed established, and theLiquidation Trust Trustee is hereby deemed appointed as of the Effective Date.The Liquidation Trust Agreement (as modified), and each of the terms andprovisions thereof, are hereby deemed to be binding upon Debtor under the Plan.E. As provided for in Section 10 of the Plan, as of the Effective Date, all entities thathave held, currently hold or may hold a Claim or an Equity Security interest or other right of anequity security holder that is terminated pursuant to the terms of this Plan are permanentlyenjoined from taking any of the following actions on account of such Claims or Equity Securityinterests or rights: (1) commencing or continuing in any manner any action or other proceedingagainst the Liquidation Trust or its respective property; (2) enforcing, attaching, collecting orrecovering in any manner any judgment, award, decree or order against the Liquidation Trust orits respective property; (3) creating, perfecting or enforcing any Lien or encumbrance against theLiquidation Trust or its respective property; (4) asserting a set-off, right of subrogation orrecoupment of any kind against any debt, liability or obligation due to the Liquidation Trust orits respective property; and (5) commencing or continuing any action, at any manner or placethat does not comply with or is inconsistent with the provisions of this Plan or the BankptcyCode. Nothing in the Plan shall affect, release, enjoin or impact in any way the prosecution ofthe Claims of Creditors including the Claims of the Lead Plaintiffs and the Class Claimantsasserted, or to be asserted against the non-Debtor defendants in the Securities Litigation and/orany non-Debtor, and nothing in this Plan shall preclude Creditors and the Lead Plaintiffs and theClass Claimants from pursuing their rights against the Debtor solely to the extent of available iinsurance coverage and proceeds. Notwithstanding the foregoing, Debtor is free to pursue itsrights to file all appropriate pleadings or actions to preserve its rights and protect the BankptcyEstate and the Liquidation Trust's interests in available insurance coverage.Unless expressly released, enjoined, or exculpated in the Plan or this ConfirmationOrder, nothing in the Plan or this Confirmation Order is intended nor shall be construed torelease, limit or enjoin (either expressly or by operation of law) the Liquidation Trust frompursuing Litigation Claims including all avoidance actions currently held by Debtor or theGORDON & SILVER, LTD.ATTORNEYS AT LAWNINTH FLOOR3960 HOWARD HUGHES PKWYLAS VEGAS, NEVADA 89109(7021 796-555544013-00l/303851.doc

Offcial Committee of Unsecured Creditors.Pursuant to 11 US. C. 9 1146(c) the vesting of Assets (including the preservationand transfer of litigation claims) to the Liquidation Trust, or any transactions arising out ofcontemplated by or in any way related to the Plan, whether occurng on or after the EffectiveDate, shall not be subject to any document recording tax, stamp tax or stamp act, conveyancefiing or transfer fee, intangibles or similar tax, mortgage tax, real estate transfer tax, mortgagerecording tax or other similar tax or governental assessments, and the appropriate state andlocal governent offcials or agents shall be, and hereby are, directed to forego the collection ofany such tax or governmental assessment and to accept for any necessary filing or recordationany of the foregoing instruments or other documents without the payment of any such tax orgovernental assessment.Subject to the provisions of Section 9. 2 of the Plan, and except as otherwiseprovided in this Confirmation Order, immediately upon the entry of this Confirmation Order, theterms of the Plan and this Confirmation Order shall be, and hereby are, deemed binding uponDebtor and any and all holders of Claims or Equity Securities (irrespective of whether suchClaims or Equity Securities are impaired under the Plan or whether the holders of such Claims orEquity Securities accepted, rejected or deemed to have accepted or rejected the Plan), any and allnon-debtor parties to Executory Contracts and Unexpired Leases with Debtor, any and all nondebtorparties who hold either a legal or equitable interest in any of the Assets and any and allentities who are parties to or subject to the settlements, compromises, releases, discharges, andinjunctions described in the Plan and their respective heirs, executors, administrators, successorsor assigns, if any, of the foregoing.I. In accordance with Bankptcy Code 9 1123(b )(3)(B), the Liquidation Trust isdeemed a representative of Debtor to prosecute, compromise and abandon the Litigation Claimsin accordance with the Plan. Other than with respect to Claims that are allowed in the Plan or inaccordance with this Confirmation Order, Debtor and the Liquidation Trust retain the right andobligation after the Effective Date to pursue objections to claims made before the Effective Dateand also retain the right and obligation to object to Claims after the Effective Date. All suchGORDON & SILVER, LTD.ATTORNEYS AT LAWNINTH FLOOR3960 HOWARD HUGHES PKWYLAS VEGAS, NEVADA 89109(702) 796-555544013 -00 1 /303 851.doc

objections to Claims must be filed and served not later than one hundred twenty (120) days afterthe Effective Date, provided, however, that such period may be extended by order of theBankptcy Court for good cause shown.From and after the Effective Date, Debtor or the Liquidation Trust may litigate tojudgment, propose settlement of, or withdraw objections to all pending or filed disputed Claim ordisputed Equity Security interests, or Litigation Claims without the Court' s approval.The Court' s retention of jurisdiction as set forth in Section 11 of the Plan isapproved. Such retention of jurisdiction does not affect the finality of this Confirmation Orderwhich the Cour now expressly directs the Clerk of the Bankptcy Court to enter immediately.In accordance with Section 12. 1 of the Plan, Debtor and the Liquidation Trust areauthorized at any time before or on the Effective Date to make non-material changes to anydocument necessary to implement the Plan, including the Liquidation Trust, without furtherorder ofthis Cour and without affecting the effectiveness ofthis Confirmation Order.Subject to all the provisions of the Plan, as of the Effective Date, all Assetsincluding Litigation Claims, shall be transferred to the Liquidation Trust pursuant to Section 6.and Section 10. 1 of the Plan free and clear of all Liens, Claims and Equity Security interests.All final applications for allowance and distribution of Administrative Claimsincluding applications for an allowance of professional fees pursuant to 11 US.C. 99328 or 330must be fied with the Court and served on counsel to Debtor, the Liquidation Trust, the OffcialCommittee of Unsecured Creditors and the Offce of the United States Trustee no later than theforty-fifth (45) day after the Effective Date (or to the extent necessary, the Liquidation Trust).In accordance with 28 US. C. 9 1930(a)(6), Debtor is required to pay all quarterlyfees to the Offce of the United States Trustee until this case is closed under Bankptcy Code9350 or dismissed or converted under Bankptcy Code 9 1112.P. In accordance with Section 13. 15 of the Plan, until entry of a final decree closingthe Chapter 11 case, the Liquidation Trust Trustee shall comply with post-confirmation reportingrequirements found in Local Rule 3020. Additionally, to the extent required, the LiquidationTrust Trustee shall file post-confirmation quarterly operating reports as required by the UnitedGORDON & SILVER, LTD.ATTORNEYS AT LAWNINTH FLOOR3960 HOWARD HUGHES PKWYLAS VEGAS, NEVADA 89109(7021 796-555544013-00l/303851.doc

States Trustee Guidelines paragraph 7.IT IS SO ORDERED.APPROVEDIDISAPPROVED:Securities Class Action LitigantsBy:!RM. LEVEE, ESQ.Lowenstein Sandler, PCAPPROVED/DISAPPROVED:Office yO .APPROVEDIBIs/\prROVDD. -Lionel Sawyer & Collins, attorneys forCheye Investments LLCAPPROVEDIDISAPPROVED:L. LSON, ESQ.Santoro, Dnggs, WalchJohnson & ThompsonKearney,GORDON & SILVER, LTD.ATTORNEYS AT LAWNINTH FLOOR3960 HOWARD HUGHES PKWYLAS VEGAS, NEVADA 89109(702) 796-555544013-00l/303851.doc

States Trustee Guidelines paragraph 7.IT IS SO ORDERED.APPROVEDIDISAPPROVED:Securif es Class Action LitigantsM. LEVEE, ESQ.Lowenstein Sandler, PCAPPROVEDIDISAPPROVED:Offce of US. TrusteeBy:BARY L. JENKS, ESQ.APPROVEDIDISAPPROVED:Lionel Sawyer & Collins, attorneys forCheyenne Investments LLCBy:LAURL E. DAVIS, ESQ.APPROVEDIDISAPPROVED:Official Committee of Unsecured CreditorsBy:VICTORI L. NELSON, ESQ.Santoro, Driggs, Wa1chJohnson & ThompsonKearey,GORDON & SILVER, LTD,ATTORNEYS AT LAWNINTH FLOOR3960 HOWARD HUGHES PKWYLAS VEGAS. NEVADA 89 109(702) 796-555544013-00l/303851.doc