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UNITED STATES BANKRUPTCY COURT FOR THE DISTRICT OF DELAWARE In re: ELECTROGLAS, INC., et al.,1 Debtors.

) ) ) ) ) ) ) ) Chapter 11 Case No. 09-12416 (PJW) (Jointly Administered)


Hrg. Date: May 26, 2010 @ 1:30 p.m. (ET) Obj. Dead.: May 19, 2010 @ 4:00 p.m. (ET)

NOTICE OF (A) HEARING TO CONFIRM PLAN OF REORGANIZATION, (B) OBJECTION AND VOTING DEADLINES, (C) SOLICITATION AND VOTING PROCEDURES, AND (D) CERTAIN OTHER INFORMATION DISCLOSURE STATEMENT AND SOLICITATION PROCEDURES APPROVED. On April 13, 2010, the United States Bankruptcy Court for the District of Delaware (the Bankruptcy Court) entered that certain Order (A) Approving Disclosure Statement (the Disclosure Statement) with Respect to Debtors Plan of Liquidation Under Chapter 11 Of The Bankruptcy Code (as may be amended, modified or supplemented, the Plan),2 (B) Fixing the Voting Record Date, (C) Approving Solicitation and Voting Procedures With Respect to Debtors Chapter 11 Plan, (D) Approving Form of Solicitation Package and Notices, and (E) Scheduling Certain Dates in Connection Therewith (the Disclosure Statement Order). In the Disclosure Statement Order, among other things, the Bankruptcy Court approved the Disclosure Statement with respect to the Plan, as containing adequate information, as required under section 1125(a) of chapter 11 of title 11 of the United States Code, 11 U.S.C. 101 et seq. (the Bankruptcy Code), and authorized the Debtors to solicit acceptances of the Plan. HEARING TO CONFIRM THE PLAN. The Bankruptcy Court has fixed May 26, 2010 at 1:30 p.m. (prevailing Eastern time) (the Confirmation Hearing Date), or as soon thereafter as counsel may be heard, as the date and time for the hearing to consider confirmation of the Plan (the Confirmation Hearing). The Confirmation Hearing will be before the Honorable Peter J. Walsh, United States Bankruptcy Judge, in the United States Bankruptcy Court for the District of Delaware, 824 Market Street, Sixth Floor, Wilmington, Delaware 19801. The Confirmation Hearing may be continued from time to time by announcing such continuance in open court or in the agenda for such hearing, and the Plan may be further modified, if necessary, pursuant to 11 U.S.C. 1127 prior to, during, or as a result of the Confirmation Hearing, without further notice to parties-in-interest.

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The Debtors are Electroglas, Inc. and Electroglas International, Inc. Capitalized terms used but not defined herein shall have the meanings ascribed in the Plan or the Disclosure Statement, as applicable.

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PLAN OBJECTION DEADLINE. The Bankruptcy Court has fixed May 19, 2010 at 4:00 p.m. (prevailing Eastern time) (the Plan Objection Deadline) as the deadline for filing and serving objections to confirmation of the Plan. To be considered, objections, if any, to the Plan must: (a) be made in writing; (b) comply with the Bankruptcy Code, the Bankruptcy Rules, and the Local Rules of Bankruptcy Practice and Procedure of the United States Bankruptcy Court for the District of Delaware; (c) state the name and address of the objecting party and the amount and nature of the claim(s) or interest(s) of such party against or in the Debtors, their estates, or their property; (d) state with particularity the legal and factual bases and nature of any objection to the Plan, including specific reference to the text of the Plan to which the objection is made and, if practicable, proposed modifications to the Plan that would resolve such objection; and (e) be filed, together with proof of service, with the Bankruptcy Court and served by personal service, overnight delivery, first class mail or facsimile, so that they are RECEIVED no later than the Plan Objection Deadline by the following parties (the Notice Parties): Special Counsel to the Debtors Morrison Foerster LLP 1290 Avenue of the Americas New York, NY 10104-0050 Attn: James J. DeCristofaro, Esq. Counsel to the Debtors Pepper Hamilton LLC Hercules Plaza - Suite 5100 1313 Market Street P.O. Box 1709 Wilmington, DE 19899-1709 Attn: David B. Stratton, Esq. James C. Carignan, Esq. Counsel to the Committee Womble, Carlyle, Sandridge & Rice, PLLC 222 Delaware Avenue, Suite 1501 Wilmington, DE 19801 Attn: Matthew P. Ward, Esq. Steven K. Kortanek, Esq.

Voting Agent Electroglas, Inc. c/o Omni Management Group, LLC 16161 Ventura Blvd., Ste C PMB 466 Encino, CA 91436 Attn: Brian Osborne US Trustee Office of the United States Trustee J. Caleb Boggs Federal Building 844 King Street Suite 2207 Lockbox 35 Wilmington, Delaware 19801 Attn: Jane M. Leamy, Esq.

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VOTING RECORD DATE. April 8, 2010 is the record date (the Voting Record Date) for purposes of determining which parties are entitled to vote on the Plan. VOTING DEADLINE. May 19, 2010 at 4:00 p.m. (prevailing Eastern time) is the voting deadline (the Voting Deadline). All Ballots must be received by the Voting Agent by the Voting Deadline. Voting Instructions will be sent with the ballots. EXCULPATORY, INJUNCTIVE AND RELEASE PROVISIONS. The following are summaries of the exculpatory injunctive and release provisions that the Debtors will be seeking under the Plan: Except as otherwise expressly provided in the Plan, the Confirmation Order or a separate order of the Bankruptcy Court, from and after the Effective Date, all entities are permanently enjoined from commencing or continuing in any manner, any cause of action released or to be released pursuant to the Plan or the Confirmation Order. To the extent of the releases and exculpation granted herein, the releasing parties hereunder shall be permanently enjoined from commencing or continuing in any manner against the parties released and the parties exculpated in the Plan and confirmation order and their assets and properties, as the case may be, any suit, action or other proceeding, on account of or respecting any claim, demand, liability, obligation, debt, right, cause of action, interest or remedy released or to be released pursuant to this Plan. Except as otherwise expressly provided in the Plan, all entities who have held, hold or may hold claims or interests that have been released, or that are subject to exculpation hereunder are permanently enjoined from and after the Effective Date, from taking any of the following actions: (i) commencing or continuing in any manner any action or other proceeding of any kind on account of or in connection with or with respect to any such claims or interests; (ii) enforcing, attaching, collecting or recovering by any manner or means any judgment, award, decree or order against such entities on account of or in connection with or with respect to any such claims or interests; (iii) creating, perfecting or enforcing any encumbrance of any kind against such entities or the property or estate of such entities on account of or in connection with or with respect to any such claims or interests; and (iv) commencing or continuing in any manner any action or other proceeding of any kind on account of or in connection with or with respect to any such claims or interests released or settled pursuant to the Plan. The rights afforded in the Plan and the treatment of all Claims and Interests herein shall be in exchange for and in complete satisfaction of Claims and Interests of any nature whatsoever, including any interest accrued on Claims from and after the Petition Date, against the Debtors or any of their assets, property or estates. On the Effective Date, all such Claims against the Debtors shall be fully released and the Interests shall be cancelled. Except as otherwise expressly provided for herein or in obligations issued pursuant hereto from and after the Effective Date, all Claims shall be fully released, and the Interests shall be cancelled, and the Debtors liability with respect 3
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thereto shall be extinguished completely, including any liability of the kind specified under section 502(g) of the Bankruptcy Code. All entities shall be precluded from asserting against the Debtors, the Debtors estates, the reorganized Debtors, each of their respective successors and assigns and each of their assets and properties, any other claims or interests based upon any documents, instruments or any act or omission, transaction or other activity of any kind or nature that occurred before the Effective Date. In no event shall the rights or protections afforded by this provision or the corresponding section of the Plan inure to the benefit of any of the Peninsula Parties. Subject to the preservation of setoff and recoupment rights as set forth in section 10.5 of the Plan, upon the Effective Date, any and all claims, interests, obligations, rights, suits, damages, causes of action, remedies and liabilities whatsoever, including without limitation any derivative claims asserted on behalf of a debtor, whether known or unknown, foreseen or unforeseen, existing or hereafter arising, in law, equity or otherwise, based on or relating to, or in any manner arising from, in whole or in part, the Debtors, the Chapter 11 Cases, the purchase, sale or rescission of the purchase or sale of any Interest of the Debtors, the subject matter of, or the transactions or events giving rise to, any Claim against or Interest in the Debtor, the business or contractual arrangements involving any Debtor, the restructuring of Claims and Interests before or during the Chapter 11 Cases, the negotiation, formulation or preparation of the Plan, Disclosure Statement or relating agreements, instruments or other documents, or any other act or omission, transaction, agreement, event or other occurrence relating to the Debtors taking place on or before the Confirmation Date of the Plan, that could have been asserted against (i) the Debtors and their successors, assigns, agents, employees, officers, directors, partners, affiliates, subsidiaries, parents, holding companies, and attorneys and other professionals; (ii) the Noteholders and Indenture Trustee and their successors, assigns, agents, employees, officers, directors, partners, affiliates, subsidiaries, parents, holding companies, and attorneys and other professionals; (iii) the bankruptcy estates; and/or (iv) the Committee and its attorneys and other professionals, shall be deemed to have been conclusively, absolutely, unconditionally, irrevocably and forever released. Notwithstanding the foregoing, nothing herein shall operate to release obligations under the Plan and the contracts, instruments, and/or any other agreements or documents assumed, passed through or delivered in connection with such Plan. Further, nothing herein or in the Plan shall operate to release liability for or waive claims arising from willful misconduct or fraud. In no event shall the release provisions of the Plan result in any waiver or release by any entity of any and all claims such entity might have against Peter Schleider and any entities with which he is affiliated in any and all capacities or with which he otherwise has a relationship, contractual or otherwise, including, but not limited to, Peninsula Master Fund, Ltd., Peninsula Capital Management LP, Peninsula Technology Fund LP and Advanced Inquiry Systems, Inc. (the Peninsula Parties). No Peninsula Party shall have or receive any benefit from the releases granted by any entity and such releases shall not be used as a defense by any of the Peninsula Parties to any claim any entity may elect to assert against the Peninsula Parties. Except as otherwise specifically provided in the Plan, neither the Debtors, the Committee, nor any of their respective members, officers, directors, employees, advisors, professionals or agents shall have or incur any liability to any holder of a Claim or Equity 4
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Interest for any act or omission in connection with, related to, or arising out of, the Chapter 11 Cases, the negotiations regarding or concerning the Plan, the pursuit of confirmation of the Plan, the consummation of the Plan, the administration of the Plan or the property to be distributed under the Plan, and, in all respects, the Debtors, the Committee, and each of their respective members, officers, directors, employees, advisors, professionals and agents shall be entitled to rely upon the advice of counsel with respect to their duties and responsibilities under the Plan. The Debtors, the Committee, their respective members, officers, directors, employees, advisors, professionals and agents shall be deemed to have participated at all times in compliance with the applicable provisions of the Bankruptcy Code with regard to the solicitation of and distributions under the Plan and, therefore, are not, and on account of such distributions shall not be, liable at any time for the violation of any applicable law, rule or regulation governing the solicitation of acceptances or rejections of the Plan or such distributions made pursuant to the Plan. In no event shall the rights or protections of this provision or the corresponding section of the Plan inure to the benefit of any of the Peninsula Parties. COPIES OF SOLICITATION PACKAGE MATERIALS, INCLUDING DISCLOSURE STATEMENT AND PLAN. The Plan, Disclosure Statement, Disclosure Statement Order, and all other materials in the Debtors Solicitation Package (other than Ballots) may be obtained at the Debtors expense by contacting the Voting Agent at Electroglas, Inc., c/o Omni Management Group, LLC, 16161 Ventura Blvd., Suite C, PMB 466, Encino, CA 91436 (Attn: Brian Osborne), Telephone: (818) 906-8300; or (ii) the undersigned counsel to the Debtors. The documents are also available electronically (i) at no charge at the Voting Agents website at http://www.omnimgt.com/sblite/electroglas and (ii) for a fee by accessing the electronic docket being maintained by the Clerk of Court for the United States Bankruptcy Court for the District of Delaware at http://www.deb.uscourts.gov. Dated: April 15, 2010 Wilmington, Delaware Respectfully submitted, PEPPER HAMILTON LLP /s/ James C. Carignan David B. Stratton (Del. Bar ID 960) James C. Carignan (Del. Bar ID 4230) Hercules Plaza - Suite 5100 1313 Market Street P.O. Box 1709 Wilmington, DE 19801-1709 Telephone: (302) 777-6500 Facsimile: (302) 421-8390 Attorneys for the Debtors and Debtors in Possession

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CERTIFICATE OF SERVICE I, James C. Carignan, hereby certify that on the 15th day of April, 2010, I caused the foregoing Notice of (A) Hearing to Confirm Plan of Reorganization, (B) Objection and Voting Deadlines, (C) Solicitation and Voting Procedures, and (D) Certain Other Information be served upon the individuals on the attached service list by first-class mail, postage prepaid.

/s/ James C. Carignan James C. Carignan (DE No. 4230)

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G. Larry Engel, Esq. Vincent J. Novak, Esq. Morrison & Foerster LLP 425 Market Street San Francisco, CA 94105

James J. DeCristofaro, Esq. Samantha Martin, Esq. Morrison & Foerster LLP 1290 Avenue of the Americas New York, NY 10104

Jane M. Leamy, Esq. Office of the United States Trustee 844 King Street Room 2207, Lockbox 35 Wilmington, DE 19801

Christopher R. Donoho, III, Esq. Omeca Nedd, Esq. Robin Keller, Esq. Lovells LLP 590 Madison Avenue Suite B New York, NY 10022

Mark E. Felger, Esq. Cozen O'Connor 1201 N. Market Street Suite 1400 Wilmington, DE 19801

Elizabeth Weller, Esq. Linebarger Goggan Blair & Sampson, LLP 2323 Bryan Street Suite 1600 Dallas, TX 75201

Securities & Exchange Commission 15th & Pennsylvania Ave., N.W. Washington, DC 20020

Alistar Bambach Securities & Exchange Commission New York Regional Office Bankruptcy Division 3 World Financial Center Suite 400 New York, NY 10281-1022

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Nathan Fuchs Securities & Exchange Commission 233 Broadway New York, NY 10279

Michael Berman Securities & Exchange Commission 15th & Pennsylvania Avenue, N.W. Washington, DC 20020

District Director of Insolvency Internal Revenue Service 31 Hopkins Plaza, Room 1150 Baltimore, MD 21201

Internal Revenue Service Centralized Insolvency Operation 11601 Roosevelt Boulevard Mail Drop N781 Philadelphia, PA 10154

Ellen Slights, Esq. U.S. Attorney's Office 1007 North Orange Street Suite 700 Wilmington, DE 19899-2046

Eric H. Holder, Jr., Esq. United States Attorney General 950 Pennsylvania Avenue, N.W. Washington, DC 20530-0001

Joseph R. Biden, III, Esq. Department of Justice Carvel State Building 820 N. French Street Wilmington, DE 19801

Secretary of State Division of Corporations Franchise Tax PO Box 7040 Dover, DE 19903

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Secretary of Treasury State of Delaware P.O. Box 7040 Dover, DE 19903

Steven K. Kortanek, Esq. Matthew P. Ward, Esq. Womble Carlyle Sandridge & Rice, PLLC 222 Delaware Avenue Suite 1501 Wilmington, DE 19801

Lawrence M. Schwab, Esq. Patrick M. Costello, Esq. Bialson, Bergen & Schwab 2600 El Camino Real Suite 300 Palo Alto, CA 94306

James S. Yoder, Esq. 824 North Market Street White and Williams Suite 902 P.O. Box 709 Wilmington, DE 19899-0709

Attn: President, Secretary, Manager, or Counsel Cic Lyonaise 8 Rue de La Republique 69001 Lyon, France

Attn: President, Secretary, Manager, or Counsel Commerica Bank Attn: Legal Department M/C 4855 333 West Santa Clara San Jose, CA 95113

Attn: President, Secretary, Manager, or Counsel Commerica Bank Attn: Legal Department 226 Airport Parkway San Jose, CA 95110

Attn: President, Secretary, Manager, or Counsel County of Santa Clara 70 W. Hedding Street, East San Jose, CA 95110

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Vincent J. Roldan, Esq. DLA Piper US LLP 1251 Avenue of the Americas New York, NY 10020

Craig Tighe, Esq. DLA Piper US LLP 2000 University Avenue East Palo Alto, CA 94303-2214

Attn: President, Secretary, Manager, or Counsel FormFactor 7005 South Front Road Livermore, CA 94551

Eric M. Sutty, Esq. Fox Rothschild LLP Citizens Bank Center 919 North Market Street, Suite 1300 Wilmington, DE 19899

Giselle Pozark NaviSite, Inc. 400 Minuteman Road Andover, MA 1810

Nick Pasco Peninsula Master Fund, Ltd. 235 Pine Street Suite 1600 San Francisco, CA 94104

Paul Bridger Oren Eisner Tracy Fu Quintessence Fund LP QVT Financial LP 1177 Avenue of the Americas 9th Floor New York, NY 10036

Santa Clara County Tax Attn: President, Secretary, Manager, or Counsel 70 W. Hedding Street, East San Jose, CA 95110

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John F. Storz, Esq. Hugh M. McDonald, Esq. Sonnenschein Nath & Rosenthal LLP 1221 Avenue of the Americas New York, NY, NY 10020-1089

The Bank of New York Trust as Trustee for the Bondholders 700 S. Flowers Street Los Angeles, CA 90017

Edward P. Zujkowski, Esq. Emmet, Marvin & Martin, LLP 120 Broadway 32nd Floor New York, NY 10271

Robert J. Dehney, Esq. Andrew R. Remming, Esq. Morris, Nichols, Arsht & Tunnell LLP 1201 North Market Street 18th Floor Wilmington, DE 19899-1347

Craig Martin, Esq. Sturart Brown, Esq. Edwards Angell Palmer & Dodge 919 North Market Street 15th Floor Wilmington, DE 19801

William J. Wellford Workout Account Manager Tygris Vendor Finance (Formerly US Express Leasing) 10 Waterview Blvd. Parsippany, NJ 07054

L.Jason Cornell, Esq. Fox Rothschild LLP Citizens Bank Center 919 North Market Street, Suite 1300 Wilmington, DE 19801

Charles J. Filardi, Jr. Filardi Law Offices LLC 65 Trumbull Street Second Floor New Haven, CT 06510

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