United States Bankruptcy Court Western District of New York
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UNITED STATES BANKRUPTCY COURT WESTERN DISTRICT OF NEW YORK IN RE: : Jointly Administered : Case Nos. 01-14099 K LAIDLAW USA, INC., : through 01-14104 K LAIDLAW INC., : LAIDLAW INVESTMENTS LTD., : Chapter 11 LAIDLAW INTERNATIONAL FINANCE : CORPORATION, : LAIDLAW TRANSPORTATION, INC. and : LAIDLAW ONE, INC., : : Debtors. : DISCLOSURE STATEMENT PURSUANT TO SECTION 1125 OF THE BANKRUPTCY CODE FOR THE THIRD AMENDED JOINT PLAN OF REORGANIZATION OF LAIDLAW USA, INC. AND ITS DEBTOR AFFILIATES GARRY M. GRABER HODGSON RUSS LLP One M&T Plaza, Suite 2000 Buffalo, New York 14203 (716) 856-4000 - and - RICHARD M. CIERI THOMAS C. DANIELS JONES DAY North Point 901 Lakeside Avenue Cleveland, Ohio 44114-1190 (216) 586-3939 PAUL E. HARNER EDWARD B. WINSLOW MARK A. CODY JONES DAY 77 West Wacker Suite 3500 Chicago, Illinois 60601-1692 (312) 782-3939 January 23, 2003 ATTORNEYS FOR DEBTORS AND DEBTORS IN POSSESSION DISCLOSURE STATEMENT, DATED JANUARY 23, 2003 SOLICITATION OF VOTES WITH RESPECT TO THE THIRD AMENDED JOINT PLAN OF REORGANIZATION OF LAIDLAW USA, INC. AND ITS DEBTOR AFFILIATES ________________________ THE BOARDS OF DIRECTORS OF LAIDLAW USA, INC. ("LAIDLAW USA") AND ITS DEBTOR AFFILIATES LISTED ON EXHIBIT I (THE "DEBTOR AFFILIATES" AND, COLLECTIVELY WITH LAIDLAW USA, THE "DEBTORS") BELIEVE THAT THE THIRD AMENDED JOINT PLAN OF REORGANIZATION OF LAIDLAW USA AND ITS DEBTOR AFFILIATES, DATED JANUARY 23, 2003 AND ATTACHED HERETO AS EXHIBIT II (THE "PLAN"), IS IN THE BEST INTERESTS OF CREDITORS AND OTHER PARTIES IN INTEREST. ALL CREDITORS ENTITLED TO VOTE THEREON ARE URGED TO VOTE IN FAVOR OF THE PLAN. A SUMMARY OF THE VOTING INSTRUCTIONS IS SET FORTH BEGINNING ON PAGE 110 OF THIS DISCLOSURE STATEMENT. MORE DETAILED INSTRUCTIONS ARE CONTAINED ON THE BALLOTS DISTRIBUTED TO CREDITORS ENTITLED TO VOTE ON THE PLAN. TO BE COUNTED, YOUR BALLOT MUST BE DULY COMPLETED, EXECUTED AND RECEIVED BY 5:00 P.M., EASTERN TIME, ON FEBRUARY 24, 2003 OR SUCH OTHER DATE AS MAY BE IDENTIFIED ON YOUR BALLOT (THE "VOTING DEADLINE"), UNLESS EXTENDED. ________________________ THE CONFIRMATION AND EFFECTIVENESS OF THE PROPOSED PLAN ARE SUBJECT TO MATERIAL CONDITIONS PRECEDENT, SOME OF WHICH MAY NOT BE SATISFIED. SEE "OVERVIEW OF THE PLAN — CONDITIONS TO CONFIRMATION AND THE EFFECTIVE DATE OF THE PLAN" AND "VOTING AND CONFIRMATION OF THE PLAN — ACCEPTANCE OR CRAMDOWN." THERE IS NO ASSURANCE THAT THESE CONDITIONS WILL BE SATISFIED OR WAIVED. No person is authorized by any of the Debtors in connection with the Plan or the solicitation of acceptances of the Plan to give any information or to make any representation other than as contained in this Disclosure Statement and the exhibits and schedules attached hereto or incorporated by reference or referred to herein, and, if given or made, such information or representation may not be relied upon as having been authorized by any of the Debtors. Although the Debtors will make available to creditors entitled to vote on the Plan such additional information as may be required by applicable law prior to the Voting Deadline, the delivery of this Disclosure Statement will not under any circumstances imply that the information herein is correct as of any time subsequent to the date hereof. ________________________ ALL CREDITORS ARE ENCOURAGED TO READ AND CAREFULLY CONSIDER THIS ENTIRE DISCLOSURE STATEMENT, INCLUDING THE PLAN ATTACHED AS EXHIBIT II AND THE MATTERS DESCRIBED UNDER "RISK FACTORS," PRIOR TO SUBMITTING BALLOTS PURSUANT TO THIS SOLICITATION. ________________________ The summaries of the Plan and the other documents contained in this Disclosure Statement are qualified by reference to the Plan itself, the exhibits thereto and documents described therein as being filed prior to approval of the Disclosure Statement. The information contained in this Disclosure Statement, including the information regarding the history, businesses and operations of the Debtors, the historical, projected and budgeted financial information regarding the Debtors and the liquidation analyses relating to the Debtors, is included for purposes of soliciting acceptances of the Plan but, as to contested matters and adversary proceedings, is not to be construed as admissions or stipulations but rather as statements made in settlement negotiations. ________________________ FORWARD-LOOKING STATEMENTS THIS DISCLOSURE STATEMENT CONTAINS FORWARD-LOOKING STATEMENTS BASED PRIMARILY ON THE CURRENT EXPECTATIONS OF THE DEBTORS AND PROJECTIONS ABOUT FUTURE EVENTS AND FINANCIAL TRENDS AFFECTING THE FINANCIAL CONDITION OF THE DEBTORS' OR THE REORGANIZED DEBTORS' BUSINESSES. THE WORDS "BELIEVE," "MAY," "ESTIMATE," "CONTINUE," "ANTICIPATE," "INTEND," "EXPECT" AND SIMILAR EXPRESSIONS IDENTIFY THESE FORWARD-LOOKING STATEMENTS. THESE FORWARD-LOOKING STATEMENTS ARE SUBJECT TO A NUMBER OF RISKS, UNCERTAINTIES AND ASSUMPTIONS, INCLUDING THOSE DESCRIBED BELOW UNDER THE CAPTION "RISK FACTORS." IN THE LIGHT OF THESE RISKS AND UNCERTAINTIES, THE FORWARD-LOOKING EVENTS AND CIRCUMSTANCES DISCUSSED IN THIS DISCLOSURE STATEMENT MAY NOT OCCUR, AND ACTUAL RESULTS COULD DIFFER MATERIALLY FROM THOSE ANTICIPATED IN THE FORWARD-LOOKING STATEMENTS. NEITHER THE DEBTORS NOR THE REORGANIZED DEBTORS UNDERTAKE ANY OBLIGATION TO UPDATE OR REVISE PUBLICLY ANY FORWARD- LOOKING STATEMENTS, WHETHER AS A RESULT OF NEW INFORMATION, FUTURE EVENTS OR OTHERWISE FOLLOWING ITS APPROVAL BY THE BANKRUPTCY COURT. THIS DISCLOSURE STATEMENT HAS NOT BEEN APPROVED OR DISAPPROVED BY THE U.S. SECURITIES AND EXCHANGE COMMISSION (THE "SEC"), ANY CANADIAN SECURITIES ADMINISTRATOR ("CSA") OR ANY STOCK EXCHANGE, NOR HAS THE SEC, ANY CSA OR ANY STOCK EXCHANGE PASSED UPON THE ACCURACY OR ADEQUACY OF THE STATEMENTS CONTAINED HEREIN. ________________________ All capitalized terms in this Disclosure Statement not otherwise defined herein have the meanings given to them in the Plan. TABLE OF CONTENTS Page INTRODUCTION....................................................................................................................................................... 1 OVERVIEW OF THE PLAN...................................................................................................................................... 2 Introduction................................................................................................................................................... 2 Changes to Corporate Structure .................................................................................................................... 2 General Information Concerning Treatment of Claims and Interests............................................................ 3 Summary of Classes and Treatment of Claims and Interests ........................................................................3 Sources and Uses of Cash ............................................................................................................................. 7 Additional Information Regarding Assertion and Treatment of Administrative Claims and Priority Tax Claims.......................................................................................................................................... 8 Administrative Claims .................................................................................................................... 8 Priority Tax Claims ..................................................................................................................................... 10 Special Provisions Regarding the Treatment of Allowed Secondary Liability Claims............................... 10 Summary of Terms of Certain Securities To Be Issued Pursuant to the Plan and Post- Reorganization Indebtedness............................................................................................................ 11 Conditions to Confirmation and the Effective Date of the Plan.................................................................. 12 Conditions to Confirmation .......................................................................................................... 12 Conditions to the Effective Date................................................................................................... 12 Waiver of Conditions to Confirmation or the Effective Date ....................................................... 13 Effect of Nonoccurrence of Conditions to the Effective Date ...................................................... 13 Exit Financing Facility and New LINC Notes; Obtaining Cash for Plan Distributions and Transfers of Funds Among the Reorganized Debtors....................................................................... 13 The CCAA Order ........................................................................................................................................ 14 CERTAIN EVENTS PRECEDING THE DEBTORS' CHAPTER 11 FILINGS...................................................... 15 Background of the Restructuring................................................................................................................. 15 The Greyhound Facility ................................................................................................................ 15 The Bridge Facility ....................................................................................................................... 16 Resolution of Disputes Among Laidlaw, Safety-Kleen and Certain Other Parties ..................................... 16 Laidlaw Proof of Claim in Safety-Kleen Cases ...........................................................................