-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, S2IIQbD8z/Tdyin5IxPTjgoD4Zb0YNBn9prEDLCIAj4vGoBK5N7VhOL93tEpOLOY wwAwtHSVA6ql8UfDL03Zeg== 0000950117-97-001266.txt : 19970806 0000950117-97-001266.hdr.sgml : 19970806 ACCESSION NUMBER: 0000950117-97-001266 CONFORMED SUBMISSION TYPE: SC 13D/A PUBLIC DOCUMENT COUNT: 3 FILED AS OF DATE: 19970805 SROS: NASD GROUP MEMBERS: JACKSON NATIONAL LIFE INSURANCE CO /MI GROUP MEMBERS: PPM AMERICA, INC SUBJECT COMPANY: COMPANY DATA: COMPANY CONFORMED NAME: BUCYRUS INTERNATIONAL INC CENTRAL INDEX KEY: 0000740761 STANDARD INDUSTRIAL CLASSIFICATION: MINING MACHINERY & EQUIP (NO OIL & GAS FIELD MACH & EQUIP) [3532] IRS NUMBER: 390188050 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: SC 13D/A SEC ACT: 1934 Act SEC FILE NUMBER: 005-33080 FILM NUMBER: 97651428 BUSINESS ADDRESS: STREET 1: P O BOX 500 STREET 2: 1100 MILWAUKEE AVENUE CITY: SOUTH MILWAUKEE STATE: WI ZIP: 53172-0500 BUSINESS PHONE: 4147684000 MAIL ADDRESS: STREET 1: P O BOX 500 STREET 2: 1100 MILWAUKEE AVENUE CITY: SOUTH MILWAUKEE STATE: WI ZIP: 53172-0500 FORMER COMPANY: FORMER CONFORMED NAME: BUCYRUS ERIE CO /DE DATE OF NAME CHANGE: 19920703 FORMER COMPANY: FORMER CONFORMED NAME: BECOR WESTERN INC/DE DATE OF NAME CHANGE: 19860901 FILED BY: COMPANY DATA: COMPANY CONFORMED NAME: JACKSON NATIONAL LIFE INSURANCE CO /MI CENTRAL INDEX KEY: 0000931788 STANDARD INDUSTRIAL CLASSIFICATION: [] STATE OF INCORPORATION: MI FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: SC 13D/A BUSINESS ADDRESS: STREET 1: 5901 EXECUTIVE DRIVE CITY: LANSING STATE: MI ZIP: 48911 BUSINESS PHONE: 5173943400 MAIL ADDRESS: STREET 1: C/O ANDERSON, KILL ET AL STREET 2: 1251 AVE OF THE AMERICAS CITY: NEW YORK STATE: NY ZIP: 10020 SC 13D/A 1 JACKSON NATIONAL LIFE 13D, AM #3 UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 --------------- Amendment No. 3 to SCHEDULE 13D --------------- Under the Securities Exchange Act of 1934 (Amendment No. 3)* Bucyrus International, Inc. (Name of Issuer) Common Stock, $.01 par value per share (Title of Class of Securities) 118902105 (CUSIP Number) --------------- J. Andrew Rahl, Jr. Esq. Anderson Kill & Olick, P.C. 1251 Avenue of the Americas, New York, NY 10020-1182 (212) 278-1469 (Name, Address and Telephone Number of Person Authorized to Receive Notices and Communications) July 31, 1997 (Date of Event which Requires Filing of this Statement) --------------- If the filing person has previously filed a statement on Schedule 13G to report the acquisition which is the subject of this Schedule 13D, and is filing this schedule because of Rule 13d-1(b)(3) or (4), check the following box [ ]. Check the following box if a fee is being paid with the statement [ ]. (A fee is not required only if the reporting person: (1) has a previous statement on file reporting beneficial ownership of more than five percent of the class of securities described in Item 1; and (2) has filed no amendment subsequent thereto reporting beneficial ownership of five percent or less of such class.) (See Rule 13d-7.) -1- Note: Six copies of this statement, including all exhibits, should be filed with the Commission. See Rule 13d-1(a) for other parties to whom copies are to be sent. *The remainder of this cover page shall be filled out for a reporting person's initial filing on this form with respect to the subject class of securities, and for any subsequent amendment containing information which would alter disclosure provided in a prior cover page. The information required on the remainder of this cover page shall not be deemed to be "filed" for the purpose of Section 18 of the Securities Exchange Act of 1934 ("Act") or otherwise subject to the liabilities of that section of the Act but shall be subject to all other provisions of the Act (however, see the Notes). -2- SCHEDULE 13D CUSIP No. 118902105 1. NAME OF REPORTING PERSON S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON Jackson National Life Insurance Company 38-1659835 2. CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a) [ ] (b) [X] 3. SEC USE ONLY 4. SOURCE OF FUNDS* Conversion of pre-bankruptcy debt and equity obligations to post-bankruptcy equity in reorganized Issuer pursuant to a Plan of Reorganization. (00). 5. CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(d) or 2(e) [ ] 6. CITIZENSHIP OR PLACE OR ORGANIZATION Michigan NUMBER OF 7. SOLE VOTING POWER SHARES 4,228,382 BENEFICIALLY 8. SHARED VOTING POWER OWNED BY 4,228,382 EACH 9. SOLE DISPOSITIVE POWER REPORTING 4,228,382 PERSON 10. SHARED DISPOSITIVE POWER WITH 4,228,382 11. AGGREGATE AMOUNT BENEFICIALLY OWED BY EACH REPORTING PERSON - 4,228,382 12. CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES* [ ] 13. PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) 40.14% 14. TYPE OF REPORTING PERSON* Life Insurance Company (IC) *SEE INSTRUCTIONS BEFORE FILLING OUT! INCLUDE BOTH SIDES OF THE COVER PAGE, RESPONSES TO ITEMS 1-7 (INCLUDING EXHIBITS) OF THE SCHEDULE AND THE SIGNATURE ATTESTATION -3- SCHEDULE 13D CUSIP No. 118902105 1. NAME OF REPORTING PERSON S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON PPM America, Inc. 36-3714794 2. CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a) [ ] (b) [X] 3. SEC USE ONLY 4. SOURCE OF FUNDS* Conversion of pre-bankruptcy debt and equity obligations to post-bankruptcy equity in reorganized Issuer pursuant to a Plan of Reorganization. (00). 5. CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(d) or 2(e) [ ] 6. CITIZENSHIP OR PLACE OR ORGANIZATION Delaware NUMBER OF 7. SOLE VOTING POWER SHARES 4,228,382 BENEFICIALLY 8. SHARED VOTING POWER OWNED BY 4,228,382 EACH 9. SOLE DISPOSITIVE POWER REPORTING 4,228,382 PERSON 10. SHARED DISPOSITIVE POWER WITH 4,228,382 11. AGGREGATE AMOUNT BENEFICIALLY OWED BY EACH REPORTING PERSON - 4,228,382 12. CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES* [ ] 13. PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) 40.14% 14. TYPE OF REPORTING PERSON* Investment Adviser (IA) *SEE INSTRUCTIONS BEFORE FILLING OUT! INCLUDE BOTH SIDES OF THE COVER PAGE, RESPONSES TO ITEMS 1-7 (INCLUDING EXHIBITS) OF THE SCHEDULE AND THE SIGNATURE ATTESTATION -4- AMENDMENT NO. 3 TO SCHEDULE 13D This Amendment relates to the Schedule 13D dated December 23, 1994 ("Original Schedule 13D"), as amended by Amendment No. 1 thereto dated April 10, 1995 ("First Amendment") and Amendment No. 2 thereto dated April 18, 1996 ("Second Amendment"), each filed by Jackson National Life Insurance Company ("JNL") and PPM America, Inc. ("PPM America") relating to the common stock, par value $.01 per share ("Common Stock"), of Bucyrus International, Inc. (the "Issuer"). Notwithstanding this Amendment No. 3, the Original Schedule 13D, the First Amendment and the Second Amendment speak as of their respective dates. All capitalized terms used but not otherwise defined in this Amendment have the meanings given to them in the Original Schedule 13D. ITEM 4. PURPOSE OF TRANSACTION. Item 4 of the Original Schedule 13D, as amended by the First Amendment and Second Amendment, is hereby amended and restated in its entirety as follows: Except as otherwise described herein, the reporting persons acquired the shares of Common Stock described in Item 5 below for investment purposes. Except as otherwise described herein, the reporting persons presently do not intend to acquire additional shares of Common Stock in the open market or through privately negotiated transactions. The reporting persons may in the future seek in open market or privately negotiated transactions to acquire additional shares of Common Stock or to dispose of all or a portion of Common Stock covered by this Schedule 13D. The reporting persons may from time to time consider or discuss with third parties the disposition of some or all of such shares of Common Stock. In making any decision whether to acquire or dispose of shares of Common Stock, in addition to the other considerations discussed herein, the reporting persons will consider various factors, including, among other things, the Issuer's financial condition, business and prospects, the price at which such securities are trading and the nature of other opportunities available. As disclosed in the Issuer's press release dated July 31, 1997, American Industrial Partners Capital Fund II, L.P. (or an affiliated entity) (the "AIP Purchaser") has entered into a letter of intent with the Issuer, providing for the acquisition of the Issuer by the AIP Purchaser. Under the terms of the letter of intent (the "AIP Offer"), the AIP Purchaser would acquire all of the shares of Common Stock of the Issuer at a -5- price of $18 per share. The transaction is subject to customary contingencies, including the execution of a definitive agreement, financing, and shareholder, board of directors and regulatory approvals. The AIP Offer contemplates the execution by JNL of a stockholder agreement pursuant to which JNL will agree to tender all of the shares of Common Stock held by it to the AIP Purchaser in the tender offer and will grant to the Purchaser an option to purchase all of such Shares at an exercise price equal to the offer price. The option would be exercisable in certain circumstances to be enumerated in the definitive stockholder agreement, including upon termination of the merger agreement, and would remain exercisable for a period of time thereafter, to be mutually agreed. In the event that an entity other than the AIP Purchaser acquired a majority of the outstanding Shares at a price higher than the offer price pursuant to an agreement signed within such period, the AIP Purchaser and JNL would share 50/50 in the amount by which the price in such other acquisition exceeded the offer price. The reporting persons presently support such proposed transaction in principle. The reporting persons believe that the terms of the proposed transaction will allow JNL to continue to pursue its pending actions against Mikael Salovaara, the South Street group of investment funds, Milbank, Tweed, Hadley & McCloy and others with respect to the Issuer. In addition, the reporting persons continue to anticipate that JNL may acquire additional shares of Common Stock pursuant to the terms of the Plan. As discussed in Item 3 of the Original Schedule 13D, pursuant to Section 3.09(b)(ii) of the Plan, any recovery of cash or property obtained by or on behalf of the Issuer with respect to any Cause of Action against a Non- Released Person which arose prior to February 18, 1994 shall constitute a distribution on JNL's claim as the holder of the Bucyrus Resettable Senior Notes. Accordingly, pursuant to Section 3.09(b)(ii) of the Plan, JNL may be entitled from time to time after the date of this filing to receive additional shares of Common Stock. Specifically, JNL is vigorously pursuing as a representative of Holdings' and Bucyrus' bankruptcy estates claims, rights and Causes of Action against South Street Corporate Recovery Fund I, L.P., South Street Leveraged Corporate Recovery Fund, L.P., South Street Corporate Recovery Fund I (International), L.P., Greycliff Partners, Ltd. and their respective successors, predecessors and other related parties, including Mikael Salovaara and Alfred Eckert, each in its or his capacity as a Non-Released Person ("Claims Against Non-Released Persons"). At this time, the reporting persons believe it is premature and speculative to estimate the number of shares which would be received by JNL if JNL were to be wholly or partially successful in pursuing such claims. -6- JNL is also presently continuing to pursue in the Bankruptcy Court a claim under Section 503(b) of the Bankruptcy Code for the recovery of approximately $3.311 million in actual, necessary professional legal and financial advisory fees and out of pocket expenses incurred by JNL in making a substantial contribution in the Proceedings ("503(b) Claim"). Pursuant to a settlement agreement dated May 23, 1995, JNL agreed that, in the event that the JNL 503(b) Claim is allowed in whole or in part by the Bankruptcy Court, JNL will accept payment in Common Stock at a price equal to $5.6375 per share in lieu of requiring payment of any award in cash. By order dated June 3, 1996, the Bankruptcy Court ruled that JNL would be awarded the sum of $500. JNL appealed the decision to the United States District Court for the Eastern District of Wisconsin. On June 26, 1997, the District Court returned the matter to the Bankruptcy Court for further proceedings. On July 11, 1997, JNL moved the Bankruptcy Court for relief from the final judgment entered on the JNL 503(b) Claim. At this time the reporting persons believe it is premature and speculative to estimate the number of shares which would be received by JNL if JNL were to be wholly or partially successful in pursuing its 503(b) Claim and if the Issuer were to issue to JNL shares of Common Stock in lieu of cash. In addition to discussions with the AIP Purchaser, from time to time the reporting persons have discussed with the Issuer and/or unrelated third parties opportunities to engage in extraordinary corporate transactions involving the Issuer or the sale or transfer of a material amount of assets of the Issuer or its subsidiaries. Subject to consummation of the transaction contemplated by the AIP Offer, the reporting persons anticipate that they will continue to explore such types of opportunities with respect to the Issuer. On July 21, 1997, the Issuer entered into a definitive agreement with Global Industrial Technologies, Inc. ("Global") to acquire (the "Marion Acquisition") certain assets and liabilities of Global's subsidiary, The Marion Power Shovel Company, and of certain subsidiaries and divisions of Global that represent Global's surface mining equipment business in Canada, Australia, and South Africa. The Issuer stated in its July 31, 1997 Press Release that the transaction contemplated by the AIP Offer is not expected to have any effect on its previously announced Marion Acquisition. In connection with the Marion Acquisition, the Issuer obtained a bridge loan commitment dated April 14, 1997 from the PPM America Special Investments Fund, L.P., an affiliate of the reporting persons (the "PPM Fund") ("Bridge Loan Commitment") to provide a $45 million unsecured bridge loan (the "Bridge Loan") to fund the purchase of the business and assets of Marion. Such Bridge Loan Commitment anticipates that the maturity date of such Bridge Loan would be 180 days from the closing date of such loan. To date, the Issuer has not closed such Bridge Loan but the Issuer has an agreement in principle with the AIP Purchaser that the Bridge Loan will close when and if the Issuer -7- consummates the Marion Acquisition. The PPM Fund anticipates that one or more other lenders may participate in such Bridge Loan. The Bridge Loan Commitment contemplates that, in addition to other customary fees and charges, the PPM Fund would receive at closing warrants to purchase Common Stock of the Issuer. However, the actual terms of the Bridge Loan will be reflected in final documentation which the parties are presently negotiating. The closing of such Bridge Loan and the issuance of any such warrants is subject to a number of contingencies, including without limitation, the negotiation, execution and delivery of definitive documentation for the Bridge Loan, the closing of the Marion Acquisition and other contingencies resulting from the recent AIP Offer. Furthermore, the AIP Offer or any other event involving an acquisition of Common Stock of the Issuer may affect the PPM Fund's willingness to receive any of its consideration for the Bridge Loan in the form of warrants. As a result of all of the foregoing considerations, the reporting persons believe it is premature and speculative at this time to determine whether or not the PPM Fund will receive any shares of Common Stock in connection with the Bridge Loan. The reporting persons have discussed with the Issuer from time to time various proposals for a recapitalization of the Issuer, including without limitation, the possibility of obtaining financing from JNL, PPM, their affiliates or third parties. Subject to the effects of the AIP Offer, the reporting persons will continue to consider all appropriate capitalization proposals affecting the Issuer. The corporate governance issues described in paragraphs 5 through 11 of the Original Schedule 13D ceased to be applicable as of the annual meeting of stockholders of the Issuer held April 30, 1997 (the "1997 Annual Meeting"). On March 5, 1997, the Board, acting pursuant to Section 4.2 of the Restated Bylaws of the Issuer, adopted a resolution establishing the number of directors at seven, effective as of the date of the 1997 Annual -8- Meeting. At such 1997 Annual Meeting, seven directors were elected to hold office until the 1998 annual meeting of shareholders of the Issuer and until their successors are duly elected and qualified. Effective April 30, 1997, the Board of Directors of the Issuer appointed Armour F. Swanson as the Non- Executive Chairman of the Issuer's Board of Directors, replacing F. John Stark III, who continued to serve as a Director. Of the directors elected at the 1997 Annual Meeting, Russell W. Swansen and F. John Stark III were reelected. Such individuals are also directors and officers of PPM, which is the investment advisor to JNL (the "JNL Directors"). Accordingly, JNL or PPM may be deemed to have the ability to influence the Issuer's Board of Directors and the JNL Directors may be deemed to participate, together with other members of the Issuer's Board of Directors, in the management of the Issuer. The JNL Directors, in their capacity as members of the Board of Directors, will necessarily consider proposals from time to time regarding the business and affairs of the Issuer, possibly including matters of the nature enumerated in clauses (a) through (j), inclusive, of Item 4 of Schedule 13D. If any such matter is presented to the Issuer's Board of Directors, the JNL Directors intend to act thereon in accordance with their business judgment at such time. Consummation of the transactions contemplated by the AIP Offer could result in a change in the present Board of Directors or management of the Issuer. The terms of the AIP Offer may also, among other things, have the effect of (i) impeding the acquisition of control of the Issuer by any person other than the AIP Purchaser, (ii) causing the Issuer's Common Stock to be delisted from a national securities exchange or cease to be authorized or quoted in an inter-dealer quotation system of a registered national securities association, or (iii) causing a class of equity securities of the Issuer to become eligible for termination of registration pursuant to Section 12(g)(4) of the Securities Exchange Act of 1934. Except as aforesaid, neither JNL, PPM America, Brooke, PPM Ltd. or Prudential, nor to the best of their knowledge, any of the directors or executive officers of any of them, presently has plans or proposals which relate to or would result in any of the matters enumerated in clauses (a) through (j), inclusive, of Item 4 of Schedule 13D. The reporting persons may take any other action with respect to the Issuer and its securities in any manner permitted by law. -9- ITEM 5. INTEREST IN SECURITIES OF THE ISSUER. Item 5 of the Original Schedule 13D is amended to add the following: (a) Item 13 of the cover pages is incorporated herein by reference. Item 13 has been amended to reflect that the percentage of shares of Common Stock beneficially owned by each reporting person is 40.14% as a result of the issuance of shares of Common Stock by the Issuer after the date of the Original Schedule 13D. ITEM 6. CONTRACTS, ARRANGEMENTS, UNDERSTANDINGS OR RELATIONSHIPS WITH RESPECT TO SECURITIES OF THE ISSUER. Item 6 of the Original Schedule 13D is hereby amended to add the following paragraphs: The disclosure provided in Item 4 hereof with respect to the warrants to which the PPM Fund may be entitled in connection with the Bridge Loan Commitment is incorporated in this Item 6 by reference. The disclosure provided in Item 4 hereof with respect to the AIP Offer is incorporated in this Item 6 by reference. ITEM 7. EXHIBITS. (1) Issuer's Press Release dated July 31, 1997. (2) Press Release issued by the reporting persons dated July 31, 1997. (3) Letter of Intent, filed by reference herein to the Issuer's Form 8-K filed August 4, 1997. -10- SIGNATURE After reasonable inquiry and to the best of my knowledge and belief, I certify that the information set forth in this Statement is true, complete and correct. Date: August 5, 1997 JACKSON NATIONAL LIFE INSURANCE COMPANY By: /s/ F. John Stark, III __________________________ Name: F. John Stark, III Title: Attorney-in-fact PPM AMERICA, INC. By: /s/ F. John Stark, III __________________________ Name: F. John Stark, III Title: Senior Vice President and General Counsel -11- STATEMENT OF DIFFERENCES The section symbol shall be expressed as...................................'SS' EX-99 2 EXHIBIT(1) Exhibit (1) PRESS RELEASE BUCYRUS INTERNATIONAL, INC. (NASDAQ: BCYR) FOR IMMEDIATE RELEASE BUCYRUS INTERNATIONAL, INC. TO BE ACQUIRED BY AMERICAN INDUSTRIAL PARTNERS South Milwaukee, Wisconsin, July 31, 1997... Willard R. Hildebrand, President and CEO of Bucyrus International, Inc. ("Bucyrus"), announced today that Bucyrus has entered into a letter of intent with American Industrial Partners Capital Fund II, L.P. ("American Industrial Partners"), providing for the acquisition of Bucyrus by American Industrial Partners or one of its affiliates. Under the terms of the letter of intent, American Industrial Partners would acquire all of the shares of Bucyrus at a price of $18 per share. The transaction is subject to customary contingencies, including the execution of a definitive agreement, financing, and shareholder, board of directors and regulatory approvals. Bucyrus stated that this transaction is not expected to have any effect on its previously announced acquisition of The Marion Power Shovel Company. Bucyrus is one of the world's leading manufacturers of large scale surface mining equipment and a provider of aftermarket parts and services. American Industrial Partners is a private investment partnership which makes equity investments in public and privately held companies located principally in the United States. Contact: William R. Hildebrand, President and Chief Executive Officer or Daniel J. Smoke, Vice President and Chief Financial Officer (414) 768-5375 or (414) 768-5378 -12- EX-99 3 EXHIBIT(2) Exhibit (2) PPMWORLDWIDE PPM America Supports Acquisition of Bucyrus International by American Industrial Partners, But Reports It Will Continue Legal Action Against Milbank, Tweed, Hadley and McCloy, & Mikael Salovaara Over Conflict of Interest Dealings in B-I Bankruptcy; $1.8 Million in Legal Fees at Issue ------------------------ Chicago, Illinois, July 31, 1997 -- PPM America, Inc., on behalf of Jackson National Life Insurance Company, as a principal shareholder of Bucyrus International, Inc. ("B-I"), is pleased to announce that it supports in principal the proposed acquisition of B-I by American Industrial Partners Capital Fund, II, L.P. PPM congratulates Frank Miller, Charles Macaluso, Willard Hildebrand and the new Bucyrus management team for their success in maximizing Bucyrus' shareholder value. PPM believes this success has been achieved in spite of what Jackson views as the contrary efforts of Mikael Salovaara, the South Street group of investment funds, Milbank, Tweed, Hadley & McCloy and others. PPM is also pleased to announce that the terms of the proposed transaction will allow Jackson to continue to pursue its pending legal actions against them. In this regard, the Office of the United States Trustee filed motions earlier this week with the United States Bankruptcy Court for the Eastern District of Wisconsin, where Bucyrus' 1994 bankruptcy proceedings were conducted, seeking: (i) to revoke the Court's order authorizing the employment of Milbank, Tweed, Hadley and McCloy as counsel to Bucyrus; (ii) disgorgement of all legal fees and expenses paid to Milbank; and (iii) sanctions against Milbank. As has been widely reported, prosecutors in Milwaukee are looking into the possibility that Milbank Tweed violated federal law by failing to disclose its conflict of interest in representing both Bucyrus International and Mr. Salovaara, one of the company's chief creditors during the B-I's reorganization efforts. Milbank Tweed has made what press accounts have called "an extraordinary confession" acknowledging the conflict. The New York law firm is now fighting efforts by B-I to not only disgorge $1.8 million in legal fees but also court-ordered sanctions in connection with its unprecedented double representation of debtor and creditor. Jackson National Life is separately engaged in litigation with Salovaara. Jackson National Life currently has a 42% equity stake in B-I. -13- UNITED STATES BANKRUPTCY COURT EASTERN DISTRICT OF WISCONSIN - -------------------------------------------------------------------------------- In Re: B-E Holdings, Inc. Case No. 94-20786-RAE Bucyrus-Erie Company Case No. 94-20787-RAE (Chapter 11 Proceedings) (Debtors) Jointly Administered - -------------------------------------------------------------------------------- MOTION TO REVOKE ORDER AUTHORIZING EMPLOYMENT OF MILBANK, TWEED HADLEY & McCLOY AS ATTORNEYS FOR THE DEBTOR - -------------------------------------------------------------------------------- Now comes the United States Trustee by John Robert Byrnes, Assistant United States Trustee, who moves the Court for an Order revoking the Order Authorizing the Employment of Milbank, Tweed, Hadley & McCloy by the Debtor entered herein on the following grounds: 1. The Order was obtained as the result of material misrepresentations and omissions in the affidavits and supplemental affidavits in support of application for employment filed pursuant to FRBP 2016. 2. The affidavits filed in support of application for employment did not comply with FRBP 2016 and as a result, employment was obtained contrary to 'SS' 327. 3. Milbank, Tweed, Hadley & McCloy was not a disinterested party either at the time of its employment or thereafter and, as a result, was ineligible for employment under 'SS' 327. Dated this 25th day of July, 1997. M. SCOTT MICHEL UNITED STATES TRUSTEE ---------------------- JOHN ROBERT BYRNES Assistant U.S. Trustee John Robert Byrnes Assistant U.S. Trustee Office of the U.S. Trustee 517 E. Wisconsin Ave., Suite 430 Milwaukee, WI Phone: (414) 297-4499 Fax: (414) 297-4478 -14- UNITED STATES BANKRUPTCY COURT EASTERN DISTRICT OF WISCONSIN - -------------------------------------------------------------------------------- In Re: B-E Holdings, Inc. Case No. 94-20786-RAE Bucyrus-Erie Company Case No. 94-20787-RAE (Chapter 11 Proceedings) (Debtors) Jointly Administered - -------------------------------------------------------------------------------- MOTION TO REQUIRE MILBANK, TWEED HADLEY & McCLOY TO DISGORGE FEES AND EXPENSES - -------------------------------------------------------------------------------- Now comes the United States Trustee by John Robert Byrnes, Assistant United States Trustee, who moves the Court for an Order requiring Milbank, Tweed, Hadley & McCloy to disgorge all fees and expenses previously ordered herein and who in support of said motion alleges as follows: 1. Milbank, Tweed, Hadley & McCloy was ineligible for employment for the reasons stated in the Motion to Revoke Employment Order filed contemporaneously with this motion and incorporated herein by reference. 2. The Order Authorizing Payment of Fees and Reimbursement of Expenses was obtained as a result of fraud on the Court on the part of Milbank, Tweed, Hadley & McCloy acting through its partner, John Gellene. Said fraud consisted of affidavits in support of applications for employment filed on behalf of Milbank, Tweed, Hadley & McCloy that were false and misleading and similar testimony provided by Attorney Gellene in support of the application for compensation and reimbursement of expenses filed on behalf of Milbank, Tweed, Hadley & McCloy. -15- 3. That regardless of any benefit the services provided to the estate the misconduct of Milbank, Tweed, Hadley & McCloy was so severe that disgorgement of all fees and expenses is the only appropriate remedy. Dated this 25th day of July, 1997. M. SCOTT MICHEL UNITED STATES TRUSTEE ---------------------- JOHN ROBERT BYRNES Assistant U.S. Trustee John Robert Byrnes Assistant U.S. Trustee Office of the U.S. Trustee 517 E. Wisconsin Ave., Suite 430 Milwaukee, WI Phone: (414) 297-4499 Fax: (414) 297-4478 -16- UNITED STATES BANKRUPTCY COURT EASTERN DISTRICT OF WISCONSIN - -------------------------------------------------------------------------------- In Re: B-E Holdings, Inc. Case No. 94-20786-RAE Bucyrus-Erie Company Case No. 94-20787-RAE (Chapter 11 Proceedings) (Debtors) Jointly Administered - -------------------------------------------------------------------------------- MOTION FOR SANCTIONS - -------------------------------------------------------------------------------- Now comes the United States Trustee by John Robert Byrnes, Assistant United States Trustee, who moves the Court for an Order imposing sanctions against Milbank, Tweed, Hadley & McCloy on the grounds that Milbank, Tweed, Hadley & McCloy violated FRBP 9011 in that the following documents were signed and filed by Milbank, Tweed, Hadley & McCloy or its agents and that said documents did not comply with said Rule: 1. Declaration Pursuant to FRBP 2014(a) and 2016(b) dated 2/18/94. Docket #3. 2. Supplemental Affidavit dated 3/29/94. Docket #175. 3. Application for Compensation and Reimbursement of Expenses dated 4/26/95. Docket #1538. 4. Briefs in support of Applications for Compensation and Reimbursement of Expenses dated 11/9/95. Docket #1878. Dated this 25th day of July, 1997. M. SCOTT MICHEL UNITED STATES TRUSTEE ---------------------- JOHN ROBERT BYRNES Assistant U.S. Trustee John Robert Byrnes Assistant U.S. Trustee Office of the U.S. Trustee 517 E. Wisconsin Ave., Suite 430 Milwaukee, WI Phone: (414) 297-4499 Fax: (414) 297-4478 -17- -----END PRIVACY-ENHANCED MESSAGE-----