-----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, GjOKyX6oh9gcA/7NeV7aL6riJu8G1GlWFG+eX41msW9Cs1Y6piT1wkB2EKqwtwVe OxgqvFWCXsjDeUl9iwF17w== 0000893220-95-000830.txt : 19951130 0000893220-95-000830.hdr.sgml : 19951130 ACCESSION NUMBER: 0000893220-95-000830 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 6 CONFORMED PERIOD OF REPORT: 19951115 ITEM INFORMATION: Bankruptcy or receivership ITEM INFORMATION: Other events ITEM INFORMATION: Financial statements and exhibits FILED AS OF DATE: 19951122 SROS: NONE FILER: COMPANY DATA: COMPANY CONFORMED NAME: COLUMBIA GAS SYSTEM INC CENTRAL INDEX KEY: 0000022099 STANDARD INDUSTRIAL CLASSIFICATION: 4923 IRS NUMBER: 131594808 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 8-K SEC ACT: 1934 Act SEC FILE NUMBER: 001-01098 FILM NUMBER: 95595730 BUSINESS ADDRESS: STREET 1: 20 MONTCHANIN RD CITY: WILMINGTON STATE: DE ZIP: 19807 BUSINESS PHONE: 3024295000 8-K 1 FORM 8-K, THE COLUMBIA GAS SYSTEM INC. 1 FORM 8-K -------- SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 CURRENT REPORT -------------- Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 Date of Report (date of earliest event Reported) November 15, 1995 ----------------- THE COLUMBIA GAS SYSTEM, INC. ----------------------------- (Exact name of registrant as specified in its charter) Delaware 1-1098 13-1594808 - - ---------------------------- ------------ ------------------- (State of other jurisdiction (Commission (IRS Employer of incorporation) File Number) Identification No.) 20 Montchanin Road, Wilmington, Delaware 19807 ----------------------------------------------- (Address of principal executive offices) Registrant's telephone number, including area code (302) 429-5000 -------------- 2 Item 3. Bankruptcy or Receivership The United States Bankruptcy Court for the District of Delaware (Bankruptcy Court) on November 15, 1995, issued orders confirming the Third Amended Plan of Reorganization for The Columbia Gas System, Inc. (Registrant) dated July 27, 1995, and Second Amended Plan of Reorganization of the Columbia Gas Transmission Corporation, (a wholly-owned subsidiary of Registrant) as further amended, dated July 17, 1995. The Bankruptcy Court orders confirming these amended plans of reorganization (Plans) are filed herewith as Exhibits B and C. A summary of material features of the Plans was published in a news release dated November 15, 1995, which is also filed herewith as Exhibit D and a more detailed discussion of the material features of the Plans was included in the report on Form 10-Q for the third quarter of 1995, as filed with the Commission on November 9, 1995. The following unaudited condensed consolidated balance sheet for the registrant, which was included in the quarterly report on Form 10-Q for the third quarter of 1995, gives the effect of the Plans as confirmed which are substantially the same as the Plans filed with the Commission under cover of Form 8-K on August 4, 1995. This pro forma statement assumed that the effective date was September 30, 1995. The actual effective date will follow a ten day waiting period from the date of the confirmation order, during which time appeals may be filed in the United States District Court for the District of Delaware, as ordered by the Bankruptcy Court. The balance sheet adjustments primarily reflect the satisfaction of approximately $4 billion of non-affiliated claims made against the Registrant and Columbia Transmission in the bankruptcy proceedings and the issuance of approximately $3 billion of associated new debt or preferred stock. The pro forma consolidated balance sheet also includes other adjustments and reclassifications to eliminate bankruptcy-related items and the anticipated readoption of Statement of Financial Accounting Standard No. 71 by Columbia Transmission and Columbia Gulf Transmission Company upon emergence. Management believes that these adjustments fairly represent the effect of emergence from bankruptcy on the consolidated balance sheet. 3 Consolidated Balance Sheet Actual and Pro Forma As of September 30, 1995 ------------------ (millions)
Pro Forma Actual Entries Pro Forma ---------- -------------- --------- Assets - - ------ Net Property, Plant and Equipment . . . . . . . . . . . $ 4,132.1 $ 18.0 $ 4,150.1 ------------ ------------ ----------- Investments and Other Assets . . . . . . . . . . . . . 297.7 (91.0) 206.7 ------------ ------------ ----------- Current Assets Cash and temporary cash investments . . . . . . . 1,759.6 (1,758.2) 1.4 Other . . . . . . . . . . . . . . . . . . . . . . 779.1 198.2 977.3 ------------ ------------- ----------- Total Current Assets . . . . . . . . . . . . . . . . . 2,538.7 (1,560.0) 978.7 ------------ ------------ ----------- Deferred Charges . . . . . . . . . . . . . . . . . . . 287.2 188.3 475.5 ------------ ------------ ----------- Total Assets . . . . . . . . . . . . . . . . . . . . . $ 7,255.7 $ (1,444.7) $ 5,811.0 ============= ============= =========== Capitalization and Liabilities - - ------------------------------ Capitalization Common Stock Equity . . . . . . . . . . . . . . . . 1,647.5 (524.3) 1,123.2 Preferred Stock . . . . . . . . . . . . . . . . . . - 400.0 400.0 Long-term debt . . . . . . . . . . . . . . . . . . . 3.8 2,000.0 2,003.8 ------------- ------------ ----------- Total Capitalization . . . . . . . . . . . . . . . . . 1,651.3 1,875.7 3,527.0 ------------ ------------ ----------- Current Liabilities Short-term debt . . . . . . . . . . . . . . . . . . - 538.0 538.0 Other . . . . . . . . . . . . . . . . . . . . . . . 734.0 17.9 751.9 ------------ ------------ ----------- Total Current Liabilities . . . . . . . . . . . . . . . 734.0 555.9 1,289.9 ------------ ------------ ----------- Liabilities Subject to Chapter 11 Proceedings . . . . . 3,981.9 (3,981.9) - ------------ ------------ ------------ Other Liabilities and Deferred Credits Deferred income taxes, noncurrent . . . . . . . . . 424.0 (67.4) 356.6 Postretirement benefits other than pensions . . . . 220.3 2.2 222.5 Other . . . . . . . . . . . . . . . . . . . . . . . 244.2 170.8 415.0 ------------ ------------ ----------- Total Other Liabilities and Deferred Credits . . . . . 888.5 105.6 994.1 ------------ ------------ ----------- Total Capitalization and Liabilities . . . . . . . . . $ 7,255.7 $ (1,444.7) $ 5,811.0 ============ ============ ===========
4 Item 5. Other Events On November 20, 1995, Registrant published certain factors which can be used to estimate distributions upon emergence with respect to outstanding prepetition debt of Registrant. A copy of that release is filed herewith as Exhibit E. On November 21, 1995, Registrant published the projected interest and dividend rates for debentures and preferred stock to be issued upon emergence assuming that emergence occurs on November 28, 1995, the first day following the 10-day appeal period. A copy of that release is filed herewith as Exhibit F. Item 7. Financial Statements and Exhibits A. Amended Plans of Reorganization and Disclosure Statements for Registrant and Columbia Transmission are incorporated by reference to Form 8-K filed with the Commission on August 8, 1995. Omitted from this filing were Exhibits 2 through 6 for both the Registrant and Columbia Transmission. Exhibit 2 for Registrant (Exhibit 4 for Columbia Transmission) is Registrant's 1994 Form 10-K. Exhibit 3 for Registrant (Exhibit 5 for Columbia Transmission) is Registrant's 1995 First and Second Quarter Form 10-Qs. These documents were previously filed with the Commission. Copies of the remaining exhibits will be provided to the Commission upon request. B. Confirmation Order of Registrant's Plan which includes certain amendments to its Plan. Omitted is Exhibit A (Stipulation and Order of Dismissal). Copies of this exhibit will be provided to the Commission upon request. C. Confirmation Order of Columbia Transmission's Plan which includes certain amendments to its Plan. Omitted is Exhibit A (Appalachian and Southwest producers, Creditor Classes 3.1 and 3.3); Exhibit B (Other Unsecured Claims, Creditor Classes 3.1 and 3.4) and Exhibit C (Listing of Assumed Executory Contracts). Copies of these exhibits will be provided to the Commission upon request. D. News Release dated November 15, 1995, regarding confirmation orders for Registrant and Columbia Transmission. E. News Release dated November 20, 1995, regarding certain factors which can be used to estimate distributions upon emergence with respect to outstanding prepetition debt of Registrant. F. News Release dated November 21, 1995, regarding projected interest and debenture rates to be issued upon emergence. 5 SIGNATURE Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized. The Columbia Gas System, Inc. ----------------------------- (Registrant) By /s/ R. E. Lowe --------------------------- Vice President & Controller Date: November 22, 1995 EX-99.B 2 CONFIRMATION ORDER OF REGISTRANT'S PLAN 1 FORM 8-K, EXHIBIT B, REGISTRANT'S CONFIRMATION ORDER DATED NOVEMBER 15, 1995 UNITED STATES BANKRUPTCY COURT FOR THE DISTRICT OF DELAWARE - - --------------------------------------- In re Chapter 11 THE COLUMBIA GAS SYSTEM, INC., Case No. 91-803(HSB) Debtor. - - --------------------------------------- ORDER CONFIRMING THE THIRD AMENDED PLAN OF REORGANIZATION OF THE COLUMBIA GAS SYSTEM, INC. DATED JULY 27, 1995 The Columbia Gas System, Inc. ("Columbia"), debtor and debtor-in-possession, having filed the Third Amended Plan of Reorganization of The Columbia Gas System, Inc. dated July 27, 1995 (the "Plan") in accordance with Section 1121 of Title 11 of the United States Code (the "Bankruptcy Code"), 11 U.S.C. Section 1121; and Columbia having filed its Disclosure Statement for the Plan pursuant to Section 1125 of the Bankruptcy Code (the "Disclosure Statement"); and hearings having been held before this Court on July 18, 1995 and July 27, 1995 (collectively, the "Hearing") to consider the adequacy of the Disclosure Statement and the amendments and revisions thereto set forth on the record at the Hearing; and the Court by Order dated July 27, 1995 having approved the Disclosure Statement as modified to comport with the record of the Hearing, the rulings of the Court and agreements reached with parties that objected to the Disclosure Statement (the "Disclosure Statement Order"); and the Court having entered an Order dated July 27, 1995 (the "Confirmation Procedures Order") establishing and approving, 2 inter alia, procedures for the solicitation and tabulation of votes to accept or reject the Plan, setting deadlines for objecting to confirmation and setting November 13, 1995 at 10:00 a.m. as the date and time for the commencement of the hearing pursuant to Section 1129 of the Bankruptcy Code, 11 U.S.C. Section 1129, to consider confirmation of the Plan; and the Court having approved by order dated October 10, 1995, the form of Class 7 Notice(1) and other material to be transmitted to the holders of Class 7 Claims (the "Class 7 Procedures Order"); and the Disclosure Statement (with a copy of the Plan annexed thereto as Exhibit 1), the Disclosure Statement Order, the report on the Plan dated August 25, 1995 issued by the Securities and Exchange Commission (the "SEC Report"), a Ballot or Non-Voting Status Notice, as appropriate, and related material having been transmitted to all known holders of Claims and/or Interests in accordance with the Confirmation Procedures Order and the Class 7 Procedures Order; and the solicitation of acceptances from holders of Claims and/or Interests entitled to vote on the Plan having been made within the time and in the manner required by the Confirmation Procedures Order; and Ballots indicating acceptance or rejection of the Plan by holders of Claims and/or Interests having been received and tallied by Poorman-Douglas (the "Balloting Agent"), the - - -------------------- 1 All capitalized terms not otherwise defined herein have the meanings set forth in the Plan or, to the extent not inconsistent therewith, in the Confirmation Procedures Order. - 2 - 3 Court-authorized balloting agent; and affidavits of publication having been filed with the Court verifying that the Confirmation Procedures Notice was published in accordance with the provisions of the Confirmation Procedures Order (collectively, the "Publication Affidavits"); and affidavits of service having been filed with respect to the mailing of the Confirmation Procedures Notice to those parties-in-interest having requested notice pursuant to Rule 2002 of the Federal Rules of Bankruptcy Procedure (the "Bankruptcy Rules") and with respect to the transmittal of the Class 7 Notice and related material in accordance with the Class 7 Procedures Order (the "Mailing Affidavits"); and objections to confirmation of the Plan having been filed by (i) the Wain Family Trust, (ii) Gerson Werner and Harry Lewis, named plaintiffs in the Derivative Action (the "Werner Lewis Objection") and (iii) the United States of America on behalf of the Internal Revenue Service (the "IRS Objection") (collectively, the "Confirmation Objections"); and it appearing that the IRS Objection and the Werner Lewis Objection have been withdrawn; and hearings having been held from November 13, 1995 through November 15, 1995 with respect to the Court's consideration of (i) confirmation of the Plan, (ii) the Confirmation Objections not previously withdrawn or settled, (iii) Columbia's proposed settlement of (a) the Class Action (the "Class Action Settlement") and (b) the Intercompany Claims Litigation, and (iv) the Columbia Omnibus Settlement and other settlements - 3 - 4 embodied in the Plan (the "Confirmation Hearing"); and upon the entire record of the Reorganization Case, including, without limitation, the record made at the Confirmation Hearing; and the Court having reviewed, inter alia, the Plan, the Disclosure Statement, the Plan Vote Certification (as defined below), the Publication Affidavits, the Mailing Affidavits, the Debtor's Memorandum of Law In Support of Confirmation of Its Third Amended Plan of Reorganization (the "Confirmation Memorandum"), and all Confirmation Objections and responses to, and statements and comments regarding confirmation of the Plan; and the Court having taken judicial notice of the transcript of the trial on the Intercompany Claims and the proposed findings of fact and conclusions of law submitted by the parties after the conclusion of the trial; and after due deliberation, the Court makes the following findings of fact and conclusions of law:(2) FINDINGS OF FACT AND CONCLUSIONS OF LAW: a. The Court has jurisdiction over the Reorganization Case pursuant to 28 U.S.C Section Section 1334(a) and 157(1). Venue of these proceedings and the Reorganization - - ------------------- 2 This Confirmation Order constitutes the Court's findings of fact and conclusions of law under Fed. R. Civ. P. 52, as made applicable by Bankruptcy Rules 7052 and 9014. Any finding of fact shall constitute a finding of fact even if it is stated as a conclusion of law, and any conclusion of law shall constitute a conclusion of law even if it is stated as a finding of fact when necessary and appropriate. - 4 - 5 Case in this district is proper pursuant to 28 U.S.C. Section Section 1408 and 1409. b. By order dated September 29, 1995, the District Court, inter alia, confirmed that this Court has jurisdiction to (i) confirm the Plan and the TCO Plan in all respects including, without limitation, the settlement of the Intercompany Claims Litigation, (ii) review the settlement of the Intercompany Claims Litigation in conjunction with the Court's hearings to consider confirmation of the Plan and the TCO Plan, to the extent judicial review of such settlement is required, (iii) approve the settlement of the Intercompany Claims Litigation, and (iv) authorize the release of the Intercompany Claims as provided for in the TCO Plan. COMPLIANCE WITH CHAPTER 11 REQUIREMENTS c. Due, sufficient and adequate notice of the Plan, the Confirmation Hearing, the Class Action Settlement, the settlement of the Intercompany Claims Litigation, the Columbia Omnibus Settlement and the other settlements and compromises embodied in the Plan, and the deadlines for voting and filing Confirmation Objections has been given to all known holders of Claims and/or Interests and other parties-in-interest in accordance with the Confirmation Procedures Order and the Class 7 Procedures Order. d. The solicitation by Columbia of votes for accepting or rejecting the Plan was conducted in good faith and complied with Sections 1125 and 1126 of the Bankruptcy - 5 - 6 Code, Bankruptcy Rules 3017 and 3018, the Confirmation Procedures Order, all other applicable provisions of the Bankruptcy Code and all other applicable laws, rules and regulations. e. The procedures by which the Ballots were distributed to holders of Claims against and/or Interests in Columbia and tabulated were fair, properly conducted and in accordance with the Bankruptcy Code, the Bankruptcy Rules, the local rules of this Court, the Confirmation Procedures Order and all other applicable laws, rules and regulations. f. As evidenced by the Declaration of Edward L. Erb dated November 7, 1995 certifying the method and results of the ballot tabulation for the Voting Classes (the "Plan Vote Certification"): (i) at least two-thirds in amount and more than one-half in number of holders of Borrowed Money Claims in Class 3.2 that voted on the Plan accepted the Plan without including the vote of insiders; and (ii) at least two-thirds in amount of the aggregate number of shares of Common Stock held by holders of Class 8 Interests that voted on the Plan accepted the Plan without including the votes of insiders. g. Classes 1, 2, 3.1, 4, 5, 6.1, 6.2, 6.3 and 7 are not impaired under the Plan and, therefore, such Classes are deemed to have accepted the Plan pursuant to Section 1126(f) of the Bankruptcy Code. - 6 - 7 h. As required by Section 1129(a)(1) of the Bankruptcy Code, the Plan complies with all applicable provisions of the Bankruptcy Code. i. As required by and in compliance with Sections 1123(a)(1),(2) and (3) of the Bankruptcy Code, the Plan identifies the Classes of Claims against Columbia that are not impaired under the Plan, the Classes of Claims against and Interests in Columbia that are impaired under the Plan, and specifies the treatment of Allowed Claims and Interests in each such Class. j. Consistent with Section 1123(a)(4) of the Bankruptcy Code, the Plan provides the same treatment for each Allowed Claim or Interest in a particular Class, except in instances where the holder of a particular Allowed Claim or Interest has agreed to less favorable treatment of its Allowed Claim or Interest. k. The classification of Claims against and Interests in Columbia under the Plan is reasonable, not discriminatory and consistent with Section 1122(a) of the Bankruptcy Code in that each Claim against or Interest in Columbia has been placed in a particular Class only if such Claim or Interest is substantially similar to the other Claims or Interests in such Class. Further, such classification is proper under Section 1122(a) because such Claims and Interests have differing rights among each other and against the assets of Columbia or differing interests in Columbia. Additionally, in accordance with Section 1122(b) - 7 - 8 of the Bankruptcy Code, the Plan as modified by this Confirmation Order provides for a Class of Borrowed Money Claims the members of which are those beneficial owners of such Claims that together with their affiliates hold Borrowed Money Claims in the aggregate principal amount of $20,000 or less, as of the (i) Ledger Closing Date, or (ii) as of the Record Date, to the extent not duplicative of the Claims in (i) above. This Class is reasonable and necessary for administrative convenience. l. As required by Section 1123(a)(5) of the Bankruptcy Code, the Plan provides adequate means for its execution and implementation including, inter alia, (i) the vesting in Reorganized Columbia of all property of the Estate and any property and assets acquired by Columbia or Reorganized Columbia under the Plan, (ii) the cancellation of each of the Borrowed Money Instruments, the $500 Million Credit Agreement, the $750 Million Credit Agreement, the 1961 Indenture, the Rate Swap Agreement, the Commercial Paper Master Note for the Commercial Paper and the LESOP Indenture, and the issuance by Reorganized Columbia of New Indenture Securities and shares of New Preferred Stock and DECS, and (iii) the adoption by Reorganized Columbia of an Amended and Restated Certificate of Incorporation, and the filing of the Amended and Restated Certificate of Incorporation and certificates of designation with respect to the New Preferred Stock and the DECS pursuant to Section IV.A of the Plan, and (iv) entry by Reorganized Columbia - 8 - 9 into one or more banking facilities as described at the Confirmation Hearing in amounts sufficient to fund Reorganized Columbia's cash needs under the Plan and to provide ongoing working capital. m. As required by Section 1123(a)(6) of the Bankruptcy Code, the Plan provides for the inclusion in the Amended and Restated Certificate of Incorporation of Reorganized Columbia of a provision prohibiting the issuance of non-voting equity securities. n. As required by Section 1123(a)(7) of the Bankruptcy Code, the selection of directors and officers who will serve in such capacities upon the Effective Date is in a manner consistent with the interests of holders of Claims and Interests and public policy. The Plan provides that subject to changes in the ordinary course of business, the initial directors and officers of Reorganized Columbia shall be the same individuals who were serving in those capacities as of July 27, 1995. o. As required by Section 1123(b) of the Bankruptcy Code, the Plan (i) impairs or leaves unimpaired, as the case may be, each Class of Claims or Interests, and (ii) provides for the assumption, rejection or other disposition of each of Columbia's executory contracts which had not been expressly assumed or rejected pursuant to Section 365 of the Bankruptcy Code by prior order of the Court as of the Confirmation Hearing. - 9 - 10 p. As required by Section 1123(b)(3), the Plan provides for either (i) the settlement or adjustment, or (ii) the retention and enforcement by Reorganized Columbia, of any claims, demands, rights and causes of action that Columbia or the Estate may hold against any Person. q. As required by Section 1129(a)(2) of the Bankruptcy Code, Columbia has complied with all applicable provisions of title 11 including the disclosure and solicitation requirements of Sections 1125 and 1126 of the Bankruptcy Code. Columbia transmitted solicitation materials including Ballots to its Creditors and Stockholders entitled to vote on the Plan only after the Court approved the Disclosure Statement as containing adequate information and in compliance with the requirements of the Confirmation Procedures Order. r. As required by Section 1129(a)(3) of the Bankruptcy Code, the Plan has been proposed in good faith, for the valid business purpose of resolving disputes and restructuring or paying in full substantial obligations of Columbia, and has not been proposed by any means forbidden by law. s. As required by Section 1129(a)(4) of the Bankruptcy Code, any payment made or to be made by Columbia for professional services or for costs and expenses in connection with the Plan or incident to the Reorganization - 10 - 11 Case, has been disclosed to and approved by, or is subject to the approval of, this Court as being reasonable. t. As required by Section 1129(a)(5) of the Bankruptcy Code, Columbia has disclosed the identity and affiliations of the individuals who are proposed to serve after confirmation of the Plan as directors and executive officers of Reorganized Columbia. The continuance of such individuals in such offices, subject to changes in the normal course, is consistent with the interests of the holders of Claims against and Interests in Columbia and with public policy. In addition, Columbia has disclosed the identity of any insider presently known to it who will be employed or retained by Reorganized Columbia, and the nature of any compensation to be paid to such insider. u. Section 1129(a)(6) of the Bankruptcy Code is not applicable as Columbia's current business does not involve the establishment of rates over which any regulatory commission has jurisdiction. As a public utility holding company, Columbia is however, registered and regulated by the SEC under the HCA. The SEC, exercising its authority under Sections 11(f) and (y) of HCA, has issued a "Memorandum Opinion and Order Approving Plan of Reorganization of Registered Holding Company Under Section 11(f) and Registered Holding Company's Participation in Subsidiary's Plan of Reorganization and Related Transactions", dated August 25, 1995. Entry of this Order - 11 - 12 followed extensive public notice in accordance with the SEC's procedures, and no objections were received. v. As required by Section 1129(a)(7) of the Bankruptcy Code, with respect to each impaired or deemed impaired Class of Claims against or Interests in Columbia, each holder of a Claim or Interest in such impaired or deemed impaired Class has accepted the Plan, or will receive or retain under the Plan on account of such Claim or Interest property of a value, as of the Effective Date, that is not less than the amount such holder would receive or retain if Columbia were liquidated on the Effective Date under Chapter 7 of the Bankruptcy Code. w. As indicated by the Plan Vote Certification and as established on the record at the Confirmation Hearing, each impaired or deemed impaired Class of Claims or Interests has voted to accept the Plan in accordance with Sections 1124 and 1126 of the Bankruptcy Code, with the result that Section 1129(a)(8) of the Bankruptcy Code is satisfied and the "cram down" provisions of Section 1129(b) of the Bankruptcy Code are not applicable. x. The Plan provides for treatment of Allowed Administrative Claims, and Allowed Priority Tax Claims pursuant to Sections 507(a)(1) and 507(a)(8) of the Bankruptcy Code in accordance with Section 1129(a)(9) of the Bankruptcy Code, except to the extent that the holder of a particular Claim has agreed to a different treatment. - 12 - 13 y. With respect to the Priority Tax Claims of the IRS which are the subject of the IRS Order, Columbia shall pay such Claims over a period not to exceed six years from the date of assessment of such Claims, together with interest, pursuant to the terms of the IRS Settlement Agreement and the IRS Order. The Plan specifically sets forth the terms of payment on such Claims. z. As required by Section 1129(a)(10) of the Bankruptcy Code, and as demonstrated by the Plan Vote Certification, at least one Class of Claims or Interests that is impaired under the Plan has accepted the Plan, determined without including any acceptance of the Plan by any insider. aa. The Plan is feasible. Based on the record established at the Confirmation Hearing, Columbia has demonstrated its ability to meet its financial obligations under the Plan and continue its business in the ordinary course. As required by Section 1129(a)(11) of the Bankruptcy Code, confirmation of the Plan is not likely to be followed by the liquidation or the need for further financial reorganization of Columbia. bb. As required by Section 1129(a)(12) of the Bankruptcy Code, Section III.A.1.d of the Plan provides that all Administrative Claims for fees payable pursuant to Section 1930 of title 28 of the United States Code, 28 U.S.C. Section 1930, which are unpaid as of the Effective Date will be paid in cash on the Effective Date. - 13 - 14 cc. Consistent with Section 1129(a)(13) of the Bankruptcy Code, Section IV.K of the Plan provides for all employee and retiree benefit plans and programs in existence as of the Petition Date including the Retirement Plan, but excluding the LESOP portion of the employee thrift plan, to continue in existence after the Effective Date, and Columbia shall continue to pay retiree benefits (as defined in Section 1114(a) of the Bankruptcy Code) at the level established by the terms of such retiree benefit plans for the duration of the period Columbia has obligated itself to provide such benefits. dd. The Plan is the only plan of reorganization for Columbia pending before this or any other Court. ee. The primary purpose of the Plan is not the avoidance of taxes or the avoidance of the application of Section 5 of the Securities Act of 1933, as amended (15 U.S.C. Section 77e). ff. The record established at the Confirmation Hearing demonstrates that all conditions precedent to confirmation of the Plan have been satisfied, are concurrently satisfied either by entry of this Confirmation Order and an order of this Court confirming the TCO Plan, and as applicable, an order of the District Court, or have been modified with the necessary consents, if any, having been obtained from the Equity Committee and/or the Creditors' Committee. - 14 - 15 gg. Columbia has stated that it believes that all conditions precedent to the Effective Date of the Plan, as set forth in Section VIII.B of the Plan, will occur or be duly waived. hh. Pursuant to Section 1125(e) of the Bankruptcy Code, Columbia shall not be liable on account of its solicitation of acceptances of the Plan and its issuance and distribution of New Indenture Securities, DECS, New Preferred Stock and Common Stock pursuant to the Plan in good faith and in compliance with the applicable provisions of the Bankruptcy Code, for any violation of applicable law, rule or regulation governing the solicitation of acceptances of a plan of reorganization or the offer, issuance, sale or purchase of securities. ii. Pursuant to Section 1145(a)(1) of the Bankruptcy Code, the offering, issuance and distribution of New Indenture Securities, DECS, New Preferred Stock and Common Stock by Columbia in exchange for Claims against and Interests in Columbia shall be exempt from Section 5 of the Securities Act, and any state or local law requiring registration prior to the offering, issuance, distribution or sale of securities. jj. Pursuant to and to the fullest extent permitted by Section 1145 of the Bankruptcy Code, the resale of any New Indenture Securities, DECS, New Preferred Stock and Common Stock shall be exempt from Section 5 of the Securities Act and any state or local law requiring - 15 - 16 registration prior to the offering, issuance, distribution or sale of securities. SETTLEMENT AGREEMENTS kk. Pursuant to Section 1123(b)(3) of the Bankruptcy Code and Bankruptcy Rule 9019(a), the Plan provides for the settlement of Claims against Columbia and its Estate, the approval of which are either conditions to confirmation of the Plan or otherwise sought by Columbia in connection with confirmation (the "Settlement Agreements"). The Settlement Agreements include but are not limited to (i) the settlement of the Intercompany Claims Litigation and other TCO creditor-related disputes through the Columbia Omnibus Settlement, (ii) the settlement of disputes relating to the calculation and allowance of post-petition interest on Borrowed Money Claims and related issues, (iii) the settlement of the LESOP Action, and (iv) the Class Action Settlement. ll. In determining that the Settlement Agreements embodied in the Plan represent fair, equitable and reasonable compromises of Claims filed or asserted against Columbia, are in the best interests of the Estate, and are hereby approved, the Court has considered the following factors: (i) the probability of ultimate success on the merits if settled issues were instead litigated; (ii) the difficulties, if any, to be encountered in the matter of collection; (iii) the complexity of the litigation involved, and the expense, inconvenience and delay necessarily - 16 - 17 attendant to continued litigation; (iv) the paramount interest of creditors as evidenced by, inter alia, the limited number, and nature of objections filed, if any, to the Settlement Agreements and the acceptance of the Plan by an overwhelming majority of the holders of Claims and Interests; (v) that the Settlement Agreements are, in each instance, the product of extensive arms-length negotiations among Columbia, the Equity Committee, the Creditors' Committee and, as applicable to the specific Settlement Agreement, numerous other parties-in-interest, and (vi) whether the value of the Settlement Agreement falls within the reasonable range of litigation possibilities. See, e.g., In re Allegheny Int'l, Inc., 118 B.R. 282, 309-310 (Bankr. W.D. Pa. 1990); Protective Comm. Stockholders of TMT Trailer Ferry, Inc. v. Anderson, 390 U.S. 414, 424-45 (1968); In re Justice Oaks II, Ltd., 898 F.2d 1544, 1549 (11th Cir.), cert. denied, 498 U.S. 959 (1990). With respect to the Class Action Settlement, on November 3, 1995 the District Court for the District of Delaware following due notice and a full hearing, signed an order approving the Class Action Settlement as fair, reasonable and adequate. mm. In determining that each of the Settlement Agreements embodied in the Plan is fair and equitable and should be approved, the Court considered, inter alia, the record of the Confirmation Hearing and the record of this Reorganization Case. - 17 - 18 SETTLEMENT OF THE INTERCOMPANY CLAIMS LITIGATION AND OTHER TCO CREDITOR RELATED DISPUTES THROUGH THE COLUMBIA OMNIBUS SETTLEMENT nn. On March 18, 1992, the TCO Creditors' Committee, pursuant to the terms of a stipulation approved by this Court during the preceding month, filed on behalf of TCO a complaint against Columbia and CNR (the "Intercompany Complaint") which sought, inter alia, (i) the equitable subordination of Columbia's claims against the TCO estate to the claims of TCO's other creditors, (ii) the recharacterization of Columbia's secured advances to TCO during the subject period as equity contributions, (iii) the avoidance of certain transfers made to CNR, and of liens granted to Columbia and (iv) the avoidance of dividends and debt paid by TCO to Columbia. The TCO Customers' Committee joined with the TCO Creditors' Committee in the prosecution of the Intercompany Claims. A proof of claim was filed on behalf of TCO by the TCO Creditors' Committee against Columbia based upon the Intercompany Claims. oo. Columbia vigorously contested the allegations asserted in the Intercompany Complaint. The Equity Committee and the Creditors' Committee intervened as defendants in the litigation. The ensuing litigation and disputes over the issues raised in the Intercompany Claims Litigation prolonged and complicated the reorganization cases of both Columbia and TCO. Those cases are linked principally because Columbia requires the resumption of payments due to it on its claims against TCO in order for - 18 - 19 Columbia to meet its own debt service requirements. As a result of the Intercompany Claims Litigation, the validation of Columbia's claims against TCO was delayed. The position of the parties at trial presented a potential range of outcomes of the Intercompany Claims Litigation with a range of loss of value by Columbia from zero to in excess of $1.0 billion. The actual benefit of any such recovery by TCO to unaffiliated creditors of TCO however, would be dependent upon other aspects of the plans of reorganization for TCO, and Columbia, including the tax consequences thereof, and upon fluctuating market conditions. Given the magnitude of the amounts at stake, appeals from any decision by the District Court would be almost certain and would further delay the achievement of reorganization for Columbia and TCO. Accordingly, only a global settlement of all issues relating to the Intercompany Claims will permit a prompt emergence of Columbia and TCO from Chapter 11 proceedings. pp. A trial on the Intercompany Claims was completed before the District Court in October 1994. While District Court Judge Farnan was preparing his decision, he was asked by the parties not to issue his ruling pending these confirmation proceedings. qq. Pursuant to the Columbia Omnibus Settlement, which is defined in Section I.A.31 of the Plan, the numerous legal and factual issues raised by the Intercompany Claims Litigation are settled, and the Intercompany Claims are fully satisfied, released and discharged. The approval of - 19 - 20 the Columbia Omnibus Settlement is a condition precedent to confirmation of the Plan for Columbia, and of the TCO Plan, and is the cornerstone of both the Plan and the TCO Plan. The Columbia Omnibus Settlement facilitates the reorganization of Columbia and TCO without further extended delay. rr. In addition to settling the Intercompany Claims Litigation, the Columbia Omnibus Settlement provides other substantial benefits to Columbia including, inter alia, (i) the retention by Columbia of the equity of Reorganized TCO, and (ii) a basis for the resolution of other significant issues affecting the TCO estate, including a basis for TCO's producer creditors and customer creditors to settle their respective Claims. ss. The settlement of the Intercompany Claims Litigation and the Columbia Omnibus Settlement are collectively the result of arduous arms-length negotiations among Columbia, TCO, their respective official committees and certain other interested parties. As evidenced by the arguments of counsel at the Confirmation Hearing, the TCO Committees and the Creditors' Committee and Equity Committee fully support the resolution of all issues raised by the Intercompany Claims Litigation, and other TCO creditor-related disputes in the manner provided for by the Columbia Omnibus Settlement. Columbia has demonstrated that the terms of the settlement of the Intercompany Claims Litigation and the Columbia Omnibus Settlement are fair, - 20 - 21 equitable and reasonable and that the benefits of these settlements greatly outweigh the risks and any rewards inherent in continuing to litigate these issues. tt. In accordance with Section 1123(b)(3) of the Bankruptcy Code and Bankruptcy Rule 9019(a), approval of the settlement of the Intercompany Claims Litigation and the Columbia Omnibus Settlement is in the best interests of Columbia, its Estate, its Creditors and Stockholders. SETTLEMENT OF BORROWED MONEY CLAIMS uu. The majority of the Claims filed against Columbia are unsecured Claims for amounts due under a number of short-term and long-term borrowing arrangements, including: (i) Debenture Claims and Medium Term Note Claims under the 1961 Indenture, (ii) Claims under the $500 Million Credit Agreement (other than the Auction Note Debt Claims), (iii) Claims under the $750 Million Credit Agreement, (iv) Commercial Paper Claims, (v) Auction Note Debt Claims, (vi) Bid Note Claims, (vii) Claims under the Rate Swap Agreement, and (viii) Claims by the holders of the LESOP Debentures issued in connection with the LESOP, including claims under the LESOP Guaranty (collectively, the "Borrowed Money Claims"). vv. During the course of the Reorganization Case, disputes arose among Columbia and its Professionals, the Equity Committee, the Creditors' Committee, certain individual creditors, and their respective professional advisors regarding the quantification and treatment of the - 21 - 22 Borrowed Money Claims against Columbia in respect of, inter alia, (i) the entitlement of the holders of such Claims to post-petition interest and interest on interest, (ii) the rate and applicability of compounding to any post-petition interest and interest on interest to be distributed, and (iii) the entitlement of the holders of certain issues of Medium Term Notes and Debentures to call premiums or pre-payment penalties. ww. Section III.C.3 and Exhibit G of the Plan set forth a proposed settlement of the issues raised with respect to the Borrowed Money Claims (the "Borrowed Money Claims Issues"), which will avoid costly and protracted litigation likely to cause a significant delay in Columbia's reorganization. The proposed compromise embodied in the Plan provides for distributions in respect of post-petition interest and interest on interest to be made on Allowed Borrowed Money Claims in the manner set forth in Exhibit G to the Plan. No distributions are to be made in respect of call premiums or pre-payment penalties. xx. The settlement of these issues is the result of arms-length negotiations and the benefits of the settlement far outweigh the risks, costs and delays inherent in litigating these issues. Additionally, by virtue of their acceptance of the Plan (as evidenced by the Plan Vote Certification), the holders of Borrowed Money Claims in Class 3.2 have overwhelmingly consented to the treatment - 22 - 23 provided to them under the Plan, as such treatment is reflected in Sections III.C.3 and Exhibit G to the Plan. yy. In accordance with Section 1123 (b)(3) of the Bankruptcy Code and Bankruptcy Rule 9019(a), Columbia has demonstrated that the terms of the settlement of the Borrowed Money Claims Issues as set forth in Section III.B.3 and Exhibit G to the Plan are fair, equitable, reasonable and in the best interests of Columbia, the Estate, its Creditors and Stockholders. THE LESOP ACTION SETTLEMENT zz. The LESOP Indenture Trustee filed a proof of claim against Columbia in February 1992 based on Columbia's obligations under the LESOP Guaranty. In March 1993, the LESOP Indenture Trustee commenced a lawsuit against Columbia alleging, inter alia, tortious interference with contract and breach of its duty. The complaint asserts that Columbia contravened the Employees' Thrift Plan of Columbia Gas System, as Amended and Restated Effective July 1, 1994 (the "Thrift Plan") for eligible employees of Columbia's subsidiaries, by directing the LESOP Thrift Plan Trustee to use contributions from participating employers for purposes other than to pay the debt service on the LESOP Debentures (the "LESOP Action"). aaa. Columbia filed a motion for summary judgment which was denied in its entirety by this Court in a Memorandum Opinion and Order dated March 24, 1994. The - 23 - 24 District Court has affirmed this Court's denial of Columbia's summary judgment motion. bbb. Columbia and the LESOP Indenture Trustee have negotiated a settlement of all of the issues raised by the LESOP Action (the "LESOP Action Settlement"), the terms of which are set forth in Section V.H of the Plan. ccc. The LESOP Action Settlement avoids the continuation of litigation over difficult legal issues and has been negotiated at arms-length by the parties. Additionally, by virtue of their acceptance of the Plan (as evidenced by the Plan Vote Certification) the overwhelming majority of Columbia's Creditors and Stockholders that voted on the Plan, including the holders of LESOP Debentures, have consented to the terms of the LESOP Action Settlement. ddd. In accordance with Section 1123(b)(3) of the Bankruptcy Code and Bankruptcy Rule 9019(a), Columbia has demonstrated that the terms of the LESOP Action Settlement as set forth in Section V.H of the Plan are fair, equitable, reasonable and in the best interests of Columbia, its Estate, its Creditors and Stockholders. THE CLASS ACTION SETTLEMENT AND DISMISSAL OF THE DERIVATIVE CLAIMS eee. After the June 19, 1991 announcement of Columbia's financial difficulties, seventeen complaints including suits purporting to be class actions or alleging claims common to the purported class actions were filed in the District Court. These actions were eventually - 24 - 25 consolidated before the District Court (the "Class Action"). Although sixteen of seventeen complaints purported to be class actions, as of the Petition Date, no class had been certified with respect to the Class Action. The Class Action complaints named as defendants Columbia, members of Columbia's board of directors as of June 1991, certain officers, Columbia's independent public accountants and Columbia's underwriters for its 1990 common stock offering (collectively, the "Defendants"). fff. The complaints alleged violations of Sections 11, 12(2) and 15 of the Securities Act of 1933, Sections 10(b), 20(a) and Rule 10b-5 of the Securities Exchange Act of 1934, negligent misrepresentations, and state and common law fraud and deceit. The complaints generally asserted that the Defendants publicly made material misleading statements during the relevant class periods (from February 28, 1990 to June 18, 1991) concerning Columbia's financial condition and failed to disclose material facts which rendered other statements misleading. Litigation of the Class Action before the District Court as to Columbia was stayed by operation of the automatic stay, and as to the non-Columbia Defendants by virtue of a series of stipulations. Approximately 29 individual proofs of claim were filed against Columbia based upon allegations described in the complaints filed in the Class Action. Three related proofs of claim on behalf of purported classes of shareholders and debenture holders injured during the - 25 - 26 class period, including two class proofs of claim filed by lead counsel for the plaintiffs in the Class Action ("Lead Class Action Counsel") were also filed against Columbia. Various of the Defendants also filed Claims against Columbia for indemnification relating to the Class Action. ggg. Columbia has denied any liability on its part or on the part of other Defendants in the Class Action with respect to any Claims asserted against Columbia, or other claims based on the same or similar allegations giving rise to the Class Action. Litigation over the issues related to the Class Action has prolonged and complicated resolution of the Reorganization Case and will continue to do so unless there is a global settlement of all issues relating to the Class Action. hhh. In addition to the Securities Claims, three derivative suits were filed in the Court of Chancery in and for New Castle County, Delaware (the "Delaware Chancery Court") in mid-1991. These suits, which were subsequently consolidated, allege that certain present and former directors of Columbia breached their fiduciary duties to Columbia in the events preceding June 1991 (collectively, the "Derivative Action"). iii. Sections III.B.4, III.D and V.I of the Plan embody the terms of the Class Action Settlement as set forth in the Stipulation of Settlement negotiated at arms-length by the parties to the Class Action and the Agreement Among Contributors dated as of July 18, 1995, providing for - 26 - 27 contributions to the Settlement Fund for the Class Action Settlement. Pursuant to those agreements and subject to this Court's approval of Columbia's participation in the Class Action Settlement and Agreement Among Contributors, Columbia and certain other Defendants will establish a Settlement Fund of $36.5 million (approximately $16.5 million of which will be contributed by Columbia). Columbia's primary D&O Insurance carrier has agreed to make a substantial contribution toward the Settlement Fund subject to this Court authorizing and directing, inter alia, (i) Columbia and the plaintiffs to the Derivative Action to undertake to dismiss with prejudice the Derivative Action and (ii) Columbia and the officers and directors releasing the D&O Insurance carriers from their policy obligations in respect of the Class Action and the Derivative Action. Columbia has agreed to the proposed Class Action Settlement, inter alia, (i) to facilitate its emergence from reorganization at the lowest cost, (ii) to permit the continued operation of Reorganized Columbia's businesses unhindered by expensive litigation and by the distractions relating to the continued prosecution of the Class Action, and (iii) to avoid the potential for an adverse judgment. jjj. Section V.F of the Plan provides for the dismissal by the Debtor of the Derivative Action, for the execution of Mutual Releases by and between the Debtor and the defendants in the Derivative Action, and for an injunction preventing all named plaintiffs from pursuing or - 27 - 28 prosecuting the Derivative Claims. In addition, the D&O insurance carriers are to be released from their policy obligations in respect of the subject matters of the Class Action and the Derivative Action, and Reorganized Columbia is to execute the Hold Harmless Agreement and the Undertaking. After balancing the benefits received pursuant to the Class Action Settlement, the costs likely to be incurred by Columbia and the benefits from continuation of the Derivative Action, and it appearing that the plaintiffs to the Derivative Action consent to the relief requested, the Court finds that continuation of the Derivative Action is unlikely to lead to any additional net benefit to the Estate, and that the dismissal of the Derivative Action, and the execution of the Mutual Releases, the Hold Harmless Agreement and the Undertaking are in the best interests of the Estate. kkk. This Court entered an order dated July 17, 1995 lifting the automatic stay of the Class Action against Columbia to, inter alia, permit proceedings in the District Court to go forward in respect of implementing the Class Action Settlement. A District Court-approved Notice of Class Action Certification, Proposed Settlement of Class Action, Fairness Hearing, Right to Appear and Notice of Nominees dated August 1, 1995 was subsequently disseminated. Notice of the Class Action Settlement was widely published. It is a condition to confirmation and consummation of the Plan that pursuant to Rule 23 of the Federal Rules of Civil - 28 - 29 Procedure, the District Court shall have entered or shall concurrently enter an order and judgment (which has not been vacated, reversed or stayed) approving the Class Action Settlement. lll. Pursuant to an order of the District Court dated November 2, 1995 (the "Fairness Order"), following a full hearing in that Court on October 16, 1995, the terms of the Class Action Settlement have been determined to be fair, reasonable and adequate. Further, Columbia has demonstrated to this Court that pursuant to Section 1123(b)(3) of the Bankruptcy Code and Bankruptcy Rule 9019(a), approval of Columbia's participation in and implementation of the Class Action Settlement is in the best interests of Columbia, its Estate, its Creditors and Stockholders. mmm. The Stipulation of Settlement has not been terminated by Columbia and the other Defendants to the Class Action. nnn. Each holder of a Securities Claim that timely submits a Proof of Claim and Release Form in the District Court in compliance with and as described in the Class Action Settlement Documents is a member of Class 4 under the Plan, a Class which is unimpaired under the Plan as each member of the Class will be entitled to receive, in complete compromise, release, and full satisfaction of its Securities Claims, its share of the Settlement Fund remaining after the payment of counsel fees and costs of administration in accordance with the Fairness Order. - 29 - 30 STATUS OF OPT-OUT SECURITIES CLAIMS ooo. As of October 6, 1995, the Claims Administrator under the Class Action Settlement Documents has received ninety-one (91) Opt-out Forms purporting to be complete and properly submitted in compliance with the procedures established by the Class Action Settlement Documents. Of the forms timely received, there appear to be only seven claimants representing holdings of approximately 742 shares of Columbia Common Stock, who, assuming their Opt-out Forms are determined to be complete and properly submitted, are members of Class 7. ppp. The motion of Columbia filed with the Court, dated October 10, 1995, seeking approval of the proposed form of Notice of the Confirmation Hearing to be transmitted to holders of Class 7 Claims, sets forth Columbia's election to (i) pay each holder of a Class 7 Claim, when and if such Claim is ultimately Allowed, in cash and (ii) treat Class 7 as an unimpaired Class of Claims under the Plan. Holders of Class 7 Claims are, therefore, not entitled to vote on the Plan. qqq. As required by the Bankruptcy Code, and in accordance with the Confirmation Procedures Order and the Class 7 Procedures Order, holders of Class 7 Claims received adequate notice and disclosure in connection with (i) the Confirmation Hearing, (ii) the treatment afforded to such creditors under the Plan and (iii) the deadline for objecting to confirmation of the Plan. - 30 - 31 MODIFICATIONS TO THE PLAN rrr. The modifications to the Plan proposed by Columbia prior to, at or in connection with the Confirmation Hearing (the "Plan Modifications") have been reviewed and consented to by the Equity Committee and the Creditors' Committee. The Plan Modifications do not adversely change the treatment of the Claim of any Creditor or the Interest of any Stockholder who has not in writing accepted the proposed Plan Modifications. Therefore, in accordance with Section 1127 of the Bankruptcy Code and Bankruptcy Rule 3019, the Plan is deemed accepted by all Creditors and Stockholders who have previously accepted the Plan. FINDING THAT THE PLAN IS CONFIRMABLE BASED ON ALL OF THE FOREGOING FINDINGS OF FACT AND CONCLUSIONS OF LAW, THE COURT ORDERS THAT: 1. The Plan and each of its provisions, as modified to the limited extent set forth herein, are hereby confirmed in accordance with Section 1129 of the Bankruptcy Code. 2. The Plan is hereby deemed modified as follows: (a) Section I; Defined Terms, Rules of Interpretation, Computation of Time and Governing Law; Defined Terms Section I.A.30 of the Plan is hereby amended and modified by deleting the text thereof and by replacing it with the following text: - 31 - 32 "'Columbia Guaranty' means the guaranty by Columbia and Reorganized Columbia of the full and prompt payment by TCO and Reorganized TCO of any and all distributions required to be made under the TCO Plan as the same has been modified by the order of this Court confirming the TCO Plan, other than payments in respect of post-petition operational liabilities incurred by TCO in the ordinary course of business during the pendency of the TCO Proceeding and Class 4 claims under the TCO Plan." (b) Section II.C.3.a; Classes of Claims and Interests; Borrowed Money Claims; Other Borrowed Money Claims. Section II.C.3.a. of the Plan is hereby amended and modified by deleting the text thereof and by replacing it with the following text: a. Class 3.1 - Borrowed Money Convenience Claims "Class 3.1 consists of all Claims (i) the principal amount of which, as of the Ledger Closing Date, did not exceed $20,000 and that, but for such monetary limitation, would be classified in Class 3.2; provided, however, that Class 3.1 shall also consist of those Claims (ii) the principal amount of which, as of the Record Date, did not exceed $20,000, to the extent not duplicative of a Claim in (i) above." (c) Section III.A.1.b; Treatment of Unclassified Claims; Administrative Claims; Post-Petition Operational Claims Section III.A.1.b of the Plan is hereby amended and modified by deleting "." at the end of the paragraph and by adding the following text at the conclusion of Section III.A.1.b as follows: "; provided, however, that each Administrative Claim of the IRS for taxes shall be paid on the later of (i) the Effective Date, (ii) the 30th day after the date such Administrative Claim becomes an Allowed Claim, or - 32 - 33 (iii) as otherwise agreed between Reorganized Columbia and the IRS." (d) Section X.B; Discharges, Releases, Settlement of Claims and Injunction; Injunction Section X.B of the Plan is hereby amended and modified by adding the following text to the end of the first full paragraph thereof: "In the event of a default under the Plan with respect to payments to the IRS, nothing in the Plan or the Confirmation Order shall be construed as prohibiting the IRS from enforcing any rights it may have under applicable law, provided, however, that this provision shall not be deemed to define or expand any such rights that may be held by the IRS." (e) Section X.D; Discharges, Releases, Settlement of Claims and Injunction; Releases Section X.D of the Plan is hereby amended and modified by deleting the words "that, such releases shall not be effective as to" after the words "provided, however," in the ninth line from the end of the first full paragraph thereof, and replacing such text with the following text: "that nothing herein shall be construed to release the Releasees from. . ." (f) Exhibit F. to the Plan; New Indenture Securities Pricing Formula; Pricing. Section G. of Exhibit F to the Plan is hereby amended and modified by deleting the second full paragraph thereof and replacing it with the following text: "The specific debt issues in each Basket shall be identified to the Pricing Agents no later than 4 business days before the commencement of Basket pricing. Prices of each Issue shall be the average (mean) of - 33 - 34 prices provided by the agents after the highest price and the lowest price are excluded." 3. For the reasons set forth on the record of the Confirmation Hearing, each and every Confirmation Objection, to the extent not withdrawn, is overruled. 4. Pursuant to Section 1141(a) of the Bankruptcy Code, the Plan and its provisions are binding upon Columbia, Reorganized Columbia, any entity acquiring property under the Plan, any holder of a Claim against or Interest in Columbia, and any other party-in-interest in the Reorganization Case, and any heir, executor, administrator, successor and assign thereof, regardless of whether the Claim or Interest of such holder or obligation of any party-in-interest is in a Class that is impaired under the Plan, regardless of whether such Creditor, Stockholder or other party-in-interest has accepted the Plan, and regardless of whether such Creditor, Stockholder or other party-in-interest has filed a proof of claim. 5. Subject to the provisions of the Plan and this Confirmation Order, Columbia will, as Reorganized Columbia, continue to exist after the Effective Date, as a Delaware corporation with all the powers of a corporation under applicable law and without prejudice to any right to alter or terminate such existence (whether by merger or otherwise) under Delaware law. 6. Consistent with the Plan, the following agreements and documents, substantially in the form of the - 34 - 35 agreement and documents which are annexed as Exhibits to the Plan or which were introduced into evidence at the Confirmation Hearing in substantially final form, including all the exhibits, attachments and schedules annexed thereto, and all terms and provisions thereof (collectively, the "Reorganization Documents"), are hereby approved in all respects: a. Restated Certificate of Incorporation of The Columbia Gas System, Inc.; b. The New Indenture and Forms of Supplemental Indenture; c. Certificate of the Powers, Designations, Preferences and Rights of the [$ ] Convertible Preferred Stock; d. Certificate of the Powers, Designations, Preferences and Rights of the [ ] % Preferred Stock; e. Form of Mutual Release referred to in Section V.F of the Plan; f. Stipulation of Settlement dated as of July 18, 1995 and the related Agreement Among Contributors dated as of July 18, 1995; g. The Hold Harmless Agreement; h. The Undertaking; i. The Federal Release Agreement dated as of July 18, 1995; - 35 - 36 j. The Underwriters Agreement. 7. Columbia and Reorganized Columbia, and their directors, officers and agents are hereby authorized to enter into, execute, deliver, file and/or implement the Reorganization Documents and other documents and instruments substantially consistent therewith or incidental thereto and any amendments, supplements or modifications to such Reorganization Documents as therein provided, and to take such other steps and perform such other acts as may be necessary to implement and effectuate the Reorganization Documents, the Plan, all other related instruments and documents and this Confirmation Order, and to satisfy all other conditions precedent to the implementation and effectiveness of the Plan. 8. Without affecting the generality of the preceding paragraph, Columbia is hereby authorized to (a) issue (i) the DECS, New Preferred Stock and the New Indenture Securities pursuant to the Plan, (ii) additional securities which may be used to provide funds to redeem some or all of the DECS and New Preferred Stock within the 120 day period following the Effective Date and (iii) equity securities that might be issued pursuant to the Plan or the TCO Plan; and (b) to implement the transactions contemplated by Sections III.B.3.d and III.B.3.e of the TCO Plan, as amended by the order of this Court confirming the TCO Plan. - 36 - 37 APPROVAL AND IMPLEMENTATION OF SETTLEMENTS 9. The settlement and release of the Intercompany Claims in the manner provided for by the Plan, and more specifically, in accordance with the Columbia Omnibus Settlement embodied in the Plan and the TCO Plan is hereby approved as being fair, equitable and in the best interests of Columbia and its Estate. Columbia or Reorganized Columbia, as applicable, Columbia Natural Resources, Inc., the plaintiffs and the intervenors in the Intercompany Claims Litigation are authorized and directed to perform their obligations under the settlement of the Intercompany Claims, including but not limited to filing the Stipulation of Dismissal with Prejudice with the District Court, and taking such actions as may be necessary by its terms to obtain District Court approval thereof. 10. As of the Effective Date, and subject to confirmation of the TCO Plan and the Stipulation of Dismissal with Prejudice becoming effective according to its terms, the Intercompany Claims and all claims arising from or related to the transactions which are the subject of the Intercompany Claims shall be settled, released and discharged in their entirety, provided, however, that the entry of this Confirmation Order shall not affect the District Court's retention of jurisdiction with respect to the order of the District Court dated October 4, 1995 rendered on the Motion to Unseal Judicial Records filed by the TCO Customers' Committee. - 37 - 38 11. The Columbia Omnibus Settlement is hereby approved as being fair and equitable and in the best interests of Columbia and its Estate. Columbia and Reorganized Columbia, as applicable, are authorized and directed to perform their obligations under the Columbia Omnibus Settlement including but not limited to (i) providing the Columbia Customer Guaranty and the Columbia Guaranty, and (ii) as provided for by Section V.E of the Plan, authorizing the issuance and sale of such shares of Common Stock to or for the account of Reorganized TCO as may be required by Reorganized TCO to fulfill distribution obligations to certain creditors under the TCO Plan and enter into one or more Facilities (as defined and described below). 12. In accordance with the Borrowed Money Claims Settlement, the specific method of calculating post-petition interest for each category of Borrowed Money Claim as set forth in Exhibit G to the Plan is approved. The Allowed amount of each category of Borrowed Money Claim shall be the sum of (a) the principal amount of each Borrowed Money Claim, plus (b) accrued pre-petition interest (or earned discount) thereon to the Petition Date, if any, in the manner articulated in Exhibit G to the Plan (the "Allowed Borrowed Money Claim Amount"). 13. The amount upon which each holder of an Allowed Borrowed Money Claim shall be entitled to receive distributions is the aggregate of the Allowed Borrowed Money - 38 - 39 Claim Amount and the amount of post-petition interest accrued thereon in the manner articulated in Exhibit G to the Plan (the "Borrowed Money Claim Distribution Amount"). The value of the aggregate of the Cash Consideration, if any, New Indenture Securities, DECS and New Preferred Stock to be distributed to each holder of an Allowed Borrowed Money Claim as provided by the Plan in respect of the Borrowed Money Claim Distribution Amount of such holder, shall constitute substantially equivalent value to the Borrowed Money Claim Distribution Amount of such holder. 14. The LESOP Action Settlement is hereby approved as being fair, equitable, reasonable and in the best interests of Columbia and its Estate, and Columbia is authorized and directed to perform its obligations under the LESOP Action Settlement as set forth in Section V.H of the Plan. As of the Effective Date, the LESOP Action shall be dismissed and the LESOP Action Claims shall be discharged. 15. Without limiting the generality of the preceding paragraph, Reorganized Columbia is hereby authorized to terminate the LESOP and to purchase the shares of Common Stock held by the LESOP Thrift Plan Trustee in Fund E of the LESOP Trust for cash in the manner provided for in Section V.H of the Plan. 16. The LESOP Indenture Trustee shall have an Allowed Administrative Claim for fees and expenses incurred under the LESOP Indenture in an aggregate amount not to exceed $300,000. Pursuant to the LESOP Action Settlement, - 39 - 40 the LESOP Indenture Trustee waives all rights to seek further payment of fees and expenses in connection with or related to the LESOP Indenture, including, but not limited to, the right to seek payment through an application pursuant to Section 503(b) of the Bankruptcy Code or through the exercise of the LESOP Indenture Trustee's lien rights and the right to post-petition interest on its claim beyond the $300,000 amount. 17. The Class Action Settlement and the release of the Derivative Action Claims are hereby approved as being reasonable and in the best interests of Columbia and its Estate, and Columbia is authorized and directed to perform its obligations under the Stipulation of Settlement, the Agreement Among Contributors, the Federal Release Agreement, the Hold Harmless Agreement and the Undertaking. 18. As of the Effective Date, each holder of a Securities Claim, and their respective agents, heirs, executors, administrators, representatives, trustees, successors and assigns, shall release and forever discharge Columbia, the other Defendants to the Class Action and all officers or directors of Columbia or TCO who were incumbent during any part of the Class Period, whether or not named as Defendants as set forth in the Stipulation of Settlement, provided, however, that such releases shall not be effective until such Claims have been paid, satisfied or otherwise disposed of in accordance with the Stipulation of Settlement and the Plan, and provided further, that this release shall not - 40 - 41 preclude any holder of a Class 7 Claim (Opt-out Securities Claim) from pursuing any rights it may have in respect of the subject matter of the Class Action against the Defendants in the Class Action other than Columbia, or any rights against Columbia that it may have under the Plan. 19. Each holder of a Securities Claim that is not a holder of a Class 7 Claim shall not be entitled to any distribution under the Plan. The entitlement of any such holder to receive distributions from the Settlement Fund shall be made in the amounts, at the times and in the manner provided for in the Class Action Settlement Documents, which documents govern all other matters concerning the Class Action and the Class Action Settlement other than as specifically provided for in the Plan, the Stipulation of Settlement and in this Confirmation Order. Pursuant to the Stipulation of Settlement and the Fairness Order, the Settlement Fund shall be administered by and be subject to the jurisdiction of the District Court. 20. Each holder of a Securities Claim that does not submit a Proof of Claim and Release Form or an Opt-out Form in accordance with the procedures established pursuant to the Class Action Settlement Documents (each, a "Non-Complying Securities Claimant"), shall have its Claim released and discharged against Columbia under the Plan and released against the other Defendants in the Class Action and all officers or directors of Columbia or TCO who were incumbent during any part of the Class Period whether or not - 41 - 42 named as Defendants, and each Non-Complying Securities Claimant shall be forever barred from asserting any Securities Claims against Columbia and the persons identified in this paragraph. 21. Pursuant to Section 541 of the Bankruptcy Code, Columbia is authorized to terminate and dismiss the Derivative Action and any and all causes of action alleged or asserted therein, or which could have been alleged or asserted therein, based on facts known or that should have been known prior to Confirmation, such termination being in the best interests of Columbia and the Estate. On or after the Effective Date, the Derivative Action shall be dismissed with prejudice and without costs, and each defendant in the Derivative Action shall execute and deliver to Columbia or Reorganized Columbia a Mutual Release (a "Releasing Defendant"). On and after the Effective Date, Reorganized Columbia shall execute each Mutual Release executed and delivered to Columbia or Reorganized Columbia by a Releasing Defendant. Gerson Werner, Harry Lewis, Columbia and the individual Defendants in the Derivative Action (the "Derivative Parties") are hereby authorized, directed and ordered to enter into a stipulation in the form attached hereto as Exhibit "A". The Derivative Parties are further ordered and directed to file the stipulation with the Chancery Court of Delaware seeking dismissal of the Derivative Action immediately upon entry of this Confirmation Order and shall promptly take all actions that - 42 - 43 may be necessary and appropriate to execute, deliver and file such documents and instruments necessary to fully implement and effectuate the dismissal of the Derivative Action. 22. Except as otherwise provided in the Plan, the Class Action Settlement Documents, or this Confirmation Order, on the Effective Date the underwriters of Columbia's D&O Insurance shall be released from their respective policy obligations in respect of the claims and causes of action which arise from the transactions which are the subject of the Class Action and the Derivative Action. 23. Pursuant to Section V.F of the Plan, and Sections 105, 1123 and 1129 of the Bankruptcy Code, in order to preserve, facilitate and implement the Class Action Settlement contemplated by and provided for in the Plan, effective after the Effective Date, upon dismissal of the Derivative Action, all named plaintiffs in the Derivative Action and their respective attorneys, servants, agents and representatives shall be permanently enjoined, stayed and restrained from pursuing or prosecuting the Derivative Action against each such Releasing Defendant. 24. In addition to the settlements and compromises specifically referred to in this Confirmation Order, all other Settlement Agreements and all other agreements provided for under the Plan, and all transactions, documents, instruments and agreements referred to therein, contemplated thereunder or executed and delivered - 43 - 44 therewith, and any amendments or modifications thereto in substantial conformity therewith, are hereby approved, and Columbia and the other parties thereto are hereby authorized and directed to enter into them and to perform thereunder according to their respective terms. 25. Columbia or Reorganized Columbia, as applicable, is hereby authorized to enter into one or more banking facilities and obtain additional financing contemplated by or consistent with the Plan (collectively, the "Facilities") including, but not limited to, the Revolving Credit Facility With Citibank, N.A. and other lenders, and to execute, deliver and/or implement such Facilities and all other documents and instruments substantially consistent therewith or incidental thereto, and to take such other actions as may be necessary and appropriate to implement such Facilities. 26. In accordance with the Canada Sale Agreement, and as provided for by Section IV.A.9 of the Plan, Columbia is hereby authorized to add an additional $25 million (Cdn) to the Kotaneelee Escrow upon confirmation of the Plan, and to replace on or after the Effective Date the cash in the Kotaneelee Escrow with one or more letters of credit. 27. In accordance with the Setoff Stipulation, and as provided for by Section IV.A.8 of the Plan, on the Effective Date, the Setoff Funds shall be distributed by Morgan Guaranty Trust Company of New York ("Morgan Guaranty") to the applicable Disbursing Agent and the - 44 - 45 balance of the interest earned and accrued on the Setoff Funds shall be distributed by Morgan Guaranty to Reorganized Columbia. 28. Columbia or Reorganized Columbia, as applicable, is hereby authorized to release the lien it has pursuant to the TCO Indenture of Mortgage and Deed of Trust dated August 30, 1985 and the Security Agreement dated as of June 19, 1985 on those certain oil and gas properties which were owned by TCO but subsequently transferred by TCO to CNR in 1990. 29. Except as otherwise provided for in the Plan or this Confirmation Order, consistent with Section IV.K of the Plan, all employee and retiree benefit plans or programs in existence as of the Petition Date, including, but not limited to, the Retirement Plan, but excluding the LESOP portion of the employee thrift plan, shall continue in full force and effect after the Effective Date, subject to any right to amend, modify or terminate such retiree benefits under the terms of the applicable retiree benefit plan or applicable non-bankruptcy law. 30. Except as otherwise provided in the Plan, or in any contract, instrument, release, indenture or other agreement or document entered into or created in connection with the Plan, or this Confirmation Order, on or after the Effective Date, all property of the Estate, and any property acquired by Columbia or Reorganized Columbia under any provisions of the Plan not being held for distribution - 45 - 46 pursuant to the terms of the Plan shall vest in and be retained by Reorganized Columbia free and clear of all claims and interests in accordance with Sections 1141(b) and (c) of the Bankruptcy Code. On and after the Effective Date, Reorganized Columbia may operate its business and may use, acquire and dispose of property and compromise or settle any claims against it without supervision or approval by the Bankruptcy Court and free of any restrictions of the Bankruptcy Code or Bankruptcy Rules, other than those restrictions expressly imposed by the Plan and this Confirmation Order. 31. Distributions required to be made to the holders of Allowed Claims against and to the holders of Allowed Interests in Columbia shall be made to such Persons as provided in the Plan. Without affecting the generality of the foregoing, or the authorization set forth above, Reorganized Columbia is hereby authorized to make distributions in respect of post-petition interest to holders of Allowed Claims to the extent and in the manner expressly provided for under Section III of the Plan. The record date for determining which holders of Allowed Borrowed Money Claims are entitled to participate in the distributions pursuant to the Plan (the "Ledger Closing Date") is set at 5:00 p.m. Eastern Time on November 1, 1995. The record date for determining which holders of Allowed Unclassified Claims or Class 1, Class 2, Class 6.1 or Class 7 Claims are entitled to participate in the distributions - 46 - 47 pursuant to the Plan is set at 5:00 p.m. Eastern Time on November 1, 1995. 32. Columbia and Reorganized Columbia are hereby authorized to recognize and deal with for all purposes under the Plan, only those Persons that are holders of Borrowed Money Instruments or any Borrowed Money Claim arising therefrom or in connection therewith as reflected on all transfer books, registers and any other records maintained by the designated transfer agents on the Ledger Closing Date. 33. Except as otherwise provided in the Plan, as of the Effective Date, upon the delivery by Reorganized Columbia to the appropriate Disbursing Agent of all distributions to be made to holders of Allowed Claims in Classes 3.1 and 3.2, the following will be terminated, deemed null and void and of no further force and effect without further action: (i) the Borrowed Money Instruments, (ii) the $500 Million Credit Agreement, (iii) the $750 Million Credit Agreement, (iv) the 1961 Indenture, (v) the Rate Swap Agreement, (vi) the Commercial Paper Master Note, (vii) the Bid Notes, (viii) the LESOP Indenture, and (viii) any other instrument or document evidencing any Claim in Class 3.1 or Class 3.2. 34. Columbia and Reorganized Columbia are hereby authorized to make appropriate arrangements for either crediting to brokerage accounts, or facilitating the creation of new brokerage accounts, for the purpose of - 47 - 48 distributing the New Indenture Securities and any other securities to be issued under the Plan in non-certificated form to the Persons entitled to receive such securities under the Plan that do not hold accounts with participants of The Depository Trust Company. 35. This Confirmation Order and the SEC Report shall constitute all approvals and consents required, if any, by the laws, rules or regulations of any state or any other governmental authority with respect to the implementation or consummation of the Plan and any other documents, instruments or agreements, and other acts referred to in or contemplated by the Plan, the Reorganization Documents, and any other documents, instruments or agreements, any amendments or modifications thereto and any other acts that may be necessary or appropriate for the implementation or consummation of the Plan. 36. Subject to changes in the ordinary course of Columbia's business, pursuant to Section V.B.2 of the Plan, on the Effective Date the following persons shall serve as members of the board of directors of Reorganized Columbia: (a) Richard F. Albosta (b) Robert H. Beeby (c) Wilson K. Cadman (d) James P. Heffernan (e) Donald P. Hodel (f) Malcolm T. Hopkins (g) Malcolm Jozoff - 48 - 49 (h) William E. Lavery (i) Gerald E. Mayo (j) Douglas E. Olesen (k) Ernesta G. Procope (l) James R. Thomas, II (m) William R. Wilson (n) Oliver G. Richard III Such directors shall remain in office until their successors are duly elected and qualified, or until their earlier resignation, removal or death, subject to the terms of the Restated and Amended Certificate of Incorporation, Columbia's by-laws as amended, and the corporate laws of the State of Delaware. EXECUTORY CONTRACTS 37. Pursuant to Section VII.A of the Plan, and in accordance with Section 1123(b)(2) of the Bankruptcy Code, Columbia will be deemed to have assumed as of the Effective Date each of its executory contracts which have not been previously rejected by order of this Court, including those contracts listed as being assumed on Exhibit E to the Plan, and excluding those contracts on Exhibit E to the Plan designated as contracts to be rejected. In accordance with Section 1123(a)(5)(G) of the Bankruptcy Code, Columbia is directed to cure all defaults respecting each assumed executory contract, other than those set forth in Section 365(b)(2) of the Bankruptcy Code. - 49 - 50 38. The executory contracts listed on Exhibit E to the Plan as contracts to be rejected shall be deemed rejected as of the Effective Date. OBJECTIONS TO CLAIMS 39. Pursuant to Section VII.C of the Plan, any Claim for damages arising by reason of the rejection of an executory contract will be forever barred and will not be enforceable against Columbia, Reorganized Columbia or its successors or assigns or the properties of any of them unless (with respect to an Administrative Claim), a request for payment, or (with respect to any other Claim), a proof of claim is filed with Poorman-Douglas, in its capacity as official claims agent, and served on Reorganized Columbia no later than thirty (30) days after the Effective Date. Columbia reserves its right to object to any request for payment or any proof of claim filed, provided, however, that Columbia shall file any objection to the allowance of the Claim no later than sixty (60) days after the Effective Date or as such time may be further extended by the Court. 40. Except as otherwise provided in Section VI or VII.C of the Plan or this Confirmation Order, after the Effective Date, only Reorganized Columbia shall have the authority to file objections, and to settle, compromise, withdraw and/or litigate to judgment objections to claims, including but not limited to Non-Ordinary Course Administrative Claims as set forth in Section VI.B.3 of the Plan, filed by Columbia or Reorganized Columbia, as - 50 - 51 applicable. Reorganized Columbia shall file all such objections to claims no later than one hundred and twenty (120) days after the Effective Date or as such time may be further extended by the Court. PROFESSIONAL FEES 41. Applications for final allowance of compensation and reimbursement of expenses by Professionals or other Persons pursuant to Sections 330, 331 or 503(b) of the Bankruptcy Code for services rendered before the Effective Date, including compensation requested pursuant to Section 503(b)(4) for making a substantial contribution in the Reorganization Case ("Final Fee Applications") shall be filed within sixty (60) days after the Effective Date, provided, however, that any Professional or other Person that fails to timely file an application for final allowance shall be forever barred from asserting such Claims against Columbia or Reorganized Columbia, provided further, that any Professional that is subject to the Administrative Fee Order or other such order of the Bankruptcy Court as of the Effective Date may continue to receive compensation and reimbursement of expenses as provided therein for services rendered prior to the Effective Date. Objections to such fees filed by Reorganized Columbia, the Equity Committee, the Creditors' Committee and/or any party-in-interest to any Final Fee Application shall be due and hearings shall be held at such time and in such manner as shall be established - 51 - 52 by a further order of the Court. No applications for compensation need be filed for post-Effective Date services. 42. Except as otherwise expressly provided in the Plan or this Confirmation Order, the issuance of this Confirmation Order operates as a discharge, pursuant to Section 1141(d) of the Bankruptcy Code, as of the Effective Date, of all debts of, Claims against and Interests in Columbia that arose prior to the Confirmation Date including, without limitation, any Claims for interest accrued on Claims from the Petition Date, any Securities Claims, any LESOP Action Claims, and any Intercompany Claims. Without limiting the generality of the foregoing, on the Effective Date, Columbia shall be discharged from any debt that arose prior to the Confirmation Date and from all debts of the kind specified in Sections 502(g), 502(h) or 502(i) of the Bankruptcy Code, whether or not (i) a proof of claim based on such debt was filed or deemed filed pursuant to Section 501 of the Bankruptcy Code, (ii) a Claim based on such debt is an Allowed Claim pursuant to Section 502 of the Bankruptcy Code or (iii) the holder of a Claim on such debt has voted to accept the Plan. 43. As to every discharged Claim, all Persons shall be precluded from asserting against Columbia, Reorganized Columbia, or their respective successors or assigns, or the properties of any of them, any other or further Claims, debts, rights, causes of action, liabilities or equity interests based upon any act, omission, transaction - 52 - 53 or other activity of any kind or nature that occurred prior to the Confirmation Date. 44. Except to the extent otherwise provided for by decretal paragraph 2 of this Confirmation Order, pursuant to Section X.B of the Plan, and Sections 105, 1123 and 1129 of the Bankruptcy Code, in order to preserve and implement the settlements contemplated by and provided for in the Plan, effective on the Effective Date, all Persons that have held, currently hold or may hold a Claim, or other debt or liability that is discharged pursuant to the terms of the Plan shall be permanently enjoined to the fullest extent permitted by law from taking any of the following actions on account of any such discharged Claims, debts or liabilities, other than actions brought to enforce any rights or obligations under the Plan or appeals, if any, from this Confirmation Order: (i) commencing or continuing, in any manner, any action or other proceeding against Columbia, Reorganized Columbia or their respective properties; (ii) enforcing, attaching, collecting or recovering in any manner any judgment, award, decree or order against Columbia, Reorganized Columbia or their respective properties; (iii) creating, perfecting or enforcing any lien or encumbrance against Columbia, Reorganized Columbia or their respective properties; (iv) asserting a setoff, right of subrogation or recoupment of any kind against any debt, liability or obligation due to Columbia, Reorganized Columbia or their respective properties; and (v) commencing or continuing, in - 53 - 54 any manner or in any place, any action that does not comply with or is inconsistent with the provisions of the Plan or this Confirmation Order. 45. The Court hereby approves and authorizes the releases provided in Section X.D of the Plan. Except as otherwise provided in the Plan or this Confirmation Order, pursuant to Section X.D of the Plan, and Sections 105, 1123 and 1129 of the Bankruptcy Code, effective on the Effective Date, any Person will be enjoined from prosecuting, whether directly, derivatively or otherwise, any claim, debt, right, cause of action or liability which was or could have been asserted against the Releasees. 46. Nothing in the Plan, this Confirmation Order or the discharge, injunction or release provisions contained therein shall be construed as discharging, releasing or relieving Columbia, Reorganized Columbia, or any other party, in any capacity, from liability with respect to the Retirement Plan to which such party is subject under any law or regulatory provision, provided, however, that nothing contained in the Plan or this Confirmation Order shall preclude Reorganized Columbia from exercising its right to amend, modify, or terminate the Retirement Plan following the Effective Date in accordance with then existing provisions of applicable law. 47. In accordance with that certain Settlement Agreement dated October 31, 1995 among Columbia and Mountaineer Gas Company and its parent or affiliated com- - 54 - 55 panies, Allegheny & Western Energy Corporation, Eastern American Energy Corporation, Eastern Systems Corporation and Energy Corporation of America (collectively, "Mountaineer") approved by this Court by order dated November 13, 1995 (the "Mountaineer Settlement"), the Disputed Claims asserted against Columbia by Mountaineer have been compromised and settled subject to consummation of the Plan and the TCO Plan, and the execution by Mountaineer and TCO of that certain Settlement Agreement dated as of October 31, 1995 approved by the Court. Notwithstanding anything to the contrary in the Plan or this Confirmation Order, in accordance with the Mountaineer Settlement, inter alia, (i) Claim Nos. 14667 and 14670 are being treated as Class 2 Claims under the Plan in the aggregate amount of $100,000, provided, however, that Mountaineer's Class 2 Claim shall not be entitled to post-petition interest and (ii) the two other proofs of Claims filed against Columbia are being withdrawn. 48. It shall be a condition to the making of any distribution to any Person holding any mortgage, deed of trust, statutory lien, lien or other security interest against the property or assets of Columbia or its Estate that such Person, or that Person's agent, shall have tendered to Columbia, Reorganized Columbia or their designated representative, a file-stamped copy of a release of lien or equivalent release document which has been recorded at the appropriate recorder's office in the jurisdiction of - 55 - 56 the liened property or shall have delivered to Columbia, Reorganized Columbia or their designated representative, any property so held. 49. Pursuant to Section X.C of the Plan, Columbia, Reorganized Columbia, their affiliates and their respective directors, officers, employees, agents, representatives and Professionals (acting in such capacity), and the Creditors' Committee, the Equity Committee and their respective members, agents and Professionals (acting in such capacity), and their respective heirs, executors, administrators, successors and assigns and the Equity Committee's invitees (including their professionals) shall neither have nor incur any liability to any Person with respect to their actions or omissions in connection with the Reorganization Case, the Plan, the Disclosure Statement and related transactions and agreements, provided, however, that this limitation of liability shall not extend to (i) any act or omission which is determined in a Final Order to have constituted gross negligence or wilful misconduct, or (ii) any violation of the securities laws except to the extent that such Person would not be liable for such violation under Section 1125(e) of the Bankruptcy Code, or would be exempt from compliance with such securities laws pursuant to Section 1145 of the Bankruptcy Code. - 56 - 57 RETENTION OF JURISDICTION 50. Notwithstanding the entry of this Confirmation Order or the occurrence of the Effective Date, in accordance with Section XI of the Plan and the Bankruptcy Code, the Court shall retain jurisdiction for the following purposes: a. To allow, disallow, determine, liquidate, classify, estimate, or establish the priority or secured or unsecured status of, any Claim, including the resolution of any request for payment of any Administrative Claim, the resolution of any disputes concerning any Disbursing Agent Agreement and the resolution of any and all objections to the allowance or priority of Claims (including the Opt-out Securities Claims) and of post-petition interest on such Claims (including any Administrative Claim and any Priority Tax Claim); b. To grant or deny any application for allowance of compensation or reimbursement of expenses authorized pursuant to the Bankruptcy Code or the Plan, for periods ending on or before the Effective Date; c. To resolve any matters related to the assumption or rejection of any executory contract or unexpired lease to which Columbia is a party or with respect to which Columbia may be liable and to hear, determine and, if necessary, Allow any Claim arising therefrom; d. To resolve any determinations which may be requested by Columbia or Reorganized Columbia of unpaid or - 57 - 58 potential tax liability or any matters relating thereto under Sections 505 and 1146(d) of the Bankruptcy Code, including tax liability or such related matters for any taxable year or portion thereof ending on or before the Effective Date; e. To resolve any issues relating to distributions to Holders of Allowed Claims pursuant to the provisions of the Plan, including the redemption of or resetting of rates and other matters with respect to the DECS and the New Preferred Stock and assertion of set-off rights by or against Columbia; f. To decide or resolve any motions, adversary proceedings, contested or litigated matters and any other matters and grant or deny any applications that may be pending on or commenced after the Effective Date, that arise in or relate to the Reorganization Case or the Plan, including any determination concerning the Allowed amount, if any, of the Opt-out Securities Claims. g. To enter such orders as may be necessary or appropriate to implement or consummate the provisions of the Plan and all contracts, instruments, releases, indentures and other agreements or documents created in connection with or referred to in the Plan or the Disclosure Statement; h. To resolve any cases, controversies, suits or disputes that may arise in connection with the consummation, interpretation or enforcement of the Plan or any Person's obligations under or in connection with the Plan, including - 58 - 59 determinations relating to the enforceability of the Columbia Customer Guaranty and the Columbia Guaranty and any disputes regarding compensation for those post-Effective Date services referenced in Section XII.A of the Plan, except that such retention of jurisdiction shall not apply to any cases, controversies, suits or disputes that may arise in connection with FERC regulatory matters; i. To modify the Plan before, on or after the Effective Date pursuant to Section 1127 of the Bankruptcy Code or modify the Disclosure Statement or any contract, instrument, release, indenture or other agreement or document created in connection with the Plan or the Disclosure Statement, or remedy any defect or omission or reconcile any inconsistency in any Bankruptcy Court order, the Plan, the Disclosure Statement or any contract, instrument, release, indenture or other agreement or document created in connection with the Plan or the Disclosure Statement, in such manner as may be necessary or appropriate to consummate the Plan, to the extent authorized by the Bankruptcy Code; j. To issue injunctions, enter and implement other orders or take such other actions as may be necessary or appropriate to restrain interference by any Person with consummation or enforcement of the Plan; k. To enter and implement such orders as are necessary or appropriate if this Confirmation Order is for - 59 - 60 any reason modified, stayed, reversed, revoked or vacated and as may be necessary or appropriate between the Confirmation Date and the Effective Date; l. To determine any other matters that may arise in connection with or relate to the Plan, the Disclosure Statement, this Confirmation Order, any Claim or any contract, instrument, release, indenture or other agreement or document created in connection with the Plan or the Disclosure Statement, except as otherwise provided herein; m. To resolve any disputes or any other matters relating to the Securities Claims and the Derivative Claims; and n. To enter a final decree closing the Reorganization Case. 51. To the extent provided in Section XII.A of the Plan, the Creditors' Committee and the Equity Committee may continue in existence after the Confirmation Date and the Professionals retained by the Creditors' Committee and the Equity Committee may continue to be employed after the Confirmation Date. Upon dissolution of the Equity Committee on the Effective Date and the Creditors' Committee on the Effective Date or such later date as permitted by Section XII.A of the Plan, the members of the Creditors' Committee and the Equity Committee, together with the invitees of the Equity Committee, shall be released and discharged from all rights and duties arising from or related to the Reorganization Case. - 60 - 61 52. Reorganized Columbia shall remain liable to pay the reasonable costs and expenses of the members of and the Professionals retained by the Creditors' Committee with respect to each of the services permitted to be rendered after the Effective Date by Section XII.A of the Plan and the reasonable costs and expenses arising from the pursuit of and objections to final fee applications filed by Professionals for the Equity Committee and the Creditors' Committee as provided in paragraph 41 hereof, upon the submission of monthly bills to Reorganized Columbia describing in reasonable detail the services provided and disbursements incurred ("Post-Effective Date Fee Requests"). The Court shall retain jurisdiction to determine any disputes concerning Post-Effective Date Fee Requests. 53. The failure to reference or discuss any particular provision of the Plan in this Confirmation Order shall have no effect on the validity, binding effect and enforceability of such provision and such provision shall have the same validity, binding effect and enforceability as every other provision of the Plan. 54. Except with respect to the modifications to the Plan set forth herein, to the extent of any - 61 - 62 inconsistency between the terms of the Plan and this Confirmation Order, the terms of the Plan shall govern. Dated: Wilmington, Delaware November 15, 1995 \s\ Helen S. Balick -------------------------------- THE HONORABLE HELEN S. BALICK CHIEF UNITED STATES BANKRUPTCY JUDGE - 62 - EX-99.C 3 CONFIRMATION ORDER OF COLUMBIA TRANSMISSION'S PLAN 1 FORM 8-K, EXHIBIT C, COLUMBIA TRANSMISSION'S CONFIRMATION ORDER DATED NOVEMBER 15, 1995 UNITED STATES BANKRUPTCY COURT FOR THE DISTRICT OF DELAWARE - - -------------------------------------- In re Chapter 11 COLUMBIA GAS TRANSMISSION CORPORATION, Case No. 91-804(HSB) Debtor. - - --------------------------------------- ORDER CONFIRMING THE SECOND AMENDED PLAN OF REORGANIZATION OF COLUMBIA GAS TRANSMISSION CORPORATION, AS FURTHER AMENDED, DATED JULY 17, 1995 Columbia Gas Transmission Corporation ("TCO"), debtor and debtor-in-possession, having filed its Second Amended Plan of Reorganization of Columbia Gas Transmission Corporation, As Further Amended, dated July 17, 1995 (the "Plan") in accordance with Section 1121 of Title 11 of the United States Code (the "Bankruptcy Code"), 11 U.S.C. Section 1121; and TCO having filed its Amended Disclosure Statement for the Plan pursuant to Section 1125 of the Bankruptcy Code (the "Disclosure Statement"); and a hearing having been held before this Court on July 18, 1995 (the "Hearing") to consider the adequacy of the Disclosure Statement and the amendments and revisions thereto set forth on the record at the Hearing; and the Court by Order dated July 18, 1995 having approved the Disclosure Statement (the "Disclosure Statement Order"); and the Court having entered an Order dated July 27, 1995 (the "Confirmation Procedures Order") establishing and approving, inter alia, procedures for the solicitation and tabulation of votes to accept or reject the Plan; and the Disclosure Statement (with a copy of the Plan 2 annexed thereto as Exhibit 1), the Disclosure Statement Order, a Ballot(3) and related material having been transmitted to all known holders of Claims and/or Interests entitled to vote on the Plan in accordance with the Confirmation Procedures Order; and the Disclosure Statement (with a copy of the Plan annexed thereto as Exhibit 1), the Disclosure Statement Order, a Non-Voting Status Notice and/or a Settlement Amount Form, and related material having been transmitted to each holder of a Claim in the Non-Voting Classes; and the solicitation of acceptances from holders of Claims and/or Interests having been made within the time and in the manner required by the Confirmation Procedures Order; and affidavits of publication having been filed with the Court evidencing that the Confirmation Procedures Notice was published in accordance with the provisions of the Confirmation Procedures Order (collectively, the "Publication Affidavits"); and an affidavit of service having been filed with respect to the mailing of the Confirmation Procedures Notice (the "Mailing Affidavit") to those parties-in-interest having requested notice pursuant to Rule 2002 of the Federal Rules of Bankruptcy Procedure (the "Bankruptcy Rules"); and objections to confirmation of the Plan having been filed by (i) Joseph H. Hager, Seneca-Upshur Petroleum, Inc., Belden & Blake Operating Company and Belden & Blake Corporation, - - -------------------- 3 All capitalized terms not otherwise defined herein have the meanings set forth in the Plan or, to the extent not inconsistent therewith, in the Confirmation Procedures Order. - 2 - 3 (ii) Belden & Blake Operating Co., Belden & Blake Corp., Boggs Natural Gas Co., Joseph H. Hager, New Bremen Corporation, New Ulm Gas, Ltd., Phillips Petroleum Co., and Seneca-Upshur Petroleum, Inc. (the "Producer Objection"), (iii) Ozark Gas Transmission System, (iv) Enterprise Energy Corporation Class Members (the "Enterprise Energy Objection"), (v) the United States of America on behalf of the Internal Revenue Service (the "IRS Objection"), (vi) Rolls-Royce (Canada) Limited (the "Rolls Royce Objection"), (vii) Trailblazer Pipeline Company, (viii) Overthrust Pipeline Company, and (ix) VJI Natural Resources Inc. (collectively, the "Confirmation Objections"); and it appearing that the Rolls Royce Objection and the IRS Objection have been withdrawn; and hearings having been held from November 13, 1995 through November 15, 1995 with respect to the Court's consideration of (i) confirmation of the Plan, (ii) the settlement by agreement of Confirmation Objections, (iii) the Confirmation Objections not previously withdrawn or settled, and (iv) the fairness and reasonableness of (a) the settlement of the Intercompany Claims Litigation, (b) the Columbia Omnibus Settlement, (c) the Customer Settlement Proposal, (d) the settlement of Producer Claims and Disputed General Unsecured Claims not otherwise approved by the Court and other settlements embodied in the Plan (the "Confirmation Hearing"); and upon the entire record of the Reorganization Case, including, without limitation, the record made at the Confirmation Hearing; and the - 3 - 4 Court having reviewed, inter alia, the Plan, the Disclosure Statement, the Plan Vote Certification (described below), the Publication Affidavits, the Mailing Affidavit, TCO's Memorandum of Law In Support of Confirmation of the Second Amended Plan of Reorganization, As Further Amended, Dated July 17, 1995 (the "Confirmation Memorandum"), and all Confirmation Objections not previously withdrawn and responses thereto, and statements and comments regarding confirmation of the Plan; and after finding that due, sufficient and adequate notice of the Confirmation Hearing, the Customer Settlement Proposal, the settlement of the Intercompany Claims Litigation, the Columbia Omnibus Settlement, the settlement of Producer Claims and Disputed General Unsecured Claims and the other settlements and compromises embodied in the Plan has been given to all interested persons and parties-in-interest; and after due deliberation, the Court makes the following findings of fact and conclusions of law:(4) FINDINGS OF FACT AND CONCLUSIONS OF LAW: a. The Court has jurisdiction over the Reorganization Case pursuant to 28 U.S.C Section Section 1334(a) and 157(b)(1). Venue of these proceedings and the Reorganization Case in - - -------------------- 4 This Confirmation Order constitutes the Court's findings of fact and conclusions of law under Fed. R. Civ. P. 52., as made applicable by Bankruptcy Rules 7052 and 9014. Any finding of fact shall constitute a finding of fact even if it is stated as a conclusion of law, and any conclusion of law shall constitute a conclusion of law even if it is stated as a finding of fact when necessary and appropriate. - 4 - 5 this district is proper pursuant to 28 U.S.C. Section Section 1408 and 1409. b. By order dated September 29, 1995, the District Court, inter alia, confirmed that this Court has jurisdiction to (i) confirm the Plan and the Columbia Plan in all respects including, without limitation, the settlement of the Intercompany Claims Litigation, (ii) review the settlement of the Intercompany Claims Litigation in conjunction with the Court's hearings to consider confirmation of the Plan and the Columbia Plan, to the extent judicial review of such settlement is required, (iii) approve the settlement of the Intercompany Claims Litigation, and (iv) authorize the release of the Intercompany Claims as provided for in the Plan. COMPLIANCE WITH CHAPTER 11 REQUIREMENTS c. Due and sufficient notice of the Plan, the Confirmation Hearing, the settlement of the Intercompany Claims Litigation, the Columbia Omnibus Settlement, the Customer Settlement Proposal, the settlement of Producer Claims and Disputed General Unsecured Claims and the other settlements and compromises embodied in the Plan, and the deadlines for voting and filing Confirmation Objections has been given to all known holders of Claims against TCO and other parties-in-interest in accordance with the Confirmation Procedures Order. - 5 - 6 d. The solicitation by TCO of votes for accepting or rejecting the Plan was conducted in good faith and complied with Sections 1125 and 1126 of the Bankruptcy Code, Bankruptcy Rules 3017 and 3018, the Confirmation Procedures Order, all other applicable provisions of the Bankruptcy Code and all other applicable laws, rules and regulations. e. The procedures by which the Ballots were distributed to holders of Claims against and/or Interests in TCO and received and tabulated by Poorman-Douglas (the "Balloting Agent"), the Court-authorized balloting agent, were fair, properly conducted and in accordance with the Bankruptcy Code, the Bankruptcy Rules, the local rules of this Court, the Confirmation Procedures Order and all other applicable laws, rules and regulations. f. As evidenced by the Declaration of Edward L. Erb dated November 7, 1995 certifying the method and results of the ballot tabulation for the Voting Classes (the "Plan Vote Certification"), (i) at least two-thirds in amount and more than one-half in number of holders of Claims in Classes 3.2, 3.3 and 3.4 that voted on the Plan accepted the Plan, without counting the votes of insiders, (ii) the sole Creditor in each of Classes 2.1 and 3.5 voted to accept the Plan, and (iii) the sole stockholder in Class 5 voted to accept the Plan. g. Classes 1.1, 1.2, 1.3, 3.1, 4.1, 4.2, 4.3, 4.4 and 4.5 are not impaired under the Plan and, therefore, - 6 - 7 such Classes are deemed to have accepted the Plan pursuant to Section 1126(f) of the Bankruptcy Code. h. As required by Section 1129(a)(1) of the Bankruptcy Code, the Plan complies with all applicable provisions of the Bankruptcy Code. i. As required by and in compliance with Sections 1123(a)(1),(2) and (3) of the Bankruptcy Code, the Plan identifies the Classes of Claims against TCO that are not impaired under the Plan, the Classes of Claims against and the Class of Interests in TCO that are impaired under the Plan and specifies the treatment of Allowed Claims and Interests in each such Class. j. Consistent with Section 1123(a)(4) of the Bankruptcy Code, the Plan as modified by this Confirmation Order provides the same treatment for each Allowed Claim in a particular Class, except in instances where the holder of a particular Allowed Claim has agreed to less favorable treatment of its Allowed Claim. k. The Classification of Claims against TCO under the Plan as modified by this Confirmation Order is consistent with Section 1122(a) of the Bankruptcy Code in that each Claim against TCO has been placed in a particular Class only if such Claim is substantially similar to the other Claims in such Class. - 7 - 8 l. Specifically, with regard to the classification scheme embodied within the Plan in respect of Classes 3.1, 3.2, 3.3 and 3.4, there is a reasonable basis for the separate classification of those Claims, since they have unique legal and factual issues attached to the allowance and payment of their respective Claim amounts. The inclusion of Unsecured Claims Allowed in amounts of $25,000 or less in Class 3.1, the Convenience Class under the Plan, is consistent with considerations of fairness to small creditors and administrative efficiency. In determining that the classification of Claims in the Plan is reasonable, appropriate and not designed to manipulate the results of voting, the Court further considered that (i) the Customers in Class 3.2 have distinct issues attached to the allowance and payment of Refund Claims including the fact that such Claims arise from TCO's provision of services to Customers subject to regulation by the FERC and such Customers' participation in the Customer Settlement Proposal, a comprehensive settlement of claims and issues between TCO and its Customers, which provides for substantial recoveries by TCO from Customers, (ii) the Producer Claims in Class 3.3 all arise from or are related to natural gas purchase contracts, for which this Court has established special Claims Estimation Procedures, the Claims, particularly contract rejection Claims, constitute the largest unaffiliated Claims against the Estate, many of which are subject to Settlement Agreements conditioned on the treatment provided to Producers - 8 - 9 under the Plan, and which are otherwise subject to large swings in potential outcome and allowance amounts; and (iii) the separate classification of Class 3.4 Claims reflects the distinction that such Claims are neither regulatory in nature nor arise from gas purchase contracts and thus are not subject to comprehensive Claims' liquidation procedures or to the risk-sharing mechanisms applicable to Producer Claims, are for the most part trade Creditor Claims by ongoing suppliers in the ordinary course of TCO's business, are largely liquidated or not subject to wide variations in potential outcome, and represent less than 5% of the total distribution to Creditors under the Plan. m. The potential use of Columbia Common Stock and distribution of additional cash, if necessary, to pay that portion of the ultimately Allowed amounts of Rejecting Producer and General Unsecured Creditor Claims in excess of the Original Settlement Values or Allowance Amounts, as applicable, proposed for such Claims in the manner provided for by Sections III.B.3.d and III.B.3.e of the Plan as modified by this Confirmation Order, constitutes substantially similar non-discriminatory treatment, and is necessary to the reorganization of Columbia and TCO. n. The evidence and arguments presented at the Confirmation Hearing and the Disclosure Statement Hearing demonstrate that the classification of Unsecured Claims set forth in the Plan as modified by this Confirmation Order appropriately classifies substantially similar Claims - 9 - 10 together, does not discriminate unfairly in the treatment of those Claims and does not support an argument that voting on the Plan has been gerrymandered. Consequently, TCO falls squarely within the latitude given to the proponent of a plan in respect of the classification of Claims as permitted by the Third Circuit. See, e.g., In re Jersey City Medical Center, 817 F.2d 1055, 1060-61 (3rd Cir. 1987); John Hancock Life Insurance Company v. Route 37 Business Park Associates, 987 F.2d 154 (3rd Cir. 1993). o. As required by Section 1123(a)(5) of the Bankruptcy Code, the Plan provides adequate means for its execution and implementation including, inter alia, (i) the vesting in Reorganized TCO of all property of the Estate and any property and assets acquired by TCO or Reorganized TCO under the Plan, (ii) the utilization of available cash on hand plus funding which, if necessary, can be provided to TCO by Columbia to satisfy payments due under the Plan, (iii) the cancellation or modification of existing liens on the Effective Date, (iv) the adoption by Reorganized TCO of an Amended and Restated Certificate of Incorporation, and the filing of the Amended and Restated Certificate of Incorporation pursuant to Section V.B.1 of the Plan, and (v) the issuance by Reorganized TCO of new secured debt securities in respect of the Class 2.1 Claim. - 10 - 11 p. As required by Section 1123(a)(6) of the Bankruptcy Code, the Plan provides for the inclusion in the Amended and Restated Certificate of Incorporation of Reorganized TCO of a provision prohibiting the issuance of non-voting equity securities. q. As required by Section 1123(a)(7) of the Bankruptcy Code, the selection of directors and officers who will serve in such capacities upon the Effective Date is in a manner consistent with the interests of holders of Claims and public policy. The Plan provides that, subject to changes in the ordinary course of business, the directors and officers of Reorganized TCO shall be the same individuals who were serving in those capacities as of July 17, 1995. r. As required by Section 1123(b) of the Bankruptcy Code, the Plan (i) impairs or leaves unimpaired, as the case may be, each Class of Claims or Interests, and (ii) provides for the assumption, rejection or other disposition of each of TCO's executory contracts or unexpired leases which had not been expressly assumed or rejected pursuant to Section 365 of the Bankruptcy Code by prior order of the Court as of the Confirmation Hearing. s. As required by Section 1123(b)(3), the Plan provides for either (i) the settlement or adjustment, or (ii) the retention and enforcement by Reorganized TCO, of - 11 - 12 any claims, demands, rights and causes of action that TCO or the Estate may hold against any Person. t. As required by Section 1129(a)(2) of the Bankruptcy Code, TCO has complied with all applicable provisions of title 11 including the disclosure and solicitation requirements of Sections 1125 and 1126 of the Bankruptcy Code. TCO transmitted solicitation materials including Ballots to its Creditors entitled to vote on the Plan and its stockholder only after the Court approved the Disclosure Statement as containing adequate information and in compliance with the requirements of the Confirmation Procedures Order. u. As required by Section 1129(a)(3) of the Bankruptcy Code, the Plan has been proposed in good faith, for the valid business purpose of resolving disputes and restructuring or paying in full substantial obligations of TCO and has not been proposed by any means forbidden by law. v. As required by Section 1129(a)(4) of the Bankruptcy Code, any payment made or to be made by TCO for professional services or for costs and expenses in connection with the Plan or incident to the Reorganization Case, has been disclosed to and approved by, or is subject to the approval of, this Court as being reasonable. w. As required by Section 1129(a)(5) of the Bankruptcy Code, TCO has disclosed the identity and affiliations of the individuals who are proposed to serve after confirmation of the Plan as directors and executive officers - 12 - 13 of Reorganized TCO. The continuance of such individuals in such offices, subject to changes in the normal course, is consistent with the interests of the holders of Claims against and Interests in TCO and with public policy. In addition, TCO has disclosed the identity of any insider presently known to it who will be employed or retained by Reorganized TCO, and the nature of any compensation to be paid to such insider. x. As required by Section 1129(a)(6) of the Bankruptcy Code, FERC, a governmental regulatory commission which has jurisdiction over TCO's interstate gas pipeline rates, has either approved rate changes provided for in the Plan or any such rate changes are expressly subject to the approval of FERC. y. As required by Section 1129(a)(7) of the Bankruptcy Code, with respect to each impaired Class of Claims against or Interests in TCO, each holder of a Claim or Interest in such impaired Class has accepted the Plan, or will receive or retain under the Plan on account of such Claim or Interest property of a value, as of the Effective Date, that is not less than the amount such holder would receive or retain if TCO was liquidated on the Effective Date under Chapter 7 of the Bankruptcy Code. z. As indicated by the Plan Vote Certification and as established on the record at the Confirmation Hearing, each impaired Class of Claims or Interests has voted to accept the Plan in accordance with Sections 1124 and 1126 of - 13 - 14 the Bankruptcy Code, with the result that Section 1129(a)(8) of the Bankruptcy Code is satisfied and the "cram down" provisions of Section 1129(b) of the Bankruptcy Code are not applicable. aa. The Plan provides for the treatment of Allowed Administrative Claims and Allowed Priority Tax Claims pursuant to Sections 507(a)(1) and 507(a)(8) of the Bankruptcy Code in accordance with Section 1129(a)(9) of the Bankruptcy Code, except to the extent that the holder of a particular Claim has agreed to a different treatment. Each holder of an Allowed Claim of a kind specified in Section 507(a)(1) of the Bankruptcy Code on the Effective Date will receive cash equal to the Allowed amount of such Claim on the Effective Date. Each holder of an Allowed Priority Tax Claim of a kind specified in Section 507(a)(8) of the Bankruptcy Code, other than the Claim which is the subject of the IRS Order, will on the Effective Date receive cash equal to the Allowed amount of such Claim, in compliance with Section 1129(a)(9)(C). bb. With respect to the Priority Tax Claims of the IRS which are the subject of the IRS Order, the Plan provides alternative methods by which such Claims will be paid. Each of the methods is in accordance with the requirements of Section 1129(a)(9)(C). TCO shall either pay such Claims in installments over a period not to exceed six years from the date of assessment of such Claims together with interest, pursuant to the terms of the IRS Settlement - 14 - 15 consents, Reorganized TCO may pay such Claims of the IRS, or any remaining balance of such Claims, in full on the Effective Date. The Plan further provides that Columbia or Reorganized Columbia may pay, as parent of the Columbia Group, all of the Allowed Priority Tax Claims of the IRS and the post-petition interest thereon. cc. As required by Section 1129(a)(10) of the Bankruptcy Code, and as demonstrated by the Plan Vote Certification, at least one Class of Claims or Interests that is impaired under the Plan has accepted the Plan, determined without including any acceptance of the Plan by any insider. dd. The Plan is feasible. TCO has demonstrated its ability to meet its financial obligations under the Plan and continue its business in the ordinary course. As required by Section 1129(a)(11) of the Bankruptcy Code, confirmation of the Plan is not likely to be followed by the liquidation or the need for further financial reorganization of TCO. ee. As required by Section 1129(a)(12) of the Bankruptcy Code, Section III.A.1.d of the Plan provides that all Administrative Claims for fees payable pursuant to Section 1930 of Title 28 of the United States Code, 28 U.S.C. Section 1930, which are unpaid as of the Effective Date will be paid in cash on the Effective Date. ff. Consistent with Section 1129(a)(13) of the Bankruptcy Code, Section IV.H of the Plan provides for all - 15 - 16 employee and retiree benefit plans and programs in existence as of the Petition Date, including the Retirement Plan, to continue in existence after the Effective Date and TCO shall continue to pay retiree benefits (as defined in Section 1114(a) of the Bankruptcy Code). gg. The Plan is the only plan of reorganization for TCO pending before this or any other court. hh. The primary purpose of the Plan is not the avoidance of taxes or the avoidance of the application of Section 5 of the Securities Act of 1933, as amended (15 U.S.C. Section 77e). ii. The record established at the Confirmation Hearing demonstrates that all conditions precedent to confirmation of the Plan have been satisfied, or are concurrently satisfied by entry of this Confirmation Order. jj. TCO has stated that it believes that all conditions precedent to the Effective Date of the Plan, as set forth in Section VIII.B of the Plan, will occur or be duly waived. kk. Pursuant to Section 1125(e) of the Bankruptcy Code, TCO shall not be liable on account of TCO's solicitation of acceptances of the Plan and its issuance and/or distribution of new secured debt securities of Reorganized TCO, and publicly traded securities of Reorganized Columbia pursuant to the Plan in good faith and in compliance with the applicable provisions of the Bankruptcy Code, for any violation of applicable law, rule or regulation governing - 16 - 17 the solicitation of acceptances of a plan of reorganization or the offer, issuance, sale or purchase of securities. ll. Pursuant to Section 1145(a)(1) of the Bankruptcy Code, the offering and distribution of securities of Reorganized Columbia by TCO in exchange for certain Claims against TCO shall be exempt from Section 5 of the Securities Act, and any state or local law requiring registration prior to the offering, issuance, distribution or sale of securities. mm. Pursuant to and to the fullest extent permitted by Section 1145 of the Bankruptcy Code, the resale of any new securities of Reorganized Columbia initially distributed pursuant to the Plan, shall be exempt from Section 5 of the Securities Act and any state or local law requiring registration prior to the offering, issuance, distribution or sale of securities. SETTLEMENT AGREEMENTS nn. Pursuant to Section 1123(b)(3) of the Bankruptcy Code and Bankruptcy Rule 9019(a), the Plan provides for the settlement or compromise of Claims against TCO and its Estate, the approval of which are either conditions to confirmation of the Plan or otherwise sought by TCO in connection with confirmation (the "Settlement Agreements"). The Settlement Agreements include but are not limited to (i) the settlement of the Intercompany Claims Litigation and other TCO creditor-related disputes through the Columbia Omnibus Settlement, (ii) the Customer Settlement Proposal, - 17 - 18 (iii) the settlement of Claims of Producers and General Unsecured Creditors that have accepted the Settlement Values or Allowance Amounts offered to them by so indicating on their Ballots or Settlement Amount Forms, as applicable, and (iv) other settlements. oo. In determining that the Settlement Agreements embodied in the Plan represent fair, equitable and reasonable compromises of Claims filed or asserted by or against TCO, are in the best interests of the Estate, and are hereby approved, the Court has considered the following factors: (i) the probability of ultimate success on the merits if settled issues were instead litigated; (ii) the difficulties, if any, to be encountered in the matter of collection; (iii) the complexity of the litigation involved, and the expense, inconvenience and delay necessarily attendant to continued litigation; (iv) the paramount interest of creditors as evidenced by, inter alia, the absence of any Confirmation Objections filed in respect of any of the Settlement Agreements and the acceptance of the Plan by an overwhelming majority of the holders of Claims and Interests; (v) that the Settlement Agreements are, in each instance, the product of extensive arms-length negotiations among TCO, Columbia, the Creditors' Committee, the Customers' Committee and, as applicable to the specific Settlement Agreement, numerous other parties-in-interest, and (vi) whether the value of the Settlement Agreement falls within the reasonable range of litigation possibilities. - 18 - 19 See, e.g., In re Allegheny Int'l., Inc., 118 B.R. 282, 309-310 (Bankr. W.D. Pa. 1990); Protective Comm. Stockholders of TMT Trailer Ferry, Inc. v. Anderson, 390 U.S. 414, 424-45 (1968); In re Justice Oaks II, Ltd., 898 F.2d 1544, 1549 (11th Cir.), cert. denied, 498 U.S. 959 (1990). pp. In determining that each of the Settlement Agreements embodied in the Plan is fair and equitable and should be approved, the Court considered, inter alia, the record of the Confirmation Hearing and the record of this Reorganization Case. SETTLEMENT OF THE INTERCOMPANY CLAIMS LITIGATION AND OTHER TCO CREDITOR-RELATED DISPUTES THROUGH THE COLUMBIA OMNIBUS SETTLEMENT qq. On March 18, 1992, the TCO Creditors' Committee, pursuant to the terms of a stipulation approved by this Court during the preceding month, filed on behalf of TCO a complaint against Columbia and CNR asserting that actions taken by Columbia during the period from 1985 through to the filing of TCO's bankruptcy petition in 1991 had conferred an unfair advantage on Columbia, as TCO's sole stockholder, over TCO's other Creditors and had caused injury to TCO and its Creditors (the "Intercompany Complaint"). The Intercompany Complaint sought, inter alia, (i) the equitable subordination of Columbia's Claims against the Estate to the Claims of TCO's other Creditors, (ii) the recharacterization of Columbia's secured advances to TCO during the subject period as equity contributions, (iii) the avoidance of certain transfers made to CNR, and of liens - 19 - 20 granted to Columbia and (iv) the avoidance of dividends and debt paid by TCO to Columbia. The Customers' Committee joined with the TCO Creditors' Committee in the prosecution of the Intercompany Claims. A proof of claim on behalf of TCO was filed by the TCO Creditors' Committee against Columbia based upon the Intercompany Claims. rr. Columbia vigorously contested the allegations asserted in the Intercompany Complaint. The Columbia Equity and Creditors' Committees intervened as defendants in the litigation. The ensuing litigation and disputes over the issues raised in the Intercompany Claims Litigation prolonged and complicated the reorganization cases of both TCO and Columbia. Those cases are linked principally because Columbia requires the resumption of payments due to it on its Claims against TCO in order for Columbia to meet its own debt service requirements. As a result of the Intercompany Claims Litigation, determination of the nature and characterization of TCO's obligation to Columbia was delayed. Further, an understanding of the value of the Estate available to unaffiliated Creditors, dependent upon the Intercompany Claims, was necessary before substantial progress could be made in the consensual quantification of the substantial Claims by Producers against TCO. The positions of the parties at trial presented a potential range of outcomes of the Intercompany Claims Litigation varying from a loss of value to Columbia of zero to an amount in excess of $1.0 billion, and the benefit of any - 20 - 21 such recovery by TCO to the unaffiliated Creditors of TCO would be dependent upon other aspects of the plans of reorganization for TCO and Columbia, including tax consequences, and upon fluctuating market conditions. ss. A trial on the Intercompany Claims was completed before the District Court in October 1994. While District Court Judge Farnan was preparing his decision, the parties asked the Court not to rule pending these confirmation proceedings. Given the positions of the parties, appeals from any decision by the District Court would be certain to further delay the achievement of reorganization for TCO and Columbia. Accordingly, only a global settlement of all issues relating to the Intercompany Claims will permit a prompt emergence of TCO and Columbia from Chapter 11 proceedings. tt. Pursuant to the Columbia Omnibus Settlement, which is defined in Section I.A.34 of the Plan, the numerous legal and factual issues raised by the Intercompany Claims Litigation are settled and the Intercompany Claims are fully satisfied, released and discharged. The approval of the Columbia Omnibus Settlement is both a condition precedent to and the cornerstone of the Plan and the Columbia Plan. The Columbia Omnibus Settlement permits Columbia to retain ownership of TCO, provides TCO's Creditors an opportunity to receive substantial cash payments upon the Effective Date and permits TCO and Columbia to emerge from bankruptcy proceedings without further extended delay. - 21 - 22 uu. In addition to settling the Intercompany Claims Litigation, the Columbia Omnibus Settlement provides other substantial benefits to TCO including, inter alia, (i) Columbia's assistance in monetizing the TCO Plan; (ii) Columbia's provision of a guaranty of payment of the distributions to be made to the holders of Allowed Claims under the Plan; (iii) Columbia's provision of the Columbia Customer Guaranty and (iv) the settlement of contentious litigation with TCO's Customer Creditors, Producer Creditors and other Creditors. vv. The settlement of the Intercompany Claims Litigation and the Columbia Omnibus Settlement are collectively the result of arduous arms-length negotiations among TCO, Columbia, their respective official committees and various other interested parties. As evidenced by the arguments of counsel at the Confirmation Hearing, the TCO Creditors' Committee and Customers' Committee and the Columbia Creditors' Committee and Equity Committee fully support the resolution of all issues raised by the Intercompany Claims Litigation, and of other TCO Creditor-related disputes in the manner provided for by the Columbia Omnibus Settlement. TCO and its Creditors' Committee have demonstrated that the terms of the settlement of the Intercompany Claims Litigation and the Columbia Omnibus Settlement are fair, equitable and reasonable, and that the benefits of these settlements greatly outweigh the risks and any rewards inherent in continuing to litigate these issues. - 22 - 23 ww. In accordance with Section 1123(b)(3) of the Bankruptcy Code and Bankruptcy Rule 9019(a), approval of the settlement of the Intercompany Claims Litigation and the Columbia Omnibus Settlement are in the best interests of TCO, its Estate, its Creditors and Columbia. THE CUSTOMER SETTLEMENT PROPOSAL xx. Approximately 450 Claims were filed against the Estate relating to or arising from TCO's contracts with its Customers for sales, transportation, gas storage and similar services, totalling approximately $550 million plus unliquidated amounts. In addition, TCO scheduled other Customer-related Claims. Customers have asserted trust fund, recoupment, setoff and other regulatory-based theories as a basis for obtaining priority over General Unsecured non-Customer Claims. yy. TCO meanwhile has asserted its entitlement to recover significant costs from its Customers under FERC Order No. 636 and on other grounds. TCO has and continues to assert that these obligations owing from its Customers include exit fees paid by TCO pursuant to settlements for the termination of transportation agreements with its upstream pipeline suppliers, gas supply realignment costs associated with contracts TCO rejected in its Reorganization Case and other pre- and/or post-petition costs TCO is authorized to recover under the regulatory scheme of the Natural Gas Act and the Natural Gas Policy Act. - 23 - 24 zz. Since November 1, 1993, TCO has negotiated settlements with its upstream pipeline suppliers including Tennessee Gas Pipeline Company, Transcontinental Pipe Line Corporation, Natural Gas Pipeline Company, Ozark Gas Transmission System, Wyoming Interstate Company, Ltd., Trailblazer Pipeline Company, and Overthrust Pipeline Company (collectively, the "Settling Upstream Pipelines") whereby each of the parties' respective pre-petition upstream contracts would be terminated, in whole or in part, and TCO would pay exit fees and other costs (the "Exit Fees") to each Settling Upstream Pipeline (the "Exit Fee Settlements"). TCO has also negotiated settlements with upstream pipeline suppliers Texas Eastern Transmission Corporation, Panhandle Eastern Pipe Line Company, Texas Gas Transmission Corporation and Transcontinental Pipe Line Corporation whereby TCO assumed such contracts and assigned them to its Customers without the payment of exit fees and contract rejection costs (the "Assumption and Assignment Settlements"). Each of the Exit Fee Settlements and Assumption and Assignment Settlements has been approved by prior orders of the Court and, in the case of the Exit Fee Settlements, by FERC. Each of the Exit Fee Settlements is subject to TCO's recovery of the full amount of the Exit Fees, and FERC's issuance of a final order approving such settlements which is not subject to appeal. On October 3, 1995, TCO notified the Creditors' Committee, the Customers' Committee and four of the Settling Upstream Pipelines of - 24 - 25 TCO's intention to assume the Exit Fee Settlements and to perform under such agreements pursuant to the provisions of their Exit Fee Settlements. TCO's Creditors' and Customers' Committees have conditionally objected to such assumption, but such objections will be withdrawn if the Customer Settlement Proposal is approved and the Plan is confirmed. aaa. Customers' Claims against TCO and TCO's assertion of its entitlement to recover costs against Customers, including the Exit Fees, in TCO's compliance filings with FERC in respect of Order No. 636 and other orders issued by the FERC, have generated prolonged and extensive litigation before this Court, the FERC and various levels of appellate courts during the course of the Reorganization Case. bbb. The Customer Settlement Proposal, the terms of which are embodied in that certain Stipulation and Agreement dated as of April 17, 1995 annexed to the Plan as Exhibit E, reflects a comprehensive settlement of the Customer Claims asserted against the Estate and the cost recovery issues asserted by TCO against Customers, including, but not limited to, a settlement of substantially all Refund Disputes, an agreement that all but $11.5 million of the Exit Fees and other upstream pipeline costs will be recoverable by TCO from Customers and, in a modified form, the 1990 Rate Case Settlement. TCO does not view the provision that it absorb $11.5 million of Exit Fees and other upstream pipeline costs as inconsistent with, or requiring - 25 - 26 modification of, the Exit Fee Settlements. The Customer Settlement Proposal contains numerous schedules which reflect, among other matters, the principal amount and, where applicable, the pre- and post-petition interest components of the Refund Claim to be Allowed for each Customer under the Customer Settlement Proposal and the Plan. The schedules also reflect the costs to be collected or recovered by TCO from each Customer. ccc. Approval of the Customer Settlement Proposal by the FERC and this Court is a condition precedent to confirmation of the Plan, as is approval of the settlement of the Refund Disputes with Accepting 3.2 Claimants and the 1990 Rate Case Settlement as modified, both of which settlements are embodied within the Customers Settlement Proposal. On June 15, 1995, the FERC entered an order approving those aspects of the Customer Settlement Proposal subject to its jurisdiction. ddd. The Customer Settlement Proposal is a result of the arms-length negotiations conducted in numerous settlement meetings held over an extended period of time among TCO, the Customers' Committee, TCO's Customers, and many state regulatory and consumer agencies. The Proposal represents a delicate balancing of multiple and diverse interests that will likely collapse if its provisions are modified or conditioned. It significantly facilitates the viability of the Plan and TCO's emergence from Chapter 11 proceedings as it resolves burdensome and costly disputes - 26 - 27 that would otherwise take years to resolve through litigation. As to all Accepting Class 3.2 Claimants (and all other Supporting Parties as defined in the Customer Settlement Proposal) the Proposal will resolve, inter alia, the amount and priority of substantially all of the hundreds of millions of dollars of regulatory Refund Claims asserted by Customers against TCO, and the Estate's entitlement to recover hundreds of millions of dollars of costs from Customers. eee. Pursuant to Section 1123(b)(3) of the Bankruptcy Code and Bankruptcy Rule 9019(a), TCO has demonstrated that the Customer Settlement Proposal as embodied in the treatment to be provided to Customers under the Plan is fair and equitable and in the best interests of TCO, its Estate, its Creditors and Stockholder. SETTLEMENT OF PRODUCER CLAIMS fff. Producers filed approximately 2,500 proofs of claim against TCO asserting, inter alia, damages resulting from TCO's rejection of over 5,000 gas purchase contracts pursuant to which TCO had purchased natural gas for resale to its Customers. In the aggregate, the proofs of claim assert Claims in excess of $13.0 billion. Producers have also filed other Claims against TCO based on pre-petition contractual disputes relating to, inter alia, pricing, take-or-pay obligations, underpayments for gas taken by TCO, production-related cost reimbursements, and other issues. Many Producer Claims were filed with unliquidated amounts, - 27 - 28 or without setting forth the basis for the liability asserted or for the amounts claimed as owed by TCO. ggg. Throughout the Reorganization Case, TCO has taken the position that many of the Producer Claims significantly overstated the value of their respective Claims and that, as a general matter, the Claims as filed were premised upon a variety of different theories as to the appropriate measure of damages which contained conflicting assumptions as to common facts or generally applicable legal principles. hhh. In March 1992, TCO filed with the Court an objection to the Producer Claims and a motion which sought to have the Court establish procedures for the quantification of Producer Claims, both contract rejection and other, on a fair, consistent and efficient basis. By orders entered on August 27, 1992 and October 9, 1992 (collectively, the "Estimation Orders") the Court established procedures for the estimation of Producer Claims and appointed a Claims Mediator. The two-stage Claims Estimation Procedures expressly invited settlement negotiations and the liquidation of Claims based on agreements between the parties, subject to supervision by the Claims Mediator and the de novo review and approval of the Bankruptcy Court. iii. On October 13, 1994, following extensive discovery, briefing and numerous evidentiary hearings with respect to identifying and resolving issues generic to all or certain kinds of Producer Claims, the Claims Mediator issued his initial report regarding the recommended determi- - 28 - 29 nation of generic issues for, and the methodology for recalculating and quantifying, contract rejection Claims (the "Initial Report"). The Initial Report did not address Claim specific issues unique to each individual Producer's Claims, determinations which were required to be resolved in order to finally estimate and recommend Allowed Claim amounts for each Producer's Claims. The Claims Mediator issued a Supplement to his Initial Report in February 1995. jjj. Commencing in February 1995, TCO and Columbia engaged in a series of meetings with individual Producer Creditors holding the larger Claims against TCO to present the concepts for a global settlement of Producer Claims. As a result of these meetings, Producers asserting Claims in the aggregate amount of $10.0 billion and representing in the aggregate over 80% of TCO and Columbia's estimate of the aggregate Allowed amount of all Producer Claims (the "Initial Accepting Producers") reached an agreement with TCO and Columbia with respect to, inter alia, the Allowed amount of the Claims of each Initial Accepting Producer and the proposed treatment of their Claims under a reorganization plan (the "Initial Producer Settlement"). The Initial Producer Settlement, which was approved by this Court by order dated June 16, 1995, is contingent upon confirmation and consummation of the Plan occurring no later than June 28, 1996. kkk. With respect to each Producer Creditor which is not a party to the Initial Producer Settlement (each, a - 29 - 30 "Non-Settling Producer"), the Plan reflects at Schedule I thereof ("Schedule of Original Settlement Values"), an offer made by TCO to settle the Claims of each such Producer by proposing a specific Allowed Claim amount for such Producer's Claims (each, a "Settlement Value"). TCO and the Creditors' Committee negotiated the principles and methodology utilized to generate the Settlement Values proposed for each Non-Settling Producer. The record before this Court demonstrates that the Settlement Values with respect to contract rejection Claims utilize parameters and assumptions generated by or based upon the Claims Mediator and incorporate proposed compromises with respect to a number of complex, disputed issues which have not yet been fully resolved by the Claims Estimation Procedures. lll. Since the Court's approval of the Initial Producer Settlement, additional Producers have signed settlement agreements with TCO agreeing to Settlement Values at the level proposed in Schedule III to the Plan, or, in certain instances, at different levels negotiated by the parties ("Producer Settlement Agreements"). By orders dated August 22, 1995, September 29, 1995 and November 2, 1995, this Court has approved 293 Producer Settlement Agreements which have resolved Disputed Producer Claims of in excess of 300 Producers. With the Initial Producer Settlement, this Court has approved agreements between TCO and Producers - 30 - 31 representing in the aggregate approximately 91.7% of the Original Settlement Values proposed for all Producers. mmm. In addition, pursuant to the Confirmation Procedures Order and as reflected on the form of (i) the Class 3.3 Ballot transmitted to Producers entitled to vote on the Plan, and (ii) the Settlement Amount Form transmitted to Producers holding Claims not entitled to vote on the Plan, each holder of a Disputed Producer Claim was provided with the opportunity to accept or reject the Settlement Value proposed by TCO through the Plan solicitation process. As demonstrated by TCO at the Confirmation Hearing, and consistent with the Plan Vote Certification, Producers representing an additional 1% of the Original Settlement Values proposed for all Producers have elected on their Class 3.3 Ballots or Settlement Amount Forms, as applicable, to accept their proposed Settlement Values. nnn. Pursuant to Section 1123(b)(3) of the Bankruptcy Code and Bankruptcy Rule 9019(a), TCO has demonstrated that these settlements with Producers of their Disputed Claims are fair and equitable and in the best interests of TCO, its Estate, its Creditors and stockholder. SETTLEMENT OF DISPUTED GENERAL UNSECURED CLAIMS ooo. The Plan contains at Schedule II thereof an offer to settle at specific Allowed Claim amounts (each, an "Allowance Amount") each Disputed General Unsecured Claim. The Allowance Amount proposed for each General Unsecured Claim that had not become an Allowed Claim prior to the - 31 - 32 Voting Record Date reflects TCO's extensive review of its books and records, discussions with a representative of virtually every Creditor holding a Disputed General Unsecured Claim, and appropriate legal analysis. ppp. Pursuant to the Confirmation Procedures Order, and as reflected on the form of (i) the Class 3.4 Ballot transmitted to holders of Disputed General Unsecured Claims entitled to vote on the Plan, and (ii) the Settlement Amount Form transmitted to such Creditors not entitled to vote on the Plan, each such Disputed General Unsecured Creditor was provided with the opportunity to accept or reject the Allowance Amount proposed by TCO. As demonstrated by TCO at the Confirmation Hearing, and consistent with the Plan Vote Certification, 89 Creditors holding Disputed General Unsecured Claims elected on their Class 3.4 Ballot or Settlement Amount Form, as applicable, to accept the proposed Allowance Amount. qqq. Pursuant to Section 1123(b)(3) of the Bankruptcy Code and Bankruptcy Rule 9019(a), TCO has demonstrated that these settlements with General Unsecured Creditors of their Disputed Claims are fair and equitable and in the best interests of TCO, its Estate, its Creditors and stockholder. MODIFICATIONS TO THE PLAN rrr. The modifications to the Plan proposed by TCO prior to, at or in connection with the Confirmation Hearing (the "Plan Modifications") have been reviewed by and - 32 - 33 consented to by the Creditors' Committee, the Customers' Committee, Columbia and the Columbia Equity and Creditors' Committees. The Plan Modifications do not adversely change the treatment of the Claim of any Creditor who has not in writing accepted the proposed Plan Modifications. Therefore, in accordance with Section 1127 of the Bankruptcy Code and Bankruptcy Rule 3019, the Plan is deemed accepted by all Creditors who have previously accepted the Plan. FINDING THAT THE PLAN IS CONFIRMABLE BASED UPON, INTER ALIA, ALL OF THE FOREGOING FINDINGS OF FACT AND CONCLUSIONS OF LAW, THE COURT ORDERS THAT: 1. The Plan and each of its provisions, as modified to the limited extent set forth herein, are hereby confirmed in accordance with Section 1129 of the Bankruptcy Code. 2. The Plan is hereby deemed modified as follows: (a) Section III.A.1.b; Treatment of Unclassified Claims; Administrative Claims; Post-Petition Operational Claims Section III.A.1.b of the Plan is hereby amended and modified by deleting "." at the end of the paragraph and by adding the following text at the conclusion of Section III.A.1.b as follows: "; provided, however, that each Administrative Claim of the IRS for taxes shall be paid on the later of (i) the Effective Date, (ii) the 30th day after the date such Administrative Claim becomes an Allowed Claim, or (iii) as otherwise agreed between Reorganized TCO and the IRS." - 33 - 34 (b) Section III.B.3.d; Treatment of Classified Claims; Class 3 Claims - Unsecured Claims; Class 3.3 - Producer Claims Section III.B.3.d of the Plan is hereby amended and modified by deleting the last full paragraph of Section III.B.3.d in its entirety and replacing it with the following text: "All distributions to holders of Allowed Class 3.3 Claims shall be made in cash, except that Reorganized TCO, with the prior consent of Reorganized Columbia, shall have the option to pay any amount due to any Rejecting Producer in excess of the Target Distribution Percentage of the Original Settlement Value proposed for its Claim (the "Excess Amount"), in the form of freely marketable common stock of Reorganized Columbia having a fair market value equal to the amount of the distribution that Reorganized TCO has elected not to pay in cash. Reorganized TCO and Reorganized Columbia shall determine on the last day of each Calendar Quarter following the Effective Date whether to pay the Excess Amount due to any Rejecting Producer whose Claim has become Allowed during that Calendar Quarter by issuing such above-referenced common stock (the "Securities Election"). Within five (5) days after the end of such Calendar Quarter, Reorganized TCO and Reorganized Columbia shall deliver a written notice by facsimile transmission and by overnight Federal Express delivery to each Rejecting Producer as to whom Reorganized TCO and Reorganized Columbia have made the Securities Election, with a copy to counsel for the Creditors' Committee. Each such Rejecting Producer shall then deliver a written notice (executed by a duly-authorized representative) by facsimile transmission with a copy to counsel for the Creditors' Committee, within twelve (12) days after the end of such Calendar Quarter (or, if the twelfth day is not a Business Day, then on the next Business Day) to Reorganized TCO and Reorganized Columbia indicating by irrevocable election (the "Election Notice") whether such Rejecting Producer intends to - 34 - 35 retain the common stock to be delivered, or elects to sell that common stock. If a Rejecting Producer fails to deliver the Election Notice within the time specified, it shall be deemed to have elected to retain such common stock. If any such Rejecting Producer elects to sell the common stock, it thereby authorizes Reorganized Columbia and Reorganized TCO to deliver the amount of common stock necessary to pay the Excess Amount to a broker- dealer designated by Reorganized Columbia and Reorganized TCO for the account of such Rejecting Producer. The broker-dealer shall sell for the account of the Rejecting Producer (in one or more lots) or purchase from the Rejecting Producer the common stock in a single lot, on or prior to the twenty-seventh day after the end of that Calendar Quarter and deliver the net proceeds of such sale or sales or the purchase price of such lot or lots, in cash, up to the Excess Amount, to the Rejecting Producer on the applicable settlement date or dates, but not later than the thirtieth day after the end of that Calendar Quarter (or, if the thirtieth day is not a Business Day, then on the next Business Day). If there is any deficiency between the amount of such net proceeds or such purchase price and the Excess Amount due, Reorganized Columbia and Reorganized TCO shall be jointly and severally obligated to pay the Rejecting Producer, in cash, such deficiency amount on the thirtieth day after the end of such Calendar Quarter (or, if the thirtieth day is not a Business Day, then on the next Business Day). If there is any excess of such net proceeds or purchase price over the Excess Amount, Reorganized Columbia and Reorganized TCO shall be entitled to receive such excess. If any such Rejecting Producer elects to retain the common stock, the amount of common stock to be delivered to such Rejecting Producer shall be delivered on the thirtieth day after the end of the applicable Calendar Quarter (or, if the thirtieth day is not a Business Day, then on the next Business Day), and shall be determined as follows: The fair market value of such common stock shall be deemed to be the midpoint between the high - 35 - 36 and the low price for Reorganized Columbia common stock as reported on the consolidated tape of the New York Stock Exchange on the last New York Stock Exchange trading day prior to the date of distribution." (c) Section III.B.3.e; Treatment of Classified Claims; Class 3 Claims - Unsecured Claims; Class 3.4 - General Unsecured Claims Section III.B.3.e of the Plan is hereby amended and modified by deleting the last full paragraph of Section III.B.3.e in its entirety and by replacing it with the following text: "All distributions to holders of Allowed Class 3.4 Claims shall be made in cash, except that Reorganized TCO, with the prior consent of Reorganized Columbia, shall have the option to pay any amount due to any holder of a General Unsecured Claim that does not accept the Allowance Amount proposed for its Claim (a "Rejecting General Unsecured Creditor") in excess of the Target Distribution Percentage of the Allowance Amount proposed for its Claim (the "Class 3.4 Excess Amount"), in the form of freely marketable common stock of Reorganized Columbia having a fair market value equal to the amount of the distribution that Reorganized TCO has elected not to pay in cash. Reorganized TCO and Reorganized Columbia shall determine on the last day of each Calendar Quarter following the Effective Date whether to pay the Excess Amount due to any Rejecting General Unsecured Creditor whose Claim has become Allowed during that Calendar Quarter by issuing such above-referenced common stock (the "Securities Election"). Within five (5) days after the end of such Calendar Quarter, Reorganized TCO and Reorganized Columbia shall deliver a written notice by facsimile transmission and by overnight Federal Express delivery to each Rejecting General Unsecured Creditor as to whom Reorganized TCO and Reorganized Columbia have made the Securities Election, with a copy to counsel for the Creditors' Committee. Each such Rejecting General Unsecured - 36 - 37 Creditor shall then deliver a written notice (executed by a duly-authorized representative) by facsimile transmission with a copy to counsel for the Creditors' Committee, within twelve (12) days after the end of such Calendar Quarter (or, if the twelfth day is not a Business Day, then on the next Business Day) to Reorganized TCO and Reorganized Columbia indicating by irrevocable election (the "Election Notice") whether such Rejecting General Unsecured Creditor intends to retain the common stock to be delivered, or elects to sell that common stock. If a Rejecting General Unsecured Creditor fails to deliver the Election Notice within the time specified, it shall be deemed to have elected to retain such common stock. If any such Rejecting General Unsecured Creditor elects to sell the common stock, it thereby authorizes Reorganized Columbia and Reorganized TCO to deliver the amount of common stock necessary to pay the Class 3.4 Excess Amount to a broker-dealer designated by Reorganized Columbia and Reorganized TCO for the account of such Rejecting General Unsecured Creditor. The broker-dealer shall sell for the account of the Rejecting General Unsecured Creditor (in one or more lots) or purchase from the Rejecting General Unsecured Creditor the common stock in a single lot, on or prior to the twenty-seventh day after the end of that Calendar Quarter and deliver the net proceeds of such sale or sales or the purchase price of such lot or lots, in cash, up to the Claim 3.4 Excess Amount, to the Rejecting General Unsecured Creditor on the applicable settlement date or dates, but not later than the thirtieth day after the end of that Calendar Quarter (or, if the thirtieth day is not a Business Day, then on the next Business Day). If there is any deficiency between the amount of such net proceeds or such purchase price and the Class 3.4 Excess Amount due, Reorganized Columbia and Reorganized TCO shall be jointly and severally obligated to pay the Rejecting General Unsecured Creditor, in cash, such deficiency amount on the thirtieth day after the end of such Calendar Quarter (or, if the thirtieth day is not a Business Day, then on the next Business Day). If there is any excess of such net proceeds or purchase price over the - 37 - 38 Class 3.4 Excess Amount, Reorganized Columbia and Reorganized TCO shall be entitled to receive such excess. If any such Rejecting General Unsecured Creditor elects to retain the common stock, the amount of common stock to be delivered to such Rejecting General Unsecured Creditor shall be delivered on the thirtieth day after the end of the applicable Calendar Quarter (or, if the thirtieth day is not a Business Day, then on the next Business Day), and shall be determined as follows: The fair market value of such common stock shall be deemed to be the midpoint between the high and the low price for Reorganized Columbia common stock as reported on the consolidated tape of the New York Stock Exchange on the last New York Stock Exchange trading day prior to the date of distribution." (d) Section X.B; Discharges, Releases, Settlement of Claims and Injunction; Injunction Section X.B of the Plan is hereby amended and modified by adding the following text to the end of the first full paragraph thereof: "In the event of a default in the Plan with respect to payments to the IRS, nothing in the Plan or the Confirmation Order shall be construed as prohibiting the IRS from enforcing any rights it may have under applicable law, provided, however, that this provision shall not be deemed to define or expand any such rights that may be held by the IRS." Section X.B of the Plan is hereby amended and modified by deleting the last sentence of the second full paragraph of Section X.B in its entirety and by replacing it with the following text: "Notwithstanding the foregoing, nothing contained in the Plan shall preclude Reorganized TCO from exercising any rights it may have under applicable law to amend, modify or terminate the Retirement Plan." - 38 - 39 (e) Section X.D; Discharges, Releases, Settlement of Claims and Injunctions; Releases Section X.D of the Plan is hereby amended and modified by deleting the last sentence of the second full paragraph of Section X.D in its entirety and by replacing it with the following text: "Notwithstanding the foregoing, nothing contained in the Plan shall preclude Reorganized TCO from exercising any rights it may have under applicable law to amend, modify or terminate the Retirement Plan." (f) Section X.D; Discharges, Releases, Settlement of Claims and Injunction; Releases Section X.D of the Plan is hereby amended and modified by inserting after the words "Refund Disputes" in the tenth line from the end of the first full paragraph thereof, the following text: "; provided further, however, that nothing herein shall be construed to release the Releasees from . . ." 3. For the reasons set forth on the record of the Confirmation Hearing, each and every Confirmation Objection, except for the Enterprise Energy Objection and the objection asserted in the Producer Objection with respect to the potential payment of the Excess Amount (as defined in paragraph 2 hereof) by the distribution of freely marketable common stock of Reorganized Columbia, to the extent not withdrawn, is hereby overruled. - 39 - 40 4. The Enterprise Energy Objection is sustained. The Bank One Ohio/Vorys Sater Claim is hereby reclassified and treated under the Plan as a Class 3.4 Claim. 5. Pursuant to Section 1141(a) of the Bankruptcy Code, the Plan and its provisions are binding upon TCO, Reorganized TCO, any entity acquiring property under the Plan, any holder of a Claim against or Interest in TCO, and any other party-in-interest in the Reorganization Case, and any heir, executor, administrator, successor and assign thereof, regardless of whether the Claim or Interest of such holder or obligation of any party-in-interest is in a Class that is impaired under the Plan, regardless of whether such Creditor, stockholder or other party-in-interest has accepted the Plan, and regardless of whether such Creditor, stockholder or other party-in-interest has filed a proof of claim. 6. Subject to the provisions of the Plan and this Confirmation Order, TCO will, as Reorganized TCO, continue to exist after the Effective Date, as a Delaware corporation with all the powers of a corporation under applicable law and without prejudice to any right to alter or terminate such existence (whether by merger or otherwise) under Delaware Law. 7. Consistent with the Plan, the following agreements and documents, substantially in the form of the agreements and documents which are annexed as Exhibits to the Plan or which were introduced into evidence at the - 40 - 41 Confirmation Hearing in substantially final form, including all the exhibits, attachments and schedules annexed thereto, and all terms and provisions thereof (collectively, the "Reorganization Documents"), are hereby approved in all respects: a. Amended and Restated Certificate of Incorporation of Columbia Gas Transmission Corporation; b. The Customer Settlement Proposal; c. The Amended and Restated Indenture dated ______________________, 1995 (the "Restated Indenture"). 8. TCO and Reorganized TCO, and their directors, officers and agents are hereby authorized to (i) modify the TCO Indenture of Mortgage and Deed of Trust dated August 30, 1985, and (ii) enter into, execute, deliver, file and/or implement the Reorganization Documents and other documents and instruments substantially consistent therewith or incidental thereto and any amendments, supplements or modifications to such Reorganization Documents as may be appropriate, and to take such other steps and perform such other acts as may be necessary to implement and effectuate the Reorganization Documents, the Plan, all other related instruments and documents and this Confirmation Order, and to satisfy all other conditions precedent to the implementation and effectiveness of the Plan. - 41 - 42 9. The total amount of the Class 2.1 Claim as of the Effective Date shall include the sum of (i) the unpaid principal amount of the Columbia Secured Claim in respect of the First Mortgage Bonds, (ii) the unpaid principal amount plus accrued and unpaid pre-petition interest in respect of the Inventory Financing Agreement, (iii) all amounts to which Columbia is entitled under the Cash Collateral Orders, (iv) all amounts for reasonable costs, fees and charges pursuant to Section 506 of the Bankruptcy Code approved by the Court and (v) post-petition interest on the unpaid principal and interest identified in subsections (i) and (ii) of this paragraph 8 in the manner articulated in Exhibit B to the Plan. The payment of post-petition interest and the specific method of calculating post-petition interest as set forth in Exhibit B are hereby approved. 10. TCO is hereby authorized to issue new secured debt securities in respect of the Class 2.1 Claim under the Plan on the terms set forth on that certain Restated Indenture which terms are hereby approved. 11. The settlement and release of the Intercompany Claims in the manner provided for by the Plan, and more specifically, in accordance with the Columbia Omnibus Settlement embodied in the Plan and the Columbia Plan are hereby approved as being fair and equitable and in the best interests of TCO and its Estate. TCO or Reorganized TCO, as applicable, is authorized and directed - 42 - 43 to perform its obligations under the settlement of the Intercompany Claims, including but not limited to filing the Stipulation of Dismissal with Prejudice with the District Court, and taking such actions as may be necessary by its terms to obtain District Court approval thereof. 12. As of the Effective Date, and subject to both (i) confirmation of the Plan, and (ii) the Stipulation of Dismissal with Prejudice becoming effective according to its terms, the Intercompany Claims and all claims arising from or related to the transactions which are the subject of the Intercompany Claims shall be settled, released and discharged in their entirety, pursuant to the terms of the Plan, provided, however, that the entry of this Order shall not affect the District Court's retention of jurisdiction with respect to its order dated October 4, 1995 (the "October 4 Order") rendered on the Motion to Unseal Judicial Records filed by the Customers' Committee and any further order of the District Court relating thereto. 13. The Columbia Omnibus Settlement is hereby approved as being fair and equitable and in the best interests of TCO and its Estate. TCO and Reorganized TCO, as applicable, are authorized and directed to perform their obligations under the Columbia Omnibus Settlement. 14. The Customer Settlement Proposal is hereby approved as being fair and equitable and in the best interests of TCO and its Estate. TCO and Reorganized TCO, as applicable, are authorized and directed to perform their - 43 - 44 obligations under the Customer Settlement Proposal including but not limited to (i) TCO's distribution of funds in the RIA Account to Accepting 3.2 Claimants in the manner provided for in the Customer Settlement Proposal, and (ii) TCO's dissolution of the RIA Account. 15. Without limiting the generality of the preceding paragraph, the settlement of (i) the Refund Disputes with Accepting 3.2 Claimants and (ii) the 1990 Rate Case, as modified by and in accordance with the Customer Settlement Proposal and the Plan, are hereby approved. 16. This Court's prior approval of each of the Exit Fee Settlements is hereby affirmed provided, however, that TCO shall absorb $11.5 million of Exit Fees and other upstream pipeline costs, in accordance with the provisions of the Customer Settlement Proposal. TCO is authorized to assume each of the Exit Fee Settlements as being in the best interests of TCO and its Estate. TCO and Reorganized TCO, as applicable, are authorized and directed to perform their obligations under each of the Exit Fee Settlements including but not limited to the payment in full of the Exit Fees as described therein. The objections filed related to the assumption of the Exit Fee Settlements are hereby overruled to the extent not otherwise withdrawn. 17. Pursuant to the Customer Settlement Proposal and the Plan, the Allowed Refund Claim amount of each Accepting 3.2 Claimant shall be the sum of the principal amount and, where applicable, pre-and post-petition interest - 44 - 45 components of each such Customer's Allowed Refund Claim as reflected on the schedules annexed to the Customer Settlement Proposal. 18. In accordance with the Customer Settlement Proposal, the Waiver Agreement and the Plan, each Accepting 3.2 Claimant agrees, inter alia, to accept the treatment provided to such claimant under the Plan in full settlement, satisfaction, discharge and termination of each and every one of such Accepting 3.2 Claimant's Refund Claims and Refund Disputes. 19. In accordance with the Customer Settlement Proposal, the Waiver Agreement and the Plan (each, a "Nullification Condition"), each Accepting 3.2 Claimant shall be entitled to nullify and void the Waiver Agreement executed by such Claimant and rescind the release granted thereby, by providing written notification thereof (the "Nullification Notice") not later than forty-five (45) days after service by TCO on each Accepting 3.2 Claimant of a notice stating that a Nullification Condition has occurred, and setting forth the person to whom the Nullification Notice should be sent. 20. Reorganized TCO is authorized pursuant to Section III.B.3.c of the Plan to make the following payments within 45 days after the Effective Date solely from post-Effective Date income of Reorganized TCO: (i) a lump sum payment in the amount of $1.3 million to the members of the Customers' Committee on July 17, 1995 (the "Eligible - 45 - 46 Customers' Committee Members") in recognition, inter alia, of the substantial and valuable services and contributions the Customers' Committee has made to the formulation and structure of the Plan, provided, that such payment will be shared pro rata solely among the Eligible Customers' Committee Members, and (ii) a payment in the amount of $225,000 to UGI Utilities Inc. ("UGI"), a former member of the Customers' Committee in respect of 50% of the expenses incurred by UGI while serving on the Customers' Committee. 21. As of the Effective Date, TCO shall withdraw, dismiss and waive its rights to recover or to seek recovery of any additional gas supply realignment costs, and certain other costs from Supporting Parties to the Customer Settlement Proposal in the manner and to the extent expressly provided for in the Customer Settlement Proposal. 22. Each Producer that accepted the Settlement Value proposed by TCO as the Allowed amount for such Producer's Claim by properly executing a Class 3.3 Ballot or Settlement Amount Form, as applicable, and returning the same to the Balloting Agent whether prior to the Voting Deadline or subsequent to the Voting Deadline but prior to the date hereof, shall have an Allowed Claim against the Estate for all purposes under the Plan including distributions, in an amount equal to the Settlement Value, which Settlement Value shall represent a settlement of all of the Claims, listed by number, and all of the contracts, listed by number, with respect to such Producer on Schedule - 46 - 47 III to the Plan. The Schedule of Accepting Producers annexed hereto as Exhibit "A" lists each such Producer. The Settlement Values accepted by Producers through the Plan solicitation process are hereby approved as being fair and reasonable and in the best interests of TCO and the Estate. 23. Each Disputed General Unsecured Creditor that accepted the Allowance Amount proposed by TCO as the Allowed Amount for such Creditor's Claim by properly executing a Class 3.4 Ballot or Settlement Amount Form, as applicable, and returning the same to the Balloting Agent whether prior to the Voting Deadline or subsequent to the Voting Deadline but prior to the date hereof, shall have an Allowed Claim against the Estate for all purposes under the Plan including distributions, in an amount equal to the Allowance Amount, which Allowance Amount shall represent a settlement of all of the Claims, listed by number, with respect to such General Unsecured Creditor on Schedule II to the Plan. The Schedule of Accepting General Unsecured Creditors annexed hereto as Exhibit "B" lists each such General Unsecured Creditor. The Allowance Amounts accepted by Disputed General Unsecured Creditors through the Plan solicitation process are hereby approved as being fair and reasonable and in the best interests of TCO and the Estate. 24. In addition to the settlements and compromises referred to in this Confirmation Order, all other settlements, agreements and compromises provided for under the Plan, and all transactions, documents, instruments - 47 - 48 and agreements referred to therein, contemplated thereunder or executed and delivered therewith, and any amendments or modifications thereto in substantial conformity therewith, are hereby approved, and TCO and the other parties thereto are authorized and directed to enter into them and to perform thereunder according to their respective terms. 25. In accordance with Section III.B.3 of the Plan, if the Plan is not consummated, each Producer or General Unsecured Creditor that voluntarily reduced the amount of its Claim by accepting the Settlement Value or Allowance Amount proposed in settlement of each such Creditor's Claim (each a "Claim Reducing Creditor"), shall be entitled to nullify and void such Claim reduction by providing written notification thereof (the "Claims Reduction Nullification Notice") not later than forty-five (45) days after service by TCO on each Claim Reducing Creditor of a notice stating that the Plan shall not be consummated, and setting forth the person to whom the Claims Reduction Nullification Notice should be sent. 26. Except as otherwise provided for in the Plan or this Confirmation Order, pursuant to Section IV.H of the Plan, all employee and retiree benefit plans or programs in existence as of the Petition Date, including, but not limited to, the Retirement Plan, shall continue in full force and effect after the Effective Date at the level established by the terms of such retiree benefit plans for the duration of the period TCO has obligated itself to - 48 - 49 provide such benefits, subject to any right to amend, modify or terminate such retiree benefits under the terms of the applicable retiree benefit plan or applicable non-bankruptcy law. 27. Pursuant to Section II.B.3 of the Plan, TCO or Reorganized TCO, as applicable, is hereby authorized and directed to turn over the East Lynn Condemnation Award to CNR on the Effective Date. 28. Except as otherwise provided in (i) the Plan, or in any contract, instrument, release, indenture or other agreement or document entered into or created in connection with the Plan, or this Confirmation Order, on or after the Effective Date, all property of the Estate, and any property acquired by TCO or Reorganized TCO under any provisions of the Plan not being held for distribution pursuant to the terms of the Plan shall vest in and be retained by Reorganized TCO free and clear of all Claims and interests in accordance with Sections 1141(b) and (c) of the Bankruptcy Code. On and after the Effective Date, Reorganized TCO may operate its business and may use, acquire and dispose of property and compromise or settle any claims against it without supervision or approval by this Court and free of any restrictions of the Bankruptcy Code or Bankruptcy Rules, other than those restrictions expressly imposed by the Plan and this Confirmation Order. 29. Distributions required to be made to the holders of Allowed Claims against, and to the holder of - 49 - 50 Allowed Interests in, TCO shall be made to such Persons as provided (i) in the Plan, including the Settlement Agreements embodied therein, and this Confirmation Order, and (ii) any other orders entered by this Court governing the timing of distributions and the procedures for resolving multiple Claims or disputes over ownership of Claims and entitlements to distributions. The record date for determining which holders of Allowed Claims and the Allowed Interest are entitled to participate in the distributions pursuant to the Plan shall be 5:00 p.m. Eastern Time on November 15, 1995 (the "Distribution Record Date"), provided, however, that the distribution record date for Producer Claims which are the subject of that certain Motion for an Order Authorizing TCO to Withdraw Payment of Disputed Producer Claims and Consolidating Such Claims Until the Proper Payee Has Been Determined shall be the first date on which (i) the Claim is allowed, and (ii) there shall have been either (a) a final determination made by this Court or another court of competent jurisdiction as to the proper payee or payees or as to the proper allocation of payment among the disputing parties, or (b) a submission by the disputing parties to TCO of a binding written agreement or letter of direction among all of the parties to the dispute stipulating as to the proper payee or payees or otherwise providing for a reasonable method of payment for the disputed funds. TCO and Reorganized TCO are hereby authorized to recognize and deal with for all purposes under - 50 - 51 the Plan, only those Persons that are holders of Allowed Claims as reflected, as of the Distribution Record Date, on (i) the proofs of claim or any amendments thereto filed with Poorman-Douglas, TCO's claims agent, (ii) if no proof of claim was filed in respect of such Claim, TCO's Schedule of Liabilities or other books and records, or (iii) any transfers of Claims filed pursuant to Bankruptcy Rule 3001(e) on or prior to the Distribution Record Date of which Poorman-Douglas has received written notice as of the Distribution Record Date. 30. This Confirmation Order shall constitute all approvals and consents required, if any, by the laws, rules or regulations of any state or any other governmental authority with respect to the implementation or consummation of the Plan and any other documents, instruments or agreements, and other acts referred to in or contemplated by the Plan, the Reorganization Documents, and any other documents, instruments or agreements, any amendments or modifications thereto and any other acts that may be necessary or appropriate for the implementation or consummation of the Plan. 31. Subject to changes in the ordinary course of TCO's business, pursuant to Section V.B.2 of the Plan, on the Effective Date the following persons shall serve as members of the board of directors of Reorganized TCO: (a) Oliver G. Richard III (b) Peter M. Schwolsky - 51 - 52 (c) Michael W. O'Donnell (d) James P. Holland (e) R. Larry Robinson, and (f) Mark P. O'Flynn Such directors shall remain in office until their successors are duly elected and qualified, or until their earlier resignation, removal or death, subject to the terms of the Amended and Restated Certificate of Incorporation, TCO's by-laws and the corporate law of the State of Delaware. EXECUTORY CONTRACTS 32. Pursuant to Section VII.A of the Plan, and except as otherwise provided in the Plan or in any contract, instrument, release, indenture, agreement or document entered into in connection with the Plan, and in accordance with Section 1123(b)(2) of the Bankruptcy Code, TCO will be deemed to have assumed as of the Effective Date each of its executory contracts which are identified on Exhibit "C" to this Order, which exhibit amends and modifies Exhibit 3A to the Disclosure Statement. Notwithstanding the foregoing, the treatment of executory contracts between TCO and its Customers shall be consistent with the treatment provided in Article XII of the Customer Settlement Proposal. In accordance with Section 1123(a)(5)(G) of the Bankruptcy Code, TCO is directed to cure all defaults respecting each assumed executory contract and unexpired lease, other than those set forth in Section 365(b)(2) of the Bankruptcy Code. - 52 - 53 32. The executory contracts listed on Exhibit "C" to this Order as contracts to be rejected, which exhibit amends and modifies Exhibit 3B to the Disclosure Statement, and all other executory contracts not listed on Exhibit 3 to the Disclosure Statement, or Exhibit "C" hereto, or otherwise previously disposed of by this Court or by operation of law, shall be deemed rejected as of the Effective Date. OBJECTIONS TO CLAIMS 33. Pursuant to Section VII.C of the Plan, any Claim for damages arising by reason of the rejection of an executory contract or unexpired lease will be forever barred and will not be enforceable against TCO, Reorganized TCO or its successors or assigns or the properties of any of them unless with respect to an Administrative Claim, a request for payment, or with respect to any other Claim, a proof of claim is filed and served on Reorganized TCO not later than thirty (30) days after the Effective Date. Reorganized TCO reserves its right to object to any request for payment or any proof of claim filed, provided, however, that Reorganized TCO shall file any objection to the allowance of the Claim not later than sixty (60) days after the Effective Date or as such time may be further extended by the Court. 34. Except as otherwise provided in Sections VI, VII. C or XII.A of the Plan, or this Confirmation Order, after the Effective Date, only Reorganized TCO shall have the authority to file objections, and shall have authority - 53 - 54 to settle, compromise, withdraw and/or litigate to judgment objections to Claims, including but not limited to Non-Ordinary Course Administrative Claims as set forth in Section VI.B.3 of the Plan, filed by TCO or Reorganized TCO, as applicable, subject to this Court's approval, provided, however, that the Creditors' Committee and Producers shall also have the right after the Effective Date to (i) file objections to Producer Claims held by Rejecting Producers, (ii) file objections to any proposed compromise or settlement of the Claim of any Producer, (iii) settle, compromise, withdraw, or litigate to judgment such objections, and (iv) participate in appeals from any such objections, subject to appropriate approvals of this Court, and provided further, however, that the Customers' Committee shall have the right after the Effective Date to (i) represent Customers' interests with respect to any appeal taken from the Confirmation Order, (ii) review proposed settlements of Customer Regulatory Claims held by Dissenting 3.2 Claimants, (iii) oversee the implementation of the Customer Settlement Proposal, and (iv) engage in such other activity on behalf of Customers' interest as agreed to by Reorganized TCO. Reorganized TCO shall file all such objections to Claims (other than Producer Claims) not later than one hundred and twenty (120) days after the Effective Date or as such time may be further extended by the Court. - 54 - 55 35. Without affecting the generality of the foregoing, with respect to all Rejecting Producer's Claims which are subject to the Claims Estimation Procedures: (i) all objections by TCO, Reorganized TCO and all other parties-in-interest to such Claims shall be governed by the Claims Estimation Procedures, or other orders of the Court, and (ii) the liquidation of such Claims before this Court shall be governed by the Claims Estimation Procedures, or by settlements or such other procedures as may be approved by this Court. PROFESSIONAL FEES 36. Applications for final allowance of compensation and reimbursement of expenses by Professionals or other entities pursuant to Sections 330, 331 or 503(b) of the Bankruptcy Code for services rendered before the Effective Date, including compensation requested pursuant to Section 503(b)(4) for making a substantial contribution in the Reorganization Case ("Final Fee Applications") shall be filed with the Court and served on Reorganized TCO, the U.S. Trustee and the Fee Examiner (the "Notice Entities") not later than sixty (60) days after the Effective Date, provided, however, that any Professional or other entity that fails to timely file an application for final allowance shall be forever barred from asserting such Claims against TCO or Reorganized TCO, provided, further, that any Professional that is subject to the Administrative Fee Order or other such order of the Bankruptcy Court as of the - 55 - 56 Effective Date may continue to receive compensation and reimbursement of expenses as provided therein for services rendered prior to the Effective Date. Objections to such fees filed by Reorganized TCO, the Customers' Committee, the Creditors' Committee and/or any party-in-interest to any Final Fee Application shall be due and hearings shall be held at such time and in such manner as shall be established by a further order of this Court. No applications for compensation need be filed for post-Effective Date services. 37. Except as otherwise expressly provided in the Plan or this Confirmation Order, the issuance of this Confirmation Order operates as a discharge, pursuant to Section 1141(d) of the Bankruptcy Code, as of the Effective Date, of all debts of, Claims against and Interests in TCO that arose prior to the Confirmation Date including, without limitation, any Claims for interest accrued on Claims from the Petition Date, so long as the distributions to Creditors which are payable under the Plan on the Effective Date are made as provided in the Plan, provided, however, that TCO shall not be discharged from Claims of Accepting Class 3.2 Claimants arising prior to the Confirmation Date solely to the extent those Claims are permitted to survive pursuant to the provisions of the Customer Settlement Proposal. Without limiting the generality of the foregoing, on the Effective Date, except as otherwise specifically provided for in the Plan or this Confirmation Order, TCO shall be discharged from any debt that arose prior to the Confirmation Date and - 56 - 57 from all debts of the kind specified in Sections 502(g), 502(h) or 502(i) of the Bankruptcy Code, whether or not (i) a proof of claim based on such debt was filed or deemed filed pursuant to Section 501 of the Bankruptcy Code, (ii) a Claim based on such debt is an Allowed Claim pursuant to Section 502 of the Bankruptcy Code or (iii) the holder of a Claim on such debt has voted to accept the Plan. 38. As to every discharged Claim, all entities, including third parties claiming rights under any contract between TCO and any Creditor, shall be precluded from asserting against TCO, Reorganized TCO, or their respective successors or assigns, or the properties of any of them, any other or further Claims, debts, rights, causes of action, liabilities or equity interests based upon any act, omission, transaction or other activity of any kind or nature that occurred prior to the Confirmation Date, provided, however, the Customers' Committee or any of its members in the event that the Customers' Committee has been dissolved, expressly reserves its right to participate in any appeals from the October 4 Order and any related Order issued in respect of that certain Motion to Unseal Judicial Records filed in the Intercompany Claims Litigation. 39. Except to the extent otherwise provided for by decretal paragraph 2 of this Confirmation Order, pursuant to Section X.B of the Plan, and Sections 105, 1123 and 1129 of the Bankruptcy Code, in order to preserve and implement the settlements contemplated by and provided for in the - 57 - 58 Plan, effective on the Effective Date, all entities that have held, currently hold or may hold a Claim, or other debt or liability that is discharged pursuant to the terms of the Plan shall be permanently enjoined to the fullest extent permitted by law from taking any of the following actions on account of any such discharged Claims, debts or liabilities, other than actions brought to enforce any rights or obligations under the Plan or appeals, if any, from this Confirmation Order: (i) commencing or continuing in any manner any action or other proceeding against TCO, Reorganized TCO or their respective properties; (ii) enforcing, attaching, collecting or recovering in any manner any judgment, award, decree or order against TCO, Reorganized TCO or their respective properties; (iii) creating, perfecting or enforcing any lien or encumbrance against TCO, Reorganized TCO or their respective properties; (iv) asserting a Setoff, right of subrogation or recoupment of any kind against any debt, liability or obligation due to TCO, Reorganized TCO or their respective properties; and (v) commencing or continuing, in any manner or in any place, any action that does not comply with or is inconsistent with the provisions of the Plan or this Confirmation Order. 40. Except to the extent otherwise provided for by decretal paragraph 2 of this Confirmation Order, as of the Effective Date, TCO, Reorganized TCO and all holders of Claims shall release unconditionally and are hereby deemed to release unconditionally (i) each of TCO's and Reorganized - 58 - 59 TCO's officers, directors, shareholders, employees, consultants, financial advisors, affiliates, attorneys, accountants and other representatives and each of their respective successors, executors, administrators, heirs and assigns, (ii) the Creditors' Committee and, solely in their capacity as members or representatives of the Creditors' Committee, each member, consultant, financial advisor, attorney, accountant or other representative of the Creditors' Committee, and each of their respective successors, executors, administrators, heirs and assigns, (iii) the Customers' Committee, and, solely in their capacity as members or representatives of the Customers' Committee, each member, consultant, financial advisor, attorney, accountant or other representative of the Customers' Committee, and each of their respective successors, executors, administrators, heirs and assigns, (iv) the Official Committee of Unsecured Creditors and the Official Committee of Equity Holders of Columbia (collectively, the "Columbia Committees") and, in their capacity as members, invitees or representatives of the Columbia Committees, each member, invitee (including its professionals), consultant, financial advisor, attorney, accountant or other representative of the Columbia Committees, and each of their respective successors, executors, administrators, heirs and assigns, and (v) Columbia, Reorganized Columbia, CNR and each of their respective officers, directors, shareholders, employees, consultants, financial advisors, attorneys, - 59 - 60 accountants or other representatives and each of their respective successors, executors, administrators, heirs and assigns (the entities referred to in clauses (i), (ii), (iii), (iv) and (v) are collectively referred to as the "Releasees"), from any and all claims, obligations, suits, judgments, damages, rights, causes of action or liabilities whatsoever, whether known or unknown, foreseen or unforeseen, existing or hereafter arising, in law, equity or otherwise based in whole or in part upon any act or omission, transaction, event or other occurrence taking place on or prior to the Effective Date in any way relating to TCO, the Reorganization Case, or the Plan, including, without limitation, (a) the Intercompany Claims and all claims arising from or related to the transactions which are the subject of the Intercompany Claims as set forth in Section X.E of the Plan (provided, however, that the release of such Intercompany Claims shall not be effective unless and until the Stipulation of Dismissal with Prejudice becomes effective pursuant to its terms) and (b) Refund Claims and Refund Disputes and any claims arising from or related to the transactions that are the subject of such Refund Claims and Refund Disputes, and provided, however, that, such releases shall not be effective as to (i) any claim for Professional Fees sought by any of the Releasees until such claim has been paid, satisfied or otherwise disposed of, (ii) any claim asserted against TCO or Columbia arising in the normal course of business after the Petition - 60 - 61 Date between TCO's Creditors or TCO and Columbia until such claim has been paid, satisfied or otherwise disposed of, and (iii) any claim asserted against CNR arising in the normal course of business after the Petition Date between TCO's Creditor or TCO and CNR until such claim has been paid, satisfied or otherwise disposed of, and (iv) any claims preserved pursuant to the Customer Settlement Proposal. 41. In accordance with that certain Settlement Agreement dated as of October 31, 1995 among TCO and Mountaineer Gas Company ("Mountaineer") approved by this Court by order dated November 13, 1995 (the "Mountaineer Settlement"), specific Claims of Mountaineer against TCO for certain liabilities have been compromised and settled subject to consummation of the Plan and the Columbia Plan. Under the terms of the Mountaineer Settlement, inter alia, notwithstanding anything to the contrary in the Plan or this Confirmation Order, Mountaineer shall not be barred by TCO's discharge from seeking legal and/or equitable relief from TCO for environmental matters provided, however, that TCO has preserved all of its rights (except assertion of its discharge) to oppose any such environmental Claim asserted by Mountaineer and provided further, if it is determined that TCO has a liability to Mountaineer which would have been (i) a pre-petition Claim in TCO's Reorganization Case, such pre-petition Claim shall be paid as if it were a Class 3.4 Claim under the Plan, discounted in the manner set forth in the Mountaineer Settlement, or (ii) a post-petition, pre- - 61 - 62 Confirmation Date Claim in TCO's Reorganization Case, such post-petition Claim shall be treated as a Miscellaneous Administrative Claim under the Plan, provided, however, that Mountaineer shall not be required to file an Administrative Claim against TCO. 42. Nothing in the Plan, this Confirmation Order or the discharge, injunction or release provisions contained therein shall be construed as discharging, releasing or relieving TCO, Reorganized TCO, or any other party, in any capacity, from liability with respect to the Retirement Plan to which such party is subject under any law or regulatory provision. 43. On the Effective Date, except as otherwise provided in the Plan, or in any contract, instrument, release, indenture or other agreement or document created in connection with the Plan, all mortgages, deeds of trust, statutory liens, liens or other security interests against the property or assets of TCO or the Estate, shall be deemed discharged and satisfied, and the right, title and interest of any holder of any such mortgage, deed of trust, statutory lien, lien or other security interest against the property or assets of TCO or its Estate shall revert to Reorganized TCO and its successors and assigns. 44. Except to the extent that TCO has agreed otherwise at the Confirmation Hearing or in writing to the contrary, it shall be a condition to the making of any distribution to any entity holding any such mortgage, deed - 62 - 63 of trust, statutory lien, lien or other security interest against the property or assets of TCO or its Estate that such entity, or that entity's agent, shall have tendered to TCO, Reorganized TCO or their designated representative, a file-stamped copy of a release of lien or equivalent release document which has been recorded at the appropriate recorder's office in the jurisdiction of the liened property or shall have delivered to TCO, Reorganized TCO or their designated representative, any property so held. 45. Pursuant to Section X.C of the Plan, TCO, Reorganized TCO, Columbia, Reorganized Columbia, their affiliates and their respective directors, officers, employees, agents, representatives and professionals (acting in such capacity), and the Creditors' Committee, and the Customers' Committee and their respective members and Professionals (acting in such capacity), the Columbia Committees and their respective members, invitees and professionals (acting in such capacity), and their respective heirs, executors, administrators, successors and assigns shall neither have nor incur any liability to any entity for any act taken or omitted to be taken in connection with, inter alia, the formulation and dissemination of the Plan, the Disclosure Statement and related transactions and agreements, provided, however, that this limitation of liability shall not extend to (i) any act or omission which is determined in a Final Order to have constituted gross negligence or wilful misconduct, or (ii) - 63 - 64 any violation of the securities laws except to the extent that such person would not be liable for such violation under Section 1125(e) of the Bankruptcy Code, or would be exempt from compliance with such securities laws pursuant to Section 1145 of the Bankruptcy Code. RETENTION OF JURISDICTION 46. Notwithstanding the entry of this Confirmation Order or the occurrence of the Effective Date, in accordance with Section XI of the Plan and the Bankruptcy Code, the Court shall retain jurisdiction for the following purposes: a. To allow, disallow, determine, liquidate, classify, estimate, or establish the priority or secured or unsecured status of, any Claim, including the resolution of any request for payment of any Administrative Claim, and the resolution of any and all objections to the allowance or priority of Claims (including any Administrative Claim and any Priority Tax Claim); b. To grant or deny any application for allowance of compensation or reimbursement of expenses authorized pursuant to the Bankruptcy Code or the Plan, for periods ending on or before the Effective Date; c. To resolve any matters related to the assumption or rejection of any executory contract or unexpired lease to which TCO is a party or with respect to which TCO may be liable and to hear, determine and, if necessary, Allow any Claim arising therefrom; - 64 - 65 d. To decide or resolve any matter arising out of the Claims Estimation Procedures; e. To resolve any determinations which may be requested by TCO or Reorganized TCO of unpaid or potential tax liability or any matters relating thereto under Sections 505 and 1146(d) of the Bankruptcy Code, including tax liability or such related matters for any taxable year or portion thereof ending on or before the Effective Date; f. To resolve any issues relating to distributions to Holders of Allowed Claims pursuant to the provisions of the Plan, including the assertion of setoff rights by or against TCO; g. To decide or resolve any motions, adversary proceedings, contested or litigated matters and any other matters and grant or deny any applications that may be pending on or commenced after the Effective Date, that arise in or relate to the Reorganization Case or the Plan; h. To enter such orders as may be necessary or appropriate to implement or consummate the provisions of the Plan and all contracts, instruments, releases, indentures and other agreements or documents created in connection with or referred to in the Plan or the Disclosure Statement; i. To resolve any cases, controversies, suits or disputes that may arise in connection with the consummation, interpretation or enforcement of the plan or any entity's obligations under or in connection with the Plan, including determinations relating to the enforceability of the - 65 - 66 Columbia Customer Guaranty and the Columbia Guaranty and any disputes regarding compensation for those post-Effective Date services referenced in Section XII.A of the Plan, except that such retention of jurisdiction shall not apply to any cases, controversies, suits or disputes that may arise in connection with FERC regulatory matters; j. To modify the Plan before, on or after the Effective Date pursuant to Section 1127 of the Bankruptcy Code or modify the Disclosure Statement or any contract, instrument, release, indenture or other agreement or document created in connection with the Plan or the Disclosure Statement, or remedy any defect or omission or reconcile any inconsistency in any Bankruptcy Court order, the Plan, the Disclosure Statement or any contract, instrument, release, indenture or other agreement or document created in connection with the Plan or the Disclosure Statement, in such manner as may be necessary or appropriate to consummate the Plan, to the extent authorized by the Bankruptcy Code; k. To issue injunctions, enter and implement other orders or take such other actions as may be necessary or appropriate to restrain interference by any entity with consummation or enforcement of the Plan; l. To enter and implement such orders as are necessary or appropriate if this Confirmation Order is for - 66 - 67 any reason modified, stayed, reversed, revoked or vacated and as may be necessary or appropriate between the Confirmation Date and the Effective Date; m. To determine any other matters that may arise in connection with or relate to the Plan, the Disclosure Statement, this Confirmation Order, any Claim or any contract, instrument, release, indenture or other agreement or document created in connection with the Plan or the Disclosure Statement, except as otherwise provided herein; and n. To enter a final decree closing the Reorganization Case. 47. Except to the extent otherwise provided by this Confirmation Order, the Creditors' Committee and the Customers' Committee may continue in existence after the Effective Date and the Professionals retained by the Creditors' Committee or the Customers' Committee may continue to be employed after the Effective Date in accordance with and to the extent provided in Section XII.A of the Plan. Upon dissolution of the Creditors' Committee and the Customers' Committee after the Effective Date as permitted by Section XII.A of the Plan, the members of the Creditors' Committee and the Customers' Committee, as - 67 - 68 applicable, shall be released and discharged from all rights and duties arising from or related to the Reorganization Case. 48. Reorganized TCO shall remain liable to pay the reasonable costs and expenses of the members of and the Professionals retained by the Creditors' Committee and the Customers' Committee in accordance with Section XII.A of the Plan, and with respect to services rendered and expenses incurred in connection with any applications for allowance of compensation and reimbursement of expenses pending on the Effective Date or filed and served after the Effective Date in accordance with Section VI.B.1 of the Plan and paragraph 37 hereof, after the submission of monthly bills to Reorganized TCO describing in reasonable detail the services provided and disbursements incurred ("Post-Effective Date Fee Requests"). The Court shall retain jurisdiction to determine any disputes concerning Post-Effective Date Fee Requests. 49. The failure to reference or discuss any particular provision of the Plan in this Confirmation Order shall have no effect on the validity, binding effect and enforceability of such provision and such provision shall have the same validity, binding effect and enforceability as every other provision of the Plan. - 68 - 69 50. Except with respect to the modifications to the Plan set forth herein and as provided in paragraph 40 hereof, to the extent of any inconsistency between the terms of the Plan and this Confirmation Order, the terms of the Plan shall govern. To the extent of any inconsistency between the terms of the Plan and the terms of the Customer Settlement Proposal, the terms of the Customer Settlement Proposal shall govern. Dated: Wilmington, Delaware November 15, 1995 /s/ Helen S. Balick ------------------------------------ THE HONORABLE HELEN S. BALICK CHIEF UNITED STATES BANKRUPTCY JUDGE - 69 - EX-99.D 4 NEWS RELEASE DATED NOVEMBER 15, 1995 1 FORM 8-K, EXHIBIT D, NEWS RELEASE DATED NOVEMBER 15, 1995 Contacts: Media - H. W. Chaddock (302) 429-5261 W. R. McLaughlin (302) 429-5443 Analysts - T. L. Hughes (302) 429-5363 K. P. Murphy (302) 429-5471 FOR IMMEDIATE RELEASE November 15, 1995 BANKRUPTCY COURT CONFIRMS COLUMBIA REORGANIZATION PLANS; CLEARS WAY FOR COMPANIES TO EMERGE FROM CHAPTER 11 WILMINGTON, DEL. -- Chapter 11 reorganization plans for The Columbia Gas System, Inc., (NYSE:CG) and Columbia Gas Transmission Corp., its principal pipeline subsidiary, were confirmed here today by U. S. Bankruptcy Court Judge Helen Balick. The rulings will permit the companies to implement the terms of their reorganization plans and emerge from Chapter 11 protection soon after a 10-day waiting period during which appeals may be filed with the Federal District Court in Delaware, provided no stay is issued. Columbia System Chairman Oliver G. Richard III said he was elated with the rulings. "We're anxious to get the bankruptcy proceedings behind us and will make every effort to expedite the implementation of the plans. We want to pay our creditors as soon as possible so that we can begin to take advantage of the many opportunities that are becoming available in today's energy marketplace." Richard said the continuing profitability of Columbia's business units throughout the bankruptcy demonstrates the basic soundness of their operations. He also pointed to the recent investment grade ratings accorded Columbia's new debt to be issued upon emergence as testimony to the financial strength of the Corporation. He added that the average interest rate on Columbia's new debt is expected to be among the lowest of any company in the gas industry. As confirmed by the Court, the Corporation's reorganization plan provides for a total distribution of approximately $3.6 billion to its creditors, including approximately $2.3 billion in payment of the debt the Corporation owed prior to filing for Chapter 11 and approximately $1.1 billion of interest on that debt. The Corporation's reorganization plan will pay its creditors the principal balances of their pre-petition debt in full and accrued pre-petition interest, post-petition interest and interest on overdue interest. This distribution will include almost $1 billion in cash to be funded in part by new bank debt; about $2 billion in new debt securities 2 with maturities that range from five to 30 years; and about $200 million in preferred stock and $200 million in dividend enhanced convertible stock. Columbia Transmission's confirmed reorganization plan provides for a total distribution of approximately $3.9 billion to its creditors. Of this, about $2.2 billion will be paid to the Corporation to resolve its secured and unsecured debt claims. About $1.2 billion will be paid to producers to resolve claims resulting from gas purchase contracts that the company rejected during the proceedings, and the remaining $500 million will pay other third-party and administrative claims. Columbia Transmission will pay 100 percent of all priority and administrative claims, the Corporation's secured debt and all unsecured claims of $25,000 or less. Other creditors, including the producers whose contracts were rejected, will initially receive 68.875 percent and subsequently could receive up to 72.5 percent of their allowed claims. Customer creditors' claims will be accorded the treatment provided in a comprehensive settlement approved by the Federal Energy Regulatory Commission and included in the confirmed plan of reorganization. The Columbia Gas System, Inc., is one of the nation's largest natural gas systems. Its 17 operating subsidiaries are engaged in the exploration, production, purchase, marketing, storage, transmission and distribution of natural gas as well as electric power generation and other energy operations. The Corporation and Columbia Transmission have been operating as debtors-in-possession since July 31, 1991, after a combination of events forced them to file separate petitions for protection under Chapter 11. # # # EX-99.E 5 NEWS RELEASE DATED NOVEMBER 20, 1995 1 FORM 8-K, EXHIBIT E, NEWS RELEASE DATED NOVEMBER 20, 1995 Columbia Gas System Claim Estimation Factors Preliminary - Prepared as of 11/16/95 The following Claim Estimation Factors are being provided to creditors of The Columbia Gas System, Inc. ("Columbia") so as to allow such creditors to estimate the consideration to be received as Class 3.2 Borrowed Money Claimants in connection with the Third Amended Plan of Reorganization for Columbia dated July 27, 1995 (the "Plan"). THE PURPOSE OF THIS INFORMATION IS TO PROVIDE CLASS 3.2 CREDITORS WITH AN ESTIMATE OF THE CONSIDERATION TO BE RECEIVED FOR THEIR CLAIMS AND MAY NOT BE RELIED UPON FOR ANY OTHER PURPOSE. The following six-month LIBOR rates were used in calculating the factors for the bank loans, bid notes, auction notes and commercial paper:
REPRICING DATE RATE(%) 07/31/91 6.310 01/31/92 4.310 07/31/92 3.620 01/31/93 3.370 07/31/93 3.500 01/31/94 3.380 07/31/94 5.190 01/31/95 6.690 07/31/94 5.880
The factors for the LESOP debentures include and apportioned amount of post-petition interest based upon the proceeds from the sale of the unallocated LESOP common stock shares. The price of the common shares at the close of business Friday, November 17, 1995, was $41 per share. The final price of these shares will be determined after the close of business on November 20, 1995 under the assumption of an effective date of November 28, 1995. THE FACTORS PROVIDED ARE BASED UPON AN ASSUMED EFFECTIVE DATE OF THE PLAN OF NOVEMBER 28, 1995. THE ACTUAL EFFECTIVE DATE COULD BE DIFFERENT FOR SEVERAL REASONS INCLUDING, BUT NOT LIMITED TO, A MATERIAL ADVERSE CHANGE IN COLUMBIA'S BUSINESS OR THE FILING OF AN APPEAL OF THE ORDER OF THE U.S. BANKRUPTCY COURT OF THE DISTRICT OF DELAWARE CONFIRMING THE PLAN. 2 Preliminary - Prepared as of 11/16/95 The Columbia Gas System, Inc. - November 28, 1995 Emergence Date Claim Estimation Factors (Interest Calculated through November 27, 1995) Debenture Claims
CUSIP # Issue Factor (1) 197648AW8 6.250% due 10/1991 1.4232 197648AX6 6.625% due 10/1992 1.4082 197648AY4 7.250% due 5/1993 1.4068 197648AZ1 7.000% due 10/1993 1.4035 197648BA5 9.000% due 10/1994 1.4713 197648BB3 8.750% due 4/1995 1.4662 197648BC1 9.125% due 10/1995 1.4842 197648BD9 8.375% due 3/1996 1.4618 197648BE7 8.250% due 9/1996 1.4563 197648BF4 7.500% due 3/1997 1.4194 197648BG2 7.500% due 6/1997 1.3925 197648BH0 7.500% due 10/1997 1.4102 197648BJ6 7.500% due 5/1998 1.4010 197648BK3 9.875% due 6/1999 1.5040 197648BM9 10.125% due 11/1995 1.4834 197648BN7 9.125% due 5/1996 1.4616 197648BP2 10.250% due 5/1999 1.5049 197648BU1 10.250% due 8/2011 1.5804 197648BT4 9.000% due 8/1993 1.4846 197648BV9 10.500% due 6/2012 1.5422 197648BW7 10.150% due 11/2013 1.5392
Total LESOP Claims
CUSIP # Issue Factor (1)(2) 292168AA9 LESOP 1.4516
(1) To calculate estimated claim through November 27, 1995 multiply factor by principal amount held. (2) The claim amount includes an apportioned amount of post-petition interest based upon the proceeds from the sale of the suspended LESOP common stock shares at $41.00/share. 3 Preliminary - Prepared as of 11/16/95 The Columbia Gas System, Inc. - November 28, 1995 Emergence Date Claim Estimation Factors (Interest Calculated through November 27, 1995) Medium-Term Note Claims
CUSIP # Issue Factor (1) 19765AAA0 9.30% MTN A due 9/1999 1.5266 19765AAB8 9.30% MTN A due 9/2019 1.5266 19765AAC6 9.25% MTN A due 9/2000 1.5237 19765AAD4 9.32% MTN A due 9/2001 1.5277 19765AAE2 9.35% MTN A due 9/2001 1.5294 19765AAF9 9.25% MTN A due 9/1999 1.5237 19765AAG7 9.40% MTN A due 9/2009 1.5322 19765AAH5 9.39% MTN A due 9/2009 1.5317 19765AAJ1 9.27% MTN A due 9/2000 1.5249 19765AAK8 9.40% MTN A due 9/2019 1.5322 19765AAK8 9.40% MTN A due 9/2019 1.5322 19765AAL6 9.34% MTN A due 10/2009 1.5288 19765AAM4 9.20% MTN A due 9/1998 1.5209 19765AAN2 9.25% MTN A due 9/2004 1.5237 19765AAP7 9.20% MTN A due 9/2004 1.5209 19765AAR3 9.40% MTN A due 10/1999 1.5322 19765AAQ5 9.40% MTN A due 10/2000 1.5322 19765AAS1 9.50% MTN A due 10/2014 1.5379 19765AAT9 9.50% MTN A due 10/2019 1.5379 19765AAU6 9.43% MTN A due 10/2019 1.5339 19765AAV4 9.22% MTN B due 12/2019 1.5220 19765AAW2 9.30% MTN B due 12/2019 1.5266 19765AAX0 8.98% MTN B due 12/1998 1.5084 19765AAY8 8.98% MTN B due 12/1999 1.5084 19765AAZ5 8.95% MTN B due 12/1998 1.5067 19765ABA9 9.18% MTN B due 1/2010 1.5198 19765ABB7 9.24% MTN B due 12/2014 1.5232 19765ABC5 9.07% MTN B due 1/2000 1.5135 19765ABD3 9.53% MTN B due 2/2005 1.5396 19765ABE1 9.50% MTN B due 2/2002 1.5379 19765ABF8 9.49% MTN B due 2/2004 1.5373 19765ABG6 9.48% MTN B due 2/2003 1.5368 19765ABH4 9.95% MTN B due 5/2020 1.5634 19765ABJ0 9.95% MTN B due 5/2020 1.5634 19765ABK7 9.90% MTN B due 6/2005 1.5605 19765ABL5 9.90% MTN B due 5/2005 1.5605 19765ABM3 9.90% MTN B due 6/2010 1.5605 19765ABN1 9.91% MTN B due 5/2020 1.5611 19765ABP6 9.72% MTN B due 6/2000 1.5503 19765ABQ4 9.70% MTN B due 6/2000 1.5492
4 19765ABV3 9.80% MTN B due 6/2010 1.5549 19765ABR2 9.86% MTN B due 6/2005 1.5583 19765ABS0 9.86% MTN B due 6/2005 1.5583 19765ABT8 9.98% MTN B due 6/2020 1.5651 19765ABU5 9.90% MTN B due 6/2007 1.5605 19765AEW1 9.62% MTN C due 6/2005 1.5447 19765ABX9 9.74% MTN C due 6/2020 1.5515 19765ABY7 9.70% MTN C due 6/2020 1.5492 19765ABZ4 9.55% MTN C due 6/2000 1.5407 19765ACA8 9.60% MTN C due 6/2002 1.5436
Total (1) To calculate estimated claim through November 27, 1995 multiply factor by principal amount held. Preliminary - Prepared as of 11/16/95 The Columbia Gas System, Inc. - November 28, 1995 Emergence Date Claim Estimation Factors (Interest Calculated through November 27, 1995) $750 Million Credit Agreement Claims
Original Issuance Maturity CUSIP # Rate Date Date Factor (1) N/A N/A N/A N/A 1.3398
$500 Million Credit Agreement Claims
Original Issuance Maturity CUSIP # Rate Date Date Factor (1) N/A 6.438% 6/14/91 8/14/91 1.2992
Auction Note Claims
Original Issuance Maturity ID Rate Date Date Factor (1) AN1 6.949% 2/21/91 6/20/91 1.3311 AN2 6.929% 2/21/91 6/20/91 1.3311 AN3 6.250% 6/6/91 8/5/91 1.3420 AN4 6.300% 6/6/91 8/5/91 1.3421 AN5 6.420% 6/6/91 10/4/91 1.3423
Total 5 Bid Note Claims
Original Issuance Maturity ID Rate Date Date Factor (1) BN1 6.090% 5/1/91 6/24/91 1.3309 BN2 6.130% 5/2/91 7/19/91 1.3309 BN3 6.150% 5/21/91 7/23/91 1.3309 BN4 6.240% 5/7/91 9/20/91 1.3487 BN5 6.540% 4/10/91 10/7/91 1.3560 BN6 6.700% 3/12/91 7/10/91 1.3310 BN7 6.180% 5/6/91 8/5/91 1.3487 BN8 6.200% 5/22/91 8/20/91 1.3452 BN9 6.200% 5/22/91 8/20/91 1.3452 BN10 6.220% 5/28/91 9/19/91 1.3439
Total (1) To calculate estimated claim through November 27, 1995 multiply factor by principal amount held. Preliminary - Prepared as of 11/16/95 The Columbia Gas System, Inc. - November 28, 1995 Emergence Date Claim Estimation Factors (Interest Calculated through November 27, 1995) Commercial Paper Claims
Original Issuance Maturity CUSIP # Discount Date Date Factor (1) 19765CTL2 6.100% 5/7/91 6/20/91 1.3309 19765CU89 6.070% 5/28/91 7/8/91 1.3309 19765CUK2 6.050% 4/30/91 7/19/91 1.3309 19765CUK2 6.070% 5/2/91 7/19/91 1.3309 19765CUN6 6.050% 4/30/91 7/22/91 1.3309 19765CV70 6.750% 2/28/91 8/7/91 1.3276 19765CVD7 6.700% 2/22/91 8/13/91 1.3259 19765CVG0 6.700% 2/22/91 8/16/91 1.3250 19765CVG0 6.200% 6/17/91 8/16/91 1.3250 19765CVK1 6.250% 6/11/91 8/19/91 1.3242 19765CVP0 6.200% 6/17/91 8/23/91 1.3230 19765CWC8 6.650% 3/14/91 9/12/91 1.3173 19765CWJ3 6.700% 3/21/91 9/18/91 1.3155 19765CX11 6.050% 4/30/91 10/1/91 1.3118 19765CYN2 6.500% 4/3/91 11/22/91 1.2968 19765CV54 6.100% 5/6/91 8/5/91 1.3282 19765CVC9 6.250% 6/12/91 8/12/91 1.3262 19765CVL9 6.240% 6/14/91 8/20/91 1.3239 19765CVN5 6.240% 6/14/91 8/22/91 1.3233
6 19765CVP0 6.200% 6/18/91 8/23/91 1.3230 19765CX86 6.170% 4/9/91 10/8/91 1.3098 19765CYF9 6.300% 6/6/91 11/15/91 1.2988 19765CYT9 6.300% 6/6/91 11/27/91 1.2953
Total Rate Swap Claims
Issuance Issuance Maturity ID Rate Date Date Factor (1) RS1 N/A N/A N/A 1.2569
(1) To calculate estimated claim through November 27, 1995 multiply factor by principal amount held. EX-99.F 6 NEWS RELEASE DATED NOVEMBER 21, 1995 1 FORM 8-K, EXHIBIT F, NEWS RELEASE DATED NOVEMBER 21, 1995 Contacts:Media --H. W. Chaddock (302) 429-5261 W. R. McLaughlin (302) 429-5443 Analysts --T. L. Hughes (302) 429-5363 K. P. Murphy (302) 429-5471 FOR IMMEDIATE RELEASE November 21, 1995 COLUMBIA GAS PROJECTS NEW DEBENTURE INTEREST RATES ASSUMING EMERGENCE FROM CHAPTER 11 ON NOVEMBER 28, 1995 WILMINGTON, DEL. -- The Columbia Gas System, Inc. (NYSE:CG) today published the projected interest rates that could be applicable to the $2 billion of new debentures the company will issue upon emergence from Chapter 11. The projected rates are based on the pricing formula contained in its plan of reorganization and assume that Columbia will emerge from Chapter 11 on November 28, 1995, the first day following the expiration of the appeal period for the Bankruptcy Court's November 15 order confirming the plan of reorganization. The new debt securities have been rated BBB by Standard & Poors and Fitch Investment Service and Baa3 by Moodys. The securities, projected interest rates and CUSIP numbers are: / / 6.39% Series A Debentures due November 28, 2000 -- CUSIP No. 197648BY3 / / 6.61% Series B Debentures due November 28, 2002 -- CUSIP No. 197648BZ0 / / 6.80% Series C Debentures due November 28, 2005 -- CUSIP No. 197648CA4 / / 7.05% Series D Debentures due November 28, 2007 -- CUSIP No. 197648CB2 / / 7.32% Series E Debentures due November 28, 2010 -- CUSIP No. 197648CC0 / / 7.42% Series F Debentures due November 28, 2015 -- CUSIP No. 197648CD8 / / 7.62% Series G Debentures due November 28, 2025 -- CUSIP No. 197648CE6 -----END PRIVACY-ENHANCED MESSAGE-----