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CITY OF SAN BERNARDINO - REQUEST FOR COUNCIL ACTION
From: JAMES F. PENMAN
City Attorney
Dept: CITY ATTORNEY
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Subject: Discuss and take possible action
relative to the proposed First Amended
, ,Joint Plan of Reorganization in the
.! bankruptcy of Metricom, Inc., Metricom
. .. Finance, Inc., Metricom Investments DC,
Inc., Metricom DC, L.L.C., Metricom
New York, L.L.C.
Date: July 31, 2002
Synopsis of Previous Council Action:
None.
Recommended motion:
None.
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01 Signature
Contact person: James F. Penman
Phone:
5255
Supporting data attached:
Staff Report
Ward:
All
FUNDING REQUIREMENTS:
Amount:
Source:
Finance:
Council Notes:
8isJ O(J-J
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Agenda Item No. S-I
. I
STAFF REPORT
Council Meeting Date: August S. 2002
TO:
FROM:
DATE:
AGENDA:
Mayor and Common Council
City Attorney's Office
July 31, 2002
Discuss and take possible action relative to the proposed First Amended Joint
Plan of Reorganization in the bankruptcy of Metricom, Inc., Metricom Finance,
Inc., Metricom Investments DC, Inc., Metricom DC, L.L.C., Metricom New
York, L.L.C.
Metricom, Inc., a Delaware corporation, and its domestic subsidiaries (hereinafter
collectively referred to as "Debtors"), have filed for bankruptcy in the United States Bankruptcy
Court for the Northern District of California (San Jose Division). The City of San Bernardino has
filed a claim in the amount of$12,180.80. Debtors filed a First Amended Disclosure Statement for
Joint Plan of Reorganization, dated July 8, 2002, which was approved by Court Order dated July 10,
2002. Accordingly, the City, as a creditor, is being asked to vote for or against the First Amended
Joint Plan of Reorganization ("Plan").
If the requisite majority of creditors accept the Plan and the Plan is confirmed by the Court,
it will be binding on the City rel1ardless of whether the City votes against it or chooses not to vote.
Since the City's claim is under $20,000, it has been placed in Class 4 (Convenience Class
Claims). A Confirmation Hearing on the Plan is scheduled for August 28,2002 at 1 :30 p.m. lithe
Plan is accepted and confirmed, the City will receive 20% of the value of its claim, or $2,436.16.
It is estimated that this amount should be received in approximately six weeks after the Plan is
accepted and confirmed. If the Plan is rejected or not confirmed, it is uncertain as to when and how
much the City will be paid.
In addition to not voting or voting for or against the Plan, the City also has the option to
decline Class 4 and elect Class 3 (General Unsecured Claims). There are over 5,000 general
unsecured claims in an aggregate amount exceeding $700 Million which were filed against Debtors
or appear on the Debtors' Schedules. The holders of Allowed Claims in Class 3 shall receive interim
and final distributions of Estate Cash, from time to time, as asset values are realized and as other
Claims may be reduced or disallowed. The Plan contemplates (but does not guaranty) that the range
of recovery under Class 3 is from 18% (worst case) to 30% (best case).
The City Attorney's office is not making a recommendation on what course of action the
Mayor and Common Council should take; however, the deadline for ballots to be received is August
14,2002. If the Mayor and Common Council wish to vote for or against the Plan, and stay in Class
4 or elect Class 3, a motion to that effect would be in order and the City Attorney's office can then
return the ballot as so directed.