The U.S. Bankruptcy Court approved A.M. Castle & Co.’s motion for entry of an order authorizing the Debtors to assume (a) a restructuring support agreement (RSA) with consenting creditors and (b) a commitment agreement with the commitment parties.
As previously reported, “The creditors that executed the RSA and have agreed to support the Debtors’ restructuring efforts include Holders of 100% of the Prepetition First Lien Secured Claims, approximately 92% of the Prepetition Second Lien Secured Claims, and approximately 61 % of the Prepetition Third Lien Secured Claims….The RSA includes certain ‘case milestones,’ including: (a) entry of an order approving this Motion within 30 days following the Petition Date, (b) entry of an order confirming the Plan and approving the Disclosure Statement within 60 days following the Petition Date, and (c) the occurrence of the effective date of the Plan by August 31, 2017.”
In addition, “Pursuant to the Commitment Agreement, each of the Commitment Parties agreed, subject to the terms and conditions set forth therein, to purchase its Commitment Amount of New Notes to be issued by the Reorganized Debtors under the Plan (the ‘New Money Notes’) for an aggregate purchase price of up to $40 million (the ‘New Money Amount’), subject to decrease based on the Debtors’ Opening Liquidity as of the Effective Date. The New Money Notes will be issued at a price of $800 in cash for each $1,000 in principal amount of New Money Notes. In consideration for the Commitment Parties’ agreements in the Commitment Agreement, the Debtors agreed to pay the Commitment Parties a put option payment equal to $2.0 million (which represents 5.0% of the maximum New Money Amount) (the ‘Put Option Payment’).”
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