Modular Space and five affiliated Debtors filed for Chapter 11 protection with the U.S. Bankruptcy Court in the District of Delaware, lead case number 16-12825 (Modular Space Holdings). The Company, which provides buildings and storage products (including office trailers, mobile offices, temporary classrooms, modular office complexes and portable storage units), is represented by Pauline K. Morgan of Young Conaway Stargatt & Taylor.
Concurrent with the petition, the Company also filed with the Court a Joint Prepackaged Plan of Reorganization and related Disclosure Statement. According to the Disclosure Statement, “The RSA and the Plan contemplate a prompt emergence from bankruptcy with the following key terms: The First Lien Lenders will provide the Debtors with post-petition financing to fund their operations during the pendency of the Chapter 11 Cases; …General unsecured claims, to the extent not paid earlier by order of the Court, would either be paid in full in Cash or Reinstated on the Effective Date…; Claims arising under the Debtors’ prepetition Indenture would receive their pro rata share of 9,122,999 New Common Equity Interests of a reorganized entity to be determined in accordance with the Plan, which will own, directly or indirectly, 100% of the equity interests in Modular Space Corporation as of the Effective Date (the ‘Reorganized Entity’) and the right to participate in an offering of equity in the Reorganized Entity (the ‘Rights Offering’) pursuant to which they may subscribe to purchase their pro rata share of an additional 18,317,500 New Common Equity Interests in the Reorganized Entity.”
The Disclosure Statement continues, “Existing equity interests in Holdings will receive: their pro rata share of 877,001 New Common Equity Interests in the Reorganized Entity; and their pro rata share of two tranches of warrants, which may be exercised in exchange for an aggregate of 1,250,000 New Common Equity Interests in the Reorganized Entity.”
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