American Tire Distributors – Files Amended Joint Plan and Disclosure Statement, Shareholders to Split $30 million ($0.036 per Share)

Register, or to view the article

November 13, 2018 – American Tire Distributors filed an Amended Joint Plan of Reorganization [Docket No. 331] and related Disclosure Statement [Docket No. 332]. According to the Disclosure Statement, “Pursuant to the restructuring support agreement entered into in connection with these Chapter 11 Cases, the Debtors, the Consenting Noteholders holding approximately 75% of the principal amount of the Senior Subordinated Notes Claims, the Consenting Term Loan Lenders holding approximately 78% of the principal amount of the Term Loan Claims, and the Sponsors agreed to support the Plan….The Debtors, with the assistance of their advisors, engaged in substantial arm’s length and good faith negotiations with their existing debtholders to secure debtor-in-possession financing (the “DIP Facility”) to satisfy the Debtors’ liquidity needs during the Chapter 11 Cases, provide continued liquidity to the Debtors’ Canadian affiliates (which are not Debtors), and refinance the Debtors’ prepetition FILO Facility. The DIP Facility (a) provides the Debtors with access to approximately $1,230 million in aggregate financing, which consists of an approximately $980 million (including $180 million available to the Debtors’ Canadian affiliates) senior secured superpriority revolving credit facility (the ‘ABL DIP Facility’) and a $250 million senior secured superpriority first in, last out credit facility (the ‘FILO DIP Facility’), and (b) authorizes the consensual use of cash collateral.  The Term Loan Settlement allows the Term Loan Lenders and the Noteholders to participate equally under the FILO DIP Facility, thus resulting in each funding $125 million of the liquidity provided thereunder.  Since the Petition Date, the full amount outstanding under the prepetition ABL Facility has been “rolled-up” into the ABL DIP Facility; the full amount of the prepetition FILO Facility has been paid down; and $190 million in new liquidity became available thereafter under the FILO DIP Facility in accordance with the terms of the DIP Facility.

The Following is a summary of classes, claims, voting rights and estimated recoveries:
  • Class 1 (“Other Secured Claims”) is unimpaired, deemed to accept and not entitled to vote on the Plan. Estimated allowed claims are $500,000 and estimated recovery is 100%.
  • Class 2 (“Other Priority Claims”) is unimpaired, deemed to accept and not entitled to vote on the Plan. Estimated allowed claims are $500,000 and estimated recovery is 100%.
  • Class 3 (“ABL Claims”) is unimpaired, deemed to accept and not entitled to vote on the Plan. Estimated allowed claims are $0 and estimated recovery is 100%.
  • Class 4 (“Term Loan Claims”) is impaired and entitled to vote on the Plan.  Estimated allowed claims are $695,000,000 and estimated recovery is 100%.
  • Class 5 (“Senior Subordinated Notes Claims”) is impaired and entitled to vote on the Plan.  Estimated allowed claims are $1,050,000,000 and estimated recovery is 54.6%.
  • Class 6 (“General Unsecured Claims”) is unimpaired, deemed to accept and not entitled to vote on the Plan. Estimated allowed claims are $616,144,244 and estimated recovery is 100%.
  • Class 7 (“Intercompany Claims”) is unimpaired/impaired, deemed to accept/reject and not entitled to vote on the Plan. 
  • Class 8 (“Section 510(b) Claims”) is impaired, deemed to reject and not entitled to vote on the Plan. Estimated allowed claims are $0 and estimated recovery is 0%.
  • Class 9 (“Intercompany Interests”) is unimpaired/impaired, deemed to accept/reject and not entitled to vote on the Plan. 
  • Class 10 (“Interests”) is impaired and entitled to vote on the Plan. Estimated recovery is approximately $30 million in aggregate or $0.036 per share.

Read more Bankruptcy News